June 22, 2012

1. It requires a contract of legal partnership to appear in a public instrument

a. Total capital is P30,000,000 c. Row boats for river rafting business e. None of them
b. Mango plant seedlings in plastic bags d. All of them

2. Which of the following is required for a partnership to exist?

a. Actual contributions from partners c. Partners are solvent e. None of them
b. Registration with the SEC d. All of them

3. Friends Gina, Lina and Tina verbally agreed to form an agricultural partnership in order to finance the medical expenses of Lina, Gina and Tina
contributed cash and bags of fertilizers, respectively, while Lina contributed her services. Among them, there is
a. A legal partnership b. A void partnership c. A voidable partnership d. No partnership

4. Which of the following contributions does not require the contract of partnership to appear in a public instrument for it to be legal?
a. Shares of stock in real estate company c. Rice mill for milling business e. None of the above
b. Usufruct of house and lot d. All of them

5. A partnership with a capital of P3,000 must appear in a public instrument for

a. Legal purposes b. Existence purposes c. Administrative purposes d. None of them

6. If the object of a partnership is unlawful, its profits

a. Are confiscated immediately c. Are confiscated only if used for illegal purpose
b. Are confiscated only after dissolution d. Cannot be confiscated

7. Moe, Curly and Larry are partners in a partnership which borrowed money from a bank. If it failed to pay it at maturity, from whom may the bank
now collect such loan?
a. Partnership only b. 3 partners only c. 3 partners & the partnership d. Any partner

8. What person is not a partner as to actual partners in a partnership but considered a partner as to a third person?
a. Any person considered as such by the third person c. Debtor of such partnership
b. Person who represents himself as a partner to such third person d. None

9. Who of the following is presumed a partner in a partnership?

a. Its creditor who receives a share of its net income c. A legal spouse e. All of them
b. Its debtor who receives a share of its net income d. None of them

10. Which of the following is a characteristic of a contract of partnership?

a. Accessory contract b. Real contract c. Contract of security d. None of them e. All of them
June 29, 2012
1. Which of the following about a partnership (P) and a co-ownership (C) is incorrect?
a. Unlike a P, a C does not require a public instrument if its object is immovable d. None of them
b. Unlike a P, a C may be created by law e. All of them
c. Unlike in a C, death of a partner in a P dissolves it

2. Which of the following about a partnership (P) and a joint venture (JV) is incorrect?
a. Unlike in a P, corporations may be members of a JV c. Both of them are governed by the Civil Code e. All of them
b. Unlike a JV, a P is a legal person d. None of them

3. This partner does not contribute services to the partnership

a. Dormant partner b. Limited partner c. Silent partner d. None of them e. All of them

4. Which of the following agreed partners’ contributions cannot be made to a universal partnership of all present property created on 25 June
2012?
a. House owned by the only child partner’s parents who died on 28 June 2012 d. None of the above
b. Lot given to a partner on 29 June 2012 by virtue of a last will of his deceased friend e. All of the above
c. Car given to a partner by his aunt on his birthday on 26 June 2012

5. Who of the following cannot join a universal partnership of all profits?

a. Man and woman in “lived-in” relationship c. Married woman and her lover e. All of them
b. Convicted habitual swindler d. None of them

6. Larry, Moe and Curly verbally agreed on 5 June 2012 to form a partnership which will engage in the buy and sell business and to contribute
money equally on 10 June 2012. Such contributions were actually given by them on 11 June 2012. If the partnership business started
operations on 12 June 2012, when did the partnership begin?
a. 5 June 2012 b. 10 June 2012 c. 11 June 2012 d. 12 June 2012

7. Which of the following about a co-ownership and a partnership is correct?

a. A partnership and a co-ownership created by law both have no term limits d. None of them
b. Profit sharing in both may be stipulated e. All of them
c. Both have juridical personalities

8. A universal partnership of all profits is formed on 20 June 2012. To that partnership, the following are its mandatory contributions, except:
a. Rent from boarders received by partner today in the 2-storey house he rented since 2011 d. None of the above
b. Cash prize a partner won in the T.V. singing contest “Tingog” yesterday e. All of the above
c. Proceeds of sale of tuna fishes a partner caught from the sea

9. A partner by estoppels is a
a. Limited partner b. Nominal partner c. Silent partner d. None of them

10. Which of the following is not a mandatory contribution to a universal partnership of all present property formed on 31 May 2012?
a. Interest income for June 2012 of time deposit made by a partner since April 2012 d. None of the above
b. House and lot of the only child partner’s parents who died on 31 May 2012 e. All of the above
c. Car bought by a partner in 2011 but has been leased to a 3rd person since 10 May 2012
July 6, 2012
1. Regarding his whole interest in the partnership, a partner
a. May sell it to a 3rd person without the consent of the other partners d. Answer not given
b. Cannot sell it to a 3rd person without such consent
c. May sell only a portion of it to a 3rd person without such consent

2. The partners agreed to entrust the designation of their shares in the profit and loss to a 3 rd person. If after such designation, a partner’s share is
lower than his expectations, he
a. Cannot question it because he is estopped c. May question it only if others also do so
b. May question it only if his share is not fair d. Answer not given

3. Which of the following stipulations among partners is void?

a. Giving an industrial partner profit share not in proportion to his contribution d. None of them
b. Excluding a capitalist partner from profit e. All of them
c. Excluding an industrial partner from losses

4. Ted, a partner’s son from his former girlfriend, desires to claim support from him. Which of the following partnership rights of his father may be
subjected to such claim?
a. Right in specific partnership property c. Profit share e. All of them
b. Partnership interest d. None of them

5. Partner Nida sold a portion of her partnership interest to a 3rd person, Tim, without the consent of the other partners. Under these
circumstances, which is correct?
a. Tim has no partner’s right c. Tim may exercise partner’s rights other than profit share
b. Tim can only be entitled to Nida’s profit share d. Answer not given

6. The designation of profit and loss shares of the partners may be entrusted to
a. All the partners b. A 3rd person only c. 3rd person or all partners d. None of them

7. Which of the following statements about an industrial partner is correct?

a. He is always exempted from sharing partnership losses c. He may share in the partnership losses
b. He may be excluded from profit and loss sharing d. Answer not given

8. A 3rd person they entrusted designated the profit and loss shares of the partners in November 2012. Based thereon, partners A, B and C
received their respective profit shares in December 2012. Under these circumstances, which of the following is correct?
a. Partner A may impugn such designation within 3 months from such designation c. Any partner may impugn it any time he wants
b. Partner B may impugn such designation within 3 months from his knowledge thereof d. None can impugn it.

9. Which of the following statements is incorrect about a partner’s right in specific partnership property?
a. He may use it without the consent of the other partners c. He is its co-owner e. All of them
b. He may have more rights to possess it than the others d. None of them

10. The partners designated their profit and loss sharing. Thereafter, a partner
a. May impugn it if his share is unfair to him d. May impugn it if his share is unfair to all partners & the public
b. May impugn it if his share is unfair to other partners e. Answer not given
c. May impugn it if his share is unfair to all partners
July 13, 2012
1. Without agreement, the partners shall contribute to the partnership capital
a. Any share they like b. Equal shares c. Proportionate shares d. Answer not given

2. If one of the partners is unable to speak in a hospital due to an accident, the other partners are required to render true & full information of all
things affecting the firm to
a. Him b. His legal representative c. Either a or b d. Answer not given

3. To revoke the power of a managing partner appointed at the time of the creation of the partnership, what is required?
a. He acted in bad faith b. ____ of controlling interest c. A & b d. Answer not given

4. The firm suffered damages in the amount of P20,000 through the fault of its capitalist partner, Jack. If from the firm’s annual profit, Jack’s share
is P25,000
a. Jack may compensate such damages with his profit share c. Jack may compensate only if the other partners agree
b. Jack cannot compensate such damages with his profit share d. Answer not given

5. Larry, Curly and Mae are partners without agreement as to management. A 3 rd person, Shemp, owes Curly P10,000.00 with interest and the
partnership P80,000. One day, Curly collects P5,000 from Shemp and issues his own receipt for it. It shall be applied
a. To Curly’s credit only c. To the partnership credit only
b. To the two credits proportionately d. To the credit chosen by Shemp

6. If in No. 5 above, Larry, Curly and Mae contributed P50,000, P10,000, and P100,000 to the partnership printing business respectively and Mae
wants to sell its printing machinery while Larry and Curly refuse to do so, whose idea shall prevail?
a. Mae b. Larry & Curly c. No one d. Mae, if its sale is useful to the partnership

7. Leo, Pio and Tio contributed cash, property and services to the firm, respectively. In case of imminent loss of its business and there is no
agreement, who shall be obliged to sell his interest to Leo, who wants to make additional investment to save it, if Pio and Leo do not make
additional investments because Pio is insolvent and Tio has other priority?
a. Pio only b. Tio only c. Pio and Tio d. None of them

8. If in No. 7 above, the firm is engaged in the restaurant business and Leo just invested in another restaurant business with the knowledge of the
other partners who did not object, what is its adverse consequence to Leo?
a. Pio & Tio may avail of his benefits in the other business with damages c. Leo may be excluded from the firm by Pio & Tio
b. Leo is required to bring his profit in the other business to the firm d. None

9. Roxanne promised to contribute a pink Nissan 2012 model car worth P1.5 million to the firm. By making such promise, what shall be her
obligations to the firm
a. To deliver such car c. To deliver its fruits without demand
b. She is bound for warranty against eviction d. All of them

10. The interests ratio of partners Jan, Jane, Jamie and Janelle to the firm are 45:25:20:10 respectively. Jan, Jane and Janelle are appointed
managers without specifying their duties. If Jane and Janelle want the firm to cater into a compromise agreement with its creditor to reduce its
liability but Han does not want to, whose idea shall prevail?
a. Jane and Janelle c. Jan only if Jamie agrees with her
b. Jan d. No one
July 20, 2012
1. The partnership bears the risk of the following contributions, except:
a. 50 sacks of rice c. Goods for sale e. All of them
b. Use of partner’s only car d. None of them

2. A non-partner is liable to partnership creditors in any of the following instances, except:

a. When his name is in the partnership name c. None of them
b. When he admits on TV interview that he is its partner d. Both of them

3. Who shall be liable for the penalty charged by the BIR on the partnership for failure to file its ITR because its managing partner wants it to avoid
paying taxes?
a. Managing partner alone c. All partners and the partnership
b. All partners d. Partnership only

4. The partnership is engaged in the ordinary fuel station business near SM CDO. One day, on request of a customer, its managing partner
promised to deliver 20 liters of its gasoline to his house in Bukidnon. Who shall be bound by such promise?
a. The partnership c. The partnership and all the partners
b. The partnership only if the controlling interest agrees d. Managing partner only

5. Which of the following is incorrect about the private creditors of a partner?

a. A judgment creditor may charge his interest in the partnership d. None of them
b. They may ask the attachment of his share in the partnership assets e. All of them
c. They are preferred over partnership creditors as to his personal assets

6. Which of the following is always required for a third person to be a partner by estoppel
a. The misrepresentation as partner must be made to a would be partnership creditor d. All of them
b. One or more partners must consent to such misrepresentation e. None of them
c. There must be an existing partnership

7. Capitalist partners Jack and Jill and industrial partner Hill agreed that Jill will not be liable for the partnership’s obligations. If after exhausting
partnership assets, its creditor still has a loan receivable from the general partnership, who shall be liable to it?
a. Jack only b. Jack and Hill c. Jack and Jill d. All the partners

8. Sole managing partner Jun received 100 sacks of flour from a customer for storage in its business warehouse for a fee. Later, partner Lito
withdrew 2 sacks and used it during his fiesta celebration. Who shall be liable to such customer for those 2 sacks?
a. Partnership alone b. Lito alone c. Partnership and all partners d. All partners

9. The partnership owes P5,000 to Ted, a third person. For partner Myrna to validly request his friend Ted to renounce his claim fro the
partnership, she
a. Must be a managing partner c. Must represent its controlling interest
b. Must be authorized by the other partners d. None of them

10. Roy, Joy, and Doy are partners. For their partnership to borrow money, Roy and Doy misrepresented to PNB that Bert is its partner although he
is not. Trusting on such misrepresentation, PNB lends money to the partnership. Who shall be liable to PNB?
a. The partnership and Bert as partner c. The partnership and Bert not as partner e. Bert alone
b. Roy, Doy and Bert only d. The partnership alone
August 17, 2012
1. A limited partner may demand the return of his contribution at these periods, except:
a. On date specified for its return in the Certificate of Limited Partnership d. None of them
b. If not so specified, within 6 months after giving written notice to other partners e. All of them
c. On its dissolution

2. Without a contrary statement in the Certificate or without the consent of all partners, a limited partner has the right to demand the return of his
capital
a. In cash, regardless of his contribution c. In the same form as his contribution
b. In cash only if he contributed cash d/ Answer not given

3. A limited partner becomes liable as a general partner in which instance?

a. When he takes part in the selection of the managing partner d. All of the above
b. Moment his surname, different from others, appears for the first time in the firm name e. None of the above
c. He erroneously believes he is a limited partner but promptly renounces such mistake

4. W/o written consent or ratification by all limited partners, a general partner may
a. Admit a general partner c. Possess firm property not for its purpose e. All of them
b. Admit a limited partner d. None of them

5. The substituted limited partner is not liable for the liabilities of the limited partner if
a. He was ignorant of them at the time he became a substituted limited partner d. None of them
b. Such liability cannot be ascertained from the Certificate e. All of them
c. He substituted a limited partner who died

6. In the order of payment during liquidation of a limited partnership, which of the following is given the third priority?
a. Limited partner’s other compensation by way of income c. Limited partner’s share of profits
b. Limited partner’s capital d. Loans to limited partner

7. In which o these instance may the Certificate of Limited Partnership be cancelled?

a. A general partner died & business is continued c. Change in character of its business e. All of them
b. Limited partner’s withdrawal of his contribution d. None of them

8. Which of the following statements about a substituted limited partner is incorrect?

a. He becomes one when the Certificate is so amended d. None of them
b. He may dissolve the firm if he rightfully but unsuccessfully demands return of capital e. All of the above
c. Firm’s loan to him enjoys the same priority as loans to third persons during liquidation

9. A limited partnership is considered general partnership in these instances, except if

a. Its Certificate of Limited Partnership appears in a private document d. None of them
b. All its limited partners take part in the control of its business e. All of them
c. Its names is “Jack and Jill Company”

10. Which is correct about a limited partner and general partner at the same time?
a. He becomes one the moment all the partners agree c. He has all the rights of a general partner e. All of them
b. He has all the rights of a limited partner d. None of them
August 24, 2012
1. Which of the following is incorrect about a corporation?
a. It enjoys certain constitutional rights under the bill of rights d. None of the above
b. It cannot exercise a profession e. All of the above
c. It cannot be punished with imprisonment for committing a crime

2. Which of the following is incorrect about a foreign corporation?

a. The liabilities of its officers are governed by Philippine laws d. None of the above
b. If an individual, its resident agent must be a Filipino citizen e. All of the above
c. If it has no license to engage in business in the Philippines, it cannot be sued

3. Which of the following companies can be a close corporation?

a. Airline company b. Electric company c. Transportation company d. None of them

4. Which of the following is incorrect about a non-stock corporation?

a. Its member may vote for as many trustees to be elected d. None of the above
b. If provided in its by-laws, its membership may be transferable e. All of the above
c. Its governing board may be designated by a name other than board of trustees

5. Which of the following is incorrect about a de factor corporation?

a. It must have a certificate of incorporation issued by the SEC d. None of the above
b. Its legal existence is questioned only by the Solicitor General e. All of the above
c. It has a legal right to corporate existence as to the public, except the state

6. Which of the following is not a common feature of a corporation and a partnership?

a. It may be created by mere agreement c. Its members are owners of its assets e. All of them
b. Its members are allowed to withdraw their capital d. None of them

7. In question No. 6 above, which of those choices is a common feature? D

8. Under the Corporation law, the catholic church is

a. A quasi-public corporation c. A religious corporation e. None of them
b. A quasi-corporation d. Not a corporation

9. Which of the following is incorrect regarding a stock corporation?

a. Its corporate president is elected by its stockholders d. None of the above
b. Banks are required to be stock corporations e. All of the above
c. For 2 directors to be elected, a stockholder with 20 shares may give 40 votes to one

10. Which of the following is incorrect about a private corporation?

a. Its separate legal personality is disregarded if 90% of its stocks are owned by 1 person d. None of the above
b. Its powers are limited compared to the powers of a partnership e. All of the above
c. It may have legal personality even without a certificate of incorporation from the SEC
September 4, 2012
1. Which of the following is incorrect about a corporation?
a. It enjoys certain Bill of Rights in the constitution d. None of them
b. It is not allowed to practice any profession e. All of them
c. It remains despite the death of all its stockholders/members

2. In which area is a corporation the same as limited partnership?

a. Withdrawal of investment any time by stockholder/general partner d. None of them
b. Co-ownership of business property by stockholders/partners e. All of them
c. Addition of a certain word or prefix to its name to be valid

3. Which of the following is not a public corporation?

a. CEPALCO b. Social Security System c. Public utility d. None e. All of them

4. Which of the following is not among those that cannot be a close corporation?
a. A water district b. Private school c. Bus company d. None of them e. All of them

5. Which of the following is correct about a foreign corporation under the Corp. Code?
a. To be its resident agent, a domestic corporation must be of sound financial standing d. None of them
b. The liabilities of its officers are governed by Philippine laws e. All of them
c. Without license to engage in business in the Philippines, it cannot sue or be sued here

6. Which of the following is incorrect about a non-stock corporation?

a. Its membership may be transferable d. None of the above
b. Its managing body is required to be called as Board of Trustees e. All of the above
c. If there are 3 trustees to be elected, its member may cast more than 1 vote

7. Which of the following is incorrect about a de facto corporation?

a. It actually exists for all practical purposes as a corporation d. None of the above
b. It must have a certificate of incorporation issued by the SEC e. All of the above
c. Its legal existence can be questioned by any person in a suit

8. Which of the following statements is incorrect?

a. A corporation sole acquires legal personality upon filing its articles of incorporation d. None of the above
b. The board of trustees of an educational corporation must be in multiples of 5 e. All of the above
c. Its powers are more restricted or limited than those of a partnership

9. Which of the following is incorrect about a corporation?

a. It is created either by law or by operation of law d. None of the above
b. Without its consent, its stockholder may sell his shares which are not fully paid e. All of the above
c. Its powers are more restricted or limited than those of a partnership

10. Which of the following is correct about a stock corporation?

a. Private banks are required to be stock corporations d. None of the above
b. For 3 directors to be elected, its stockholder with 3 shares may give 9 votes to 1 person e. All of the above
c. Its president must be elected by its board of directors
September 11, 2012
1. If Juan’s 200 shares in a corporation have become delinquent, which is correct?
a. Juan is still entitled to stock dividends for his 100 shares c. None of them
b. They will be sold to the bidder who offers the biggest amount for those shares d. All of them
c. If only 80 shares are sold to the highest bidder, the 20 shares shall be given to Juan

2. Which of the following is correct about pre-incorporation subscription requirements?

a. 25% of the authorized capital stock must be subscribed upon filing the articles of incorp. d. All of them
b. The amount of such subscription must not be less than P5,000 e. None of them
c. 25 % of the subscribed capital stocks must be paid upon incorporation

3. A non-voting share may still vote on any of these matters, except:

a. Investment in another corporation c. Increase its capital stock e. All of them
b. Creation of bonded indebtedness d. None of them

4. Which of the following about a preferred stock is incorrect?

a. It may be given preference in the distribution of assets in liquidation d. None of them
b. It may be deprived of voting rights e. All of them
c. It is issued only with a stated par value

5. Which of the following about founder’s shares is incorrect?

a. They are issued to the organizers and promoters of the corporation d. None of the above
b. They must be classified as such in its by-laws e. All of the above
c. If given exclusive rights, they must be for a limited period not exceeding 5 years

6. Which of the following is correct about stock subscriptions?

a. Pre-incorporation subscriptions are irrevocable for 6 months from incorporation d. None of the above
b. The subscriber becomes liable for interest once the stocks become delinquent e. All of the above
c. Consideration for subscription may be in the form of a negotiable instrument

7. Which of the following is incorrect about a treasury share?

a. It may be disposed of at less than its par value d. All of the above
b. Its holder has no right to dividends e. None of the above
c. it is not part of outstanding shares of stock

8. Which of the following is incorrect about incorporators of a corporation?

a. Each is required to have its certificate of shares of stock for at least 1 share d. None of the above
b. A corporation cannot be an incorporator of another corporation e. All of the above
c. As a rule, incorporators of Philippine corporations are not required to be Filipinos

9. Which of the following is correct about post-incorporation legal requirements?

a. A corporation is deemed dissolved if it has no secretary within 2 years from incorp. d. None of the above
b. A corporation which becomes inoperative for a total of 5 years may be suspended e. All of the above
c. A corporation may file its by-laws within 1 month after its incorporation

10. Which of the following is incorrect about a certificate of shares of stock?

a. It is a personal property of its stockholder d. None of the above
b. It is transferable by indorsement and delivery e. All of the above
c. If it is lost, a new certificate may be issued but only after more than 1 year
September 18, 2012
1. Koi, Inc. has 9 members of its board of directors. Its articles of incorporation fix its majority as 6. What is the minimum no. of votes from
directors to elect its treasurer?
a. 6 b. 5 c. 4 d. 3

2. The corp.’s management committee cannot be delegated with these powers, except
a. Enter into a management contract c. Issue stock dividend e. All of them
b. Amend its articles of incorporation d. None of them

3. Which of the following is incorrect about meetings of stockholders and directors?

a. As a rule, both meetings shall be presided by its corporate president d. None of the above
b. A meeting for directors to be held in America requires at least 1 day prior notice e. All of the above
c. If not in by-laws, any stockholder may preside at a certain meeting of stockholders

4. If its secretary enters into a fair and reasonable contract with the stock corporation, it is
a. Valid only if ratified by stockholders rep. 2/3 of the outstanding cap. Stock (OCS) c. Voidable
b. Valid d. Void

5. If 1 of the 9 directors of a corporation died, which of the following is correct?

a. Such vacancy will be filled by vote of stockholders rep. 2/3 of the OCS d. None of them
b. New director will hold office for 1 year and until his successor is elected & qualified e. All of them
c. A voting trustee may be elected for such vacancy

6. Juan, a director of Magnolia, Inc., sells its rival corp.’s product, Selecta, exclusively in his own store and cuts Selecta ice cream during its board
meetings. Which is correct?
a. As a rule, he is guilty of disloyalty under the Corporation Code d. All of them
b. As a rule, he should refund its profits to the corporation e. None of them
c. He is not affected if his acts are notified by stockholders esp. 2/3 of the OCS

7. Who has the power to fix the issue price of no par value shares if it is not granted in the articles of incorporation or by-laws?
a. Board of directors and stockholders rep. 2/3 of the OCS c. Board of directors alone
b. Board of directors and stockholders rep. A majority of the OCS d. Stockholders alone

8. An agricultural corp.’s power to establish a car plan for the benefit of its directors
a. Is an express power b. Is an implied power c. Is an inherent power d. Is ultra vires

9. Who has the power to enter into a management contract with another corp. whose stockholders representing the same interests of both
corporations own more than 1/3 of the total OCS?
a. Board of directors and stockholders rep. 2/3 of the OCS c. Board of directors alone e. None of them
b. Board of directors and stockholders rep. A majority of the OCS d. Stockholders alone

10. In a meeting, 7 of 8 directors voted for the issuance of 900 shares with P10 par value to Jack for P8,000 while one abstained. Under these
circumstances, which is correct?
a. Only the 7 directors who voted are liable for watered stocks but only t the corporation e. No one is liable for watered stocks
b. Only the 8 directors are liable for watered stocks but only to the corporation f. None of them
c. Only the 8 directors are liable for watered stocks to the corporation and its creditors
d. Only the 7 directors who voted are liable to the corp. & its creditors for watered stocks
September 25, 2012
1. Who of the following has no right to inspect corporate books?
a. Stockholder who mortgaged all his shares to a third person c. Voting trustor e. All of them
b. Voting trustee d. None of them

2. A stockholder may exercise appraisal right in these instances, except:

a. Investment of corporate funds in another corporation c. Merger e. All of them
b. Shorten its corporate term d. None of them

3. In the liquidation of a corporation, who should be paid third in the order of priority?
a. Stockholders preferred as to dividends c. All stockholders
b. Inside creditors or loans from stockholders d. None of them

4. Which of the following is incorrect about consolidation?

a. It deals with the combination of 2 corporations into a new single corporation d. None of them
b. No winding up or liquidation is required e. All of them
c. Consent of creditors from the 2 corporations in not required

5. What suit should a stockholder file if the board of directors refuse to let him vote?
a. Representative suit b. Derivative suit c. Individual suit d. Class suit

6. Which of the following is correct about a stockholder’s right to cash dividends?

a. W/o record date, corporation becomes liable at time of its declaration, not its payment d. All of the above
b. Only stockholders with certificates of shares of stock are entitled to cash dividends e. None of the above
c. One who pledged his shares to a 3rd person w/o notice to the corporation is not entitled

7. Which of the following is incorrect about a stockholder’s liabilities?

a. He is liable for unpaid stock subscriptions to the corporation and its creditors d. None of the above
b. He is liable for interest on unpaid stock subscriptions only to the corporation
c. He is liable for unpaid stock subscriptions & interest thereon to the corp. & its creditors

8. Verbal notice of stockholder’s special meeting to remove a director was sent 1 week prior thereto. In that meeting attended by all stockholders,
a director was removed by a vote of stockholders representing a majority of the outstanding capital stock. Under these circumstances, which of
the following is correct?
a. Meeting is improper, proceeding is void c. Meeting is proper, proceeding is valid
b. Meeting is proper, proceeding is void d. Meeting is improper, proceeding is valid

9. Who of the following is not entitled to vote in stockholders’ meeting?

a. Stock subscriber who failed to pay balance of subscription since 2 weeks after maturity d. None of them
b. Court-appointed executor of stockholder without written proxy for the meeting e. All of them
c. Mortgagee of shares who was told in writing by the stockholder to vote in that meeting

10. Which of the following is correct about a stockholder’s appraisal right?

a. His stockholder’s rights are suspended from the time he votes against a proposed act d. None of the above
b. If it is implemented, the fair value of his shares as of the day of such vote must be paid e. All of the above
c. His rights are restored if it is not paid within 30 days from such implementation
Midterm Exam
1. To raise funds for Jack’s immigration to Canada, he, Janet and Crissy verbally agreed to contribute bird houses, pigeon houses and bee houses
to be sold to customers. There is
a. A valid partnership b. No partnership c. A co-ownership d. None of them

2. Which of the following cannot be contributed by stipulation to a universal partnership of all present property created on 1 August 2012?
a. Rental income of car acquired by partner through his friend’s last will on 8/2/12 d. None of the above
b. Motorcycle given to a partner by his godfather on his birthday on 1 August 2012 e. All of the above
c. Use of a truck acquired by partner upon the death of his grandfather on 8/3/12

3. Larry, Curly and Moe agreed to form a partnership business for the purpose of selling Japanese Koi fishes. Among them, there is a partnership
a. With a fixed term b. With a particular undertaking c. At will d. None of them

4. In the absence of stipulation, a partnership engaged in the sale of fruits and dry goods bears the risk of these contributions, except:
a. Things brought and appraised in the inventory c. Goods for sale e. All of them
b. Baskets of mangoes d. None of them

5. Which of the following is incorrect if the term of a partnership already expired?

a. If continued without liquidation and agreement, it becomes a partnership at will d. None of them
b. Such partnership is automatically dissolved e. All of them
c. A partner’s assignee may apply for its automatic dissolution

6. Rico, Jacko and Coco are the only partners of their business. With his consent, a third person’s name is included by them in their partnership’s
name. The third person
a. Is a partner by estoppels c. Has a partner’s liability only
b. Has a partner’s rights only d. Has a partner’s rights and liability

7. Which is a ground for the automatic dissolution of a universal partnership?

a. A partner is in a coma in the hospital c. Marriage between 2 partners e. All of them
b. Civil interdiction of partnership d. None of them

8. Which of the following is a common feature of both a partnership and a co-ownership

a. Representation of members b. Governing law c. Profit sharing d. None of them

9. Without agreement, each partner’s share or right is equal as to the following, except:
a. Contribution to satisfy partnership liabilities c. Possession of specific partnership asset e. All of them
b. Initial contribution of capitalist partners d. None of them

10. Partners Sam, Pam, and Jam decided to share the firm’s credit equally and collect it individually. If Sam collected his share of the credit giving
his own receipt while Pam and Jam are unable to do so because its debtor later absconded, which is correct?
a. Sam is considered a partnership trustee only if he is a managing partner
b. Sam is considered a partnership trustee even if he is not a managing partners
c. Sam is not considered a partnership trustee, whether he is a managing partner or not
d. Sam, Pam and Jam are considered as partnership trustees

11. Which of the following is not subject to stipulation under the law on partnership?
a. Satisfaction of a new partner’s liability for firm debts arising before his admission d. None of them
b. Where the partnership books should be kept e. All of them
c. Rights of partner’s assignee

12. Which of the following is a ground for dissolution of a partnership?

a. Capitalist partner engages in the same competing business w/o the consent of others d. None of them
b. Industrial partner is in a coma in the hospital e. All of them
c. Partnership incurs a loss for 10 consecutive years

13. As a rule, less than all partners have no authority to do the following, except:
a. Sell its franchise to a non-creditor of the firm c. Compromise its firm liability e. All of them
b. Waive its receivable from a partnership debtor d. None of them

14. Bert misrepresented to PNB that he is a partner of Noel and Tess who are not actual partners. Relying on such misrepresentation, PNB gave
them credit. If Noel and Tess consented to such misrepresentation, who shall be liable to PNB for such credit?
a. Bert as a partner c. Bert, Noel and Tess as partners
 b. Bert, Noel and Tess pro rata d. Answer not given

15. If a partner dies, which of the following is incorrect?

a. The partnership is automatically dissolved c. The partnership still exists
b. He is discharged from partnership liability d. None of them

16. Without agreement and fraud on him, which is not a right of a partner’s assignee?
a. Receive the assigning partner’s profit share c. Apply for dissolution of partnership e. All of them
b. Require partnership accounting d. None of them

17. After dissolution, a partnership is in no case bound by a partner’s act, which is not appropriate for winding up of its affairs, in which of the
following instances?
a. Partnership has become insolvent c. Either of the above
b. It is dissolved because it is unlawful for a partner to carry on its business d. Neither of the above

18. Non-managing partner Fred derived profit from leasing a partnership property to a third person without the consent of the other partners. For
this, he is considered
a. A partnership debtor b. A partnership trustee c. Both d. Neither

19. If a firm borrowed money from Juan, a 3rd person whose name is included in the firm name with his consent; Pedro, who is a partner’s assignee;
and Ted, who is a partner by estoppels in a transaction, who should be paid first during its liquidation after dissolution?
a. Juan b. Pedro c. Ted d. The three of them e. Answer not given

20. Mike, one of the managers of the firm appointed with stipulation that all of them must agree for the validity of an act of administration, was
convicted by final judgment of a crime punishable by life imprisonment. Its legal effects are the following, except:
a. His legal wife is entitled to true and full information affecting the firm on her demand d. None of them
b. The other managers may validly execute acts of administration without his consent e. All of them
c. The firm will be automatically dissolved

21. Which firm contribution does not require its agreement to appear in a public instrument?
a. Statues for sale c. Contract for servitude e. All of them
b. Fruits of 10 year old mango plant d. None of them

22. As a rule, he never contributes cash or property to the partnership

a. Limited partner b. Industrial partner c. Partner by estoppel d. None e. All

23. A partner’s liability for partnership debts shall be satisfied out of its assets alone in which of these instances?
a. For a partner’s act binding the firm after dissolution if he is unknown at that time c. Both a and b
b. For its debts arising before his admission as new partner regardless of agreement d. Neither a nor b

24. Which of the following is not an obligation of the partnership to its partners?
a. Debt incurred by partner in good faith for the interest of its business d. None of them
b. Risks in consequence of its management e. All of them
c. Interest for partner’s disbursement for it

25. Which of the following stipulations by partners is not void as to third persons?
a. A capitalist partner is exempt from sharing losses c. The managing partner will designate their profit share
b. A capitalist partner is exempt from partnership liability d. None of them
June 21, 2013
1. For a partnership with a total capital of P3,000 to be legal, which is not required?
a. Its agreement must be in an instrument to be executed in public d. All of them
b. It must be registered with the SEC e. None of them
c. It must have an inventory

2. A contract of partnership is
a. A formal contract c. Subject to the statute of frauds e. All of them
b. A real contract d. None of them

3. Ben, Vic and Ric verbally agreed to contribute paintings, statues, and cash, respectively, to their partnership that will engage in the art store
business. If there is no inventory of their contributions, their contract of partnership is
a. Valid but unenforceable c. Void
b. Valid & enforceable d. Answer not given

4. Which of the following statements about a partner is correct?

a. Persons who are not partners as to each other cannot be partners as to 3 rd persons d. None of them
b. Persons who are partners as to each other may not be partners as to 3rd persons e. All of them
c. Persons who are not partners as to each other may be partners as to 3rd persons

5. Lito, Earl and Ben are owners of a building. If Lito receives 20% share of the gross income derived from the lease of the building to third
persons
a. He is a partner in the lease business c. He is not presumed as such partner
b. He is merely presumed as such partner d. Answer not given

6. In verbally forming an agricultural business with Maria in order to finance her college education, Juan and Pedro agreed to contribute fertilizers
in sacks and shares of stock from a real estate company respectively. Among the three of them, there is
a. A legal partnership b. A void partnership c. Answer not given

7. The partnership of Jack, Jill and Hill borrowed money from PNB. If the partnership fails to pay its monthly obligation to PNB, from whom may it
collect such obligation?
a. Partnership only b. Partnership and the partners c. Partners only

8. As a consequence of the characteristics of a partnership, which is incorrect?

a. Those convicted of the crimes of estafa or swindling cannot join a partnership d. None of them
b. A partner is allowed to leave the partnership even before the expiration of its term e. All of them
c. Only natural persons can join a partnership

9. For a partnership to exist, which is required?

a. Actual contribution by partners c. A business to engage in e. All of them
b. Agreement to divide profits d. None of them

10. What is the legal consequence if a partnership engaged in the pharmacy business also sells prohibited drugs to its customers?
a. Only its profits from prohibited drugs will be immediately confiscated c. None of its profits will be confiscated
b. All its profits from its pharmacy business will be immediately confiscated d. Answer not given
June 28, 2013
1. If a partner assigns a portion of his profit share to a third person, Ted, without the consent of the other partners, which of these statements is
correct regarding his rights?
a. Ted is entitled only to receive such profit share d. None of them
b. Ted is not entitled to any right of a partner e. All of them
c. Ted may be entitled to other partner’s rights aside from his profit share

2. Which of the following has a legal personality?

a. Joint venture b. Co-ownership c. Both of them d. Neither of them

3. Which of the following constitutes a mandatory contribution of the partners to a universal partnership they formed on 5 May 2013?
a. Truck purchased by a partner on 4 May 2013 and used by him until now d. None of the above
b. House boarders’ rent received today by a partner who rented it since 1 May 2013 e. All of the above
c. P2,500 cash received by a partner on 31 May 2013 as salary for teaching part time

4. After they designated their profit shares in March 2013, partner Jack received his profit share in May 2013 while the other partner, Jane, has not
yet received her profit share. Who is allowed to question his or her profit share today?
a. Any of them b. Jane only c. Jack only d. Neither of them

5. Which of the following about an industrial partner’s share in losses is correct?

a. He is always excluded from sharing losses d. Answer not given
b. He is excluded from sharing losses only if there is a stipulation to that effect
c. Stipulation excluding him from sharing losses is void

6. Which of these about a partner’s right in specific partnership property is incorrect?

a. A partnership creditor may attach it d. None of them
b. All the partners may assign them e. All of them
c. A partner’s wife may charge it for legal support with the consent of all partners

7. As a rule, he cannot be an industrial partner

a. Dormant partner b. Limited partner c. Ostensible partner d. General partner e. None

8. Who may join a universal partnership?

a. Married couple c. Deaf mutes who do not know how to write e. All of them
b. Boyfriend and his girlfriend living together d. None of them

9. Partners Ric, Dic and Nic entrusted the designation of their profit shares to a third person, Vic. If, later, Dic is unsatisfied with the designation of
his profit share, which of the following may be his valid reason to impugn it?
a. Ric influenced Vic b. It is unfair c. Vic is Nic’s boyfriend d. None e. All of them

10. Which of the following cannot be contributed by stipulation to a universal partnership of all present property created on 1 May 2013?
a. Land purchased by a partner on 1 June 2013 d. None of the above
b. His neighbor’s house given to a partner in her Last Will on 5 May 2013 e. All of the above
c. Agricultural lot inherited by a partner from his parents who died on 1 May 2013
July 5, 2013
1. Without agreement as to its management Jack, Jill and Hill formed their partnership which is engaged in the grocery business. What is required
to dismiss its cashier?
a. The consent of any of them c. The consent of all of them e. Answer not given
b. The consent of at least 2 of them d. The consent of the court

2. A third person, Jun, has separate demandable debts to the partnership for P100,000 and its managing partner, Jane, for P5,000 with interest. If
Jun paid P4,000 to Jane who issued the partnership’s receipt for it, to which credit or credits should it be applied?
a. The partnership’s credit fully c. Jane’s credit fully
b. The two credits proportionately d. Jane’s credit fully only if chosen by Jun

3. In their partnership engaged in the restaurant business, Lolo, Piolo and Jolo contributed cash, furniture and services, respectively. If Piolo
invested cash in another restaurant business and the other partners know about it but did not oppose it, which is correct?
a. Piolo is required to bring his profits from the other business to the partnership
b. Lolo & Jolo may either exclude him or avail of such profits with damages in each
c. Only Lolo may either exclude him or avail of such profits with damages in each
d. Lolo & Jolo have no right whatsoever against Piolo for his other business

4. If in the same firm in No. 3 above, there is an imminent loss of its business and Lolo failed to make additional contributions to save it because
he is insolvent while Piolo made additional contributions and Jolo did not bother to do so, which is correct?
a. Lolo & Jolo are obliged to sell their interests to Piolo c. Only Jolo is obliged to sell his interest to Piolo
b. Only Lolo is obliged to sell his interest to Piolo d. No one is obliged to sell his interest to Piolo

5. The right to a formal account as to its affairs is available to the only industrial partner of a partnership in these instances, except:
a. Another partner derived profits without his consent from the use of its car d. All of the above
b. He is excluded by the other partners for engaging in a different business e. None of the above
c. He is not allowed by the other partners to possess specific partnership property

6. If a partner can no longer talk after losing his vocal chords in an accident, to whom should other partners render true & full information about all
things affecting the firm?
a. To such partner only c. To such partner but with condition
b. To such partner or his legal representative d. To such partner’s legal representative

7. The day after the partners verbally agreed to form their partnership, they signed its Articles of Partnership for its restaurant business and
appointed Roxan as its managing partner. What is required to oppose her desire to change its accounting system?
a. Just or lawful cause b. Consent of controlling interest c. A & b d. She is in bad faith

8. The partners agreed to divide the firm’s receivable from Yu equally and collect it separately. After partner Lee collected his share, Yu refused to
pay the shares of its managing partner and the other partners. Consequently, which is correct?
a. Lee is required to give his collection to the firm if he issued his own receipt for it
b. Lee is required to give his collection the firm if he issued its own receipt for it
c. Lee us not required to do so as he is not its managing partner
d. Answer not given

9. The firm’s managing partner received payment from one of its creditors and kept it in his pocket. Later, he used it to pay for his own debt. To the
firm, he is liable to pay
a. Such amount, interest and damages from the time he kept it c. Such amount plus interest only
b. Such amount, interest and damages from the time he used it d. Answer not given

10. Without agreement, how much should the capitalist partners contribute to firm capital
a. Any share they like b. Equal shares c. Proportionate shares d. Answer not given
July 12, 2013
1. For a non-partner, Jill, to be considered a partner by estoppel by a third person, Jack, which of the following is not required?
a. There must be an existing partnership of whom Jill is misrepresented as a partner d. None of them
b. Such misrepresentation must be made or communicated to Jack e. All of them
c. Jack must have given credit to that existing partnership

2. In their partnership, Bill and Ted are capitalist partners while Kille is an industrial partner. All of them agreed that Bill is exempt from liability to
creditors. If after its assets are exhausted, the firm still has a liability to a creditor, from whom may it collect?
a. All partners b. Ted and Kille only c. Ted only d. None of them

3. Which of these statements about a partnership creditor & a partner’s creditor is incorrect?
a. As to a partner’s property, the latter is preferred over the former d. All of the above
b. The latter may ask the attachment and public sale of a partner’s share in the firm assets e. None of the above
c. The latter may charge a partner’s interest in the partnership with payment of his debt

4. Which of these is correct regarding the obligations of the partnership to a partner?

a. It bears the risk of contribution brought and appraised in its inventory d. None of the above
b. It is liable to a partner for disbursements he made for the firm plus interest e. All of the above
c. It bears the risk of a specific fungible thing whose usufruct is contributed

5. So that the firm will not be able to deliver his order in time and be liable for damages, a customer notified only its silent partner when to make
such delivery. Such notice is
a. Notice to the firm c. Not notice to the firm for other reason
b. Not notice to the firm because there is fraud d. Answer not given

6. Which of the following is not an act of ownership by a partner?

a. Submit its claim to arbitration c. Agree in a case that the firm owes a creditor e. All of them
b. Renounce its liability d. None of them

7. While partner Ben is in the hospital and partner Jean is abroad, its managing partner Lane failed to pay its taxes on time to the BIR, which later
imposed a fine on the firm. Who shall be liable for such fine?
a. The firm only b. The firm and all the partners c. Lane only d. All the partners only

8. To dispose of the partnership’s goodwill, three out of its four partners

a. May do so if authorized by other partners c. May not do so w/o the consent of others e. None of them
b. May do so if other partners abandoned its business d. All of them

9. While acting in the ordinary course of the firm business, its manager partner caused injury to its capitalist partner by his wrongful act. Who shall
be liable for such injury?
a. Managing partner only c. All partners solidarily
b. All partners & the firm solidarily d. Answers not given

10. After Jay was admitted as a partner in March 2013 by partners Kay and Ray, a creditor of their general partnership exhausted all its assets to
collect its debt which was incurred in February 2013. If thereafter, there is still a balance of its debt, who shall be liable for it?
a. All the partners b. Kay & Ray only c. The partnership only d. Answer not given
July 18, 2013
1. If a partner has become insolvent, which of the following statements is incorrect?
a. Against his personal assets, his debt to the firm is preferred over his debt to partners by way of contribution d. None of them
b. The firm will never be bound by his act after its dissolution e. All of them
c. The firm will not be terminated yet

2. If a universal partnership with no term incurred a net loss for 5 consecutive years
a. If cannot be dissolved yet c. A partner’s assignee may apply for its dissolution e. None of them
b. Any partner may apply for its dissolution d. All of them

3. If a partner dies and the firm business is continued by the remaining partners without settlement of accounts, the rights of his legal
representative are the following, except:
a. To have the value of his interest ascertained at dissolution d. None of the above
b. To receive as an ordinary creditor an amount equal to such value with interest e. All of the above
c. To receive the profits attributable to the use of his right in the dissolved firm

4. When a partner withdraws from the partnership before the expiration of its agreed term and the other partners continued its business using the
same firm name, which is incorrect?
a. They may pay the withdrawing partner less than the value of his interest d. None of them
b. They are required to indemnify the withdrawing partner against all future debts e. All of them
c. They can use its name during such term

5. Which of these does not dissolve a firm engaged in farming by decree of court?
a. A partner has unintentionally violated the partnership agreement many times d. None of the above
b. A capitalist partner has been under lucid interval after being declared insane last month e. All of the above
c. Industrial partner immigrates to Canada

6. Upon dissolution, the existing liability of a partner

a. Is discharged c. May be discharged by agreement
b. Will never be discharged d. May be discharged by other means

7. The partnership is dissolved without decree of court in these instances, except:

a. Partner is expelled by the other partners because their competitor is his girlfriend d. None of them
b. A partner’s only car which he promised to contribute today was burned yesterday e. All of them
c. A partner has no more cash to pay his debts

8. If after it is dissolved due to the death of a partner, the partnership still has liabilities to its creditor, Jack, after all its assets are exhausted, which
of the following is correct?
a. Jack has the right to run after the personal properties of all partners d. None of them
b. Jack has the right to run after the personal properties of all living partners only
c. Jack has no right to run after the personal properties of any partner

9. In the order of payment of firm liabilities during its liquidation, the capital of partners
a. Ranks second b. Ranks third c. Ranks fourth d. None of them

10. If a partner in a universal firm marries another partner today, which is incorrect?
a. The firm is dissolved without decree of court d. Answer not given
b. A partner’s act of buying from its suppliers tomorrow can never bind the firm
c. A partner’s act of selling to its customers tomorrow binds the firm
August 2, 2013
1. As a rule, a limited partner is liable as a general partner in these instances, except:
a. After knowing his wrong belief that he is a limited partner, he renounces his profit share d. None of them
b. When he takes part in the selection of the business manager e. All of them
c. When he deals with a customer

2. Without their only limited partner’s consent or ratification, all general partners may
a. Admit a limited partner c. Sell the goodwill of the business e. All of them
b. Admit a general partner d. None of them

3. The liability of a substituted limited partner (SLP) compared to that of the limited partner he substituted is
a. Always the same, except only those he did not know at the time he became an SLP d. Not always the same
b. Always the same, except only those that could not be ascertained from the Certificate e. Answer not given
c. Always the same, except only those mentioned in both a and b above

4. Which of the following is correct about a limited and general partner at the same time in the same limited partnership?
a. He becomes one the moment all the partners agree d. None of them
b. He is entitled to all the rights of a limited partner and a general partner e. All of them
c. After exhausting its assets, its creditors may run after his personal properties

5. In the liquidation of a limited partnership, what is the order of payment for a limited partner’s other compensation by way of income?
a. First b. Second c. Third d. Fourth

6. The Certificate of Limited Partnership is only amended in these instances, except:

a. One of the limited partners dies c. One of the general partners dies e. All of them
b. Withdrawal of a limited partner’s contribution d. None of them

7. If one suffers loss by relying on a false statement in the Certificate which was known by a limited partner at the time he signed it and he is later
substituted by his assignee, who is now liable for such loss as a rule?
a. Both the limited partner and the substituted limited partner c. Only the limited partner
b. Only the substituted limited partner d. None of them

8. If a limited partner’s surname, which is not the same as the surname of any other partner, newly appears in the firm name after his admission,
which is correct?
a. He is liable as a general partner but none of his rights d. He has all the general partner’s rights & liabilities
b. He is liable as a general partner and has some of his rights e. Answer not given
c. He has some of a general partner’s rights but may not be liable like him

9. Which of the following statements about a limited partner is incorrect?

a. He may demand and receive cash in return for the land he contributed d. None of the above
b. He may demand the return of his contribution before dissolution e. All of the above
c. He may dissolve the partnership on grounds not available to general partners

10. Which is incorrect about a mere limited partner and his substituted limited partner?
a. The Certificate is required to be amended for the former to be additionally admitted to the partnership and for the latter to be a substituted
limited partner
b. Even if only the former is empowered by the Certificate to give his assignee the right to become a substituted limited partner, the latter may
also give such right
c. If the latter becomes one due to the former’s death, he is not liable for any of his debts
d. None of the above
e. All of the above
Midterm 08.07.2013
1. In their rose-producing business, the partners contributed rose plants in plastic containers, P5,000 cash, and fertilizers actually used in those
containers. If it is formed verbally, the firm is
a. Valid but unenforceable b. Valid & enforceable c. Void d. Answer not given

2. A partnership and a joint venture may have the following common characteristics, except:
a. They may involve a temporary business c. They are governed by the law on partnership e. None of them
b. Their members share in the profits d. All of them

3. Its creditor, Jean, can no longer run after the personal properties of its general partner, Jack, to satisfy her claim arising from a transaction with
the partnership in these instances, except when
a. Partnership incurred such claim before it admitted Jack as a partner d. None of them
b. Jean, who is unaware of its dissolution & does not know Jack, transacted it thereafter e. All of them
c. Jean entered into such transaction with an insolvent partner after its dissolution

4. If a partner partially satisfied her debt to her personal debtor, Ric, by assigning her interest in the partnership to him, Ric is entitled to the
following, except
a. To be paid fourth in the liquidation of the dissolved partnership d. None of them
b. Ask the attachment of her share in the partnership assets e. All of them
c. Require an account from the date of the last account agreed by partners

5. Larry, Curly and Moe are partners. One day, Beth, who has demandable debts to their firm and Moe, paid him P3,000 for which he issued his
own receipt. Which of these is incorrect?
a. Such payment should be applied proportionately to the credits of the firm and Moe d. None of the above
b. Moe may alter an immovable property of the firm without the consent of Larry & Curly e. All of the above
c. Moe is a partnership trustee

6. If the partners agreed to form a universal partnership on 1 June 2013, which of the following is not a mandatory contribution to such
partnership?
a. Right to enjoy a partner’s only car he has borrowed from a friend since January 2013 d. None
b. A capitalist partner’s July 2013 profit share from another partnership as its industrial partner e. All of them
c. Proceeds of sale of partner’s own house he resided in 2012 but sold yesterday

7. If partner Fred withdraws from the partnership before the expiration of its term and its business is continued by the other partners using its same
name, which is correct?
a. The other partners may pay the value of Fred’s interest therein in cash or property d. None of them
b. Aside from such value of his interest, Fred is entitled to compensation e. All of them
c. The value of Fred’s interest includes goodwill

8. Which of these statements about a partner’s right in specific partnership property is incorrect?
a. A partner may subject such right to attachment c. It can never be subject to legal support e. All of them
b. All the partners may assign their rights therein d. None of them

9. Who may apply for the dissolution of the partnership by decree of court?
a. A partner’s personal creditor c. A partner’s legal representative e. All of them
b. A third person who buys a partner’s interest on credit d. None of them

10. In using a specific partnership property, partner Bert earned income without the knowledge of his other partners. Under these circumstances,
which is incorrect?
a. The other partners have the right to a formal account of the partnership affairs d. None of them
b. Bert is liable to the partnership for such income, interest and damages e. All of them
c. Bert is considered a partnership trustee

11. If a partner dies and the partnership business is continued by the remaining partners without liquidation, which of the following statements is
correct?
a. His legal representative will receive as an ordinary creditor the value of his interest d. None of them
b. Before such receipt, partnership creditors must receive their claims first e. All of them
c. The remaining partners may not pay the value of his interest

12. Po, Ho and So agreed to exclude So from sharing profits. If their firm still owes its creditor, Wo, P30,000 after its assets are exhausted and Ho
dies, which of these is correct?
a. After giving the required payment to Wo, Po is entitled to reimbursement from So d. None of them
 b. Po is required to pay Wo more than P10,000 e. All of them
c. Wo cannot recover from all the partners’ personal properties

13. If the partnership suffers damages through the fault of its industrial partner, which of the following is correct?
a. He may compensate it with his profit share only with the consent of all partners d. None
b. If it earns unusual profits in the same activities, his liability may be lessened by the court e. All
c. His liability may be lessened only if it earns such profits through his extraordinary efforts

14. Which of the following acts of a partner does not constitute an act of ownership?
a. Enter into a compromise about its loss c. Assign its generic things for creditors e. All of them
b. Submit its claim to arbitration d. None of them

15. If in their partnership name, the surname of a non-partner, Vicky, is included with her consent, which of the following is correct?
a. Vicky is always liable as a partner to third persons c. Her liability to third persons is prorata
b. Vicky may not be liable as a partner to third persons d. Answer not given

16. Which of these requires that a firm contract should appear in a public instrument to be valid?
a. Right to cross a piece of land is contributed by a partner to the firm d. None of them
b. The partners agreed to purchase land for their beach resort business e. All of them
c. The partners signed an inventory of their contributions

17. Which of the following stipulations by partners is void?

a. Partner’s failure to make annual additional contributions is a ground for its dissolution
b. A partner is not solidarily liable if any of the other partners causes injury to 3rd persons due to his wrongful act while acting in the ordinary
course of the firm business
c. The industrial partner who refuses to give additional contribution to save its business in case of its imminent loss is obliged to sell his
interest to the other persons
d. None of them
e. All of them

18. An unknown partner who does not participate in the management of the partnership
a. Ostensible partner b. Silent partner c. Nominal partner d. Dormant partner

19. Which of the following has a legal personality to transact business?

a. Co-ownership b. Sole proprietorship c. Joint venture d. All of them e. None of them

20. Their liability to pay the value of the interest of a partner whose violation of the partnership agreement caused its dissolution may be secured by
the remaining partners continuing it by
a. Paying it in cash b. Paying it in property c. Either a or b d. Neither a nor b

21. It is that point of time when the partners stop to carry on the firm business together
a. Dissolution b. Winding up c. Termination d. None of them

22. In which of these instances, is the liability of a partner always prorata?

a. For the firm’s contractual obligations after its assets are exhausted d. None of them
b. For transactions after dissolution with its old creditor who is unaware thereof e. All of them
c. To its creditor in case there is a partner by estoppel

23. A partner is also liable for interest and damages of a sum of money
a. Owned by the firm is used by him for personal purpose c. Either of them
b. He promised to contribute is not given on time d. Neither of them
August 20, 2013
1. To avoid its legal obligations to its workers who sued it for paying wages below the minimum wage, Fruit Corporation became insolvent after
transferring its assets to another corporation, Bread Incorporated, which it dominates. Under these circumstances,
a. The workers can claim only from their employer, Fruit Corporation
b. The corporate character of Bread Incorporated may be abrogated
c. The corporate character of Bread Incorporated cannot be abrogated
d. Answer not given

2. If a corporation commits a crime punishable by imprisonment, which is correct?

a. It cannot be sued for committing that crime d. Answer not given
b. Only its officers responsible for it may be sued for that crime
c. The corporation and its responsible officers may be sued for that crime

3. It may have legal personality without the SEC’s certificate of incorporation

a. Religious corporation b. Quasi-corporation c. Foreign corporation d. None e. None of them

4. Which of these statements about a corporation in general is correct?

a. The death of all its members and officers will not dissolve it d. None of them
b. It enjoys certain constitutional rights just like a natural person e. All of them
c. It is created either by law or by operation of law

5. Which of the following is a public corporation?

a. GSIS b. CEPALCO c. CDO water district d. All of them e. None of them

6. Which of the following about a close corporation is incorrect?

a. Its issued stocks, except treasury, must be held of record by not more than 20 persons d. None of them
b. A transportation company cannot be a close corporation e. All of them
c. It cannot make any public offering of its shares

7. Which of the following statements about a stock corporation is incorrect?

a. Its stockholder can never withdraw his investment
b. Its stockholder may make his transferee of shares a stockholder without its consent
c. The law requires the word “Corporation” or “Incorporated” or its abbreviation to be added to its corporate name
d. None of them
e. All of them

8. Which of the following statements about a de facto corporation is incorrect?

a. It must have a certificate of incorporation issued by the SEC d. None of them
b. It has a legal right to corporate existence as to its private creditors and customers e. All of them
c. Its existence is questioned only by one person

9. Which of the following is incorrect about special corporations?

a. A non-stock educational corporation’s board of trustees may have 12 members
b. As a rule, a corporation sole cannot sell its real property w/o the consent of the court
c. The successor of the deceased chief priest becomes a corporation sole upon filing with the SEC of a copy of appointment or commission
d. None of them
e. All of them

10. Which of the following is correct regarding a foreign corporation in the Phil.?
a. Rules & regulations applicable to domestic corp. Govern the duties of its officers d. All of the above
b. For a domestic corp. to be its resident agent, it must have sound financial standing e. None of the above
c. If it has no license to do business in the Phil., it cannot sue here but may be sued
August 27, 2013
1. Which of these is a legal requirement to incorporate a private stock corporation?
a. 25% its pre-incorporation subscription must be paid in cash c. Promotion e. None of them
b. Its by-laws must be filed before incorporation d. All of them

2. A non-voting share has a right to vote on these matters, except:

a. Investment in another corporation c. Lease of substantially all its assets e. All of them
b. Enter into a management contract with another corp. d. None of them

3. If Moe’s 100 delinquent shares are sold by a corporation at a public auction to the highest bidder, Ted, who offers to pay the required amount
for 80 shares, which is correct?
a. Only 80 shares will be issued to Ted and 20 will become treasury shares c. 100 shares will be issued to Ted
b. Only 80 shares will be issued to Ted while 20 shares will be issued to Moe d. None of them

4. Which of the following corporations is permitted to issue no-par value shares?

a. Insurance company b. Electric cooperative c. Oil company d. None e. All of them

5. Which of these complies with the pre-incorporation subscription requirements?

a. P70,000 authorized capital stock, P30,000 subscribed, P7,000 paid d. None
b. P70,000 authorized capital stock, P18,500 subscribed, P4,800 paid e. All of them
c. P70,000 authorized capital stock, P17,000 subscribed, fully paid

6. Which of the following statements about a corporation is correct?

a. To be its incorporator, one is required to own at least one share of its stock d. None of the above
b. It may be dissolved if it does not elect its president within 2 years from incorporation e. All of the above
c. a corporate name is allowed to be the same as that of an existing partnership name

7. Which of the following is usually a preferred stock?

a. A redeemable share c. Issued only with a stated par value e. All of them
b. A non-voting share d. None of them

8. If Jack subscribed shares of stock in June 2013 to be paid on 30 December 2013 as specified in his subscription contract, which of the following
is correct?
a. His subscription liability may be due before 30 December 2013 d. None of them
b. He may be liable for interest thereon before 30 December 2013 e. All of them
c. His shares may become delinquent before 30 December 2013

9. Which of the following about shares is incorrect?

a. Founder’s shares must be classified as such in the articles of incorporation d. None of the above
b. A share of stock may be disposed of at less than its par value e/ all of the above
c. The consideration for no-par value shares cannot be distributed as dividends

10. Which of the following is not a ground for suspension or revocation of the certificate of registration of a corporation?
a. Failure to file by-laws within the required period d. None of them
b. Corporation becomes continuously inoperative for 5 years e. All of them
c. Failure to commence its operations within 2 years from incorporation
September 2, 2013
1. There are 15 trustees of a non-stock corporation as fixed in its articles of incorporation. If 2 just died, what is the number required for them to
validly lay down its policies?
a. 8 b. 7 c. 5 d. 4 e. Answer not given

2. Which of the following about corporate officers of a stock corporation is incorrect?

a. Its vice-president may not be its stockholder c. Its accountant may also be its auditor e. All of them
b. Its secretary must be a Filipino d. None of them

3. Fruit Corp. And Veggy, Inc. have interlocking directors whose interest in the latter represents 20% of its outstanding capital stock. As a rule, a
contract between them is
a. Valid b. Valid if fair and reasonable c. Voidable d. Voidable if there is fraud

4. Jack is a director of a corporation that manufactures Selecta brand ice cream. If Jack always eats its competitor’s ice cream, Magnolia, during
board meetings and sells it exclusively in his own store, which of the following is incorrect?
a. He is guilty of disloyalty under the Corporation Code d. None of them
b. He is required to refund all his profits arising from its sales to his corporation e. All of them
c. He is not penalized for his acts if ratified by a vote of stockholders rep. 2/3 of OCS

5. To elect its corporate secretary, what is the required minimum number of votes from the 14 directors of a stock corporation if its articles of
incorporation fix its quorum at 10 and 2 of them just died?
a. 3 b. 4 c. 5 d. Answer not given

6. Which of these statements about a corporation’s executive committee is correct?

a. It acts by majority vote of its members in a quorum c. Its members must be its stockholders e. All of them
b. Its members are elected by the stockholders d. None of them

7. If out of 10 directors, 8 voted for the issuance of 1,000 shares at P100 par value per shares to Tess who gave as full payment thereof her lot
with a fair value of P95,000 while the other 2 talked to its secretary about their opposition against it, which is correct?
a. The 8 voting directors are solidarily liable to the corporation for P5,000 e. Answer not given
b. All directors are solidarily liable to the corporation for P5,000
c. Those directors are solidarily liable with Tess to the cprp. & its creditors for P5,000
d. All directors are solidarily liable with Tess to the corp. & its creditors for P5,000

8. If 2 out of 15 directors of a stock corporation die, who will fill up such vacancies?
a. Vote of stockholders rep. 2/3 of the OCS c. Vote of the majority of 15 directors
b. Vote of the majority of the 13 directors d. Answer not given

9. Which of the following about stockholders and directors meetings is incorrect?

a. Stockholders and directors may attend their respective meetings personally or by proxy d. None of the above
b. The former’s meeting is held at a certain place, the latter’s may be held anywhere e. All of the above
c. Notice for the former’s special meeting is 1 week before; the latter’s is 1 day before

10. For the contract entered into by a stock corporation and its treasurer, who attended the meeting for its approval, to be valid, which of the
following is required?
a. It is ratified by its stockholders rep. 2/3 of its OCS c. It is fair and reasonable e. All of them
b. Full disclosure of adverse interest d. None of them
September 10, 2013
1. Which of the following is not an express power of a food & beverage corporation?
a. To make reasonable donations to support the anti-pork barrel rally in EDSA d. None of the above
b. To establish vacation plans for the exclusive benefit of its directors e. All of the above
c. To give reasonable financial aid to a palaeontologist who is digging for dinosaur fossils

2. If a corporation wants to manage the gasoline station of another corporation, who is required to approve the contract between them for that
purpose?
a. Board of directors and stockholders rep. 2/3 of the OCS c. Board of directors alone
b. Board of directors and stockholders rep. a majority of the OCS d. None of them

3. A cement corporation’s act of operating an electric plant to supply electricity to its cement factory and to its employees living within its
compound is
a. Its express power b. Its implied power c. Its incidental power d. Ultra vires

4. Who is required to exercise the power of a corporation to mortgage its property?

a. Board of directors and stockholders rep. 2/3 of the OCS c. Board of directors alone
b. Board of directors and stockholders rep. a majority of the OCS d. None of them

5. Stockholders representing a majority of the outstanding capital stock are required to exercise these powers, except:
a. Fix issue price of no-par value shares if not granted to the board d. None of them
b. Grant compensation other than per diems to directors e. All of them
c. Fill in a vacancy in the board caused by expiration of term

6. Who may exercise the power to invest corporate funds in another business?
a. Board of directors and stockholder rep. 2/3 of the OCS c. Executive committee e. All
b. Board of directors and stockholders rep. a majority of the OCS d. None

7. Stockholders representing 2/3 of the outstanding capital stock are required to approve the decision of the board of directors in these instances,
except:
a. Create bonded indebtedness c. Issue stock dividends e. All of them
b. Repeal its by-laws d. None of them

8. To acquire its own shares, the corporation is required to have the following, except:
a. Unrestricted retained earnings c. Approval by its stockholders rep. certain shares e. All of them
b. Vote of the majority of its board in a quorum d. None of them

9. Who has the power to abandon the approved mortgaged of all corporate properties?
a. Board of directors and stockholder rep. 2/3 of the OCS c. Board of directors e. All
b. Board of directors and stockholders rep. a majority of the OCS d. None

10. To extend its term, a non-stock corporation is required to have these, except:
a. Vote of the majority of its board in a quorum d. None of them
b. Ratification by 2/3 of its members e. All of them
c. Dissenting members are given the appraisal right
September 16, 2013
1. Which of the following statements about a voting trust agreement is incorrect?
a. The voting trustee is qualified to be a director of the corporation d. None
b. Both voting transferor and trustee have the right to inspect corporate books e. All
c. The voting trustee may vote by proxy in the stockholder’s meeting

2. A stockholder may exercise his appraisal right in any of these instances, except:
a. Deny the pre-emptive right granted to stockholders in the articles of incorporation d. None of them
b. Extension of corporate term e. All of them
c. Investment of its corporate funds

3. For its annual stockholders’ meeting, the corporate secretary sent a written notice to all stockholders 1 week prior thereto. If in that meeting,
90% of the stockholders were present while the rest were represented by their proxies and stockholders representing a majority of its OCS
removed 2 members of the board, which is correct?
a. The meeting is improper but its proceedings are valid d. The meeting is proper but its proceedings are not valid
b. Both the meeting and its proceedings are not valid e. Answer not given
c. Both the meeting and its proceedings are valid

4. Which of the following statements about a stockholder’s liability is incorrect?

a. For his unpaid stock subscriptions, he is liable to the corporation and its creditors c. Both a and b
b. For interest on his unpaid stock subscriptions, he is liable only to the corporation d. Neither a nor b

5. When are the stockholder’s rights of one exercising appraisal right suspended?
a. from the time he makes any demand for the payment of the fair value of his shares d. Answer not given
b. From the time he makes such demand within 30 days from taking of vote
c. After the lapse of 30 days from the time he makes such demand

6. If the board refused in bad faith to allow a stockholder to inspect its corporate books to check if it committed fraud despite his demands, what
may he file against its members
a. Individual suit b. Derivative suit c. Representative suit d. None of them

7. Which of these statements is correct regarding a stockholder’s pre-emptive right?

a. It does not allow him to subscribe to issues of shares of a class different from his shares
b. It cannot be denied if it is not denied by its SEC-approved articles of incorporation
c. It cannot extend to shares issued in good faith with the approval of stockholders representing a majority of its OCS in payment of previous
debt
d. None of the above
e. All of the above

8. How much should the corporation, which implemented the action opposed by a stockholder in the exercise of his appraisal right, pay him for his
shares?
a. Their fair value as of his valid demand for their payment c. Their fair value as of the day such action is implemented
b. Their fair value as of the taking of the vote for an action he opposed d. None of them

9. Which of the following is incorrect about a stockholder’s right to dividends?

a. He is not entitled to dividends not declared by the board of directors
b. He is not entitled to declare stock dividends that are subsequently rescinded by the board before their actual issuance
c. He is not entitled to stock dividends if his shares are already delinquent
d. None of the above
e. All of the above

10. When is a stockholder who exercised appraisal right entitled to cash dividends?
a. Anytime or before and after such exercise
b. If he is not paid of the fair value of his shares within 30 days from his demand thereof
c. If he is not paid of the fair value of his shares within 30 days from their appraisal
d. None of them
September 23, 2013
1. If by the required votes of their respective boards and stockholders, A Corporation and B, Inc. agreed to enter into a contract of merger, which
of the following is incorrect?
a. Only one of them will automatically acquire the rights and liabilities of the other d. None of them
b. There is no need for winding up or liquidation of the assets of both corporations e. All of them
c. Only one of these corporations will be dissolved

2. In 2007, Jack filed a case for damages against Pepsi, Inc. which was represented in that case by its lawyer. In 2009, Pepsi, Inc. undertook a
voluntary dissolution. The court issued a final and executor decision in 2012 awarding Jack P1 million. If Jack will claim such award today by
asking the court sheriff to implement it, which is correct?
a. It can no longer be implemented because Pepsi, Inc. no longer exist d. All of them
b. It can no longer be implemented because Pepsi, Inc. has no trustee e. None of them
c. It can no longer be implemented because it is late

3. In the order of liquidation of a dissolved corporation with all kinds of shares, its holders of common shares should be paid for such shares
a. Second b. Third c. Fourth d. Fifth

4. In the consolidation of two corporations, which of these is incorrect?

a. The consent of all the creditors of both corporations is not required d. None of them
b. Both corporations will be dissolved e. All of them
c. Both corporations will continue to exist 3 years after dissolution

5. In the voluntary dissolution of a corporation, which of these distinctions between one where no creditors are affected and one where its creditors
are affected is incorrect?
a. Unlike in the former, there is a newspaper publication requirement in the latter d. None of them
b. Unlike in the latter, there is no hearing requirement in the former e. All of them
c. Unlike in the former, there is a petition filed with the SEC in the latter

6. Which of these about the merger of two non-stock school corporations is correct?
a. Its articles must be approved by the required votes of their trustees and their members d. None of them
b. Its plan must be signed by their presidents and certified by their secretaries e. All of them
c. It must be approved by two government agencies

7. Which of these statements about a corporation’s dissolution and liquidation is incorrect?

a. Its life is terminated only after a 3 year period from its dissolution d. None of the above
b. Its trustees may complete the liquidation of its assets in their hands beyond such period e. All of the above
c. The termination of its life causes the extinction or diminution of its rights and liabilities

8. If the articles of merger were executed by two corporations on 9/01/13 and both corporations became liable for damages to third persons on
9/2/13, which is correct?
a. As of 9/01/13, only one of them is liable for all the liabilities of both corporations
b. As of 9/02/13, only one of them is liable for all the liabilities of both corporations
c. As of 9/01/13, one of these corporations already cease to exist
d. None of them

9. If after its dissolution in 2011, a corporation conveyed today all its assets to its trustees for the benefit of its stockholders and creditors, which is
incorrect?
a. Its stockholders and creditors are now the beneficial owners of its assets d. None of them
b. Its trustees are now the legal owners of its assets e. All of them
c. All interest the corporation had in its assets are now terminated

10. If in the liquidation of X Corporation, its assets in Cagayan de Oro City are distributable to its creditor, Pedro who is from Butuan City but is
unknown, and to its stockholder Juan who is from Iligan City but cannot be found, which is correct?
a. All their shares of its assets will be given to Cagayan de Oro City c. Their shares will be given to their respective legal heirs
b. Their shares will be given to Butuan City for Pedro’s and Iligan City for Juan’s d. None of the above
Semifinal exam 10.1.2013
1. Which is incorrect about a stock corporation’s by-laws submitted before incorporation?
a. It must be approved by all its stockholders who signed its articles of incorporation d. None of the above
b. It may be amended after incorporation by the board & stockholders rep. 2/3 of its OCS e. All of the above
c. Its stockholders rep. 2/3 of the OCS may delegate to the board the power to amend it

2. Which is a characteristic of a limited partnership with movables as contributions?

a. Formal contract b. Real contract c. Covered by the state of frauds d. None e. All

3. Which is incorrect about a banking corporation?

a. It cannot issue no-par value shares of stock c. It cannot be a non-stock corporation e. All of them
b. It cannot be a close corporation d. None of them

4. If the total assets of the limited partnership is P500,000 and its liabilities are P300,000 to a limited partner Jack and P400,000 to an outside
creditor Jean, which is correct?
a. Jack is entitled to receive a pro-rata payment of his claim from the partnership assets d. None of the above
b. Jack may hold any partnership asset as collateral security for his claim e. All of the above
c. If the partnership is dissolved, Jack can demand the return of his capital contribution

5. Who is required to acquire its own shares to pay stockholders exercising appraisal right
a. Board and stockholder rep. 2/3 of OCS c. Board alone
b. Board and stockholders rep. a majority of the OCS d. None of them

6. Which is a right of a limited and general partner in the same limited partnership?
a. His profit share must be paid first before those of general partners d. None of the above
b. For its loan from him, it must be paid together with its debt to outside creditors e. All of the above
c. He may demand the return of his contribution even before dissolution

7. Which of the following is incorrect about the corporate treasurer Joy?

a. The rule on dealing with the corporation by a director applies to her d. None of them
b. The rule on disloyalty by a director applies to her e. All of them
c. the rule on disqualifications of directors applies to her

8. Which of the following is not a ground for the dissolution of a limited partnership?
a. Insanity of one general partner and the partnership is not continued d. None of them
b. A limited partner rightfully but unsuccessfully demands the return of his capital e. All of them
c. Death of the only limited partner

9. Which of these is incorrect about the compensation of directors other than per diems?
a. Its total for this year must not exceed 10% of net income before income tax last year c. Both
b. It must be granted by stockholders rep. a majority of the OCS d. Neither

10. Which of the following about a substituted limited partner is incorrect?

a. He cannot become one if he does not sign the Certificate of Limited Partnership d. None of the above
b. He may demand the return of his assignor’s capital even before dissolution e. All of the above
c. He is liable for false statements made by his assignor in the Certificate

11. Who of the following may declare property dividends?

a. Executive committee c. Board alone e. All of them
b. Board and stockholders rep. 2/3 of the OCS d. None of them

12. Which is incorrect about a corporation’s plan to invest its funds in another corp.?
a. It must be approved by the board and stockholders rep. 2/3 of the OCS d. None of them
b. A stockholder may exercise appraisal right on such plan e. All of them
c. A non-voting share may vote on such plan

13. Which of the following shares may be deprived of voting rights?

a. Preferred b. Delinquent c. Redeemable d. None of them e. All of them

14. Which is incorrect about incorporators and stockholders of the same corporation?
a. Not all stockholders may be incorporators c. Any stockholder may be an incorporator e. All of them
 b. All incorporators are stockholders d. None of them

15. Which is correct about a foreign corporation in the Philippines?

a. To transact business here, it needs the consent of at least 2 government agencies d. None
b. For its debts to Filipinos here, it is bound by laws applicable to domestic corporations e. All of them
c. To fix the liability of its officer, it is not bound by such laws

16. A domestic corporation engaged in the telephone business is a

a. Quasi-public corporation b. Public utility c. Private corporation d. None e. All

17. Which is incorrect about an educational corporation?

a. It may be a non-stock corporation c. It cannot issue no-par value shares of stock e. All of them
b. It cannot be a close corporation d. None of them

18. Which of these does not require that the corporation has unrestricted retained earnings
a. Its purchase of its redeemable shares c. Its declaration of cash dividends e. All of them
b. Its purchase of its own delinquent shares d. None of them

19. As a rule, which of these has no right to vote on the corporation’s proposed merger?
a. Holder of subscribed shares not fully paid at maturity date c. Mortgagor of shares e. All of them
b. Holder of non-voting shares d. None of them

20. To elect 3 trustees of a non-stock corporation from 6 candidates, its member

a. Is entitled to 3 votes which he may distribute to the latter or cast all to only one of them d. Is entitled to one vote
b. Is entitled to 3 votes but he cannot cast more than one vote for one candidate e. None of them
c. Is entitled to 6 votes which he may cast at will

21. If there are 10 trustees of a non-stock corporation and, later, there is a vacancy because one of them resigned, what is the required no. of votes
to fill up such vacancy?
a. 4 votes in meeting attended by 9 trustees c. 3 votes in meeting attended by 9 trustees e. None of the above
b. 4 votes in meeting attended by 6 trustees d. 3 votes in meeting attended by 5 trustees

22. Which of the following is not an express power of a pharmaceutical corporation?

a. Make any donation for any purpose except for any political party, candidate or activity c. Adopt by-laws e. All of them
b. Create car plans for its employees d. None of them

23. Which of the following is incorrect about a trust company?

a. It cannot be a close corp. b. It cannot issue no-par value shares c. Both d. Neither

24. Under the Corp. Code, the corporation’s president is required to sign the
a. Certificate of shares of stock c. Articles of incorporation e. All of them
b. Amendment to by-laws d. None of them

25. Which of the following is not part of the outstanding capital stock of a corporation?
a. Shares whose holder demanded payment of their fair value in exercise of appraisal right d. None of them
b. Delinquent shares e. All of them
c. Founder’s shares
1. For a limited partnership to exist, which of the following is not required?
a. Agreement appears in a public instrument c. Written agreement filed with SEC e. All
b. Word “limited” or abbreviation “Ltd.” Is added to its name d. None of them

2. Which of these is incorrect about a limited and general partner at the same time?
a. He is liable to partnership creditors to the extent of his personal properties d. None of the above
b. Has right to dissolve the partnership on grounds not available to general partners e. All of the above
c. In liquidation, he is given priority over general partners in the return of his capital

3. Without the consent of all limited partners, all general partners have no authority to do any of these acts, except:
a. Continue its business on a general partner’s death c. Admit a limited partner e. All of them
b. Assign its specific property d. All of them

4. Which is 3rd in the order of payment during liquidation of a limited partnership?

a. Limited partner’s other compensation by way of income c. Limited partner’s profit share
b. Limited partner’s capital d. None of them

5. Which of the following is not a ground for dissolution of a limited partnership?

a. It fails to return a limited partner’s contribution despite his valid demand d. None of the above
b. A general partner is convicted by final judgment of an offense punishable by death e. All of the above
c. A limited partner withdrew from the partnership leaving his only other partner

6. Which of the following may not make a limited partner liable as a general partner to partnership creditors?
a. His surname, different from those of other partners, appears in firm name for first time d. None of them
b. He signed the certificate knowing it contained false statements, causing loss to them e. All of them
c. He contributes also services to the partnership

7. A substituted limited partner

a. Always has the same liability as the limited partner (LP), except for certain liabilities d. None of them
b. Cannot be liable for the LP’s liabilities of which he was ignorant when he became one e. All of them
c. Has all the rights of the LP

8. Which is incorrect about the return of a limited partner’s contribution?

a. It can’t be returned w/o paying all partnership liabilities, except those to gen. Partners d. None of them
b. W/o agreement or consent of all partners, he receives it in cash regardless of its kind e. All of them
c. He cannot demand its return any time he pleases

9. The Certificate of limited partnership is merely amended in these instances, except:

a. A limited partner withdraws a portion of his contribution d. None of them
b. Death of one general partner and its business is continued by the other partners e. All of them
c. Change in the character of its business

10. Limited partner Jack contributed P80,000 in cash to the limited partnership. Later, the latter borrowed P100,000 from Jack, P200,000 from its
outside creditor and P150,000 from its general partners. If its assets totalled only P150,000 and Jack rightfully demands the return of his
contribution before its dissolution, the partnership
a. Is now obliged to pay him P100,000 d. Is now obliged to pay him other amount
b. Is now obliged to pay him P100/P300 x P150,000 e. Is not yet obliged to pay him any amount
c. Is now obliged to pay him P100/P450 x P150,000
June 19, 2014
1. Which of the following cannot exist in a partnership?
a. Co-ownership b. No actual contribution c. Sharing of gross returns d. None e. All

2. In May 2014, Jack, Jill and Hill verbally agreed to form a partnership and contribute cash, services and goods for its grocery store. If days later,
Jack also contributed a portion of his building where they plan to transfer such store, what happens to the partnership?
a. It is valid b. It is valid only if certain conditions are met c. It is void

3. A stranger whose surname appears in the firm name is a

a. Nominal partner b. Ostensible partner c. General partner d. None of them e. All of them

4. If the partners formed a universal partnership on 1 April 2014, which of the following is not a mandatory contribution thereto?
a. A partner’s salary as insurance salesman for May 2014 d. None of them
b. Cash prize won by a partner from an SM raffle draw in June 2014 e. All of them
c. May 2014 rental fee paid by taxi driver of car owned by partner since March 2014

5. Lito, Roxan and Ed are partners of a universal partnership engaged in the lending business. If, thereafter, Roxan marries Ed, what is the legal
effect?
a. Both can remain in their business partnership c. Only one may remain therein
b. Both cannot remain in their business partnership d. Only one cannot continue therein

6. For a partnership engaged in business to legally exist, which of these is required?

a. Actual contribution by partners c. Intent to divide profits equally e. All of them
b. Partnership name d. None of them

7. If the partners formed a universal partnership of all present property on 1 May 2014, they may contribute by stipulation the following, except:
a. June 2014 rental income of car donated to a partner by his mother on 2 May 2014 d. None of them
b. Cows inherited solely by a partner from his parents who died on 1 May 2014 e. All of them
c. Car acquired onerously by a partner on 1 June 2014

8. On 6/4/14, Larry, Curly and Moe verbally agreed to form a partnership on 6/8/14 and contribute P500,000 cash, usufruct of a 500 square meter
lot and services, respectively. On 6/5/14, they signed a notarized contract to that effect and attached thereto a signed inventory of such lot. If
they gave their contributions the following day, when did their partnership begin?
a. 6/4/14 b. 6/5/14 c. 6/6/14 d. 6/8/14

9. Who of the following cannot join a partnership?

a. A senator who appealed his conviction for plunder punishable by death d. None of them
b. An insane person who was under lucid interval when he signed its contract e. All of them
c. A deaf mute who does not know how to read

10. Which of the following may be a characteristic of a partnership?

a. Real contract b. Formal contract c. Contract of real security d. None e. All
Prelim July 14, 2014
1. Which of the following is incorrect about a partner who contributes only services?
a. He has no say to resolve a dispute between the only 2 managing partners as to admin d. None
b. He is always exempted from partnership losses without agreement e. All
c. He has no say to replace a managing partner appointed at or after its creation

2. Jack and Jill are partners. If Jack derives profit from the use of a partnership property without Jill’s consent, which of the following is incorrect?
a. He is considered its trustee for such profit c. He is not allowed to hold such profit e. All of them
b. She may demand a formal account as to its affairs d. None of them

3. He is a partner who is known only to his other partners and does not manage the firm
a. Secret partner b. Nominal partner c. Ostensible partner d. Dormant partner

4. If a universal partnership of all present property engaged in farming is formed on July 1, 2014, which of the following may be contributed to it by
agreement of the partners?
a. Horse given to a partner on July 2, 2014 from his neighbor’s Last Will d. None of the above
b. Calf born on July 3, 2014 from a cow donated to a partner on July 1, 2014 e. All of the above
c. Truck driven by a partner as only child on 7/24 after his parents died the day before

5. Which of these is incorrect about a co-ownership as distinguished from a partnership

a. It does not require a public instrument if it involves immovable properties d. None of them
b. It may be created without the consent of its members e. All of them
c. Its articles may be kept secret among its members

6. Which of these does not require a public instrument for the partnership to be valid?
a. In forming their partnership, its partners agreed to purchase a house and lot d. None of the above
b. In creating it, its partners promised to contribute their contracts of public works e. All of the above
c. In forming a partnership engaged in selling lots, its partners agreed to contribute lots

7. Who of them has no right to demand true information of things affecting the firm?
a. Wife of partner dying of cancer c. Partner who became mute & blind due to accident e. All
b. Mother of single partner who is missing for 10 years d. None

8. Which of these is not correct about a capitalist partner?

a. Bears the risks of non-fungible thing the fruits of which he promises to contribute d. None
b. Shares its net losses unless he is exempted by all partners e. All
c. Is always considered to solve conflicts bet. the only 2 managing partners as to admin

9. Which of these contributions require an inventory for the partnership to be valid?

a. Oil paintings contributed to a partnership engaged in selling art works d. None
b. Printing machine contributed to a partnership engaged in photocopying services e. All
c. Fertilizers actually used on plants in plastic bags to be sold

10. Partners Ha, He, Ho and Hu contributed cash, equipments, cash and services, respectively, to their partnership and agreed to a profit sharing
ratio of 20:20:20:40, respectively. If He and Hu are appointed as its managers without specifying their duties and, later, they cannot agree
whether to hire a janitor or not, whose decision prevail?
a. Majority of all the partners c. He, Ha and Ho
b. Hu and either Ha or Ho d. Answer not given

11. The partners in No. 10 above agreed to divide the partnership’s P10,000 receivable from Ann based on their profit sharing ratio and to collect it
separately. If after He collected P1,000 from Ann, she did not pay the other partners because he assigned all her properties to her creditors as
payment by cession, which is correct?
a. He is required to give P1,000 to the partnership c. He has no such obligation
b. He is required to give only a portion of such amount d. Answer not given

12. For a partner to be liable as a partner, he must be considered a partner by

a. Third persons only b. Third persons and partners c. Partners only d. None of them

13. Jun, Jan and Jean verbally agreed to contribute P1 million cash, P800,000 worth of canned goods and the P20,000 monthly rental income of a
building, respectively, to their partnership. Such partnership is
a. Valid and enforceable b. Valid but unenforceable c. Void d. None of them
14. Which of the following is correct about partnership contributions?
a. An industrial partner can never be a partnership debtor about his contribution d. None
b. A partnership can exist even without agreement to give them e. All
c. A partner may be required to give something different from his promised contribution

15. If 3 engineers agree that their engineering partnership will continue for as long as mutually satisfactory and for the purpose of rendering
services to clients, there is a
a. Partnership (PP) with a fixed term b. PP with a particular undertaking c. PP at will

16. W/o the other partners’ consent, the managing partner may do these acts, except:
a. Sell a partnership lot b. Sell its good will c. Renovate its building d. None e. All

17. Which of the following cannot be a characteristic of a partnership created by industrial partners?
a. Subject to statue of fraud b. Formal contract c. Onerous d. None e. All

18. Which of the following agreements by partners is not void?

a. Appointing 2 out of 3 partners to determine their shares of profit and loss d. None of them
b. Giving an unjust and inequitable profit share to the industrial partner e. All of them
c. Allowing an industrial partner to compensate damages suffered by the partnership through his own fault with his profit share

19. A partnership may legally exist without the following, except:

a. Registration with the SEC c. Agreement to exist for a certain period e. All of them
b. Profit sharing d. None of them

20. Which of the following is correct about partnership books?

a. A partner has access thereto at anytime he wants c. A partner’s right of access thereto is limited
b. A partner has access thereto only with the consent of the other partners d. A partner has no access thereto
July 28, 2014
1. Which of the following is a ground for automatic dissolution of the partnership?
a. Partner commits crime punishable by death d. None of them
b. Partner marries his partner in universal partnership e. All of them
c. Specific thing to be contributed by partner deteriorates before delivery

2. If a partner retires and the partnership is continued by his other partners without settlement of accounts between them, his legal representative
has these rights, except
a. Becomes an ordinary creditor of the remaining partners d. None of them
b. Choose either to receive the value of his interest or certain profits e. All of them
c. Have the value of his interest ascertained at his death

3. Which of the following is not a ground for judicial dissolution of a partnership?

a. Industrial partner who is chef of its restaurant becomes blind after an accident d. None of them
b. After expiration of its agreed term, partnership is continued without agreement e. All of them
c. Its business has incurred net loss for years

4. Larry, Curly and Moe were partners of Fruits Company. If Curly dies and its business is continued without liquidation by Larry and Moe who
admitted Shemp as their partner
a. Only the creditors of Fruits Company (FC) may run after Shemp’s personal properties
b. Only the creditors of FC cannot run after Shemp’s personal properties
c. Both the creditors of FC and the new partnership cannot run after those properties
d. Both the creditors of FC and the new partnership may run after those properties

5. A partnership was engaged in the mail order bride business. When a law was passed making such business unlawful, it was dissolved. If
thereafter, the partners entered into a contract for the first time with a lawyer to file a case against its debtor, which is correct?
a. Such act binds the partnership c. Such act does not bind the partnership
b. Such act binds the partnership only if the lawyer does not know about its dissolution d. None

6. If a partner becomes insolvent, which of the following is correct?

a. The partnership is bound by his act after its dissolution if it is for winding up purposes d. None of them
b. Partnership creditors ranks third in the order of payment from his personal properties
c. The partnership can only be dissolved by judicial decree

7. Which of the following ranks fourth in the order of payment during liquidation of a dissolved partnership?
a. Capital contributions of partners c. Profit shares of all partners e. None of them
b. All contributions of partners d. Profit shares of certain partners

8. Jack and Jill are partners of their partnership named “Jack & Jill Forever”. If Jack withdraws before its agreed term, Jill has the following rights
and obligations, except:
a. Pay Jack not less than the amount equivalent to the value of his interest d. None of them
b. Continue its business in the same name without limit e. All of them
c. Pay Jack only in cash for whatever he is legally entitled

9. Blake, Black and Bloke are partners. After their partnership became insolvent, Black ordered its new supplies to be sold to a customer from Bill
who has no previous dealings with the partnership but knew about it before its insolvency. If the partnership has no more assets to pay Bill, who
shall be liable to him?
a. The three partners c. Black and any partner whom Bill previously knew as a partner
b. Black only d. None of the partners as it is the liability of the partnership

10. A partnership may be dissolved on any of these grounds, except:

a. A partner is unlawfully expelled from the partnership by the other partners d. None of the above
b. Partner has been failing to keep his promises to contribute on certain dates e. All of the above
c. Partnership is engaged in the business of selling typewriters and black & white T.V.s
Midterm exam 8.22.2014
1. Under the Civil Code, a non-partner may have the right to
a. Demand from partners true and full information of all things affecting the partnership d. All of them
b. Apply for its dissolution e. None
c. Exercise a partner’s property right

2. If a silent partner in a bakery business sells its products to a customer, which of the following is required so that such sale will not bind the
partnership?
a. Such customer knows he is a silent partner c. Both a and b
b. His other partners have abandoned such business d. None, because it is binding

3. Jim, Jun and Joe contributed P100,000, P50,000 and P40,000, respectively, to their partnership engaged in selling flowers and agreed to a
profit sharing ratio of 50:30:20. If Jim wants to sell its roses to a customer at a discount but the other partners oppose, who will prevail?
a. Jim, because of his capital c. Based on profit ration
b. Jun and Joe because they are the majority d. Answer not given

4. Assuming the same partnership in No. 3 above, if its P90,000 loan to creditor Jean is already due and demandable, she can now collect from
each general partner
a. P30,000 c. Based on profit ratio
b. In proportion to his contribution d. Answer not given

5. The legal representative of a deceased partner may be entitled to these rights, except:
a. Receive as an ordinary creditor the profits attributable to the use of such partner’s rights d. None of them
b. Demand true and full information of all things affecting the partnership e. All of them
c. Exercise a certain personal right of such partner

6. Which of the following is not a distinction between a partnership and co-ownership?

a. Unlike in the former, there is no mutual representation in the latter d. None of them
b. Unlike in the former, the latter may be created without the consent of its members e. All of them
c. Unlike in the latter, profit shares of its members are subject to stipulation

7. Which of the following is not an obligation of the partnership?

a. Risk of partner’s contributions to be sold d. None of them
b. Interest on amount disbursed by a partner for partnership expense e. All of them
c. Risk in consequence of managing the partnership

8. Which of these cannot be a characteristic of a partnership of capitalist partners?

a. Commutative b. Merely preparatory c. Subject to statute of fraud d. None e. All

9. Which of these stipulations by partners involving their industrial partner is not void?
a. He may engage in other business without express consent from partners d. None
b. He is required to make additional contribution in case of imminent loss of business e. All of them
c. His right in specific partnership property is subject to legal support

10. A partnership with Jack as managing partner is dissolved upon the death of partner Jun. If, thereafter, partner Rick borrowed money from Phil,
who has no prior dealings with it, to pay taxes for the sale of its assets, the partnership, as to such loan, is
a. Bound if Rick is not insolvent c. Both a and b
b. Bound if Phil knew the partnership but does not know Jun’s death d. Not bound

11. Which of the following statements is incorrect?

a. A partner’s personal creditor may attach his share in the partnership assets d. None of the above
b. A partnership creditor may attach a partner’s right in specific partnership property e. All of the above
c. A partner’s personal creditor may charge his interest in the partnership

12. Ha, He and Ho are partners of a barber shop business. Later, Ha and He misrepresents to Te that Le is their partner when he is not and Te
extended credit to their partnership relying thereon
a. Te may collect from Ha, He and Le only after exhausting the assets of the partnership d. Answer not given
b. Te may collect from Ha, He, Ho and Le only after such exhaustion
c. Te may collect directly from Ha, He and Le only

13. Which of the following is a ground for dissolution of a partnership?

a. Partner contributed a car, which was totally burned before delivery to the partnership d. None of them
 b. Partner accuses another partner of working for the competitor of the partnership e. All of them
c. When it becomes fair to dissolve it

14. Larry, Curly and Moe contributed P40,000, P30,000 and P10,000 to their partnership and agreed to a profit sharing ratio of P50:40:10. If it has
no more assets and partnership creditor Jean still has a P120,000 credit, how much should Curly pay her?
a. 30/80 x P120,000 c. P40,000
b. 40% x P120,000 d. None yet

15. Assuming the same facts in No. 14 above, if Larry properly paid his obligation to Jean for her credit, which of the following consequences
thereof is correct?
a. He has obligations to Curly and Moe c. He has receivables from Curly and Moe
b. He has an obligation to one of the partners d. He has a receivable from one of them

16. Which of the following partners’ contributions requires their agreement to appear in a public instrument for the partnership to be legal?
a. Corn milling machine to be sold in the partnership business d. None of them
b. Road constructed by government over a partner’s private land e. All of them
c. Row boats for the river resort business of the partnership

17. Without agreement to the contrary, general partner Jean is not liable to partnership creditor, Jack, who still has a receivable against it after
exhausting all its assets in these instances, except:
a. Such credit arose after its dissolution and Jack does not know her as a partner d. None of them
b. Such credit arose before its dissolution w/o liquidation and she is admitted thereafter e. All of them
c. Such credit arose before her admission

18. If the partners formed a universal partnership of all present property on 1 August, 2014, which of the following is not a mandatory contribution
thereto?
a. Land left behind by a couple who died on 8/01/14 and whose only child is a partner d. None
b. Car received by a partner on 7/31/14 from a friend’s Last Will and Testament e. All
c. House being leased by a partner since it was given to him by his aunt in 2013

19. The partnership is entitled to damages in which of the following instances?

a. From the time a partner fails to contribute money at the time promised d. None of the above
b. An industrial partner engages in another business without permission from partners e. All of the above
c. A partner withdraws from the partnership before the expiration of its agreed term

20. The vote of partners representing the controlling interest is required in these instances, except:
a. To make an important alteration in the immovable property of the partnership d. None of them
b. When 2 managers appointed w/o specifying their duties can’t agree to hire a worker e. All of them
c. To revoke the power of a managing partner appointed after the partnership’s creation
August 29, 2014
1. Which of the following statements about a corporation is incorrect?
a. It cannot exercise the accounting profession d. None of them
b. It remains even if all its stockholders/members, officers and board members dies e. All of them
c. It may not be sued for committing a crime

2. Mars is a foreign corporation engaged in the business of selling chocolates outside the Philippines. If it purchases jeepneys here and the
Filipino seller fails to deliver them, it is
a. Allowed to sue such seller here only if it also sells chocolates here d. Not allowed to sue here
b. Allowed to sue such seller here only if it has a license e. Answer not given
c. Allowed to sue such seller here without further condition

3. If a corporation sole wants to sell its golden crucifix for P10 million to a third person, what is required under the Corporation Code for such sale
to be valid?
a. It must be approved by the appropriate court c. Either a or b
b. It is allowed by its rules and regulations d. None

4. Which of the following corporations is allowed to be a close corporation?

a. Elementary school b. Telephone company c. Lending company d. None e. All

5. Which of these is incorrect about a non-stock corporation’s board of trustees?

a. To elect 5 trustees, a member may cast 5 votes c. It may not have 13 trustees e. All of them
b. It may have more than 15 trustees d. None of them

6. Which of the following is a public corporation?

a. CEPALCO b. GSIS c. Philippine National Railways d. None e. All

7. Which of the following is correct about a de facto corporation?

a. It has no legal existence as far as everybody is concerned c. It has legal existence only as far as the SEC is concerned
b. It has legal existence as far as the general public is concerned d. None of them

8. Which of the following statements about a stock corporation is incorrect?

a. Its stockholder may sell his fully paid shares without its consent d. None
b. Its stockholder may compel it to purchase his fully paid shares e. All of them
c. Its stockholder with 100 shares may cast 500 votes to elect its 5 board members

9. Which of the following is not a quasi-corporation?

a. Catholic church b. Corp. by estoppel c. Corp. by prescription d. None e. All

10. Which of these distinctions between a corporation and a partnership is incorrect?

a. The latter has more limitations in its powers than the former d. None of the above
b. Unlike in the latter, the former’s members cannot withdraw their investments e. All of the above
c. Unlike the latter, the former may exist without the consent of its members
September 4, 2014
1. Which is incorrect about a non-par value share of stock?
a. Its consideration cannot be distributed as dividends c. Cannot be sold for less than P5 per share e. All
b. It cannot be a preferred stock d. None

2. Which of these is correct regarding pre-incorporation subscription requirements?

a. 25% of the shares subscribed before incorporation must be paid upon incorporation d. None of them
b. The subscription is irrevocable for 6 months from incorporation e. All of them
c. Compliance with such requirements must be shown by receipts

3. Which of the following stock corporations may issue no-par value shares?
a. Telephone company b. Mining company c. Shipyard company d. None e. All

4. Which of the following statements about a stock corporation is incorrect?

a. Failure to elect its other officers after 2 years from incorporation will dissolve it d. None
b. Before its incorporation, its incorporators are required to fully pay their shares e. All
c. Its treasurer is required to be elected before its incorporation

5. Which is incorrect about a treasury stock?

a. It can never earn dividends c. It may be sold at less than its par value e. All
b. It is not part of a corporation’s outstanding shares d. None

6. A non-voting share has the right to vote on these matters, except:

a. Investment in another business c. Amendment of by-laws e. All of them
b. Increase of bonded indebtedness d. None of them

7. Jack subscribed 10 shares of stock for P10,000 from X Corporation and paid only P6,0000. If, thereafter, the shares became delinquent and
sold by the corporation at public auction to the highest bidder, Jean, who offered to buy 8 shares, which is correct?
a. Only 8 shares will be issued to Jean, while the 2 shares are considered treasury shares c. All the 10 shares will be issued to Jean
b. Only 8 shares will be issued to Jean, while the 2 shares will be issued to Jack d. None of them

8. Which of the following is incorrect about a certificate of stock?

a. If lost, a new one will be issued 1 year from its loss if there is no bond/security d. None of the above
b. To validly sell it to another person, no written contract of sale is required e. All of the above
c. It is signed by its stockholder, the president and the secretary as a rule

9. Which of the following is incorrect about a preferred stock?

a. It may be deprived of voting rights c. It is preferred in the distribution of assets e. All of the above
b. It is issued only with a stated par value d. None of the above

10. Which of these statements is incorrect?

a. A negotiable instrument may be a valid consideration for stock subscription d. None
b. The holder of delinquent shares is entitled to cash dividends e. All
c. A founder’s share is required to be classified as such in the by-laws
September 12, 2014
1. There are 12 members of the board of directors of Happy Corporation. To elect its president, the vote of how many of its members is required?
a. 12 b. 7 c. 4 d. None, because he is elected by its stockholders

2. Which of the following statements is correct?

a. A stockholder cannot be a director if all his shareholdings are not fully paid d. None of them
b. A non-stockholder may be elected as vice-president of the corporation e. All of them
c. the corporate treasurer is not allowed to be also the corporate auditor in the same corporation

3. Which of the following is correct regarding meetings of the board of directors?

a. It is presided by the corporate president c. It cannot be held outside the Philippines e. All of them
b. It may be held anytime upon the call of its member d. None of them

4. If out of 6 directors, one died, who shall fill up the vacancy created by such death?
a. 5 remaining directors b. 4 directors c. 3 directors d. 2 directors e. Stockholders

5. If the deceased director in NO. 4 above was elected on 9/12/13 and he died on 9/8/14, what is the term of his successor who is elected to fill up
the vacancy caused by his death?
a. More than 1 year b. 1 year only c. Less than 1 year d. Less than 1 week

6. For a contract entered into by the corporation and is director to be valid, which of the following is always required?
a. Full disclosure of adverse interest c. Contract is fair and reasonable e. All of them
b. There is no opposition or objection thereto d. None of them

7. If directors Pedro, Lito and Berto consented to the issuance of 1,000 shares of stock at 100 par value to Juan for P90,000 while directors Nilo
and Ben vocally argued against it during the meeting for its approval, which of the following statements is correct?
a. All directors are solely liable to the corporation and its creditors for P10,000 d. None of the above
b. Only Pedro, Lito and Berto are solely liable to the corporation and its creditors for such amount
c. All directors are solely liable only to the corporation for such amount

8. After he was appointed by the corporate president as its accounting manager, Jack entered into a contract with the corporation regarding the
sale of materials. As a rule, such contract is
a. Voidable b. Valid c. Void d. None of them

9. If by virtue of his office, Jack in No. 8 above acquires for himself a business opportunity belonging to the corporation, thereby obtaining profits to
its prejudice, which is correct?
a. He is guilty of disloyalty to the corporation d. None of them
b. He is required to refund those profits to the corporation e. All of them
c. He is not required to make such refund only if it is ratified by certain stockholders

10. Filling up of vacancies in the board of directors may be made by the following, except:
a. Remaining directors b. Stockholders c. Executive committee d. None of them e. All
1. By-laws may be amended by the following, except:
a. Board and stockholders representing a majority of the outstanding capital stock (OCS) d. None of them
b. Board and stockholders representing 2/3 of the OCS e. All of them
c. Board alone

2. Which of the following is not an express power and incidental power at the same time of a corporation?
a. To continue to exist after the death of all its stockholders in a flood c. To change its name e. All of them
b. To sue its corporate debtors d. None of them

3. Which of the following statements is incorrect?

a. The board and stockholders representing 2/3 of the OCS may declare stock dividends d. None of them
b. The board alone may declare cash dividends e. All of them
c. The executive committee may issue property dividends

4. The vote of stockholders representing 2/3 of the OCS is required in these instances, except:
a. Enter into a management contract with another corporation with different stockholders d. One of them
b. Invest corporate funds for its secondary purpose e. All of them
c. Remove a member of its board of directors

5. If the sole purpose of a corporation is to deliver packages anywhere in the Philippines, which of the following may be its implied power?
a. Purchase an airplane c. Construct a building e. All of them
b. Hire mountain climbers d. None of them

6. Which of the following is not an express power of a corporation engage in the business of manufacturing cement?
a. Give food packages to persons displaced by flood d. None of them
b. Sue a person for hacking its internet website e. All of them
c. Establish a retirement plan for exclusively for its directors

7. The executive committee of a corporation may exercise these powers, except:

a. Mortgage its property c. Change its corporate name e. All of them
b. Invest its funds to accomplish its sole purpose d. None of them

8. The board alone or stockholders representing a certain number of the OCS alone may exercise these powers, except:
a. Fill in vacancies in the board c. Adopt new by-laws e. All of them
b. Fix issue price of no-par value shares d. None of them

9. The board and stockholders representing 2/3 of the OCS may exercise which of the following powers?
a. Invest its funds for its sole purpose
b. Enter into a management contract with another corporation majority of whose board is also the majority of its own board
c. Repeal its by-laws
d. None of them
e. All of them

10. If the board alone declared stock dividends, which of these is correct?
a. Such act is ultra vires and illegal c. Such act is not ultra vires but illegal
b. Such act is ultra vires but not illegal d. Such act is neither ultra vires nor illegal
1. Neymar, Luiz, Julio, Thiago and Hulk contributed P10,000, P5,000, P12,000, P23,000, and services, respectively, to their partnership engaged
in selling cell phones. They appointed the last four as managers without specifying their duties. If Julio and Luiz want to give customer discounts
which is oppsed by Thiago and Hulk, which is correct?
a. Thiago and Hulk will prevail c. Whoever is supported by Neymar will prevail
b. Julio and Luiz will prevail d. None of them

2. Te, Co and Yu are capitalist partners while Ho is an industrial partners. If there is an imminent loss of their partnership business and only Co
made additional contributions to save it because the others did not want to do so and Te is insolvent, which is correct?
a. Te, Yu and Ho are obliged to sell their interests to Co c. Only Yu is so obliged
b. Only Te and Yu are obliged to sell their interests to Co d. No one is obliged

3. Jack, Jill and Hill are partners. If due to an accident, married Jack losses both his arms and legs while single Jill only breathes and is kept alive
only by machines, to whom is Hill obliged to render true and full information of all things affecting their partnership?
a. Jack’s legal wife and Jill’s mother c. Jack and the mother of Jill e. No one
b. Jill’s mother only d. Jack’s legal wife only

4. A day after partners Curly, Larry and Moe formed their partnership, they appointed Curly as its manager. What is required to validly oppose
Curly’s act of administration?
a. Vote of the controlling interest c. Both a and b
b. Just or lawful cause d. Neither a nor b

5. A partner is liable to the partnership for damages in these instances, except:

a. He is late by 2 weeks in making good his promised cash contribution d. None of them
b. He derives profits from using partnership property without the consent of other partners
c. He uses partnership funds for his personal purpose

6. Jane, Vicky and Cherry are partners. Rica owes their partnership P100,000 and had a debt with a penal clause to Vicky in the amount of
P5,000. If both debts are demandable and Rica paid P4,000 to Vicky who issued her own receipt, it should be
a. Applied proportionately to the 2 credits c. Applied fully to the partnership’s credit
b. Applied fully to Vicky’s credit d. Applied to the credit chosen by Rica

7. After the partnership grocery business managed solely by Lito failed to pay its loans to PNB, he wants to sell a portion of its parking lot in order
to prevent PNB from foreclosing the whole lot. How can the other partners validly oppose such sale?
a. They cannot since Lito is the managing partner
b. They will seek court intervention if it is manifestly prejudicial to its interest
c. They cannot because such sale is not manifestly prejudicial to its interest
d. They will tell him they are opposed

8. Where should the partners keep their partnership books?

a. At the regular place of its business c. At the usual place of its business
b. At the principal place of its business d. Anywhere they want

9. Partners Tom, Dick and Harry agreed to divide equally a partnership credit from Lily and collect their respective shares separately. If after
collecting his share, for which he gave his own receipt, Tom becomes insolvent and she refuses to pay the other partners,
a. Tom is not liable to the partnership for any of his collected share since he is insolvent d. Answer not given
b. Tom is liable to the partnership for the full amount of his collected share
c. Tom is liable to the partnership for a portion of his collected share

10. If the partnership suffered damages through the fault of the managing partner who contributed only services, which of the following is correct?
a. He is liable to the partnership and may compensate it with his profit share
b. He is liable to the partnership but he cannot compensate it with his profit share
1. Juan, Pedro and Berto are partners in a partnership engaged in the gasoline station business. One day, Pedro sold and delivered its diesel fuel
to Jane in her house. Such sale
a. Binds the partnership c. Does not bind the partnership
b. Binds the partnership only if Juan & Berto consented d. Answer not given

2. Capitalist partners Curly & Moe and industrial partner Larry agreed that their profit sharing ratio is 30:50:20 and that Larry is exempt from
sharing partnership liabilities to its creditors. If it owed Liza P150,000 and after she exhausted all its assets, it still has a debt to her of P100,000,
who are liable to Liza and how much?
a. Curly, Moe & Larry P30,000, P50,000 and P20,000, respectively c. None of the partners because it is a partnership debt
b. Curly & Moe only, 30/80 and 50/80 of P100,000 respectively d. The three of them, P33,333.33 each

3. Among the partners in No. 2 above, how much should they contribute? (same choices as above) b.

4. For a non-partner to be a partner by estoppel by means of misrepresentation to a 3 rd person who extends credit on the faith thereof, which of
the following is required?
a. Such misrepresentation must be communicated to the 3rd person d. All of them
b. The partner by estoppel must give his consent to the misrepresentation e. None of them
c. There must exist an actual partnership

5. To their partnership engaged in the cell phone business, Jack contributed cash while Jill and Hill contributed services. If, known by his partners
who just remained silent, Hill invested only cash in his friend’s restaurant business, which of these is correct?
a. Hill has no obligation whatsoever to his partners because they did not object e. None of them
b. The other partners may exclude Hill from their partnership and demand damages
c. Hill has no obligation to his partners because he invested only cash in the restaurant
d. Hill has obligations to the partnership for his restaurant business

6. Which of the following is not an act of ownership by partners?

a. Assign its partnership business license to third persons d. None of them
b. Make a third person settle disputes about its receivable from a debtor e. All of them
c. Allow its creditor to enter a decision against it

7. If a partner disbursed his own personal funds for its expense, the partnership
a. Is liable to him for such funds only c. Is liable to him for such funds, interest and damages
b. Is liable to him for such funds plus interest thereon d. Is not liable to him

8. Mario and Carlo are the only partners of their partnership. To borrow money from Gina, Mario brought with him a rich man, Berto, and told her
that he is also their partner. Relying on such representation, she lends money to the partnership. If after exhausting all its assets, she still has a
credit against the partnership, who shall be liable to her?
a. Mario, Carlo and Berto pro rata c. Mario and Berto only pro rata
b. Mario and Carlo only pro rata d. None of them

9. While the managing partner was attending the partnership hardware store, he argued with another partner how to operate one of its products.
When the former demonstrated its operation, it hit the latter, causing him to lose a finger. Who is liable for such loss?
a. Only the managing partner c. All the partners and the partnership solidarily
b. All the partners solidarily d. No one is liable

10. Partners Jun and Joy agreed that she will handle the sales and marketing departments of their partnership engaged in the grocery business
while he handle its human resource and warehouse departments. If he later sold its goods to customer Joe, such sale
a. Binds the partnership c. Does not bind the partnership if Joe knows what he handles
b. Does not bind the partnership d. Binds the partnership only if Joy approves it