Professional Documents
Culture Documents
OBLIGATION
1. Statement no. 1: The creditor may be compelled to accept payment in checks as
long as the check is negotiable.
Statement no. 2: An obligation payable should the client die of diabetes is an
obligation subject to a period.
a. Statement No. 1 is false while statement No.2 is true.
b. Statement No. 1 is true while statement No. 2 is true.
c. Both Statement are false
d. Both Statement are true
2. The buyer has the right to the fruit of the thing from:
a. The time the thing is delivered
b. The time the contract is perfected
c. The time the obligation to deliver the thing arises
d. The time the fruits are delivered
3. Statement no. 1: Just before the obligation became due and demandable, the
debtor proposed to the creditor that he would give him a specific car instead of
paying 150,000.00, and which proposal was accepted by the creditor. Here, there
is extinguishment of an obligation by way of dacion en pago.
4. Meeting in one person of the characteristics of both the debtor and creditor in
one and the same obligation extinguishers the obligation by way of:
a. Novation
b. Compensation or set-off
c. Condonation or remission
d. Merger or confusion
Statement no. 2: In the case of a joint obligation, the co-debtors may be held
liable for the share of an insolvent co-debtor.
a. Both Statement are true
b. Both statement are false
c. Statement no. 1 is true while statement no. 2 is false
d. Statement no. 1 is false while statement no. 2 is true
7. An obligation based on positive law and give right to enforce its performance.
a. Civil Obligation
b. Moral Obligation
c. Legal Obligation
d. Natural Obligation
8. An obligation wherein various things are due, but the payment of one of them is
sufficient to extinguish the obligation is called:
a. Simple obligation
b. Conjoint obligation
c. Alternative Obligation
d. Facultative Obligation
9. An obligation wherein various things are due but the complete performance of all
of them is necessary to extinguish the obligation
a. Facultative obligation
b. Conjoint obligation
c. Alternative obligation
d. Pure or simple obligation
10. Statement no. 1: I will give you 10,000.00 if you will not marry X this year. If by
the end of the year, X entered the convent, my obligation is extinguished.
Statement no. 2: I will give you 10,000.00 when my means permit me to do so.
This is a conditional obligation for the benefit of the debtor.
a. Both are true
b. Both are false
c. No. 1 is true; no. 2 is false
d. No. 1 is false; no. 2 is true
12. Which of the following is not a ground for the extinguishment of an obligation?
a. Remission
b. Merger
c. Compensation
d. Death of creditor
e. None of the above
13. S owns an oil painting. Being in need of money, S sold the painting to B for
1,000.00. After the sale S discovered that the painting was valuable and worth
5,000.00.
a. B is entitled to the benefit of the contract because it is valid and binding.
b. S may annul the contract on ground of error
c. S may annul the contract on ground of fraud
d. S may rescind the contract on ground of lesion or inadequacy of cause.
14. A and B are jointly and severally liable to C for 20,000.00. A is a minor.
a. C can collect 20,000.00 from B
b. C can collect 10,000.00 from B
c. C can collect 10,000.00 from A that is the share of B.
d. C can collect 20,000.00 because minority is not a defense
15. Every obligation whose performance does not depend upon a future or uncertain
event, or upon a past event unknown to the parties, is demandable at once. This
refers to:
a. Divisible and Indivisible obligation
b. Joint and Solidary obligations
c. Pure obligation
d. Obligations with a period
16. DR promised to give DE, his grandson, a car if the latter will pass the bar
examinations. When his grandson passed the said examinations, which of the
following statement is true?
a. DR may refuse to deliver because the condition is purely a potestative
one.
b. The obligation is valid because the condition depends upon the sole will of
the debtor.
c. Both the obligation and the condition are ineffective because they depend
upon the sole will of the donor.
d. The obligation is valid although potestative because they depend upon the
sole will of the done.
18. Ill give you my car one year after your death. The obligation is
a. Valid because the event is sure to come
b. Void, not legally possible
c. Valid, the obligation is conditional
d. Valid, but disregard the condition.
19. Statement no. 1: D oblige to give a specific car to C on Dec. 20, 2006. If on the
date stated D did not comply with his obligation, the next day he is considered in
default without the need of demand.
Statement no. 2: S sold to B a specific car for 10,000.00. Both parties promise to
comply with their obligations the day after tomorrow. If on the date stated S
delivers the car to B, but B is not ready to comply with his obligation, from
thereon he is considered in default without the need of a demand.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true
21. Conrad and Charlie are jointly indebted to Pete for 100,000.00. Pete assigned his
interest to Crispin who assigned it back Conrad.
a. The debt is totally extinguished by compensation
b. The debt is totally extinguished by merger
c. The debt is partially extinguished by compensation
d. The debt is partially extinguished by merger
22. In three of the following cases, compensation shall not be proper. Which is the
exception?
a. Commodatum
b. Gratuitous support
c. Civil liability arising out of criminal offenses
d. Bank deposit
e. Rescission
25. Statement no. 1: The debtor of a thing cannot compel the creditor to receive a
different one, although the latter may be of the same value or more valuable than
that which is due.
Statement no. 2: In dation in payment, ownership of the thing delivered is
transferred to the creditor; while in cession, it merely authorizes the creditor to
convert the property into cash and out of the proceeds to extinguish the
obligation partially.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true
26. I will give you specific car if you will marry X this year, 20016. Which of the
following statement in incorrect?
a. If on December 25, X died, without marriage, my obligation is effective
because one party is dead, marriage is impossible to take place.
b. If on December 25, X died, without marriage, my obligation is extinguished
because one party is dead. Marriage is impossible to take place.
c. If the year has ended, no marriage taking place, both parties are alive, just
the same my obligation is extinguished because the time indicated has
already elapsed
d. If you marry X on December, my obligation is to give you the car
27. Mr. Debtor owes Mr. Creditor who has two (2) legitimate children, 50,000.00
payable on December 31, 2006.
a. If Mr. Debtor dies before December 31, 2006, Mr. Creditor cannot collect
from the heirs of Mr. Debtor.
b. If Mr. Debtor dies before December 31, 2006, Mr. Creditor can collect from
the heirs of Mr. Debtor.
c. If Mr. Creditor dies, his two (2) legitimate emancipated children cannot
recover from Mr. Debtor his obligation.
d. If both Mr. Debtor and Mr. Creditor die, the heirs of Mr. Creditor can collect
from the heirs of Mr. Debtor.
29. A owes B 2,000.00 demandable and due on September 10, 2006. B on the other
hand, owes A 2,000.00 demandable and due on or before September 30, 2006. If
B claims compensation on September 10, 2006, can A rightfully oppose?
a. No. B who was giving the benefit of the term, may claim compensation
because he could then choose to pay his debt on September 10, 2006
which is actually on or before September 30, 2006.
b. Yes, A can properly oppose because for compensation to take place,
mutual consent of both parties is necessary.
c. Yes, A c ab properly oppose and if B still refuses to accept his payment
made on September 30, 2006, A can deposit his payment in court.
d. None of the above.
30. Statement no. 1: Merger taking place in the person of the guarantor shall
extinguish only the secondary contract such as the contract of guaranty but not
the principal obligation.
Statement no. 2: when the debtor promises to pay his obligation whenever his
means permit him to do so the obligations is with a period.
a. Both statement are true
b. Both statement are false
c. Statement no. 1 is true while statement no. 2 is false
d. Statement no. 1 is false while statement no. 2 is true
32. D obliged himself to give a specific car to C on December 25, 2006, stipulating
that D is liable even if the thing is lost due to fortuitous event, and without the
need of a demand. On the due date, the car got lost due to fortuitous event.
Which of the following is correct?
a. Obligation remains to subsist, but converted into monetary consideration
b. C can compel D to deliver another car
c. C can require another person to deliver a car, expenses chargeable to D.
d. Obligation is totally extinguished
33. Statement no. 1: The debtor of a thing cannot compel the creditor to receive a
different one, although the latter maybe of the same value or more valuable than
that which is due.
Statement no. 2: In dation of payment, ownership of the thing delivered is
transferred to the creditor; while cession, It merely authorize the creditor to
convert the property into cash and out of the proceeds to extinguish the
obligation partially.
a. Both are true
b. Both are false
c. No.1 is true, no. 2 is false
d. No.1 is false, no.2 is true
34. A is obliged to give B his only car on September 1, 2006. On the said date, A did
not deliver. On September 2, 2006, an earthquake completely destroyed the car.
Is A still liable?
a. No. Considering that no demand to deliver was made by B and the
specific thing was lost due to fortuitous event, the obligation is
extinguished.
b. No. the obligation is extinguished, even if the debtor is already in default
because the debtor can plead impossibility of performance
c. Yes. A is already in legal delay thus the obligation to deliver the lost
specific thing is converted into monetary claim for damages.
d. Yes. The creditor can instead demand for a substitute of equivalent value
from the debtor.
35. A sold his cow to B for 2,500.00. No date was stipulated for the delivery of the
cow. While still in the possession of A, the cow gave birth to a calf.
a. A is entitled to the calf because it was born before his obligation to deliver
the cow arises.
b. A is entitled to the calf as B has not paid the price
c. B is entitled to the calf which was born after the perfection of the contract
d. B, in order to be entitled to the calf, should pay additional cost for the calf
to be agreed upon by both parties.
36. The kind of compensation which may only be raised by the creditor and not by
the debtor in the obligation to give gratuitous support:
a. Judicial compensation
b. Conventional compensation
c. Facultative compensation
d. Legal compensation
37. Statement no. 1: Legal compensation takes place by operation of law even if the
parties may not be aware of it.
Statement no. 2: The indivisibility of an obligation necessarily implies solidarity.
a. Both statement are true
b. Both statement are false
c. Statement no. 1 is true while statement no .2 is false
d. Statement no. 1 is false while statement no. 2 is true
38. Debtor obliged himself to deliver to creditor 100 cavans of rice on 06/01/2001. On
said date, D failed to make delivery despite repeated demands by C. In this case:
a. C has no remedy under the law
b. C can compel D to deliver 100 cavans of rice plus damages
c. C may ask a third person to deliver 100 cavans of rice to him, the value
recoverable from D plus damages
d. None of the above.
39. The kind of compensation which arises by way of proved counterclaim in a case
called:
a.
b.
c.
d.
Legal compensation
Voluntary compensation
Judicial compensation
Facultative compensation
42. X, Y and Z solidary bound themselves to pay to solidary creditors A, B and C the
amount of 75,000.00. The loan was secured by a mortgage on Bs land. Out of
gratuity, A, in a public instrument, renounced the obligation in favor of X, with the
formality required by law. In this case, which statement is correct?
a. The principal obligation is extinguished
b. The real estate mortgage is extinguished
c. Both the principal obligation and the mortgage are extinguished by
remission
d. Both the principal and accessory obligations subsist.
45. Bernie offered Zo a specific parcel of land at a specified price. Bernie gave Zo 60
days within which to accept. Zo agreed.
a. Within 60 days, Bernie cannot withdraw but may increase the price
b. There cant be no withdrawal because the period is binding
c. Bernie may withdraw or increase the price within the 60 day period
d. There can be no withdrawal because there is a perfected option contract
46. I will give you this book provided that if I like to have it back, you will return the
same to me
a. The obligation is void, because the fulfillment depends upon the will of the
debtor
b. The obligation is void, because the fulfillment depends upon the will of the
creditor
c. The obligation is valid, because the condition merely causes the loss of
rights already acquired.
d. Combination of A and B
47. I will give you this book provided that if I like to have it back, you will return the
same to me
a. The obligation is void, because the fulfillment depends upon the will of the
debtor
b. The obligation is void, because the fulfillment depends upon the will of the
creditor.
c. The obligation is valid because the condition merely causes the loss of
rights already acquired
d. Combination of A and B.
48. The following, except one, are requisites of payment as a mode of extinguishing
an ordinary obligation. Which is the exception?
a. Complete or full payment
b. Payment in due course when the obligation is due and demandable
c. Payment using negotiable instrument
50. Fruits as resulting from spontaneous products of the soil without the intervention
of human labor, as well as animal offspring are:
a. Industrial fruits
b. Civil fruits
c. Natural fruits
d. All of above fruits
CONTRACTS
1. Which of the following can be considered as a feature of a void contract?
a. Subject to ratification
b. They exist
c. Action or defense for nullity is subject to prescription
d. None of them
2. L entered into a contract of lease with X. T, the clerk of L, typed the document.
Due to Ts negligence, the document made was that of sale instead of lease.
a. The remedy is annulment
b. Parties may go to court for interpretation
c. Parties may enforce their right because it is enforceable
d. None of the above
3. These persons are bound by contracts:
a. Contracting Parties
b. Assigns or Assign
c. Heirs
d. All of them
4. Who is liable for the loss of the subject matter by fortuitous event?
a. Creditor
b. Debtor
c. Both creditor and debtor
d. None of them
5. S offers to sell his house to B for P100, 000. B asks him if he would accept P80,
000. Which of the following is correct?
a. Because of ambiguity, both offers are terminated by operation of law.
b. Bs response is a counter- offer effectively terminating the P10, 000 offer and
instigating an offer for P80, 000.
c. Bs response is a more inquiry, the P100, 000 offer by S is still in force.
d. Bs response is a rejection of the P100, 000 offer, and there is no offer for
P80, 000 because it is too indefinite to be an offer.
6. Example No. 1: G, guardian of W, sold Ws house valued at P50, 000 for P37,
500 or a lesion by one-fourth of the value.
Example No. 2: S sold his house valued to P50, 000 for only P10, 000 because S
did not know the true value of the house.
a. Both contracts are rescissible.
b. Only No. 1 is rescissible.
c. No. 2 is voidable because there is an error or mistake.
d. Both contracts are valid and enforceable.
7. B1 Company bought out a competitor, B2 Corporation, with a stipulation that B2
Corporation should not thereafter engage in any business in the Philippines
unless consented to and approved by B1 Company.
a. The stipulation is void because it is contrary to public policy.
b. The stipulation is defective but subject to ratification.
c. The stipulation is valid because the parties are free to enter into any business
in the Philippines unless consented to and approved by B1 Company.
d. The stipulation is unenforceable as there was no showing that the was done
in writing
8. Which of the following contract is not valid?
a. Mutual promise to marry entered into orally
b. Sale of immovable property orally entered into
c. One of parties in a contract is incapable of giving consent
d. None of the above
9. D forced C to lend him P10, 000. The promissory note is in writing.
a. The contract is rescissible because the contract is fraudulent
b. Contract remains to be valid
c. The contract is void
d. C cannot demand payment from D because the contract is unenforceable
10. Example 1 S sold to B in a private instrument his land. Later, B wanted to have
the sale registered, but registration requires a public instrument. In here, B may
compel S to execute the needed public instrument.
Example 2 S sold to B orally his specific land. After B paid S the price of the
sale, he want to registered the land in his name but he needed a public
instrument of sale. In here B may compel S to execute the needed public
instrument.
a. Both examples are also
b. Only 1 is true
c. Only 2 is true
d. Both examples are true
11. In a contract of sale executed by S and B, it appears S sold his motor vehicle to
B and B bought it for P10, 000. It turned out however, S has three motor vehicles.
Gallant valued P80, 000: Hi-Ace van valued P70, 000; and a Jeep valued P60,
000. Which of the following is correct?
a. The contract shall be reformed because there was mistake
b. The parties can ask for interpretation because the word Motor vehicle is
ambiguous.
c. There is no contract.
17. Statement No. 1: Dolo incidente entitles the person against whom, it was
employed the right to seek the annulment of the contract.
Statement No. 2: A stipulation pour autrui is an exception to the rule on relativity
of contracts.
a. Both are true
c. No. 1 is true; No. 2 is
false
b. Both are false
d. No. 1 is false; No. 2 is
true
18. Example No.1: W, 16 year old, sold his house valued at P1 M for P50, 000 or a
lesion by more than one-fourth of the value of the said house.
Example No. 2: S sold his house valued at P1 M for only P400, 000 because S
did not know the true value thereof.
a. Both examples are unenforceable
b. No. 1 is rescissible; while No. 2 is unenforceable
c. Both contracts are binding
d. No. 2 is unenforceable
19. S owns an oul painting. Being in need of money, S sold the painting to B for P1,
000. After the sale it was discovered that the painting was valuable and worth
P5, 000.
a. B is entitled to the benefit of the contract because it is valid and binding.
b. S may rescind the contract on ground of lesion or inadequency of cause
c. S may rescind the contract on ground of fraud
d. S may annul the contract on the ground the error
20. A, bachelor lawyer, raped W twice. Upon learning this, F the father of W, was
able to force A to marry W under pain of being sued in court and dibarred from
the practice of his law profession. Which statement is correct?
a. There was no defect, the marriage was perfectly valid
b. The marriage may be annulled on the ground of force or violence
c. The marriage may be annulled on the ground of threat of intimidation
d. The defective marriage may, however, be ratified
21. Statement No. 1: If the cause is not stated in the contract it is presumed that it is
unlawful.
Statement No. 2: the action for rescission is subsidiary, it cannot be instituted
except when there is no other legal means to obtain reparation for damages
suffered.
a. Both are true
c. No. 1 is true; No. 2 is false
b. Both are false
d. No. 1 is false; No. 2 is true
22. In an invitation to bud, B proposes the following:
I will buy the property for P10, 000 if the bid of any other offerrors or bidders
shall be considered the best terms of amount and conditions, I am to equal that
offer.
a. The offer is speculative, because it cannot be considered as against another
offer which is certain.
b. The offer is considered a counter offer
a. Rescissible contract
c. Voidable contract
b. Inexistence contract
d. None of the above
37. In three of the following defective contracts, ratification ceases the defects.
Which is the exception?
a. Sale of piece of land thru an agent the authority is oral
b. Sale of immovable property or interest orally entered into
c. Contracts entered into by a person who has been given no authority.
d. Both parties are incapable of giving consent.
38. S makes an offer to B on January 1, 2007. B makes known his acceptance in a
letter sent on January 2, and received by S on January 10. Meantime, on
January 5, S become insane.
a. The contract is voidable because on party is insane
b. The contract is not binding because there is no meeting of minds.
c. There is already a meeting of minds, the contract is perfected.
d. None of the above
39. In the preceding number S is perfectly sane but only an un- emancipated minor
of the time the acceptance is communicated to him.
a. There is no meeting of minds between the parties, unless ratified by the
guardian of S.
b. The contract is not binding because the party is incapacitated
c. The contract is binding between the parties
d. None of the above
40. Which of the following contracts is voidable?
a. Those where one of the parties is incapacitated.
b. Those whose object is outside the commerce of men.
c. Those which are absolutely fictitious.
d. Those which contemplate an impossible service
41. The stipulation in a contract to the effect that the debtor should remain as a
servant in the house and in the service of her creditor so long as she had not
paid her debt is void because it is:
a. Contrary to good custom
b. Contrary to public policy
c. Contrary to law and morality
d. None of the above.
42. X, after the death of his father, sold his inheritance though its amount has not yet
been determined to B, for a consideration of P50, 000.
a. The contract is valid only if the inheritance valued at least equal or more than
p50, 000
b. The contract is rescissible.
c. The contract is valid even though nothing remains of the inheritance to be
turned over to B.
d. Contract is void, future inheritance cannot be the object of sale.
43. X, alleged that Y promised to give X one hectare of land. This is in consideration
Ys meritorious services to Y. Y pleads in defense that since the promise was not
in writing, it is unenforceable under the Statute of Frauds. Decide.
a.
b.
c.
d.
e. Those which refer to things under litigation if they have been entered into by
the defendant without the knowledge and approval of the litigants or of
competent judicial authority.
50. When there is concurrence of offer and acceptance, there is
a. Payment
c. Revocation
b. Consent
d. none of the above
PARTNERSHIP
All present property and all property that they may acquire thereof
All present property and all profits that they may acquire therewith
All future property
All present property
2. A, B and C are partners of A and Company. They agreed that in case of loss, the
share of A is 50%, B 30%, and C 20%.After three years of total assets of A and
Company is P100,000 as against total liability of P112,000. If D is the only creditor, D
can collect from A,
a.
b.
c.
d.
6,000
12,000
4,000
8,000
3. One or more but less than all the partners have no authority to perform the following
acts, except:
a. Do any act which would make it impossible to carry on the ordinary course of
business
b. Submit a partnership claim or liability to arbitration.
c. Renounce a claim of the partnership
d. Convey partnership property in the ordinary course of business
e. None of the above
Limited partnership
Partnership where immovable are contributed
Partnership having a capital of 3,000 or more
None of the above
6. The following persons are disqualified to form a universal partnership. Who are the
exception?
a.
b.
c.
d.
Capitalist partner
Limited partner
Industrial partner
None of the above
The deceased
The partnership
executor would
partners estate
automatically become
a partner
any partnership
liability
a.
b.
c.
d.
Yes
Yes
No
No
Yes
No
Yes
No
would be
Yes
No
No
Yes
13. A, B and C wish to go into the business together to bottle mineral water. Each
contributed P50,000 but C wanted to limit his liability to the extent of his contribution,
and his name to appear in the partnership name. Which form of partnership as business
organization should they choose?
a.
b.
c.
d.
General partnership
Limited partnership
No partnership organization is available
Limited
That of X
2,000
That of Y
Nothing
17. When the manner of management has not been agreed upon, who shall manage
the affairs of the partnership?
a. Capitalist partners
b.
c.
d.
e.
Industrial partners
Capitalist-Industrialist partners
All of the partners
None of the above
18. As a general rule, a partner cannot ask for a formal accounting of the affairs of the
partnership during its existence and before it is dissolved, except:
a.
b.
c.
d.
e.
Limited partner
Capitalist partner
Secret partner
None of the above
Cash
Property
Services
Partly cash and partly property
None of the above
22. Statement No. 1: Every partner is responsible to the partnership for damages
suffered by it through his fault, and he may compensate them with the profits and
benefits which he may have earned for the partnership by his industry of work.
Statement No. 2: When an unlawful partnership is dissolved by a judicial decree, the
profits, but not the partners contributions, shall be confiscated in favor of the state.
a.
b.
c.
d.
23. Statement No. 1: If property has been promised by a partner as contribution to the
partnership, the fruit arising from the time the property should have been delivered,
should also be given without need of a demand.
Statement No. 2: The partner who has been appointed manager in the Articles of
Partnership may execute al acts of administration despite the opposition of his partners,
unless he should act in bad faith and his power is irrevocable without just or lawful
cause.
a.
b.
c.
d.
24. A, B and C formed a general partnership with a gross capital of P90,000. They
agree that the profit and loss sharing is: A-50%, B-25%, and C-25%. Upon dissolution
and after exhausting partnership capital, X has still collectible amount of P30,000 from
the firm. How much can X collect from C alone?
a.
b.
c.
d.
7,500
15,000
30,000
10,000
25. In the preceding question, supposing there is no profit or loss sharing, and A
contributed P24,000, B-P21,000 and C-P15,000. How much is the obligation of C to X?
a.
b.
c.
d.
7,500
15,000
30,000
10,000
1 and 3
3 only
2 only
2 and 3
27. A and B are partners engaged in the real estate business, A learned that C was
interested in buying a certain parcel of land owned by the partnership, even for a higher
price. Without informing B, A was able to make B sell to him (A) his (Bs) share in the
partnership. Then A sold the land at a higher profit.
a. A is liable to B for the latters share in the profit.
29. The remedy of capitalist partners against an industrial partner who engaged in a
business for himself without the expressed permission from the partnership is:
a.
b.
c.
d.
To compel the industrial partner to sell his interest to the said capitalist partners.
To exclude him from the sharing in the profits in the partnership.
To remove him as manager if he is appointed as manager of the partnership.
To expel him from the partnership and claim for damages.
Manager
President
Partners
None of the above
33. A partnership having for its object determinate things, their use or fruits, or a specific
undertaking, or the exercise of a profession or vocation is called:
a.
b.
c.
d.
e.
Partnership by estoppel
Particular partnership
Universal partnership of al present property
Universal partnership of profits
None of the above
a. An industrial partner cannot, without the consent of all the other partners, engage
in a business similar to the business of the partnership.
b. As to liability to third persons, an industrial partner is considered as a general
partner.
c. An agreement among the partners that the managing partner shall determine the
share of all partners in the profit is void.
d. All partners including industrial ones can be compelled to give additional
contribution if the purpose is to save the business from certain loss.
35. A, B and C are partners. Their contributions are as follows: A, P60,000; B, P40,000;
and C, services. The partners agreed to divide profits and losses in the following
proportions: A, 35%, B, 25%, and C, 40%. If there is a profit of P10,000, how should the
said profit be distributed among the partners?
a.
b.
c.
d.
e.
General partner
Industrial partner
General-Limited partner
Limited partner
None of the above
37. In case of imminent loss of the business of a partnership, the following partners are
required to give additional contribution, except:
a.
b.
c.
d.
e.
Capitalist partner
General partner
Capitalist-Industrialist partner
Industrial partner
None of the above
a.
b.
c.
d.
e.
Limited partnership
Partnership where immovables are contributed
Partnership having a capital of P3,000 or more
None of the above
All of the above
40. A partner whose connection with the partnership is open and pubic, such as by
including his name in the firm name of the partnership is called:
a.
b.
c.
d.
e.
Nominal partner
Ostensible partner
Secret partner
Dormant partner
None of the above
41. Which of the following statements is correct regarding the division of profits in a
general partnership when the written partnership agreement only provides that losses
be divided equally among the partners?
a.
b.
c.
d.
44. Which of the following statement is correct concerning liability when a partner in a
general partnership commits a tort while engaged in partnership business?
a.
b.
c.
d.
45. A limited partner shall not become liable as a general partner unless:
a.
b.
c.
d.
e.
46. A partner whose connection is concealed and has no voice nor say in the
management of the affairs of the partnership is called:
a.
b.
c.
d.
e.
Nominal partner
Secret partner
Silent partner
Dormant partner
None of the above
47. Three of the following are rights of a partner. Which one is not?
a.
b.
c.
d.
48. A partnership
a. is created by mere agreement of the partners.
b. has a juridical personality separate and distinct from that of each of the partners.
c. may be constituted in any form, except, except where immovable property or real
rights are contributed thereto, in which case a public instrument shall be
necessary.
d. is dissolved by the death of a partner.
e. All of the above.
49. Three of the following do not prove the existence of a valid partnership. Which is the
exception?
a. The sharing of gross receipts
b. There is the intention of dividing the profits among themselves
c. Receipts by a person of a share of the profits for the payment of a partnership
debt by installments
d. When two or more partners are co-owners and they share correspondingly in the
profits made from the sale or use of their property.
Waiver or compromise
Sell equipment
Borrow money
None of the above
CORPORATION
1. Which of the following cannot be lawfully exercised by a non-stock corporation?
a.
Pay dividend
b.
Elect trustees
c.
Amend the Articles of Incorporation
d.
Adopt by-laws
2. A bond issue to pay-off prior floating indebtedness of the corporation issuing it is
called
a.
Convertible bond
b.
Equipment bond
c.
Collateral bond
d.
Funding bond
e.
None of the above
3. A bond secured by stocks or other bonds or both which are owned by the debtor,
the securities being deposited with a trustee for the bondholder is called:
a.
Mortgage bond
b.
Collateral trust bond
c.
Equipment bond
d.
Debenture bond
e.
None of the above
4. Involuntary dissolution of the corporation is caused by
a.
an expiration of the period for which it was lawfully formed.
b.
judicial decree of forfeiture or by order of the SEC.
c.
legislative enactment.
d.
failure to organize formally and commence the transaction of its
business within two years from the date of incorporation.
e.
All of the above.
5. To revoke the power granted to the board to make the by-laws.
a.
Majority vote of the board and of the outstanding capital stock of the
members
b.
2/3 of the outstanding capital stock of the members.
c.
Majority of the quorum of the board and 2/3 of the outstanding capital
stock of the members.
d.
Majority of the outstanding capital stock or of the members.
6. A corporate officer or director cannot take advantage their personal benefit in
business opportunity which the corporation is financially able to undertake.
a.
Doctrine of corporate fiction
b.
Trust fund doctrine
c.
Doctrine of corporate opportunity
d.
Doctrine of limited capacity
e.
None of the above
7. One of the following does not require stockholders approval.
a.
Merger or consolidation
b.
Change of corporate name
c.
Investment of corporate funds for a purpose outside of the main
purpose of the corporation
d.
Declaration of cash dividend
8. The required minimum authorized capital stock for stock corporation is:
a.
Not less than P5,000
b.
25% must be subscribed and 25% must be paid
c.
At least 25% must be subscribed and at least 25% must be paid and in
no case shall it be less than P5,000
d.
None
9. Which of the following must be contained in a corporations Articles of
Incorporation?
a.
Names of stockholders
b.
Name of temporary treasurer
c.
Provisions for issuance of par and no par value shares
d.
Quorum voting requirement
10. Shares deposited by the seller or his agent with a bank or third party to be
delivered to the buyer or subscriber only upon the fulfillment of the stipulated
suspensive condition
a.
Promotion shares
b.
Founders shares
c.
Redeemable shares
d.
Escrow shares
11. A corporation cannot be an incorporator in the Philippines because only natural
persons may become incorporators, except
a.
Cooperative as incorporator of rural bank
b.
Eleemosynary corporations
c.
Charitable organizations incorporated under the Philippines laws
d.
Corporation sole
12. Every decision of the directors or trustees shall be valid as a corporate act at
which there is quorum by
a.
Majority of all members of the board
b.
Majority of the directors or trustees present
c.
2/3 vote of the members of the board
d.
2/3 vote of the directors or trustees present
13. The following are expressed powers of a corporation, except:
a.
To sue and be sued
b.
The power of succession
c.
To adopt and use a corporate seal
d.
To amend its Corporate Charter
e.
None of the above
14. The right of pre-emption shall not apply:
a.
When such profit is denied in the corporate charter
b.
To share to be issued in compliance with the laws requiring stock
offering or minimum stock ownership by the public
c.
To share to be issued in good faith with the approval of the
stockholders owning 2/3 of the outstanding capital stock in exchange
for property needed for corporate purpose of a previously contracted
debt
d.
All of the above
e.
None of the above
15. Ultra vires act
a.
Acts which are beyond the powers expressly or impliedly conferred
upon the corporation
b.
Unenforceable
c.
May be ratified by the stockholders
d.
May not be attacked by competitors in business
e.
All of the above
16. The difference of a proxy and a voting trust agreement is
a.
Proxy is required to be notarized
b.
Voting trust agreement is not required to be notarized
c.
Presence of the stockholder in the meeting where the proxy is given
automatically cancels the proxy
d.
Voting trust must only be written
17. A, B, C, D and E organized a corporation. An article of incorporation was
prepared, signed and acknowledge before a notary public and filed with the SEC.
The corresponding certificate of incorporation was issued. It turned out, however,
that A, B and C are not residing in the Philippines. What is the status of the
corporation?
a.
b.
c.
d.
e.
De jure corporation
De facto corporation
Corporation by estoppel
Corporation by prescription
None of the above
18. The SEC may reject the article of incorporation or disapproved any amendments
thereto if
21. Which of the following is(are) valid consideration for the purchase of stocks of a
corporation
I.
II.
III.
a.
b.
c.
d.
Real estate
A negotiable promissory note in money
Monetary consideration for services to be performed
I only
II only
Both I and III
Both II and III
22. Suppose X Corporation has an authorized capital stock of 100,000 divided into
1000 shares of stock with par value of 100 each Subscribers:
A 100 shares and paid 8,000
B 160 shares and paid 100
C 250 shares and paid 4,000
D 50 shares and paid 5,000
E 200 shares and paid 600
Names of stockholders
Name of the temporary treasurer
Provisions for issuance of par and no par value shares
Quorum voting requirement
24. X company is a stock corporation composed of the Reyes family engaged in the
real estate business. Because of the regional crisis, the stockholders decided to
convert their stock corporation into a charitable non-stock and non-profit association
by amending the articles of incorporation.
Could this be legally done?
Would your answer be the same if at the inception. X company is a nonstock corporation to a stock corporation? Why?
Answers:
A. Yes, by amending the articles of incorporation. Be it noted that the
stock coporation is not distributing assets to the stockholders.
B. No, because in a non-stock corporation the members are not entitled
to share in the profit.
a.
b.
c.
d.
25. Suppose that X Corporation has already issued the 1000 originally authorized
shares of the corporation so that its board of directors and stockholders wish to
increase Xs authorized capital stock. After complying with the requirements of the
law on increase of capital stock, X issued an additional 1000 shares of the same
value. S presently holds 200 shares out of the original 1000 shares. Which of the
following statement is true?
a. S must be offered equivalent 200 shares under his pre-emptive right
of stated in the articles of incorporation
d. Majority vote of the board and 2/3 of the outstanding capital stock or of
the members.
30. In no case shall the total yearly compensation of directors exceeds.
a.
b.
c.
d.
5% of the net income before income tax during the preceding year
10% of the net income before income tax during the preceding year
10% of the net income after income tax during the preceding year
10% if the net income before income tax during the current year
31. Statement no. 1: Directors can attend and vote by proxy at board meetings.
Statement no. 2: The articles of incorporation may expressly provide that
redeemable shares by a corporation may be purchased upon the expiration of a
fixed period, regardless of the existence of unrestricted retained earnings in the
books of the corporation.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true
32. Three of the following statement are true; which is the exception?
a. Redemption of redeemable stock is required even if the corporation at
that time has no unrestricted earnings
b. The requirement that at least 25% of authorized capital must be
subscribed applies only to non-stock corporation
c. Directors are entitled to compensation as a matter of rights
d. Derivatives suits can be filed only by dissenting stockholders.
33. Shall constitute a quorum for the transaction of corporate business
a. 2/3 of the number of directors or trustee
b. Majority of the directors or trustees present
c. Majority of the number of directors or trustee as fixed in the articles of
incorporation
d. of the number of directors or trustee
34. To issue stock dividends
a.
b.
c.
d.
Majority vote of the board and 2/3 of the outstanding capital stock
2/3 of the outstanding capital stock
Majority of the outstanding capital stock
Majority of the quorum of the board and 2/3 of the outstanding capital
stock.
35. An action brought by a stockholder against the corporation for direct violation of
his contractual rights
a.
b.
c.
d.
Representative suit
Individual suit
Derivative suit
Corporate suit
Incorporators
Promoters
Corporators
Subscribers
None of the above
39. Unless the by-laws provide otherwise, written notice of regular meetings shall be
sent to all stockholders or record
a.
b.
c.
d.
42. Statement no. 1: the liability of the stockholders for the payment of corporate
debts is limited to the value of the shares.
Statement no. 2: the entire consideration received by the corporation for its nopar value share shall be treated as capital and shall not be available for
distribution as dividends.
a. Both are true
b. Both are false
c. No. 1is true; No. 2 is false
d. No. 1 is false; No. 2 is true
43. Stocks which has been issued by a corporation as fully paid up when in fact it is
not, because it has been issued as bonus or otherwise, without any consideration at
all, or for less than par, or for property, labor or services at an overvaluation.
a.
b.
c.
d.
e.
Watered stocks
Over issued stocks
Treasury stocks
Redeemable stocks
None of the above
44. Which of the following qualifications is necessary in order that one may be
elected secretary of the corporation?
a.
b.
c.
d.
e.
45. Three of the following are similarities between a partnership and corporation.
Which is not?
a. The individuals composing both have little voice in the conduct of the
business
b. Both have juridical personality separate and distinct form that the
individuals composing them
c. Like a partnership, a corporation can act only through agents
d. Both are organizations composed of an aggregate of individuals
46. The right given to stockholder to dissent and demand payment of the fair value
of their shares is called
a.
b.
c.
d.
e.
Right of proxy
Appraisal right
Pre-emptive right
Stock right
None of the above
47. All of the close corporations issued shares shall be held of record by bot more
than
a.
b.
c.
d.
10 persons
15 persons
20 persons
None of the above
48. A bond which is payable to a particular individual whose name is entered on the
books of the corporation as the registered owner is called
a.
b.
c.
d.
e.
Registered bond
Coupon bond
Convertible bond
Guaranteed bond
None of the above
49. The authorized capital stock of a proposed corporation is 100,000 dividend 1,000
shares with a par value of 100 each. At least 25,000 or 250 shares was subscribed
by 25 subscribers. To meet the minimum amount of subscription that must be paid
a. It is enough that 25% of the total subscription is paid, regardless of the
amount paid by each individual subscription
b. Each and every subscriber must always pay 250 which is 25% of their
individual subscription
c. Seven of the subscribers paid 6,250 and the rest of the subscribers
d. None of the above
50. The owners of share in stock corporation are called
a.
b.
c.
d.
Incorporators
Promoters
Members
Stockholders