Corporate Law Bylaws Quiz
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Questions and Answers

Which statement is true about a certificate of stock?

  • It must contain an unconditional order or promise to pay a sum certain money
  • It must be payable on demand or at fixed or determinable future time
  • It must be in writing and signed by the maker or drawer
  • It must be payable to order or to bearer (correct)

    • In a non-stock corporation, what is the range of trustees allowed?

  • Not less than five but maybe not more than fifteen
  • Not less than five years but not more than fifteen
  • Maybe less than five but not more than fifteen
  • Not less than five but not more than eleven (correct)

    • What is a limitation on a proxy?

  • The proxy acquires legal titles to the shares of the stockholders
  • The proxy may attend the meeting even in the presence of the stockholder
  • The proxy can call for the meeting only for which it is issued (correct)
  • The proxy is not revocable at the will of the stockholder

    • Stockholders with or without voting rights may typically vote on which of the following matters?

    <p>Dissolution of the corporation</p> Signup and view all the answers

    What determines the nationality of a corporation based on the control test?

    <p>Control test</p> Signup and view all the answers

    Which element must a negotiable instrument contain according to legal requirements?

    <p>Must contain an unconditional order or promise to pay a sum certain money</p> Signup and view all the answers

    What is false regarding corporate bylaws?

    <p>The power to adopt the majority of the outstanding capital stock</p> Signup and view all the answers

    Which power denies pre-emptive rights to stockholders?

    <p>Discretionary power</p> Signup and view all the answers

    What is incorrect concerning treasury shares?

    <p>They are considered part of the earned or surplus profits, thus distributable as dividends</p> Signup and view all the answers

    What is defined as the stockholders' right to subscribe to all shares in proportion to their shareholdings?

    <p>Pre-emptive right</p> Signup and view all the answers

    Who holds supreme authority in the management of a corporation?

    <p>Board of directors</p> Signup and view all the answers

    Incorporated powers, attributes, and property must be:

    <p>Expressly authorized by law</p> Signup and view all the answers

    Which statement regarding contracts between corporations with interlocking directors is accurate?

    <p>Only the first statement is true</p> Signup and view all the answers

    In which scenario can a vacancy in the board of directors not be filled up by the remaining directors?

    <p>None of the above</p> Signup and view all the answers

    What is NOT a requisite for a de facto corporation?

    <p>Non-issuance by the SEC of certificate of incorporation</p> Signup and view all the answers

    Which statement accurately describes the appraisal rights of stockholders in open and close corporations?

    <p>Only the first is true</p> Signup and view all the answers

    Under what circumstances can the bylaws of a corporation dictate meetings outside the Philippines?

    <p>At any time during incorporation process</p> Signup and view all the answers

    What is required for management contracts between corporations with interlocking directors to be approved?

    <p>2/3 vote of directors and stockholders</p> Signup and view all the answers

    Can the incorporators validly form a domestic corporation?

    <p>Yes, provided they will subscribe for at least 25% of the authorized capital stock.</p> Signup and view all the answers

    At the time of incorporation, how much should at least be subscribed by the incorporators?

    <p>P250,000.00</p> Signup and view all the answers

    How many shares shall be paid up by the incorporators?

    <p>P625</p> Signup and view all the answers

    Can B demand a certificate of stock for 1,200 shares?

    <p>No, because certificates are only issued after full payment of subscription.</p> Signup and view all the answers

    What is the consequence if an incorporator does not subscribe for any number of shares at the time of incorporation?

    <p>The corporation formation will fail due to insufficient capital.</p> Signup and view all the answers

    What could be a potential issue arising from X issuing a promissory note instead of payment?

    <p>The corporation may face liquidity problems if promissory notes aren't honored.</p> Signup and view all the answers

    What is the minimum amount of subscription that must be paid based on the authorized capital stock details provided?

    <p>P50,000 or 500 shares</p> Signup and view all the answers

    Which of the following can qualify as an incorporator in a corporation?

    <p>A corporation</p> Signup and view all the answers

    According to the Corporation Code, what residency requirements are needed for directors or trustees of a corporation?

    <p>All of the directors or trustee are residents of the Philippines</p> Signup and view all the answers

    What voting proportion is required for a corporation to invest its funds in any other corporation or business?

    <p>2/3 vote of the board of directors and ratified by majority of the outstanding capital stock</p> Signup and view all the answers

    What is watered stock in relation to a corporation's share issuance?

    <p>A share issued at a premium to its par value with non-cash consideration</p> Signup and view all the answers

    Which factor determines if a share is considered watered stock?

    <p>Issued below par value or with non-cash consideration</p> Signup and view all the answers

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