Corporation Operations and Director Removal
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Questions and Answers

What is a valid reason for a corporation's dissolution?

  • The corporation fails to commence and operate due to causes beyond its control (correct)
  • The corporation does not issue watered stock
  • The corporation does not have a minimum of five directors
  • The corporation's directors are not Filipino citizens

    • How can a director's vacancy be filled after removal by stockholders?

  • By a vote of the remaining directors (correct)
  • By the Securities and Exchange Commission (SEC)
  • By a vote of the board of directors
  • By a vote of the stockholders holding at least 2/3 of the outstanding capital stock

    • What is the consequence of non-commencement of business within 2 years from the date of incorporation?

  • Dissolution of the corporation (correct)
  • No consequences
  • Fines and penalties
  • Revocation of the certificate of incorporation

    • Is it legal to issue watered stock in the Philippines?

    <p>No, it is illegal to issue watered stock</p> Signup and view all the answers

    What is the status of Super Corporation in the given scenario?

    <p>It is a de facto corporation</p> Signup and view all the answers

    What is the minimum number of years a corporation must operate before it can be considered continuously inoperative?

    <p>2 years</p> Signup and view all the answers

    What is a necessary requirement for a person to be selected as president of a corporation?

    <p>Being a citizen and resident of the Philippines</p> Signup and view all the answers

    What is the minimum amount of paid-up capital required for a corporation to comply with the law?

    <p>P25,000.00</p> Signup and view all the answers

    What is an exception to the ways of enforcing payment of unpaid subscription?

    <p>Denying delinquent stocks cash dividends</p> Signup and view all the answers

    Can a director enter into a contract with another corporation of which he is also a partner?

    <p>Yes, if the vote of such director is not necessary for the approval of the contract</p> Signup and view all the answers

    What is the title of the person(s) who are responsible for the formation of a corporation?

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

    What is the minimum amount of authorized capital required for a corporation to comply with the law?

    <p>No minimum amount is specified</p> Signup and view all the answers

    What happens to the subscription price if a corporation becomes insolvent?

    <p>It cannot be enforced.</p> Signup and view all the answers

    What is a characteristic of cash dividends?

    <p>It involves disbursement of cash.</p> Signup and view all the answers

    What is a disadvantage of forming a corporation?

    <p>The subservience of minority stockholders to the wishes of the majority.</p> Signup and view all the answers

    What is required of a corporation after a quasi-reorganization?

    <p>To disclose the effects of quasi-reorganization on its financial statements for a minimum of three years.</p> Signup and view all the answers

    What is the effect of a quasi-reorganization on a company's retained earnings?

    <p>The retained earnings are restricted to the extent of the deficit wiped out by the appraisal surplus.</p> Signup and view all the answers

    What is the relationship between a quasi-reorganization and a corporation's financial statements?

    <p>The quasi-reorganization must be disclosed on all financial statements for a minimum of three years.</p> Signup and view all the answers

    What is the term for the owner's interest in the corporation's profits or net assets?

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

    What is the required vote to effect an amendment of the by-laws of a corporation?

    <p>Majority vote of the outstanding capital stock</p> Signup and view all the answers

    What is the test used to determine the nationality of a corporation based on the controlling stockholders?

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

    Who cannot be an incorporator of a corporation?

    <p>A subscriber on the shares of the corporation who pays less than 25% of his subscription</p> Signup and view all the answers

    Which two positions cannot be held simultaneously by one person in a corporation?

    <p>Secretary and Treasurer</p> Signup and view all the answers

    Which of the following is not part of the three-fold duty of directors of a corporation?

    <p>Duty of Efficiency</p> Signup and view all the answers

    What is the liability of A and B as solidary debtors of W, X, Y, and Z, joint creditors for P40,000?

    <p>Both A and B are liable for P40,000 each with provision for damages</p> Signup and view all the answers

    How much can X collect from A as a joint creditor?

    <p>P40,000</p> Signup and view all the answers

    How much can E collect from A as a solidary creditor?

    <p>P1,000</p> Signup and view all the answers

    What is the total obligation of the partnership on June 15, 2007?

    <p>P80,000</p> Signup and view all the answers

    What is the total amount of debt incurred by the partnership after June 15, 2007?

    <p>P30,000</p> Signup and view all the answers

    How will the creditors' claims be satisfied after the partnership becomes insolvent?

    <p>The creditors will collect from the separate properties of the partners</p> Signup and view all the answers

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