Partnership Revised Corporation

Cooperative Law: Section 3

Obligations of the Partners with
Regard to Third Persons

Group 4
 TRUE OR FALSE PART I

1. Being a contract of partnership, each partner must share in the profits and
losses of the venture. That is the essence of a partnership.
Ans: TRUE, ART.1788

2. An industrial partner can engage in business for himself, unless the

partnership expressly permits him to do so.
Ans: FALSE, ART.1789 (Cannot engage)

3. The partners shall contribute equal shares to the capital of the partnership,
unless there is a stipulation to the contrary.
Ans: TRUE, ART.1790
4. The risk of specific and determinate things contributed to the partnership so
that only their use and fruits may be for the common benefit, shall be borne by
the partner who owns them.
Ans: TRUE, ART.1795

5. If the things contribute are fungible or if they were contributed to be sold, the
risk shall be borne by the partnership.
Ans: TRUE, ART. 1795

6. A stipulation which excludes one or more partners from any share in the profits
or losses is voidable.
Ans: FALSE, ART. 1799 (VOID)

7. A partnership begins from the moment of meeting of the minds.

Ans:FALSE, ART.1783(Execution of the contract)
8. Limited partners have absolute right to participate in the management.
Ans: FALSE, ART.1843

9. The birth and life of a partnership at will is predicated on the mutual desire
and consent of the partners.
Ans:TRUE,Doctrine of Delectus Personae

10. The right to choose with whom a person wishes to associate himself is the
very foundation and essence of that partnership.
Ans: TRUE,Doctrine of Delectus Personae

11. Every partner is a creditor of the partnership for whatever he may have
promised to contribute thereto.
Ans: FALSE, ART.1786
12. The mutual contribution to a common fund is the first test in order to have a
contract of partnership.
Ans:TRUE,ART.1767
13. Capitalist partners are not bound to contribute additional capital.
Ans: TRUE,ART.1788
14. Every partner is responsible to the partnership for damages suffered by it
through his fault.
Ans: TRUE,ART.1794
15. A partner who has received his share of a partnership credit, when the other
partners have not collected theirs, shall be obliged, if the debtor should
thereafter become insolvent, to bring to the partnership capital what he received
even though he may have given receipt for his share only.
Ans: TRUE,ART.1793
 TRUE OR FALSE PART II
1. Partners shall render on demand true and full information of all things
affecting the partnership to any partner.
Ans: TRUE,ART.1806

2. The partners are governed by fiduciary relationship, that is, mutual trust
and confidence.
Ans: TRUE, Art. 1807 under Rationale, pp.65

3. As a rule, the capitalist partners can engage for their own account in any
operation which is of the kind of business in which the partnership is engaged.
Ans: FALSE, Art. 1808 (cannot engage) pp.66
4. A conveyance by a partner of his whole interest in the partnership dissolves the
partnership.
Ans: FALSE, Art. 1813 (does not itself dissolve) pp.75

5. In case of a dissolution of the partnership, the assignee is entitled to receive his

assignor's interest and may require an account from the date only of the last
account agreed to by all the partners.
Ans: TRUE, Art. 1813, pp.76

6. Every partnership shall operate under a firm name, which may or may not
include the name of one or more of the partners.
Ans: TRUE, Art. 1815, pp.80
7. The act of every partner, including the execution in the partnership name of
any instrument, for apparently carrying on in the usual way the business of the
partnership of which he is a member binds the partnership.
Ans: TRUE, Art. 1818, pp.83

8. The partner who has been appointed manager in the articles of partnership may
execute all acts of ownership.
Ans: FALSE, Art. 1800 ( acts of administration despite the opposition of his
partners ) pp.58

9. If two or more partners have been intrusted with the management of the
partnership without specification of their respective duties each one may
separately execute all acts of administration.
Ans: TRUE, Art. 1801, pp.59-60
10. In case it should have been stipulated that none of the managing partners
shall act without the consent of the others, the concurrence of the majority shall
be necessary for the validity of the acts.
Ans: FALSE, Art. 1802 ( all ) pp.62

11. Every partner may associate another person with him in his share, and the
associate shall be admitted into the partnership without the consent of all the
other partners.
Ans: FALSE, Art. 1804 ( shall not be ) pp.64

12. The partnership books shall be kept at the principal place of business of the
partnership, and every partner shall at any reasonable hour have access to and
may inspect and copy any of them.
Ans: TRUE, Art. 1805, pp.64
13. Partnership books are examples of partnership property and every partner is a
co-owner of specific partnership property.
Ans: TRUE, Art. 1811, pp.71

14. The partnership cannot use an identical or deceptively confusingly similar to

that of any existing partnership or corporation or to any other name already
protected by law.
Ans: TRUE, Art. 1815 under Exeption , pp.80

15. All partners shall be liable pro rata with all their property and after all the
partnership assets have been exhausted, for the contracts which may be entered
into in the name and for the account of the partnership.
Ans: TRUE, Art. 1816, pp.80
 MULTIPLE CHOICE PART I
1. A, B and C are partners contributed the following: A - P6, 000.00; B - P4, 000.00; and C-
industry. They agreed that the profits and losses shall be distributed as follows to with:
A-35%; B-25% and C-40%. How shall the loss of P10, 000 be distributed?
a. A - P6,000; B - P4, 000; C - none
b. A - P3, 500; B - P2, 500; C - P4, 000
c. A - P3, 333; B - P3, 333; C - P3, 333
d. A - P5,000; B - P2, 500; C - none

2. In the same problem in the preceding number, suppose it is a profit of P10, 000, how shall
it be distributed?
a. A-P5,000; BP5, 000; C-none
b. A-P3,333; B-P3, 333; C-P3, 333
c. A-P3, 500; BP2, 500; CP4, 000
d. A-P6,000; BP4, 000; C-none
3. Those who cannot be held liable to third persons for partnership obligations.
a Limited partner
b. Capitalist partner
c. Industrial partner
d. General partner

4. A is the managing partner of A and B partnership. X is indebted to A for P25, 000 and the
partnership for P75, 000. When both debts mature, X pays A P10, 000 and the latter issues a
receipt for his personal credit. The payment for P10, 000 shall be applied:
a. To the whole debt owing to A.
b. 4 in favor of A and ½ in favor of partnership.
c. Debt owing to the partnership.
d. ½ in favour of A and ½ in favour of the partnership.
5. Those who manage actively the business or affairs of the partnership.
a. Silent partner
b. Ostensible partner
c. Managing partner
d. Dormant partner

6. Which of the following is not a requisite prescribed by law in order that the partnership
may be held liable to a third party for the acts of one of the partners.
a. The partners bind the partnership by consenting for obligations he may have contracted
in good faith.
b. The partner must have the authority to bind the partnership.
c. The contract must be in the name of the partnership.
d. The partner must act on behalf of the partnership.
7. Those who do not take active part in the business or affairs of the partnership though they
share in the profits or losses.
a. Managing partner
b. Ostensible partner
c. Dormant partner
d. Silent partner

8. Those who takes active part and known to the public as a partner in the partnership.
a. Ostensible partner
b. Secret partner
c. Liquidating partner
d. Dormant partner
9. Those whose connection with the partnership is not known to the public.
a. Ostensible partner
b. Liquidating partner
c. Secret partner
d. Dormant partner

10. Those who does not take active part in the business and is not known to the public as
partner. Thus, they are both a secret and silent partner.
a. Dormant partner
b. Ostensible partner
c. Secret partner
d. Liquidating partner
11. Those partner in an existing legal partnership.
a. Secret partner
b. Partner by estoppel
c. De facto partner
d. Real partner

12. Those who are not really partners but represent themselves, or consent to another or
others representing them to anyone as partners in an existing partnership or in one that is
fictitious or apparent.
a. Real partner
b. Partner by estoppel
c. Secret partner
d. De facto partner
13. X, Y, and Z are partners who contributed P10,000 each to the capital of the partnership.
D owes the partnership P3, 000. Z collected from D P1, 000 before X and Y could receive
anything from D, who later became insolvent and therefore, they could not collect their
shares.
a. Z cannot be required to share what he already received from D.
b. X and Y should first exhaust all remedies to collect from D.
c. Z shall share the P1, 000 with his co-partners X and Y.
d. X and Y can automatically deduct from the capital contribution of Z in the partnership
their respective shares of P333.33.

14. Those who became members of the partnership after its establishment.
a. Secret partner
b. Partner by estoppel
c. De facto partner
d. Incoming partner
15. The following are the legal relations created by a contract of partnership, except:
a. Relations between third persons.
b. Relations between the partners on one hand and the partnership on the other hand.
c. Relations between the partners on one hand and third persons on the other hand.
d. Relations between the partnership and the third persons.

16. Those who contribute money or property or both money and property to the common
fund.
a. Industrial partner
b. Capitalist partner
c. General partner
d. Limited partner

17. A, B, C, and D organized a general partnership with A and B as industrial partners, C

and D as capitalist partners. C contributed P800,000 and D contributed P600,00 to the
common fund.
A and B were appointed managing partners. J applied as office assistant and K applied as
accountant of the partnership. The hiring of was decided upon by A and B but was opposed
by C and D. Whose decision shall prevail?
a. The decision of A and B shall prevail because they are the managers.
b. The decision of C and D shall prevail because they are the capitalist partners.
c. The decision of C and D because they have the controlling interest
d. The decision of A and B because it is an act of ownership.

18. In the preceding problem, suppose the hiring of K was decided upon by A and D, but
was opposed by B and C, whose decision shall prevail?
a. The decision of A and D because A is the managing partner and the hiring is an act of
administration.
b. That of A and D because D is also a capitalist partner.
c. The decision of B and C because in case of tie in the decision of managing partners, that
of the controlling interest shall prevail.
d. The decision of A and B because they are the managing partners.
19. Those who contribute money or property and industry or both money, property and
industry to the common fund.
a. Industrial partner
b. Capitalist partner
c. General-limited partner
d. Capitalist-industrial partner

20. X and Y verbally agreed to form a contract of partnership 18 months from today, each
one to contribute P15, 000. At the arrival of the said date, if one refuses to go ahead with
the agreement, can the other enforce the agreement?
a. Yes, since the agreement is to be enforced after one year from the making thereof, the
same should be in writing to be enforceable. made.
b. Yes, because the prior agreement was voluntarily
c. No, because the agreement was merely verbal.
d. Yes, because the contract of partnership is not governed by the Statute of Frauds.
21. Those who contribute only their industry or labor to the common fund.
a. Capitalist partner
b. General partner
c. Industrial partner
d. Limited partner

22. Those who takes charge of the winding up or liquidation of the partnership affairs after
dissolution.
a. Ostensible partner
b. Liquidating partner
c. Secret partner
d. Dormant partner

23. A, B, and C formed a partnership. They contributed P250,000 each. They also agreed on
equal distribution of profit. After 5 years of operation however, C conveys her whole
interest in the partnership to D, without knowledge and consent of A and B. Is the
partnership dissolved?
a. The partnership is not dissolved because the assignment made by C of his whole interest
was without the knowledge and consent of A and B.
b. The partnership was dissolved because the assignee, D automatically becomes a new
partner.
c. It is dissolved since C has ceased to be a partner because of the assignment of his whole
interest to D.
d. The partnership is not dissolved because the conveyance of a partner's interest in the
partnership does not of itself dissolve the partnership.

24. Based on the preceding problem :

a. D can participate in the management of the partnership.
b. D can inspect the books because he is a partner and therefore there is a fiduciary
relationship.
c. D cannot inspect the books.
d. D can take part in the control of the business.
25. Still based on the said problem:
a. If A and B want to dissolve the partnership, C as a partner need not consent thereto
because he had assigned his interest to D.
b. D may ask the court for its dissolution being the assignee of C's interest in the
partnership.
c. A, B and C may dissolve the partnership even without the consent of D.
d. A. B and C can ask for judicial dissolution of the partnership.
MULTIPLE CHOICE PART II

1. A. B, C and E are partners. They contributed to the capital as follows: A -P50,000; B-

P100, 000; C-P150, 000; and E as the industrial partner, his services. The partnership
obligation to outsiders exceeds the total net assets by P200, 000.Who and by how much will
the partners be liable for the payment of the P200,000?
a. Azero; B-zero; C-zero; E-zero
b. A-P33, 333: B-P66, 666; C-P100,000; E-zero
c. A-P45,000; B-P45,000; C-P55, 000; E-55,000
d. A-P50,000; B-P50,000; C-P50, 500; E P50, 000
2. A is a capitalist partner and B the industrial one. A engaged personally in the same kind
of business as that of the partnership:
a. If there are losses, the partnership will bear the losses.
b. If there are profits, they will be shared by A and the partnership.
c. If there are profits, A shall give them to the partnership.
d. A may be excluded from the partnership with liability for damages.

3. Suppose in the preceding problem, B engages in business on his own account but
different from that of the partnership.
a. If there are profits, B and the partnership shall share equally.
b. B may be excluded from the partnership with damages.
c. If there are losses, B and the partnership shall equally share.
d. B may be excluded from the partnership but without damages.
4. Those who contribute money or property and industry or both money. property and
industry to the common fund.
a. Industrial partners
b. General partners
c. Limited partners
d. Capitalist-industrial partners

5. Those who contribute only their industry or labor to the common fund
a Industrial partners
b. Capitalist-industrial partners
c. General partners
d. Limited partners

6. A and B are capitalist partners while C is an industrial partner. Both A and B equally
contributed P50, 000. A contractual liability in favor of X was incurred in the amount of
P150, 000. After exhausting partnership assets, there is a balance recoverable from:
a. A and B only
b. A, B and C
c. A, B and C and C can get reimbursement from A and B.
d. B and C only.

7. The following are the remedies of capitalist partners against an industrial partner who
engaged in business for himself:
I. The capitalist partners may exclude the industrial partner from the partnership plus
damages.
II. The capitalist partners may avail themselves of the benefits which the industrial partner
may have obtained plus damages.

a. Only I is correct
b. Only II is correct
C. Both are true
d. Both are false
8. A, B and C are partners in a partnership with each contributing P100, 000 each. D is
admitted as a new partner with a contribution of P50, 000. At the time of his admission, the
partnership has a pre-existing obligation to E in the amount of P150, 000.
a. D is not liable to E for this obligation incurred when he was not yet a partner.
b. D is liable up to P50, 000.
c. D is liable up to P25, 000.
d. D is liable up to P16, 667.

9. Who can demand true and full information?

a. Any partner
b. Legal representative of any deceased partner
c. Legal representative of any partner under legal disability
d. All of the above
10. A and B are capitalist partners while C is an industrial partner. There is no agreement as
to the profits and losses. The partnership realized profit in the amount of P150, 000. The
share of C in the profits shall be:
a. A and B will determine C's share in the profits.
b. Just and equitable under the circumstances.
c. C's share shall be P150,000.
d. Pro rata to his contributed capital.

11. Suppose instead of profit, the partnership suffered loss in the same amount of P150,000,
the share of the capitalist partners in the loss shall be:
a. In accordance to their profit sharing agreement.
b. In accordance with their loss sharing agreement.
c. In proportion to their capital contribution.
d. Equally among them.
12. With still the same facts, as industrial partner, the share of C in the lou shall be:
a. Just and equitable under the circumstances.
b. As agreed upon by the partners before the loss was realized.
c. In proportion to his capital contribution.
d. None, he being an industrial partner.

13. The following are the rights of an assignee, except:

a. To receive the profits to which the assigning partner would otherwise be entitled;
b. In case of dissolution, the assignee may require an account from the date of liquidation.
c. In case of fraud in the management of the partnership, the assignee may avail himself of
the usual remedies provided by law;
d. In case of dissolution, to receive the assignor's interest; and
14. A and B are partners with A as the managing partner. C owes A P100,000 and the
partnership P300, 000 which are now both due. A issued a receipt for the payment of C in
the amount of P100, 000 in his own name The payment shall be applied to:
a. The partnership credit totally.
b. The credit of A only since the receipt is in his name.
c. The payments shall be applied proportionately to both credits.
d. The payment shall be applied equally in both credits.

15. Arises if all the partners consented to the misrepresentation of a third person who is not
a real partner. This creates a partnership obligation.
a. General partnership
b. Limited partnership
c. Partnership by estoppel
d. None of the above
16. This is the order of priority in general partnership liabilities:
a. Outside creditors, creditor partner, partner's capital, partner's profit.
b. Outside creditors, creditor partner, partner's profit, partner's capital.
c. Creditor partner, Outside creditor, partner's profit, partner's capital
d. Creditor partner, Outside creditor, partner's capital, partner's profit

17. The following are obligations of partners, except:

a. To give their promised contribution.
b. To account and hold as trustee for any profits derived without the consent of the other
partners.
c. To engage in any business which is of the kind in which the partnership is engaged.
d. Not to convert partnership money to their own use.
18. The following are obligations of partners, except:
a. Obligation to share with the other partners the share of the partnership credit which they
have received from an insolvent partnership debtor.
b. Obligation of a managing partner to credit to the partnership the payment made by a
debtor who owes them and the partnership.
c. Not to engage in any business which is of the kind in which the partnership is engaged.
d. Pay for damages suffered by the partnership without their fault.

19. The following are the rights of partners, except:

a. Right to ask for the dissolution of the partnership at the proper time.
b. Right to have access to and inspect and copy partnership books on Sundays and holidays.
c. Right to demand a formal account.
d. Right to associate with another person in their share.
20. The following are the rights of partners, except:
a. Appraisal right
b. Rights in specific partnership property
c. Interest in the partnership
d. Right to participate in the management

21. A, B and C formed a commercial partnership. D represented himself as a partner in the

partnership to E who, on the belief of such representation, extended credit of P50, 000 to
the partnership. Assuming only B and C consented to such representation, who shall be
liable to E?
a. B, C and D are partners by estoppels and thus, are liable to E.
b. Only partners A, B and C are liable to E for the benefit extended to them.
c. Only D who made the representation is liable to E.
d. All of A, B, C, and D are liable because of partnership liability for the credit extended to
the partnership by E.
22. A, B and C are general partners in ABC partnership. X is a debtor to the partnership in
the amount of P180, 000. A received from the debtor X the sum of P60, 000 and issued a
receipt identifying the amount collected as P60,000.
a. A cannot be compelled to share the P60, 000 with B and C.
b. A can be compelled to share with B and C their P60, 000.
c. B and C should automatically sue X to collect the P120, 000.
d. B and C can deduct from the capital of A their share of P60,000.

23. It is one where it will exist until the purpose is accomplished.

a. Partnership with a fixed term
b. Partnership at will
c. Partnership for a particular undertaking
d. None of the above
24. Three of the following are property rights of a partner. Which is not?
a. Right to specific partnership property.
b. Right to participate in the management.
c. Right to demand formal accounting of partnership affairs.
d. Interest of the partner in the partnership

25. A partnership that does not fix its term.

a. Partnership with a fixed term
b. Partnership for a particular undertaking
c. Partnership at will
d. None of the above
THANK YOU
Presented By:
Pita, Charlyn P.
Tugari, Mary May A.
Joson, Caryl Jane A.
Quintua, Ma Angeline C.
Delgado, Michelle L.