Corporate Law Principles Quiz

Shares that a corporation can buy back from shareholders after a fixed period, as stated in the corporation's articles of incorporation. These shares can be redeemed regardless of the company's available retained earnings.

Shares that a corporation can buy back from shareholders, regardless of the company's retained earnings. This buyback is subject to terms outlined in the corporation's articles of incorporation and the certificate of stock, along with SEC regulations.

A corporation has a perpetual existence, meaning it can continue operating indefinitely, unless its articles of incorporation specify a limited duration.

Corporations can exist for a specific period of time as defined in their articles of incorporation. This duration can be extended or shortened through specific amendments to the articles of incorporation.

A corporation's articles of incorporation can specify a fixed duration for its existence. This duration is subject to potential extension or shortening by amending the articles of incorporation.

When a corporation decides to change its corporate term, it must notify the SEC. This change is subject to the appraisal rights of dissenting stockholders, which are outlined in the corporation's code.

To change the corporate term to a specific period, a corporation needs a majority vote from its stockholders, who represent a majority of the outstanding capital stock.

A corporation can only extend its corporate term earlier than three years prior to the original or subsequent expiry date(s) if there are justifiable reasons. Otherwise, the extension must be made within three years of the expiry date.

Shares of stock that a company has bought back from investors. These shares are no longer actively traded and are held by the company.

The process of a company regaining ownership of its own shares by purchasing them from investors in the market.

A company buys back its own shares to reduce the number of outstanding shares in the market, potentially increasing the value of the remaining shares.

A company's ability to buy back its own shares gives it more control over its stock price and can signal confidence in the company's future prospects.

The price at which a company can resell its treasury shares is ultimately decided by the company's board of directors.

Treasury shares can be resold by a company to raise capital, increase earnings per share, or for other strategic reasons.

Treasury shares can be a valuable tool for companies to manage their capital structure and influence market perception.

Shares repurchased by a company are not considered 'outstanding' and do not contribute to earnings per share calculations.

The SEC can order an election of directors if a stockholder, member, director, or trustee requests it.

The SEC sets the time, place, presiding officer, and voting criteria for a special election.

Even if the corporation has a quorum requirement, the shareholders present at the SEC-ordered election constitute a quorum.

The corporation must report the death, resignation, or departure of a director, trustee, or officer to the SEC within 7 days.

A person cannot be a director, trustee, or officer if they were convicted of a crime within the past five years.

The secretary or other designated officer must call a special meeting for removing a director or trustee.

Stockholders can demand a special meeting for removing a director or trustee.

Removing a director or trustee without cause must not violate minority shareholder rights.

A corporation can continue operating indefinitely unless its articles of incorporation specify a limited duration.

The company's rules and regulations are called bylaws.

A corporation's charter is a formal document that outlines its fundamental operating guidelines.

A corporation can change its articles of incorporation to reflect its evolving business needs or legal requirements.

Corporations can buy back outstanding shares from their shareholders under specific conditions and regulations.

A person cannot be appointed or elected as a director or trustee if they were convicted of certain crimes within the past 5 years.

A corporation's bylaws can specify a period of time for a director or trustee's term. In the absence of this, they serve without a fixed term.

A director or trustee can be removed from their position with or without cause, but removal without cause requires specific safeguards to protect minority stockholders.

If a director or trustee is disqualified after being elected, the SEC can order their removal. This can happen if their disqualification was discovered after the election.

A corporation may have an emergency board consisting of directors or trustees who are solely responsible for addressing urgent situations. Their role is limited and requires notification to the SEC.

If vacancies occur due to an increase in board seats, elections must be held for the new positions. These replacement directors or trustees serve only the remainder of the previous term.

Unless specified in the bylaws, directors or trustees are not paid for their services.

The SEC can impose additional penalties on a board if they were aware of a director or trustee's disqualification but did not take action to remove them.

A corporation can only increase its capital stock if at least 25% of the new shares are subscribed to and 25% of the subscribed amount is paid in cash or by transferring property equal to 25% of the subscription.

A corporation's sale of all or substantially all of its assets, including goodwill, must be approved by at least two-thirds of the outstanding capital stock or at least two-thirds of the members.

Nonstock corporations can incur bonded indebtedness if approved by a majority of the board of trustees and at least two-thirds of the members.

Bonds issued by a corporation must be registered with the Securities and Exchange Commission (SEC), which evaluates their terms.

The Philippine Competition Act (RA 10667) restricts corporations from increasing their capital stock without a sworn statement from the treasurer showing compliance with specific requirements.

A corporation's capital stock cannot be decreased if it would negatively affect the rights of its creditors.

In nonstock corporations without voting members, a majority vote of the trustees is sufficient authorization for transactions like selling assets.

The Commission is responsible for determining the sufficiency of the terms of the corporation's bonds.