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Questions and Answers
What is required for the amendment of the articles of incorporation to be valid?
What is required for the amendment of the articles of incorporation to be valid?
Which of the following statements about a corporation's powers is accurate?
Which of the following statements about a corporation's powers is accurate?
Who typically exercises the powers granted to a corporation?
Who typically exercises the powers granted to a corporation?
Which of the following is NOT a requirement for amending articles of incorporation?
Which of the following is NOT a requirement for amending articles of incorporation?
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If a corporation intends to amend its articles of incorporation, which statement is true?
If a corporation intends to amend its articles of incorporation, which statement is true?
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What must an amendment to the articles of incorporation avoid?
What must an amendment to the articles of incorporation avoid?
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In the context of corporate powers, which statement is accurate?
In the context of corporate powers, which statement is accurate?
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What is a false statement regarding the requirements for amending articles of incorporation?
What is a false statement regarding the requirements for amending articles of incorporation?
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What must be included in the financial report presented by the board of directors at the regular meeting of stockholders?
What must be included in the financial report presented by the board of directors at the regular meeting of stockholders?
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In which situation is a Corporation liable for the debts of the selling Corporation when purchasing its assets?
In which situation is a Corporation liable for the debts of the selling Corporation when purchasing its assets?
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Which statement about the merger and consolidation of corporations is true?
Which statement about the merger and consolidation of corporations is true?
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What is the definition of a merger?
What is the definition of a merger?
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What is true about the effect of merger or consolidation agreements?
What is true about the effect of merger or consolidation agreements?
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What describes the process of consolidation in corporate terms?
What describes the process of consolidation in corporate terms?
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In which case would the purchasing corporation be seen as a continuation of the selling corporation?
In which case would the purchasing corporation be seen as a continuation of the selling corporation?
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Which of the following best differentiates between a merger and an acquisition?
Which of the following best differentiates between a merger and an acquisition?
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What is required for the approval of a plan of merger or consolidation in the case of stock corporations?
What is required for the approval of a plan of merger or consolidation in the case of stock corporations?
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What does the SEC require for a valid merger or consolidation?
What does the SEC require for a valid merger or consolidation?
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When does a merger become effective?
When does a merger become effective?
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What happens to the absorbed corporation in a merger?
What happens to the absorbed corporation in a merger?
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What is necessary for a consolidation to become effective?
What is necessary for a consolidation to become effective?
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What occurs when the SEC is satisfied with a consolidation?
What occurs when the SEC is satisfied with a consolidation?
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How does the law treat the dissolved corporation after a merger?
How does the law treat the dissolved corporation after a merger?
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If the SEC finds a proposed merger contrary to corporate law, what action does it take?
If the SEC finds a proposed merger contrary to corporate law, what action does it take?
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Study Notes
LAW Corporation Title I - General Provisions
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Factors for piercing corporate veil (except):
- Stock ownership by one or common ownership of both corporations
- Identity of directors and officers
- Manner of keeping corporate books and records
- Identity of stockholders
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Doctrine of piercing the corporate veil should be used with caution.
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A corporation exercises its powers through its board of directors and/or its duly authorized officers and agents.
LAW Corporation Title I- Multiple Choice Continued
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Corporations with capital stock divided into shares, may distribute dividends to holders of shares:
- Stock corporations
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Corporations where no part of the income is distributable as dividends:
- Non-stock corporations
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A corporation that has exercised powers for an indefinite period without government interference:
- Corporation by prescription
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A corporation incorporated under the laws of the Philippines:
- Domestic corporation
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A corporation formed, organized, or existing under any laws other than those of the Philippines:
- Foreign corporation
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A corporation consisting of more than one member:
- Corporation aggregate
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A corporation consisting of only one member to manage a church:
- Corporation sole
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A corporation organized for religious purposes:
- Ecclesiastical corporation
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A corporation organized for charitable purposes:
- Eleemosynary corporation
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An artificial being created by operation of law with the right of succession:
- Corporation
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A corporation is a juridical entity with a personality separate from its acting members:
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Well settled is the principle that the corporate veil may be pierced when it is merely an alter ego of a person or another corporation.
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A corporation has a personality which is the same as its members.
LAW Corporation Title I - Multiple Choice Continued
- A corporation which has exercised corporate powers for an indefinite period without interference on the part of the government.
- Foreign corporation
- Domestic corporation
- Properties of a corporation are not held by the members but by the corporation itself
- The powers, attributes, and properties of a corporation are expressly authorized by law or incidental to its existence.
- A corporation acquires a legal personality by operation of special or general law.
LAW Corporation Title II - Incorporation and Organization of Private Corporations
- A one person corporation can be formed by a natural person, trust, or estate.
- Banks, quasi-banks, preneed companies, and certain other types of corporations cannot form one-person corporations.
- The maximum amount subscribed and paid for by stockholders :
- Authorized capital stock
- Limitations in corporation amendment:
- The amendment must be for legitimate purposes and must not be contrary to the Corporation Code and special laws.
- The amendment requires the vote of the majority of the outstanding capital stock.
- The amendment must be approved by a majority of the board of directors or board of trustees
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- A corporation has perpetual existence unless the articles of incorporation state otherwise.
- Corporations must have a name for the purpose of suing, being sued, and performing legal acts.
- A corporation's existence begins when the DTI issues a certificate of incorporation.
- A corporation's existence is determined by valid law, attempted incorporation, and assumption of corporate powers.
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- The three-fold nature of articles of incorporation:
- Contract between Corporation and corporation, State, and stockholders.
- Stockholders/members meeting may be outside locations but must be in the Philippines.
- Purposes of a principal office for a corporation:
- Fixing the residence of the corporation.
- Used for purposes of meetings.
- Determining the venue of court cases.
- Determining the place where records are kept.
- The number of directors:
- No more than 15
- The number of trustees:
- May be more than 15
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
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Grounds for disapproval when amending articles of incorporation:
- Purposes that are unconstitutional or are contrary to rules and laws.
- False documentation or false representations of ownership ratios.
- Any failure or discrepancy in meeting the ownership requirements of the Philippines
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No corporate name shall be allowed by the SEC if it is not distinguishable from another entity for the use of another corporation.
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A corporation may not be approved if the name is not distinguishable (i.e., has similar punctuation, articles of conjunctions, abbreviations, tenses, spacing, or number of the same word or phrase, or abbreviations of the same phrase)
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- A corporation that does not formally organize or begin operating within 5 years from incorporation date is deemed revoked.
- The SEC may place a corporation under delinquent status if there is a period of non-operation for at least 5 years, with due notice and hearing.
- A corporation can be deemed revoked if it fails to comply with the SEC's requirements for operation within 2 years after being placed under delinquent status.
- Any person, partnership, association, or corporation can organize as a corporation.
- A corporation cannot be formed for a purpose of practicing a profession, however a licensed professional person may own stock or membership in a corporation that engages in such profession.
- The incorporators of a stock corporation must be a legal age and own at least 1 share of the stock.
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- There are two requisites for a stock corporation. It must have capital stock divided into shares, and it must be authorized to distribute dividends.
- A class of stock that gives the holder the right to vote, receive dividends after other claims, and to share assets upon liquidation is known as preferred stock.
- Stock entitling the holder to preferences over holders of common stock.
- Stock that can be purchased by the corporation at a fixed time:
- Redeemable stock
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- Shares with a fixed value in the articles of incorporation and stock certificate.
- Shares that may limit considerations to no less than P3.00
- The entire consideration of the stock shall be capital stock, not dividends.
- Shares cannot be classified as preferred stock.
- The exclusive right to vote or be voted for in director elections is for a limited period (no more than 5 years) unless SEC approval is acquired.
- Stockholders are not creditors of the corporation with granted preferences.
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- Stock with no preference that entitles the holder to a proportional division of profits.
- Stock without voting rights.
- Stock with voting rights.
- A juridical personality acquired either by special or general law.
- The general law under which a private corporation is formed/organized is the Revised Corporation Code.
LAW Corporation Title II - Incorporation and Organization of Private Corporations Continued
- Stock which has a lower par value or issued price
- Shares, or shares that are issued for a lower than fair valuation
- Stock issued for a consideration less than the par or issued price.
- Stock issued in a form other than cash.
- Any Agency Organized for Public Needs.
- Owned by the Government; wholly or 51% of capital
- Two requisites must concur before something can be classified as a stock corporation:
- It must have capital stock divided into shares.
- It must be authorized to distribute dividends to its members.
- Non-stock corporations can distribute up to 10% pf their income to members.
- Non-stock corporations are formed for various purposes (charitable, religious, educational, professional, etc.)
LAW Corporation Title II- Incorporation and Organization of Private Corporations Continued
- A corporation which accepts from the State a grant of franchise or contract is known as:
- Government-owned or controlled corporation
- Quasi-public corporation.
- De jure corporation.
- De facto corporation.
- Two requisites for a stock corporation are:
- It has capital stock divided into shares
- It is authorized to distribute dividends and allotments for surplus and profits
LAW Corporation Title II- Incorporation and Organization of Private Corporations Continued
- A corporation must have capital stock divided into shares.
- A corporation must be authorized to distribute dividends to its members.
- Non-stock corporations can distribute 10% of their income to their members.
- Non-stock corporations are organized for various purposes (religious, educational, etc.)
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Description
Test your knowledge on the essential aspects of corporate law, focusing on the amendment of articles of incorporation and the powers of corporations. This quiz covers key definitions, requirements, and implications of mergers and consolidations. Enhance your understanding of corporate governance and responsibilities.
