Group 5- MCQ for MIDTERMS.pdf

EYA, BRENDAN AVENIDO, REIN MYTE SOLIS, BUEN PLACENCIA, MIGUEL BELUSO, ROCHELLE ANNE MCQ for Midterm Exam Prepare 10 MCQs each for the following topics: Total MCQs - 40; a) Chapter 1 - General Provisions 1. What is the definition of a partnership as stated in Article 1767? ○ a)...

EYA, BRENDAN AVENIDO, REIN MYTE SOLIS, BUEN PLACENCIA, MIGUEL BELUSO, ROCHELLE ANNE MCQ for Midterm Exam Prepare 10 MCQs each for the following topics: Total MCQs - 40; a) Chapter 1 - General Provisions 1. What is the definition of a partnership as stated in Article 1767? ○ a) A contract between a single person and an entity. ○ b) A contract between two or more persons to contribute money, property, or industry to a common fund, with the intention of dividing profits. ○ c) A contract between family members for estate planning purposes. ○ d) A contract between two or more corporations. Answer: b) A contract between two or more persons to contribute money, property, or industry to a common fund, with the intention of dividing profits. 2. Which of the following is not a factor in determining the existence of a partnership under Article 1769? ○ a) Sharing of gross returns. ○ b) Receipt of profits as an employee’s wage. ○ c) Co-ownership of property. ○ d) Voluntary association of two persons to exercise a profession. Answer: d) Voluntary association of two persons to exercise a profession. 3. According to Article 1768, what is the consequence of a partnership having a separate juridical personality? ○ a) Partners are personally liable for all debts of the partnership. ○ b) The partnership is treated as a separate legal entity, capable of owning property and entering into contracts. ○ c) The partnership cannot be sued. ○ d) Partners cannot share profits or losses. Answer: b) The partnership is treated as a separate legal entity, capable of owning property and entering into contracts. 4. Under Article 1771, when must a partnership be constituted in a public instrument? ○ a) When the capital is less than P3,000. ○ b) When the partners are under 18 years old. ○ c) When immovable property or real rights are contributed. ○ d) When a partnership is for the exercise of a profession.  Answer: c) When immovable property or real rights are contributed. 5. What is the effect if a contract of partnership fails to attach an inventory of immovable properties contributed, as required under Article 1773? ○ a) The partnership will be dissolved. ○ b) The partnership is valid only between the partners. ○ c) The contract of partnership is void. ○ d) The partnership must register with the SEC. Answer: c) The contract of partnership is void. 6. Which type of partnership, as defined in Article 1777, refers to the inclusion of all present property and future profits? ○ a) Universal partnership of profits. ○ b) General partnership. ○ c) Limited partnership. ○ d) Universal partnership of all present property. Answer: d) Universal partnership of all present property. 7. Who is prohibited from entering into a universal partnership according to Article 1782? ○ a) Minors. ○ b) Foreign nationals. ○ c) Persons prohibited from making donations, such as husband and wife. ○ d) Corporations. Answer: c) Persons prohibited from making donations, such as husband and wife. 8. Which of the following is prima facie evidence of a partnership under Article 1769? ○ a) Sharing of gross returns. ○ b) Co-ownership of a building. ○ c) Sharing of profits from a business. ○ d) Joint bank accounts. Answer: c) Sharing of profits from a business. 9. According to Article 1770, what must the object or purpose of a partnership be? ○ a) Any activity that results in financial gain. ○ b) A lawful object or purpose established for the common benefit of the partners. ○ c) Social activities. ○ d) Banking and finance. Answer: b) A lawful object or purpose established for the common benefit of the partners.  10. Under Article 1775, what is the legal standing of associations whose articles are kept secret and members may contract in their own name? ○ a) They are considered partnerships. ○ b) They have no separate juridical personality and are governed by co-ownership laws. ○ c) They are considered corporations. ○ d) They must be registered with the SEC. Answer: b) They have no separate juridical personality and are governed by co-ownership laws. b) Chapter 2 - Obligations of the Partners 1. When does a partnership generally begin? a) When the partners first meet b) When the contract is executed c) When the business starts d) When the partnership is dissolved Answer: b) When the contract is executed 2. If a partnership for a fixed term continues after its expiration without a new agreement, the partnership is considered to be: a) Automatically dissolved b) A partnership at will c) A general partnership d) A dissolved entity Answer: b) A partnership at will 3. If a partner fails to contribute a promised sum of money, he becomes liable for: a) Legal fees b) Partnership dissolution c) Interest and damages d) Nothing, unless agreed otherwise Answer: c) Interest and damages 4. An industrial partner is prohibited from engaging in business for himself unless: a) He is the only partner b) The partnership allows it c) He is also a capitalist partner d) The partnership is dissolved Answer: b) The partnership allows it 5. In the absence of any agreement, partners contribute to the partnership: a) Unequally based on seniority b) Proportionally to their assets c) Equally d) Based on their industry expertise Answer: c) Equally 6. If a partner receives payment for both his own and the partnership's credit, the payment is applied to: a) His own credit first b) The partnership's credit only c) Both credits proportionally d) The larger debt Answer: c) Both credits proportionally 7. What happens if a partner receives his share of a partnership credit and the debtor becomes insolvent? a) He keeps his share b) He must return what he received to the partnership c) The partnership absorbs the loss d) The other partners are liable for the loss Answer: b) He must return what he received to the partnership 8. In the absence of an agreement, the share of each partner in the profits and losses is based on: a) Equal distribution b) The amount they contributed c) The decision of the manager d) The partner's seniority Answer: b) The amount they contributed 9. Can a partner associate another person with him in his share of the partnership? a) No, it is forbidden b) Yes, with the consent of all partners c) Only if the other partners are silent d) Yes, without restrictions Answer: b) Yes, with the consent of all partners 10. A capitalist partner engaging in the same type of business as the partnership for his own account must: a) Notify the other partners b) Dissolve the partnership c) Bring any profits to the partnership d) Transfer his share to the partnership Answer: c) Bring any profits to the partnership c) Chapter 3 - Dissolution and Liquidation 1. What is "dissolution" in the context of a partnership? a) Complete termination of the partnership. b) Settlement of partnership affairs. c) Change in the relationship of partners due to any partner ceasing to be associated in carrying on the business. d) Distribution of surplus assets among the partners. Answer: c) Change in the relationship of partners due to any partner ceasing to be associated in carrying on the business. 2. Which of the following best describes "winding-up"? a) Distributing the remaining assets to the partners. b) The process of settling the business or partnership affairs after dissolution. c) Announcing the termination of the partnership to the public. d) Initiating new business transactions. Answer: b) The process of settling the business or partnership affairs after dissolution. 3. When does "termination" occur in a partnership? a) When a partner dies. b) When all debts are paid, and all contracts are completed. c) When one partner decides to leave. d) When a new partner joins the firm. Answer: b) When all debts are paid, and all contracts are completed. 4. Which of the following is not a cause of dissolution without violation of the agreement? a) Termination of a definite term. b) Express will in a partnership at will. c) Death of a partner. d) Expulsion of a partner in good faith. Answer: c) Death of a partner.  5. Which of the following is a ground for dissolution by a court decree? a) Breach of a partnership agreement. b) Insanity of a partner. c) Express will of all partners. d) Completion of the term of the partnership. Answer: b) Insanity of a partner. 6. What is the effect of dissolution on the authority of partners? a) All partners retain full authority. b) Partners lose authority to act for the partnership, except to wind up partnership affairs. c) Authority is transferred to the creditors. d) Authority to act for the partnership is strengthened. Answer: b) Partners lose authority to act for the partnership, except to wind up partnership affairs. 7. What happens to a partner’s liability after dissolution if the remaining partners continue the business without an agreement? a) The partner is automatically discharged from all liabilities. b) The partner remains liable for partnership debts. c) The partner can choose to be liable or not. d) The partner is liable only for his separate debts. Answer: b) The partner remains liable for partnership debts. 8. Which of the following rights does a partner have if dissolution is caused without violation of the agreement? a) Indemnity for damages against the guilty partner. b) The right to continue the business by paying a bond in court. c) The right to receive in cash the value of his interest. d) The right to share in future profits. Answer: c) The right to receive in cash the value of his interest. 9. What is the effect of insolvency of a partner on the dissolution of a partnership? a) The partnership is automatically terminated. b) The partner’s interest is liquidated, and the partnership is continued. c) It causes the dissolution of the partnership. d) It has no effect on the partnership. Answer: c) It causes the dissolution of the partnership. 10. Who has the right to wind up the partnership affairs after dissolution? a) Any partner who caused the dissolution. b) All partners, regardless of their conduct. c) Partners who have not wrongfully caused the dissolution. d) The oldest partner. Answer: c) Partners who have not wrongfully caused the dissolution. d) Chapter 4 - Limited Partnership 1. Which of the following is a characteristic of a limited partnership? a) All partners are equally liable for the debts of the partnership. b) Limited partners participate in the management of the business. c) There are one or more general partners and one or more limited partners. d) All partners can withdraw their contributions without consent. Answer: c) There are one or more general partners and one or more limited partners. 2. Which type of contribution is not allowed for a limited partner? a) Cash b) Property c) Services d) All of the above are allowed. Answer: c) Services 3. What happens if the surname of a limited partner is included in the partnership name? a) The limited partner becomes liable as a general partner. b) The limited partner has no liability beyond his contribution. c) The partnership must dissolve. d) There is no effect on the partnership. Answer: a) The limited partner becomes liable as a general partner. 4. What is the effect of a limited partner participating in the management of the partnership? a) The limited partner is liable only for his contribution. b) The limited partner becomes liable as a general partner. c) The limited partner is entitled to a higher share of profits. d) The partnership is automatically dissolved. Answer: b) The limited partner becomes liable as a general partner. 5. Which document is required to form a limited partnership? a) Articles of Incorporation b) Certificate or Articles of Limited Partnership c) Partnership Agreement  d) Memorandum of Association Answer: b) Certificate or Articles of Limited Partnership 6. Which of the following actions requires the consent or ratification of limited partners? a) Admission of a new general partner. b) Payment of existing liabilities. c) Routine business transactions. d) Filing tax returns for the partnership. Answer: a) Admission of a new general partner. 7. What right does a limited partner have according to Article 1838? a) Manage the day-to-day operations. b) Inspect and copy partnership books. c) Terminate any general partner at will. d) Change the partnership's business model. Answer: b) Inspect and copy partnership books. 8. In the event of falsity in the certificate of a limited partnership, who is liable? a) Limited partners are liable as general partners. b) There is no liability as a general partner; only statutory penalties apply. c) The partnership is dissolved. d) All partners are equally liable for the false statement. Answer: b) There is no liability as a general partner; only statutory penalties apply. 9. What happens if a limited partner becomes a general partner while still holding the rights of a limited partner? a) He loses all rights as a limited partner. b) He has the rights and powers of a general partner and is subsidiarily liable to creditors. c) He cannot contribute more capital to the partnership. d) He must dissolve the partnership. Answer: b) He has the rights and powers of a general partner and is subsidiarily liable to creditors.  10. Which of the following is not a requirement for the amendment or cancellation of the Certificate or Articles of Limited Partnership? a) Filing before the SEC. b) Written consent from all partners. c) Signed and sworn document. d) Verbal agreement between partners. Answer: d) Verbal agreement between partners.