1. Sharon, guardian of Kaycee sold Kaycee's house and lot worth P4M for P2M.

As a result:
A. The contract can be rescinded because of inadequacy of price.
B. The contract cannot be rescinded because there is no fraud, mistake or undue influence.
C. The contract cannot be rescinded because all the elements of a contract are present
D. The contract cannot be rescinded because it is expressly provided by law as one of the contracts that cannot be
rescinded.

2. A sold to B 800 baskets of duhat at P600 a basket. Thereafter. A can only deliver 600 baskets and offered this number
to B and no more, but at P700 each. Decide
A. B can refuse to accept delivery of the 600 baskets without liability.
B. B must pay for 800 baskets but at P500 each.
C. B can accept 600 baskets but pay P550 for each.
D. A can require B to accept 600 at P700 each.

3. As a general rule, in assignment of credit, the assignor in good faith:

a) Warrants the existence of the credit at the time of assignment
b) Warrants the legality of the credit at the time of assignment
c) Warrants the solvency of the debtor at the time of assignment A
A. A and C. B. A and B C. B and C D. A, B and C

4. If the corporation has commenced the transaction of its business, the corporate franchise or certificate of incorporation
may be suspended or revoked, if it subsequently becomes continuously inoperative for a period of at least
A. 6 years B. 5 years C. 1 year D. 3 years

5. Dona pledged her LG washing machine to Belle for P25,000.00. Dona was unable to pay the obligation 60 days after
due date. Belle sold the machine at public auction for P15,000.00. Which of the following is correct?
A. Belle cannot recover the deficiency of P10,000.00
B. Belle can recover the deficiency of P10,000.00
C. Belle can recover the deficiency of P 10,000.00 if stipulated
D. Belle cannot recover the deficiency of P 10,500.00 even if there is a stipulation that she can.

6. Subscriber Apple has a total of 100 delinquent shares at P100 par value, to be sold at public auction. sale. Total amount
recoverable includes: Total amount of the delinquent shares, P10,000 and total expenses of the sale, P5,000. who will
be declared the highest bidder?.
A. C who is willing to pay P15,000 for 100 shares
B. A who is willing to pay P15,000 for 95 shares
C. R who is willing to pay P15,000 for 97 shares
D. E who is willing to pay P15,000 for 90 shares

7. . Mark appointed Gideon as his agent to sell a specific car for P500,000 with promise to pay 5% commission. Gideon
was able to sell it for P750,000 on credit. After the sale but before payment of the buy Mark can demand from Gideon:
A. P500,000 only.
B. P750,000 minus the commission.
C. P500,000 minus the commission.
D. P750,000.

8. Which of the following is not correct? In a limited partnership composed of A, B and C, the contribution may be as follows:
A. A-land (limited partner); B-building (general partner); C-services (limited partner)
B. A-check (limited partner); B-tools (general partner); C-car (general partner)
C. A-real property (limited partner), B-labor (general partner); C-cash (general partner)
D. A-movables (limited partner); B-money (general partner); C-services (general partner

9. Which of the following instruments is negotiable?

A. "Pay to Bearer C P100,000.00" (Sgd) X; addressed to Y
B. "Pay to C P10,000.00 or his order out of the rental of my house in Manila". (Sgd) X, addressed to Y
 C. "Pay to C P10,000.00 and reimburse yourself out of the dividends I may receive from CRC ACE". (Sgd) X,
addressed to Y
D. D. "Pay to the order of C P10,000.00”. (Sgd) X, addressed to Y

10. 1st Statement - The guardian cannot purchase the property of the ward and any stipulation to the contrary is void.
2nd Statement - Sale of property between husband and wife is void
A. 1st statement is wrong, and statement is correct
B. 1st statement is correct, and statement is wrong.
C. Both statements are correct
D. Both statements are wrong.

11. By specific provisions of law, which of the following need not appear in a public instrument?
A. An assignment of credit, right or action involving real property in order to produce an effect against third persons.
B. A pledge, describing the thing pledged and the date of the pledge, in order to be effective against third persons.
C. A contract of agency, for the sale of a piece of land or any interest therein, in order to consider the sale by the agent
as valid.
D. A contract of partnership having a capital of three thousand pesos or more, in money or property.

12. 1st STATEMENT: A director is removed from office by a vote of the stockholders holding or representing at least 2/3 of
outstanding capital stock. The vacancy occasioned by such removal can be filled by the vote of a majority of the remaining
directors if still constituting a quorum.
2nd STATEMENT: The vacancy in the board occasioned by the death of a director can be filled by the vote of a majority
of the remaining directors if still constituting a quorum.
A. Both statements are true.
B. 1st statement is false, 2nd statement is true.
C. Both statements are false.
D. 1st statement is true, 2nd state is false

13. Gabriel sold to Andre a car for a price of P750,000.00. The contract provides that Andre will pay cash of P200,000.00
and for the balance, Andre will give a land worth P550,000.00. What is the nature of the contract?
A. Sale C. Barter
B. Partly sale and partly barter D. Commodatum

14. Choose the situation which illustrates best the minimum requirement of the law to corporate formation:
Authorized Capital Subscribed Capital Paid-in Capital
A. P150,000 P 37,500 P15,000
B. P600,000 P150,000 P37,500
C. P 50.000 P.12,500 P 3,125
D. P 60,000 P 30,000 P 5,000
15. Cash dividend as distinguished from stock dividend
A. It increases legal capital
B. Does not involve any disbursement
C. It is declared on by the Board of Directors
D. It is still part of the corporate asset

16. Which of the following is not correct? In a limited partnership composed of A, B and C, the contribution may be as follows:
A. A-services (limited partner); B-cash (general partner); C-services (general partner)
B. A-cash (limited partner); B-property (general partner); C-services (general partner)
C. A-property (limited partner), B-services (general partner); C-cash (general partner)
D. A-cash (limited partner); B-cash (general partner); C-services (general partner)
17. Lets and Gets are partners. On March 1, 2010 when the total obligation of the partnership was P450,000, Go was
admitted as a new partner. At the time of Go's admission, the partnership was indebted to A for P50,000 and B for
P400,000. After March 1, 2010, the partnership borrowed from X P200,000 and P40,000 from Y. On December 1, 2010,
the partnership became insolvent leaving an obligation totalling P690,000 and partnership assets amounting in P300,000.
The creditors are going after the separate properties of the partners to satisfy their remaining claims. How are the
creditors' claims satisfied?
ANSWER 1: A and B can go after the separate properties of Lets, Gets and Go.
ANSWER 2: X and Y can go after the separate properties of Lets and Gets.
Which of the following is correct?
A. Both answers are wrong.
B. Both answers are correct.
C. Answer #1 is wrong, but answer #2 is correct.
D. Answer #1 is correct, but answer #2 is wrong.

18. A is the managing partner in A & B Company. X is indebted to A for P20,000 and to the partnership for P60,000. When
both debts mature, X pays A P20,000 and the latter issues his personal credit. The payment for P20,000 shall be applied:
A. One-fourth in favor of A and three-fourth in favor of partnership
B. To the whole debt owing to A.
C. One-half in favor of A and one-half in favor of the partnership ·
D. To the debt owing to the partnership

19. The following person cannot be an incorporator of a corporation:

A. A resident alien
B. A married woman without the consent of the husband even if the payment of her shares is her paraphernal property.
C. A subscriber on the shares of the corporation who pays less than 25% of his subscription.
D. A corporation organized under the laws of the Philippines.

20. All are books to be kept or maintained by the corporation except one:
A. Books of all business transactions
B. Books of minutes of the corporate officers' meeting
C. Books of minutes of the meetings of the board of directors
D. Stock and transfer book for stock corporations

21. 1st Statement - A close corporation may not have more than 15 corporators
2nd Statement - No delinquent stock shall be voted for or be entitled to vote through representation at any stockholders'
meeting. .
A. 1st statement is wrong, 2nd statement is correct
B. 1st statement is correct, 2nd statement is wrong.
C. Both statements are correct
D. Both statements are wrong.

22. Which of the following is not correct?

A. A partnership begins from the moment of the execution of the contract, unless it is otherwise stipulated
B. Persons who are prohibited from giving each other any donation or advantage cannot enter into universal
partnership
C. A particular partnership has for its object determinate things, their use or fruits, or a specific undertaking or the
exercise of a profession or vocation.
D. Articles of universal partnership; entered into without specifications of its nature, only constitutes a universal
partnership of all present property.

23. 1st Statement - The acceptor of a bill may refuse to pay the holder on the ground that the signature of the drawer is
forged.
2nd Statement - An instrument if not negotiable if it is payable to the order of a fictitious person.
A. 1st statement is wrong, 2nd statement is correct
B. 1st statement is correct, 2na statement is wrong.
C. Both statements are correct
 D. Both statements are wrong.

24. Maggie makes a promissory note for P40,000 payable to the order of Homer. Homer negotiates the note to Margie who
indorses it to Henry. Henry indorsed the instrument to Melissa who with the consent of Henry raises the amount to
P100,000 and thereafter indorses it to Hilary, Hilary to Menandro, and Menandro to Helen, who is a holder in due course.
In this case
A. Helen can recover P40,000 as against Maggie.
B. Helen can recover P100,000 from Maggie.
C. Menandro and Melissa are liable to Helen for 240,000
D. Maggie and Homer are not liable to Helen.

25. Mike makes a note payable to the order of Nimfa' who indorses it to Allan. Lorena obtains possession of the note
fraudulently, forges Allan's signature and indorses it to Cory who in turn indorses it to Jenny. In this case, Jenny can
enforce the instrument against
A. Cory B. Allan C. Nancy D. Nimfa

26. Pedro agreed with his creditor Jose, that in case the former fails to pay his loan, he will serve as a servant in the house
of Jose. Which of the following statements is correct?
A. An action for damages should be brought by Jose in case of non-compliance by Pedro of their stipulation
B. The stipulation is valid if there is no vice of consent
C. The stipulation is void for being contrary to law and morals
D. If the services will be compensated specific performance of the service will be the proper remedy in case of non-
compliance.

27. If Imelda pays an obligation that has prescribed:

1. not knowing it has prescribed, Imelda can recover on the ground of solutio indebite
2. knowing it has prescribed but still voluntarily paid, Imelda cannot recover for this would be a case of natural
obligation
A. Both 1 and 2 are true C. Only 2 is true
B. Only 1 is true D. Both 1 and 2 are false

28. Ai pledged her i-phone 5 to Yeng for P20,000.00. Ai was unable to pay the obligation upon maturity so Yeng sold the
phone at public auction for P15,000.00. Which of the following is correct?
A. The deficiency of P5,000.00 can be recovered
B. The deficiency of P5,000.00 can be recovered even if a contrary stipulation appears
C. The deficiency of P5,000.00 can be recovered if stipulated
D. The deficiency of P5,000.00 cannot be recovered even if there is a stipulation.

29. Pauline and Angela are partners. On September 17, 2011 Gabriel was admitted as a new partner. At the time of Gabriel's
admission, the partnership was indebted to Angelo for P50,000 and Judiel for P100,000. After Gabriel's admission, the
partnership borrowed from Kaela P200,000 and P400.000 from Riza. On September 1, 2012, the partnership became
insolvent. The creditors are going after the separate properties of the partners to satisfy their remaining claims. How are
the creditors' Claims satisfied?
ANSWER 1: Angelo and Judiel can go after the separate properties of. Pauline, Angela and Gabriel
ANSWER 2: Kaela and Riza can go after the separate properties of Pauline and Angela but not of Gabriel
ANSWER 3: All creditors can run after the properties of the three partners
ANSWER 4: All partners shall be liable to the creditors except Gabriel
Which of the following is correct?
A. All answers are correct
B. All answers are wrong.
C. Only answer #1 is wrong
D. Only answer #4 is correct

30. 1st Statement - No delinquent stock shall be entitled to dividends

2nd Statement - No delinquent stock shall be voted for or be entitled to vote through representation at any stockholders'
meeting.
 A. 1st statement is wrong, 2nd statement is correct C. Both statements are correct
B. 191 statement is correct, 2nd statement is wrong. D. Both statements are wrong.

31. The voting requirement to remove a director.

A. Two-thirds (2/3) outstanding capital stock and majority vote of the board of directors.
B. Majority vote of the outstanding capital stock with voting rights.
C. Two-thirds (2/3) of the outstanding capital stock with voting rights
D. Majority vote of the outstanding capital stock voting and non-voting

32. Annaliza uses a savings account with a BPI bank. The contract between Annaliza and the bank is one of:
A. Agency B. Commodatum. C. Deposit. D. Simple loan

33. 1st STATEMENT - If the same car should have been sold to different buyers, the ownership shall be transferred to the
person who may first taken possession thereof in good faith.
2nd STATEMENT - The seller is responsible to the buyer for any hidden defects or faults in the thing sold only if he was
aware thereof.
A. The 1st statement is true, 2nd statement false
B. 19 statement false, 2nd statement true
C. Both statements are false
D. Both statements are true

34. Statement No. 1 - An oral agreement to answer all expenses for the wedding reception if Andy marries Baby is
unenforceable
Statement No. 2 - An oral contract of sale of a land is void.
A. False, false. B. True, true C. False, true. D. True, false

35. When the thing improves pending the fulfillment of the suspensive condition with the expense of the debtor, the
improvement shall inure to the benefit of:
A. the party who made the improvement . C. the debtor
B. partly by the debtor and partly by the creditor D. the creditor

36. Annie promised to sell her house and lot in Davao to Leny if the latter decides to live in Davao. This obligation is:
A. with casual condition and is therefore valid
B. with suspensive potestative condition on the part of the debtor and is therefore void.
C. with resolutory potestative condition on the part of the debtor and is therefore valid.
D. with suspensive potestative condition on the part of the creditor and is therefore valid.

37. Angel promised her dog to Baby on Jan 1, 2011 to be delivered on Feb 1, 2011. The dog gave birth to puppies while in
possession of Angel. In this case:
1. Angel is entitled to the puppies as they were born while the dog is in her possession
2. If the puppies were born on Feb. 1, 2011 or after, Baby is entitled to them
3. If the puppies were born before Feb. 1, 2011, Angel is entitled to them
A. Only 1 and 2 are correct C. Only 1 and 3 are correct
B. Only 2 and 3 are correct D. Only 3 is correct

38. Using the same facts as given above, supposing the dog was sold by Angel to Baby?'
1. Angel is entitled to the puppies as they were born while the dog is in her possession
2. Baby is entitled to the puppies as the buyer is entitled to the fruits from perfection of the contract of sale
A. Both 1 and 2 are true C. Only 2 is true
B. Only 1 is true D. Both 1 and 2 are false

39. June obliged himself to give to Peter his motorcycle dn January 10, 2016. There was no delivery until January 17, 2016
when the garage of the motorcycle collapsed due to a strong typhoon and the motorcycle was totally destroyed. Is June
still liable?
 A. No, even if June was already in default, he could plead impossibility of performance
B. Yes, the obligation to deliver the motorcycle is changed to pay the equivalent value because June is in legal delay
C. No, because there was no demand by Peter to deliver the motorcycle and the specific object was lost due to
fortuitous event. The obligation is extinguished.
D. Yes, because the contract is perfected.

40. "We promise to pay solidary creditors A, B, C, and D P100,000.

(Sgd.) X and Y"
How much can A collect from X?
A. P100,000 B. P 50,000C C. 25,000 D. P20,000

41. In Facultative obligations, if substitution has been made, which of the following is false?
A. The obligation is extinguished
B. The loss of the original prestation is immaterial
C. The obligation is converted into a simple obligation
D. The obligation ceases to be facultative

42. On June 1, 2015 Anne was indebted to Charlie for P500,000 for a 30-day period. Anne proposed to Charlie that Sofia
will pay Anne's debt, and that Anne will be free from all liabilities. Charlie and Sofia agreed to the proposal. On July 1,
2015, when Charlie tries to collect from Sofia, he finds that Sofia is insolvent. At the time of delegation, Sofia was insolvent
but this was not known to Anne. The insolvency is not of public knowledge. So Charlie sues Anne on the ground that it
was Anne who made the proposal and that Anne really guaranteed Sofia's solvency. Decide.
A. Anne is liable because she is presumed to have guaranteed Sofia's solvency.
B. Anne is not liable, because Anne does not know the insolvency of Sofia at the time of delegation and neither was
the insolvency of public knowledge.
C. C. Anne is liable because she did not exercise due diligence in determining the insolvency of Sofia
D. D. Anne is liable because Sofia agreed to the proposal to make himself solidarily liable for the obligation.

43. Case No. 1. Sheila promised to give her son a car if the son will not marry Michie this year. If by the end of the year,
Michie is already dead or the son has not married Michie, the obligation to give a car is effective and demandable.
Case No.2. Sheila promised to give her son a car if the son will marry Michie before the end of 2016. If on January 1,
2017, the son has not yet married Michie, or Michie has died, the obligation is extinguished.
A. Both statements are true. C. First false, second true.
B. Both statements are false. D. First true, second false.

44. Ana obliged herself to deliver to Bobby the following:

1) An apple i-phone 6gs
2) Honda Accord car with plate number AMB 1211
1st statement - In case Ana failed to deliver any of the two objects, the obligations may be compelled with at the expense
of Ana
2nd statement-in case Ana failed to deliver the car, the court may compel him to deliver another car plus damages.
A. True, true
B. True, false
C. False, true
D. False, false

45. Angeline owes Heidi P100,000. Later Angeline paid Heidi P75,000 leaving a balance of P25,000. Marcel a suitor of
Angeline and intending to surprise Angeline, paid Heidi the sum of P100.000 thinking that Angeline still owed Heidi that
amount. Marcel did this without knowledge of Angeline. Which is correct?
A. Marcel can recover P100,000 from Angeline
B. Marcel can recover P100,00 from Heidi
C. Marcel cannot recover anything from Angeline
D. Marcel can recover P25,000 from Angeline
46. Any voluntary act or omission, there being no malice, which prevents the normal fulfillment of an obligation
A. dolo B. culpa C. mora D. traditio

47. Ana sold her Laptop for P20,000 to Bobby. There was no fixed date for the performance of the obligations of both parties.
The obligation of the seller is:
A. To wait for demand before delivering the laptop
B. To deliver the laptop immediately as this is a perfected contract.
C. To deliver the laptop after receiving the payment.
D. To rescind the contract

48. Carlito, Alfredo and Francisco owed in solidum P15,000 to Ricardo as evidenced by a promissory note. The note
prescribed on September 30, 2010. On May 1, 2011, Carlito paid Ricardo. In this case Carlito is:
A. Entitled to collect P5,000 each from Alfredo and Francisco
B. Not entitled to reimbursement from his co-debtors for the shares of the latter
C. Entitled to recover from Ricardo
D. Can be sued.

49. A sold his horse to B for P100,000. No date was stipulated for the delivery of the horse. While still in the possession of
A, the horse gave birth to a colt.
A. A is entitled to the colt because it was born before his obligation to deliver the horse arises.
B. A is entitled to the colt as B has not paid the price.
C. B is entitled to the colt which was born after the perfection of the contract.
D. B, in order to be entitled to the colt, should pay additional cost for the colt to be agreed upon by both parties

50. A and B promised to deliver a dog named "Kisses" valued at P20,000 to C on August 1, 2016. Which is correct?
A. The prestation is indivisible making the liability of A and B solidary
B. If on March 1, 2016, A is willing to deliver the dog but B is not, C may enforce the obligation against A
C. A is liable for a proportionate part of the obligation and will be liable also for damages if B is not ready to comply
with his obligation, even if A is willing to deliver the dog
D. The liability of A and B is joint and that damages may be assessed only against the debtor who violated the
obligation
51. The following are examples of obligations with a period, except:
A. “As soon as I have money"
B. “30 days after the death of Mr. A”
C. "If the sun will rise on August 1, 2016"
D. "if Mr. A reaches the age of 25 which is 2 years from today"

52. Mr. Arrovo, a former government employee, suffered from severe paranoia and was confined in the mental hospital in
2010. After his release he was placed under the guardianship of his wife to enable him to get his retirement pay. In 2014
he became a mining prospector and sold some mining claims. In 2016 he sued to annul the sale claiming that he was
not mentally capacitated at the time of sale. The sale in question was
A. Illegal.
B. Void.
C. Voidable.
D. Valid.

53. Statement No. 1 – An oral agreement to answer all expenses for the wedding reception if Andy marries Baby is
unenforceable
Statement No. 2 - Contracts infringing the Statute of Frauds are void.
A. False, false. C. True, true
B. False, true. D. True, false

54. . Which of the following instruments is negotiable?

A. "I promise to pay Gabriel or order P100,000.00 10 days before end of the world"
B. "Due to Gabriel or bearer P100,000.00”.
C. "Good to Gabriel or order P100,000.00 worth of sugar"
 D. "I hereby authorize you to pay Gabriel or order P100,000.00" Sgd. B addressed to A

55. Which of the following instruments is negotiable?

A. "I promise to pay Angelo or order P100,000.00 in four installments"
B. "I promise to pay the bearer Angelo P100,000.00"
C. ". promise to pay Angelo or order P100,000.00 if he will pass the October 2014 CPA examinations"
D. D. "I promise to pay Angelo or order P100,000.00 10 days after death of Gloria"

56. Andy. Baby, Cathy and Danny formed ABCD partnership. Andy, Baby and Cathy are general partners and contributed
P500,000.00 each while Danny is an industrial partner. All the partners signed an agreement stipulating that the liability
of Andy will be limited to his contribution. After all the assets of the partnership were exhausted, there remains an unpaid
liability of P600,000.00. The creditors of the partnership can compel:
A. all partners to pay P600,000 each H
B. all partners to pay P150,000 each
C. all partners except Andy, to pay the P200,000.00 each
D. Baby and Cathy to pay P300,000.00 each

57. The power to aid and protect employees is more specifically classified as:
A. Incidental power C. Inherent power
B. Necessary power D. Express power

58. 1st Statement - The instrument is discharged upon payment by an indorser of a promissory note at or after maturity date
2nd Statement – The promissory note is discharged upon payment by the accommodation party at or after maturity.
A. 15 statement is wrong, 2nd statement is correct
B. Both statements are correct
C. 1st statement is correct, 2nd statement is wrong.
D. Both statements are wrong.

59. A negotiable promissory note payable to order was altered by the holder, changed the amount from P500,000 to
P1,000,000 and thereafter indorses it to M:
1st statement: If M is a holder in due course, he can enforce the instrument against the maker for P1,000,000
2nd statement: If M is a holder not in due course, he can enforce the instrument for P500,000 against the maker
3rd statement: M cannot enforce the instrument against the maker because material alteration is a real defense.
A. Only the first statement is correct D C. only the 3rd statement is correct
B. Only the second statement is correct D. all statements are wrong

60. In three of the following defective contracts, ratification cleanses the defects. Which is the exception?
A. Both parties are incapable of giving consent
B. Sale of immovable property or interest orally entered into
C. Contract of sale fraudulently made as a mortgage
D. Contract entered into by a person who has been given no authority

61. Upon request of A, B makes a note to accommodate A. Then A indorses the note to C, when C presented the note to B,
the latter dishonor it, which is correct?
A. Notice of dishonor should be given to A to make him liable as an indorser
B. As a party secondarily liable, without the notice of dishonor, A will be discharged
C. As an accommodated party, A will be liable even if notice of dishonor is not given to him
D. As an indorser, A will be liable provided notice of dishonor is given

62. Atoy sold to Bitoy a residential lot to be containing an area of 1,000 square meters at P1,000 per square meter. In this
connection, which of the following statements is correct?
A. If the lot should contain '950 sq. meters only, B can ask for a proportionate reduction of the price and rescission.
B. If the lot should contain 1,200 sq. meters, B cannot reject the excess and must pay additional price at P1,000 per
square meter.
C. If the lot should contain 900 sq. meters, B can choose between proportionate reduction of the price but not
rescission of the sale
 D. if the lot should contain 900 sq. meters, B can choose between proportionate reduction of the price or rescission of
the contract

63. A sale with a right to repurchase anytime from the date of sale was executed. In this case:
A. The stipulation is valid
B. The buyer has 4 years within which to repurchase the property sold
C. The buyer has 12 years within which to repurchase the property sold
D. The buyer has 10 years within which to repurchase the property sold.

64. Which of the following can be a close corporation?

A. Insurance companies.
B Banks
C. Mining corporations
D. Building and loan associations

65. Boy owes Bheng to debts, both of which are already due. The first debt is secured by registered chaitel mortgaged
constituted over a car belonging to Boy and the second is not. Boy tells Bheng that the payment he is now making should
be applied to the second debt instead of the first, which is correct?
A. Bheng cannot refuse the application if the first debt is older than the second
B. Bheng may refuse such application on the ground that the first debt is more burdensome to the debtor
C. Bheng may refuse such application because the payment shall be applied proportionately
D. Bheng cannnot refuse the application because the preference of the debtor must be followed

66. A partner can engage in business for himself without the consent of his co-partners if he is
A. A capitalist partner whether or not the business he will engage in is of the same kind as or different from the
partnership business
B. An industrial partner whether or not, business he will engage in is or the same kind as or different from the
partnership business
C. A capitalist partner and the business he will engage in is of a kind different from the partnership business
D. An industrial partner and the business he will engage in is of a kind different from the partnership business

67. A and B put up a partnership to engage in distribution of books and school supplies. A contributed PIM while B his
services. A wants to put a restaurant on the opposite side of the street. On the other hand, B wants to have a bakery
beside A's restaurant. Which of the following is correct?
A. A may put up his restaurant without need of securing B's consent
B. B may put up his bakery without need of securing B's consent
C. Both A and B can put up their restaurant and bakery business without the need of securing each other's consent
D. Neither A or B can put up another business.

68. The partnership will bear the risk of loss of three of the following things, except
A. Things contributed to be sold
B. Fungible things or those that cannot be kept without deteriorating
C. Non-fungible things contributed so that only their use of fruits will be for the common benefit
D. Things brought and appraised in the inventory

69. A and B orally agreed to form a partnership two years from today, each one to contribute P1,000. If at the arrival of the
period, one refuses to go ahead with the agreement, can the other enforce the agreement?
A. Yes, because the partnership contract is not governed by the Statute of Frauds
B. Yes, because the prior agreement was voluntarily made
C. No, because the agreement was merely oral and executory
D. No, since the agreement is to enforced after one year from the making thereof, the same should be in a public
instrument to be enforceable

70. The following persons are disqualified to form a universal partnership, except
 A. Husband and Wife
B. Brother and sister
C. Those guilty of adultery and concubinage
D. Those guilty of the same criminal offense, if the partnership is entered into the consideration of the same.

71. A partnership suffered losses in the first year of its operation. A, a capitalist partner, cannot contribute an additional share
to the capital because of insolvency. Can A be obliged to sell his interest to the other partners on the ground of such
refusal?
A. Yes, A's refusal to contribute additional share reflects is lack of interest in the continuance of the partnership
B. No, because there is actually no imminent loss of the business.
C. Yes, provided that A is paid the value of his interest.
D. No, because his refusal is justifiable.

72. A, B and C are partners. A is an industrial partner. During the first year of operation, the firm realized a profit of P60,000.
During the second year, the firm sustained a loss of P30,000. So, the net profit for the two years of operation was only
P.30,000. In the Articles of Partnership, it was agreed that A, the industrial partner would get 1/3 of the profit but wouid
not share in the losses. How much will A, the industrial partners get?
A. A will get only P20,000 which is 1/3 of the profit of the 1st year of operation.
B. A will get only P10,000 which is 1/3 of the net profit.
C. A will get only P20,000 in the first year and none in the second year.
D. A will share in the loss in the second year.

73. First Statement - The partner who has been appointed manager may execute all 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.
Second Statement - When the manner of management has not been agreed upon, none of the partners may, without
the consent of the others, make any important alterations in the property of the partnership, even if it may be useful to
the partnership.
A. Both statements are true
B. Both statements are false
C. Only the first is true
D. Only the second is true

74. The articles of incorporation differ from the by-laws in the articles of incorporation are
A. The rules of action adopted by a corporation for its internal government
B. Adopted before or after incorporated
C. A condition precedent in the acquisition by a corporation of a judicial personality
D. Approved by the stockholders if adopted after the incorporation

75. This is characteristic of a stock corporation as distinguished from a non-stock corporation

A. The powers are vested in the Board
B. The owners can vested dividends
C. It is formed by at least 5 but not more than 15 persons
D. It is organized for profit

76. If the remaining directors constitute a quorurn, they can fill up the vacancy
A. In case of removal of a director
B. In case of expiration of term of a director
C. If there is an increase in the number of directors
D. In case of resignation of a director

77. The following may be the consideration of the shares of stock of a corporation, except
A. Actual cash paid to the corporation
B. Previously incurred indebtedness of the corporation
C. Amounts transferred from unrestricted retained earnings
D. Service to be performed by a lawyer on the proposal increase in capital stock of the corporation
 78. Shares deposited by the seller or his agent with a bank or third 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

79. As regards treasury shares, which is not correct?

A. They have no voting rights as long as they remain in the treasury
B. They are considered as part of earned or surplus profits and therefore distributable as dividends
C. They are not entitles to dividends
D. They may be the distributed as property divided if there are retained earnings arising from the business of the
corporations.

80. In no case shall the total yearly compensation of directors, as such directors, exceed
A. 5% of the net income before income tax during the preceding year
B. 10% of the net income before income tax during the preceding year
C. 10% of the net income after income tax during the preceding year
D. 10% of the net income before income tax during the current year

81. A corporate officer or director 'cannot, take advantage for their personal benefit a 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

82. A shareholders' opinion to subscribe to allotment of shares in proportion to his holding of outstanding shares, before new
shares are offered to others
A. Voting right
B. Pre-emptive right
C. Ultra vires act
D. Appraisal right

83. A representative action where a stockholder brings an action in the name and in behalf of the corporation and any relief
obtained belongs to the corporation and not to the stockholders individually or collectively
A. Individual suit
B. Derivative suit
C. Representative suit
D. Corporate suit
.
84. A non-voting stock may vote in the following corporate acts, except in case of
A. Approval of the compensation of directors
B. Merger or consolidation
C. Increase or decrease in capital stock
D. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of corporate property.

85. One of the following acts maybe performed by the executive committee of a corporation. Which is it?
A. Declaration of stock dividends
B. Filling of vacancies in the board of directors
C. Amendment or repeal of the by-laws or adoption of new by-law
D. Approval of contracts in the ordinary course of business
86. First Statement - Redeemable shares may be redeemed regardless of the existence of unrestricted retained earnings
even if such redemption would cause insolvency or inability of the corporation to meet its debts as they mature. Second
Statement - Treasury shares do not revert to the unissued shares of the corporation and are still issued shares but being
in the treasury they have the status of outstanding shares.
A. Both are true
B. Both are false
C. Only the first is true
D. Only the second is true

87. First Statement - No person convicted by final judgment of an offense punishable by imprisonment shall qualify as a
director, trustee, or officer of any corporation.
Second Statement - Any vacancy occurring in the board of directors or trustee may be filled by the vote of at least majority
of the remaining directors of trustees, 'if still constituting a quorum.
A. Both are true
B. Both are false
C. Only the first is true
D. Only the second is true

88. First Statement - In the election of directors, owners of majority of the outstanding capital stock must be present to vote
in person as they cannot vote by proxy
Second Statement - Directors or trustees can attend and vote by proxy in board meetings
A. Both are true
B. Both are false
C. Only the first is true
D. Only the second is true

89. First Statement - The corporate secretary must be a director, and a resident and citizen of the Philippines.
Second Statement - The by-law of a corporation may create an executive committee, composed of not less than three
(3) members to be appointed y the board of directors
A. Both are true
B. Both are false
C. Only the first is true
D. Only the second is true

90. First Statement - The highest bidder is the person offering to pay the full amount of the balance on the subscription
together with accrued interest, if any, cost of advertisement and expenses of sale for the highest number of shares.
Second Statement - Holders of subscribed shares not fully paid shall have all the rights of stockholder.
A. Both are true
B. Both are false
C. Only the first is true
D. Only the second is true

91. First Statement - The cost and expenses of appraisal shall be borne by the stockholders.
Second Statement - The board of directors may remove a member of the board for excessive absences.
A. Both are true B. Both are false C. Only the first is true D. Only the second is true

92. A clause providing that the mortgagee will automatically own the property mortgaged if the debt is not paid at maturity is
A. Dacion en pago
B. Payment by cession
C. Pactum commissorium
D. Upset price

93. Pledge, deposit and commodatum are

A. Consensual contracts
B. Real contracts
C. Solemn contracts
 D. Formal contracts

94. When through insidious words or machinations of one of the contracting parties, the other is induces to enter into a
contract which, without them he would not have agreed, there is
A. Fraud B. Mistake C. Intimidation D. Undue influence

95. Which of the following constitutes a definite offer

A. An offer made through an agent
B. Advertisement for bidders
C. Business advertisement of things for sale
D. Newspapers advertisements for employment

96. A offered to sell her watch to B for P1,000. B offered to buy the watch for P800 but was rejected by A When B turned to
go away. A called him and said she is now willing to sell the watch for P800. May B refuse to buy said watch?
A. No, because B's offer of P800 was accepted by A.
B. No, there is a meeting of the minds between the parties or the subject matter and the cause of the contract.
C. Yes, because B made a counter offer which was rejected by A.
D. Yes, because the agreement is under the statute of frauds.

97. One is not a rescissible contract

A. Those undertaken in fraud of creditors when the latter cannot I any other manner collect the claim due them.
B. Those which are entered into by guardian whenever the wards whom they represent suffer lesion by more than 1/4
of the value of the things which are object thereof
C. Those agreed upon in representation of absentees, if the latter suffer a lesion of more than ¼ of the value of the
objective of the contract
D. D. Those where one of the parties is incapable of giving consent to a contract

98. Which of the following is enforceable?

A. Oral sale of immovable property for a price of P400
B. Oral sale of immovable property for a price of P10,000
C. Oral contract of loan for P1,000
D. Oral agreement made in consideration of marriage

99. If one debt is P12,000 and the other is P6,000 and the debtor without making any application payment gives P3,000,
how should said payment be applied, presuming that both debts are of the same nature and burden?
A. The payment will be applied to the P12,000 debt
B. The payment will be applied to the P6,000 debt
C. The payment will be applied equally.
D. The payment will be applied proportionately

100. In order that fraud may make a contract voidable:

A. It may be incidental but both parties should not be in parti delicto
B. It may be serious and the parties must be in pari delicto
C. It may be incidental but should have been employed by both parties.
ND. It should be serious and should have not have been employed by both contracting parties.