30 Questions
What is a valid reason for a corporation's dissolution?
The corporation fails to commence and operate due to causes beyond its control
How can a director's vacancy be filled after removal by stockholders?
By a vote of the remaining directors
What is the consequence of non-commencement of business within 2 years from the date of incorporation?
Dissolution of the corporation
Is it legal to issue watered stock in the Philippines?
No, it is illegal to issue watered stock
What is the status of Super Corporation in the given scenario?
It is a de facto corporation
What is the minimum number of years a corporation must operate before it can be considered continuously inoperative?
2 years
What is a necessary requirement for a person to be selected as president of a corporation?
Being a citizen and resident of the Philippines
What is the minimum amount of paid-up capital required for a corporation to comply with the law?
P25,000.00
What is an exception to the ways of enforcing payment of unpaid subscription?
Denying delinquent stocks cash dividends
Can a director enter into a contract with another corporation of which he is also a partner?
Yes, if the vote of such director is not necessary for the approval of the contract
What is the title of the person(s) who are responsible for the formation of a corporation?
Incorporators
What is the minimum amount of authorized capital required for a corporation to comply with the law?
No minimum amount is specified
What happens to the subscription price if a corporation becomes insolvent?
It cannot be enforced.
What is a characteristic of cash dividends?
It involves disbursement of cash.
What is a disadvantage of forming a corporation?
The subservience of minority stockholders to the wishes of the majority.
What is required of a corporation after a quasi-reorganization?
To disclose the effects of quasi-reorganization on its financial statements for a minimum of three years.
What is the effect of a quasi-reorganization on a company's retained earnings?
The retained earnings are restricted to the extent of the deficit wiped out by the appraisal surplus.
What is the relationship between a quasi-reorganization and a corporation's financial statements?
The quasi-reorganization must be disclosed on all financial statements for a minimum of three years.
What is the term for the owner's interest in the corporation's profits or net assets?
Capital
What is the required vote to effect an amendment of the by-laws of a corporation?
Majority vote of the outstanding capital stock
What is the test used to determine the nationality of a corporation based on the controlling stockholders?
Control test
Who cannot be an incorporator of a corporation?
A subscriber on the shares of the corporation who pays less than 25% of his subscription
Which two positions cannot be held simultaneously by one person in a corporation?
Secretary and Treasurer
Which of the following is not part of the three-fold duty of directors of a corporation?
Duty of Efficiency
What is the liability of A and B as solidary debtors of W, X, Y, and Z, joint creditors for P40,000?
Both A and B are liable for P40,000 each with provision for damages
How much can X collect from A as a joint creditor?
P40,000
How much can E collect from A as a solidary creditor?
P1,000
What is the total obligation of the partnership on June 15, 2007?
P80,000
What is the total amount of debt incurred by the partnership after June 15, 2007?
P30,000
How will the creditors' claims be satisfied after the partnership becomes insolvent?
The creditors will collect from the separate properties of the partners
Test your knowledge of corporation laws and regulations, including the circumstances under which a corporation may be considered inoperative and the process of removing a director from office. Review your understanding of corporate governance and operations. Get ready to answer questions about corporation rules and regulations!
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