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Questions and Answers
What is a requirement for a de facto corporation?
What is a requirement for a de facto corporation?
- The corporation must have a valid law under which it may be incorporated (correct)
- The board of directors must declare stock dividends
- The corporation must have unrestricted retained earnings
- The corporation must have a one-person corporation
What is the purpose of the control test in determining the nationality of a corporation?
What is the purpose of the control test in determining the nationality of a corporation?
- To determine the validity of the corporation's existence
- To determine the corporation's engagement in nationalized areas of activities (correct)
- To determine the corporation's corporate governance
- To determine the corporation's liability for debts
What can a stockholder do in view of the automatic conversion of the corporate term to perpetual existence?
What can a stockholder do in view of the automatic conversion of the corporate term to perpetual existence?
- Request for a review of the corporation's financial statements
- Sue the corporation for damages
- Exercise his appraisal right (correct)
- Demand a special meeting of the stockholders
What is the minimum vote required for a merger or consolidation?
What is the minimum vote required for a merger or consolidation?
What is the doctrine of piercing the corporate veil applicable to?
What is the doctrine of piercing the corporate veil applicable to?
What is the effect of void acts of the board of directors?
What is the effect of void acts of the board of directors?
What is the term of a newly elected board of trustees in Y Corporation?
What is the term of a newly elected board of trustees in Y Corporation?
What is the primary requirement for a corporation to declare stock dividends?
What is the primary requirement for a corporation to declare stock dividends?
What is the liability of Mika, Nash, KD, and Alexa for secretly leaking financial information of the corporation?
What is the liability of Mika, Nash, KD, and Alexa for secretly leaking financial information of the corporation?
Can a corporation have only one incorporator?
Can a corporation have only one incorporator?
Can a corporation with an expired term apply for a revival of its corporate existence?
Can a corporation with an expired term apply for a revival of its corporate existence?
Can a corporate creditor enforce payment of the unpaid subscriptions in case of insolvency of a corporation?
Can a corporate creditor enforce payment of the unpaid subscriptions in case of insolvency of a corporation?
Can Corporation B pay Kathryn B 10,000 shares as an advance payment for her services as legal consultant?
Can Corporation B pay Kathryn B 10,000 shares as an advance payment for her services as legal consultant?
Should Catherine be disqualified as a Board of Director due to her conviction for violation of city ordinance for jaywalking?
Should Catherine be disqualified as a Board of Director due to her conviction for violation of city ordinance for jaywalking?
Is the distribution of assets to stockholders by the board of directors prior to the approval of the Commission for dissolution valid?
Is the distribution of assets to stockholders by the board of directors prior to the approval of the Commission for dissolution valid?
Can Y Corporation, a domestic corporation, validly donate P1,000,000.00 to Senator Makatanga for the latter's 2025 election campaign?
Can Y Corporation, a domestic corporation, validly donate P1,000,000.00 to Senator Makatanga for the latter's 2025 election campaign?
When is a transfer of shares binding against the corporation?
When is a transfer of shares binding against the corporation?
What is the requirement for a corporation to be dissolved?
What is the requirement for a corporation to be dissolved?
Who has the corporate powers vested in them?
Who has the corporate powers vested in them?
What is the liability of directors who consent to the issuance of watered stocks?
What is the liability of directors who consent to the issuance of watered stocks?
What test is used to determine the nationality of a corporation?
What test is used to determine the nationality of a corporation?
Can a corporation be incorporated as a One-Person Corporation?
Can a corporation be incorporated as a One-Person Corporation?
What is required for a corporation to revive its corporate existence?
What is required for a corporation to revive its corporate existence?
What happens to the liabilities of a corporation when it merges with another corporation?
What happens to the liabilities of a corporation when it merges with another corporation?
Study Notes
De Facto Corporation
- A corporation has separate juridical existence from its incorporators.
- Elements of a de facto corporation: • Existence of a valid law under which it may be incorporated. • Actual use in good faith of its corporate powers. • Attempt in good faith to incorporate. • The board of trustees exercise corporate powers in a stock corporation.
Stocks and Dividends
- The board of directors may declare stock dividends as long as there is an unrestricted retained earnings.
- Holders of non-voting shares may be entitled to vote in the following instances: • Amendment of the articles of incorporation. • Consolidation of another corporation. • Dissolution of the corporation.
Corporate Governance
- Void acts of the board of directors can be ratified.
- The board of directors is responsible for the corporate powers.
- A corporation can have only one incorporator.
- A corporation can apply for a revival of its corporate existence.
Corporate Liability
- The liability of directors who consented to the issuance of watered stocks shall be jointly.
- Corporate creditors can enforce payment of the unpaid subscriptions in case of insolvency of a corporation.
Corporate Nationality
- The Control Test is used to determine the nationality of a corporation engaged in nationalized areas of activities.
- The Place of Incorporation Test is used to determine the nationality of a corporation by the state of its incorporation.
Piercing the Corporate Veil
- The doctrine of piercing the corporate veil may be applied in the following cases: • To defeat public convenience. • In fraud cases. • In alter ego cases.
Corporate Dissolution
- A corporation can only be dissolved voluntarily.
- Prior to the approval of the Commission, the board of directors cannot distribute all of its assets to its stockholders.
Miscellaneous
- A partnership can be a one-person corporation.
- A corporation can donate to a political campaign, but it is not allowed in the Philippines.
- A corporation can be incorporated as a close corporation.
- A corporation can be incorporated as a non-stock corporation, but its profits will not be distributed to its members.
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Description
Quiz about the elements of a de facto corporation, including separate juridical existence, valid law, and actual use of corporate powers, in relation to corporate liability.
