Partnership Law Quiz

If a partner is insolvent, the first in the order of preference in the distribution of his assets is:

• Partnership creditors

• Partner's contribution to the partnership

• Separate creditors of the debtor

• Pro-rata between the separate creditors and the partnership creditors.

Which of the following is not a requisite prescribed by law in order that the partnership may be held liable to a third party for the acts of one of the partners.

• The partners bind the partnership by acquiescence for obligations he may have contracted in good faith.

• The partner must have the authority to bind the partnership.

• The contract must be in the name of the partnership or for its own account.

• The partner must act on behalf of the partnership.

X, Y and Z are partners in Ace & Co. W represented himself as a partner in the said partnership to A, who on the faith of such representation, granted P1M loan to the partnership. Assuming only X and Y consented to such representation, who shall be liable to A?

• Since the partnership benefited from the credit extended by A, all partners X, Y and Z are liable.

• Only X, Y and W are partners by estoppel and are liable pro rata.

• the loan was extended to the partnership, all the partners and W are liable. Since

• Only W who made the representation shall be liable.

A, B, and C are general partners in the merchandising firm. Having contributed equal amounts to the capital, they also agreed on equal distribution of whatever profit is realized per fiscal period. After two years of operation however, C conveys her whole interest in the partnership to D, without knowledge and consent of A and B. Is the partnership dissolved?

• The partnership is not dissolved because the conveyance of a partner's interest in the partnership does not of itself dissolve the partnership.

• The partnership is not dissolved because the assignment made by C of his whole interest was without the knowledge and consent of A and B.

• The partnership was dissolved because the assignee, D automatically becomes a new partner and strictly speaking, there is a new entity.

• It is dissolved because C has ceased to be a partner because of the assignment of his whole interest to D.

Based on the preceding facts:

• can participate in the management of the partnership.

• cannot inspect the books nor copy them for any information on the partnership affairs as a partner can.

• has ceased to have the rights to use the partnership property.

• cannot take part in the control of the business anymore.

Still based on the same facts:

• lf A and B want to dissolve the partnership, C as a partner need not consent thereto because he had assigned his interest to D.

• D may ask the court for its dissolution being the assignee of C’s interest in the partnership.

• A, B and D may dissolve the partnership even without the consent of C.

• A, B and C cannot dissolve the partnership without the consent of D.

W, X, Y and Z organized a general partnership with W and X as industrial partners and Y and Z as capitalist partners. Y contributed P.5 M and Z contributed P.2 M to the common fund. By a vote of the partners, W and X were appointed managing partners, without specification of their duties and powers. A applied as secretary and B applied as accountant of the partnership. The hiring of A was decided upon by W and X but was opposed by Y and Z. Whose decision shall prevail?

• The decision of W and X shall prevail because the hiring is an act of management and as managers they can do so.

• That of Y and Z shall prevail because they are the capitalist partners.

• The decision of Y and 2 because they have the controlling interest.

• The decision of W and X because it is an act of ownership.

In the same problem as aforementioned, suppose the hiring of B was decided upon by W and Z, but was opposed by X and Y, whose decision shall prevail?

• The decision of W and Z because W is the managing partner and the hiring is an act of administration.

• The decision of X and Y because in case of tie in the decision of managing partners, that of the controlling interest shall prevail.

• That of W and Z because Z is also a capitalist partner.

• None of the decision because of the statement of equal rights.

if a partner is insolvent, the first in the order of preference is:

• Partnership creditors

• Partner's contribution to the partnership.

• Separate creditors of the partner.

• Pro rata between the separate creditors and the partnership creditors.

A and B are partners in a real estate business. The partnership owns a parcel of land which C desires to buy. C contacted A and informed him of his intention to buy the said land. A did not tell B such intention of C. A bought B out of the partnership and afterwards sold the land to C at a profit.

• The partnership was dissolved when A became the sole owner.

• The sale is void because it was without the knowledge of B.

• A is not liable to B for his share of the profits.

• A is liable to B for his share in the profits.