Corporate Law Bylaws Quiz

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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?

Dissolution of the corporation Signup and view all the answers

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

Control test Signup and view all the answers

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

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

What is false regarding corporate bylaws?

The power to adopt the majority of the outstanding capital stock Signup and view all the answers

Which power denies pre-emptive rights to stockholders?

Discretionary power Signup and view all the answers

What is incorrect concerning treasury shares?

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

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

Pre-emptive right Signup and view all the answers

Who holds supreme authority in the management of a corporation?

Board of directors Signup and view all the answers

Incorporated powers, attributes, and property must be:

Expressly authorized by law Signup and view all the answers

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

Only the first statement is true 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?

None of the above Signup and view all the answers

What is NOT a requisite for a de facto corporation?

Non-issuance by the SEC of certificate of incorporation Signup and view all the answers

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

Only the first is true Signup and view all the answers

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

At any time during incorporation process Signup and view all the answers

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

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

Can the incorporators validly form a domestic corporation?

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

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

P250,000.00 Signup and view all the answers

How many shares shall be paid up by the incorporators?

P625 Signup and view all the answers

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

No, because certificates are only issued after full payment of subscription. 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?

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

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

The corporation may face liquidity problems if promissory notes aren't honored. 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?

P50,000 or 500 shares Signup and view all the answers

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

A corporation Signup and view all the answers

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

All of the directors or trustee are residents of the Philippines Signup and view all the answers

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

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

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

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

Which factor determines if a share is considered watered stock?

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