Partnership And Corporation Quiz

1. A contract where two or more persons bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves.

Voluntary association

Corporation

Partnership

Sole proprietorship

A partnership is a type of contract where two or more individuals agree to pool their resources, such as money, property, or skills, into a common fund. The purpose of this agreement is to share the profits generated from their joint efforts. In a partnership, each partner has equal rights and responsibilities, and they work together towards achieving common goals. This business structure allows for the sharing of risks, costs, and expertise among the partners, making it a suitable choice for individuals who want to collaborate and divide the profits among themselves.

Explanation

A partnership is a type of contract where two or more individuals agree to pool their resources, such as money, property, or skills, into a common fund. The purpose of this agreement is to share the profits generated from their joint efforts. In a partnership, each partner has equal rights and responsibilities, and they work together towards achieving common goals. This business structure allows for the sharing of risks, costs, and expertise among the partners, making it a suitable choice for individuals who want to collaborate and divide the profits among themselves.

2. One of the following is not a requirement of a contract of partnership. Which is it?

There must be a valid contract.

There must be a mutual contribution of money, property, or industry to a common fund.

It is established for the common benefit of the partners, which is to obtain profits and divide the same among themselves.

The articles are kept secret among the members.

A requirement of a contract of partnership is that the articles are not kept secret among the members. This means that the terms and conditions of the partnership must be disclosed and agreed upon by all partners. The transparency of the articles ensures that all partners have a clear understanding of their rights, responsibilities, and obligations within the partnership.

Explanation

A requirement of a contract of partnership is that the articles are not kept secret among the members. This means that the terms and conditions of the partnership must be disclosed and agreed upon by all partners. The transparency of the articles ensures that all partners have a clear understanding of their rights, responsibilities, and obligations within the partnership.

3. A limited partner may contribute:

Money and/or property.

Money and/or services.

Property and/or services.

Services only

A limited partner has the option to contribute either money or property or both. This means that they can invest capital in the form of money or assets, such as real estate or equipment. By contributing money and/or property, limited partners become passive investors in a partnership, allowing them to share in the profits and losses of the business without actively participating in its operations. This flexibility in contribution options allows limited partners to invest in a way that aligns with their financial capabilities and goals.

Explanation

A limited partner has the option to contribute either money or property or both. This means that they can invest capital in the form of money or assets, such as real estate or equipment. By contributing money and/or property, limited partners become passive investors in a partnership, allowing them to share in the profits and losses of the business without actively participating in its operations. This flexibility in contribution options allows limited partners to invest in a way that aligns with their financial capabilities and goals.

4. The sharing of gross returns does not in itself establish a partnership even if the persons sharing them have a joint or common interest in the property from which the returns are derived.

True

False

This statement is true because the sharing of gross returns alone does not establish a partnership. Even if the individuals sharing the returns have a joint or common interest in the property, it does not automatically make them partners. Partnership requires more than just sharing returns, such as an agreement to carry on a business together, sharing profits and losses, and having mutual agency.

Explanation

This statement is true because the sharing of gross returns alone does not establish a partnership. Even if the individuals sharing the returns have a joint or common interest in the property, it does not automatically make them partners. Partnership requires more than just sharing returns, such as an agreement to carry on a business together, sharing profits and losses, and having mutual agency.

5. The change in the relation of the partners caused by any ceasing to be associated in carrying on the business is known as:

Termination of the partnership

Winding up of partnership affairs.

Liquidation of the partnership business.

Dissolution of the partnership.

Dissolution of the partnership refers to the change in the relation of the partners caused by any ceasing to be associated in carrying on the business. It signifies the end of the partnership and the partners are no longer bound by the partnership agreement. The assets and liabilities of the partnership are typically settled, and the partnership affairs are wound up during this process.

Explanation

Dissolution of the partnership refers to the change in the relation of the partners caused by any ceasing to be associated in carrying on the business. It signifies the end of the partnership and the partners are no longer bound by the partnership agreement. The assets and liabilities of the partnership are typically settled, and the partnership affairs are wound up during this process.

6. The minimum capital in money or property except when immovable property or real rights thereto are contributed will require the partnership's contract to be in a public instrument and be registered with the Securities and Exchange Commission (SEC).

P5,000.00

P10,000.00

P3,000.00

P30,000.00

The correct answer is P3,000.00. This is the minimum capital amount that is required for a partnership's contract to be in a public instrument and be registered with the Securities and Exchange Commission (SEC), unless immovable property or real rights are contributed.

Explanation

The correct answer is P3,000.00. This is the minimum capital amount that is required for a partnership's contract to be in a public instrument and be registered with the Securities and Exchange Commission (SEC), unless immovable property or real rights are contributed.

7. A partnership formed for the exercise of a profession that is duly registered is an example of:

The universal partnership of profits

The universal partnership of all present property.

Particular partnership.

Partnership by estoppels.

A partnership formed for the exercise of a profession that is duly registered is an example of a particular partnership. This type of partnership is formed for a specific purpose or business activity, such as a professional practice. It is different from a universal partnership of profits, which involves a sharing of all profits and losses, or a universal partnership of all present property, which involves a sharing of all assets and liabilities. Partnership by estoppel refers to a situation where someone is held liable as a partner even if they are not officially a partner.

Explanation

A partnership formed for the exercise of a profession that is duly registered is an example of a particular partnership. This type of partnership is formed for a specific purpose or business activity, such as a professional practice. It is different from a universal partnership of profits, which involves a sharing of all profits and losses, or a universal partnership of all present property, which involves a sharing of all assets and liabilities. Partnership by estoppel refers to a situation where someone is held liable as a partner even if they are not officially a partner.

8. Their names are mentioned in the articles of incorporation as originally forming the corporation and are signatories thereof.

Corporators

Stockholders.

Incorporators.

Members.

The correct answer is "Incorporators." Incorporators are individuals who are mentioned in the articles of incorporation as the original founders of a corporation and have signed the documents. They are responsible for initiating the process of forming the corporation and are typically involved in the early stages of its establishment.

Explanation

The correct answer is "Incorporators." Incorporators are individuals who are mentioned in the articles of incorporation as the original founders of a corporation and have signed the documents. They are responsible for initiating the process of forming the corporation and are typically involved in the early stages of its establishment.

9. Jason, Ariane, and Gina are partners in JAG Enterprises. Not having established their credit standing yet, the three partners requested Heidi, a well-known businesswoman, to help them negotiate a loan from Joy, a money leader. With the consent of Jason, Ariane, and Gina, Heidi represented himself as a partner of JAG Enterprises. What kind of partner is Heidi?

Managing partner.

Liquidating partner.

Ostensible partner.

Partner by estoppels.

Heidi is considered a partner by estoppel because she represented herself as a partner of JAG Enterprises with the consent of Jason, Ariane, and Gina. This means that even though she is not actually a legal partner, her actions and representations have led others to believe that she is a partner, and therefore she can be held liable as if she were a partner.

Explanation

Heidi is considered a partner by estoppel because she represented herself as a partner of JAG Enterprises with the consent of Jason, Ariane, and Gina. This means that even though she is not actually a legal partner, her actions and representations have led others to believe that she is a partner, and therefore she can be held liable as if she were a partner.

10. In a limited partnership where there are 4 partners:

All the partners must be limited partners.

The number of limited partners must be equal to the number of general partner, that is, 2:2.

The number of limited partners must be greater than the number of the general partners, that is, 3:1

It is enough that there is one limited partner; the rest may all be general partners.

In a limited partnership, there must be at least one limited partner, but the remaining partners can be general partners. The number of limited partners does not have to be equal to the number of general partners or greater than the number of general partners. As long as there is at least one limited partner, the partnership can have any combination of limited and general partners.

Explanation

In a limited partnership, there must be at least one limited partner, but the remaining partners can be general partners. The number of limited partners does not have to be equal to the number of general partners or greater than the number of general partners. As long as there is at least one limited partner, the partnership can have any combination of limited and general partners.

11. 1. The articles of incorporation differ from the by-laws in that the articles of incorporation are:

The rules of action adopted by a corporation for its internal government.

Adopted before or after incorporation.

A condition precedent in the acquisition by a corporation of a juridical personality.

Approved by the stockholders if adopted after incorporation.

The articles of incorporation are a condition precedent in the acquisition by a corporation of a juridical personality. This means that the articles of incorporation are necessary for a corporation to legally exist and have a separate legal identity from its owners. They outline the corporation's purpose, structure, and other key information required for its formation. Without the articles of incorporation, a corporation cannot be recognized as a separate legal entity and cannot conduct business activities.

Explanation

The articles of incorporation are a condition precedent in the acquisition by a corporation of a juridical personality. This means that the articles of incorporation are necessary for a corporation to legally exist and have a separate legal identity from its owners. They outline the corporation's purpose, structure, and other key information required for its formation. Without the articles of incorporation, a corporation cannot be recognized as a separate legal entity and cannot conduct business activities.

12. One of the distinctions between a partnership and a corporation is that a partnership:

May be formed by one person.

Is created by operation of law.

Acts through a board of directions.

May exist for an indefinite period.

A partnership may exist for an indefinite period, unlike a corporation which has a defined lifespan. Partnerships are typically formed through a partnership agreement between two or more individuals, and there is no legal requirement for them to have a specific end date. This allows partnerships to continue operating as long as the partners wish to remain in business together. In contrast, a corporation is a separate legal entity that is created by filing certain documents with the government, and it has a predetermined duration unless it is dissolved or liquidated.

Explanation

A partnership may exist for an indefinite period, unlike a corporation which has a defined lifespan. Partnerships are typically formed through a partnership agreement between two or more individuals, and there is no legal requirement for them to have a specific end date. This allows partnerships to continue operating as long as the partners wish to remain in business together. In contrast, a corporation is a separate legal entity that is created by filing certain documents with the government, and it has a predetermined duration unless it is dissolved or liquidated.

13. A corporation acquires juridical personality:

Upon the filling of the articles of incorporation.

Upon the filling of by-laws.

Upon the issuance of the certificate of incorporation.

Within 30 days from the receipt of the notice of the issuance of the certificate of incorporation.

A corporation acquires juridical personality upon the issuance of the certificate of incorporation. This means that the corporation becomes a legal entity recognized by the law. The certificate of incorporation is a document issued by the government or a regulatory authority that confirms the formation and existence of the corporation. It includes important information such as the name of the corporation, its purpose, and the names of its shareholders or members. Once the certificate of incorporation is issued, the corporation can start conducting business and enjoying the rights and privileges of a separate legal entity.

Explanation

A corporation acquires juridical personality upon the issuance of the certificate of incorporation. This means that the corporation becomes a legal entity recognized by the law. The certificate of incorporation is a document issued by the government or a regulatory authority that confirms the formation and existence of the corporation. It includes important information such as the name of the corporation, its purpose, and the names of its shareholders or members. Once the certificate of incorporation is issued, the corporation can start conducting business and enjoying the rights and privileges of a separate legal entity.

14. Lea and Revy entered into a universal partnership of profits. At the time of the execution of the articles of partnership, Lea had a two-door apartment which he inherited from his father 3 years earlier. Revy, on the other hand, had a fleet of taxis which he purchased 2 years before. In the first year of the partnership, Lea earned P500,000.00 as a radio talent, while Revy won P1,000,000,00 in the lotto. During the same period, rentals of P2000,000.00 were realized from the operation of the fleet of taxis. Which of the following belongs to the partnership?

Two-door apartment.

Lotto winnings of P1,000,000.00

Salary of P500,000.00

Fleet of taxis

The salary of P500,000.00 belongs to the partnership because it was earned by Lea as a radio talent during the first year of the partnership. Since Lea and Revy entered into a universal partnership of profits, any income earned by either partner during the partnership period is considered part of the partnership. The two-door apartment, lotto winnings, and fleet of taxis were acquired by Lea and Revy before the partnership was formed, so they do not belong to the partnership.

Explanation

The salary of P500,000.00 belongs to the partnership because it was earned by Lea as a radio talent during the first year of the partnership. Since Lea and Revy entered into a universal partnership of profits, any income earned by either partner during the partnership period is considered part of the partnership. The two-door apartment, lotto winnings, and fleet of taxis were acquired by Lea and Revy before the partnership was formed, so they do not belong to the partnership.

15. Three of the following partnership contracts are void. Which one is not?

A universal partnership of all present property between husband and wife.

A universal partnership of profits between a man and a woman living together as husband and wife without the benefit of marriage.

A particular Partnership between husband and wife.

A universal partnership of profits between a private individual and a public officer.

A particular partnership between husband and wife is not void because it refers to a specific partnership agreement between a married couple, which is legally recognized. The other options involve partnerships that are considered void because they either involve individuals living together without being married, or partnerships between a private individual and a public officer, which may present conflicts of interest.

Explanation

A particular partnership between husband and wife is not void because it refers to a specific partnership agreement between a married couple, which is legally recognized. The other options involve partnerships that are considered void because they either involve individuals living together without being married, or partnerships between a private individual and a public officer, which may present conflicts of interest.