Final Pre-Board Examination 2021
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Questions and Answers

Which of these options are correct regarding RA 7934 and premium pay?

  • All are false
  • Only S1 is false
  • Only S2 is false
  • All are true (correct)

    • Is the arrangement between Benito and the models allowed?

  • No, their compensation requires compensation in legal tender (correct)
  • No, being labor only contracting
  • Yes, being in the nature of job contracting
  • Yes, being an independent contractor
  • Yes, being in the nature of distributorship agreement

    • Can the e-mail messages regarding Angel Dela Cruz's tardiness be used as evidence?

  • Yes, only preponderance of evidence is required to dismiss the employee
  • Yes, management prerogative prevails if there is a just cause to dismiss the employee
  • No, he is entitled to Security of Tenure
  • Yes, there is sufficient compliance with the two-notice requirement since electronic messages are legally recognized as a valid notice (correct)
  • No, in case of doubt, the provisions of the Labor Code should be decided in favor of Labor

    • Which statements regarding lemon law rights and worker compensation are true?

    <p>Only S1 is false</p> Signup and view all the answers

    Which of the following regarding procurement methods and management prerogatives is true?

    <p>All are true</p> Signup and view all the answers

    What is a useful reference for government office policies and procedures regarding business transactions?

    <p>Citizen’s Charter</p> Signup and view all the answers

    Are the statements about transparency and primary beneficiaries true?

    <p>All are true</p> Signup and view all the answers

    What describes a single common site for the Business Permit and Licensing System (BPLS)?

    <p>Business One-Stop Shop</p> Signup and view all the answers

    Are the statements regarding child labor and competitive bidding true?

    <p>All are true</p> Signup and view all the answers

    What violation occurred involving the Cement Manufacturers’ Association (CMA)?

    <p>Price fixing</p> Signup and view all the answers

    Are the statements about mixed procurements and compulsory SSS coverage accurate?

    <p>All are true</p> Signup and view all the answers

    Under the SSS law, compulsory coverage of the employer takes effect on the first day of operation and that of the employee on the first day of employment.

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

    Direct Contracting, otherwise known as Selective Procurement, requires elaborate bidding documents.

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

    The sum to be paid to the Government during the default shall be ________________________.

    <p>five hundred pesos a month for each month or fraction</p> Signup and view all the answers

    What is true about the notice of dishonor under BP 22?

    <p>Both are correct</p> Signup and view all the answers

    Which of the following is not one of the sources of liability for damages?

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

    Annual Financial Statements need not need an independent CPA if total assets or liabilities are:

    <p>below 500,000</p> Signup and view all the answers

    When the manner of management has not been agreed upon:

    <p>Vote of the partners owing the controlling interest prevails</p> Signup and view all the answers

    If the appointment of a manager is in the articles of partnership, the appointment is ____________.

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

    Where the unanimity of action on the part of the managing partners is stipulated, the general rule is:

    <p>Unanimous consent of all the managing partners is required</p> Signup and view all the answers

    What is the period to transfer the shares to the heirs of the OPC?

    <p>10 days</p> Signup and view all the answers

    Which is a condition that would make an obligation immediately demandable?

    <p>If Juan commits suicide</p> Signup and view all the answers

    How much can B collect from X if X and Y are solidary debtors of A, B, and C?

    <p>B can collect P15,000 from X</p> Signup and view all the answers

    After demand for payment, Y can demand from X the following if X obligated himself to pay Y P30,000 after 30 days with a penalty:

    <p>P30,000 plus P3,000 plus legal interest plus damages</p> Signup and view all the answers

    Regarding the transaction between A and B, who will be liable for the debt payment?

    <p>A is not liable, because A does not know the insolvency of X.</p> Signup and view all the answers

    Is the oral sale of land valid after delivery and payment?

    <p>The contract is valid because the contract is already perfected and executed.</p> Signup and view all the answers

    What type of defective contract refers to one that can be nullified by the courts?

    <p>Rescissible contract</p> Signup and view all the answers

    To make a contract voidable due to fraud:

    <p>It should be serious and should not have been employed by both contracting parties.</p> Signup and view all the answers

    Is A guilty of violating the Bouncing Checks Law after issuing a check that was subsequently dishonored?

    <p>Yes, A is liable because the check was dishonored.</p> Signup and view all the answers

    Which statement about partnerships is incorrect?

    <p>A partnership contract is not covered by the Statute of Fraud.</p> Signup and view all the answers

    A partnership is not dissolved upon the death of which type of partner?

    <p>Limited partner</p> Signup and view all the answers

    One of the following is not an alternative remedy available to a seller of personal property on installment if the buyer defaults:

    <p>To take possession of the property and forfeit the amount paid by buyer.</p> Signup and view all the answers

    If A delivered only 150 cavans of rice out of 200 ordered, what is B's right?

    <p>He can accept 150 cavans but withhold payment for the entire order.</p> Signup and view all the answers

    Can A be held liable for violating BP 22 after issuing a check with sufficient funds but was dishonored for being stale dated?

    <p>No, the check was dishonored for being stale dated.</p> Signup and view all the answers

    Which statement about penalties for hacking is correct?

    <p>All are correct</p> Signup and view all the answers

    Is the introduction of computer viruses categorized as hacking?

    <p>All are correct</p> Signup and view all the answers

    Can an employer ask employees to submit personal data declarations regarding COVID-19?

    <p>All are correct</p> Signup and view all the answers

    Is the Data Protection Office led by a Data Protection Officer?

    <p>All are correct</p> Signup and view all the answers

    Can a bank disclose information about a deposit?

    <p>Upon court order in annulment of marriage cases.</p> Signup and view all the answers

    What type of endorsement does an endorser increase his liability by waiving presentment and notice of dishonor?

    <p>Facultative endorsement</p> Signup and view all the answers

    Can David successfully collect from Ariel given the circumstances of failed consideration?

    <p>No, because David knew the failure of consideration.</p> Signup and view all the answers

    Which statement about the SEC's powers is not correct?

    <p>SEC can automatically dissolve a corporation if there are affected creditors.</p> Signup and view all the answers

    Which of the following will cause the automatic dissolution of a corporation?

    <p>Continuous non-operation for a period of at least 5 years</p> Signup and view all the answers

    What is a requirement for patentable inventions?

    <p>All of the above.</p> Signup and view all the answers

    Jurisdiction over IP cases for infringement is lodged in which entity?

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

    What is the act of creating artificial prices by controlling demand during shortages?

    <p>Squeezing the float</p> Signup and view all the answers

    Is the bank correct in refusing to disclose A's name due to bouncing checks?

    <p>No, because the law prohibits disclosure of the deposit amount, not the name.</p> Signup and view all the answers

    Can a person be charged with both money laundering and unlawful activity?

    <p>Only S1 is incorrect</p> Signup and view all the answers

    How much can A recover from PDIC if he has three accounts with X Bank totaling P750,000?

    <p>The amount recoverable is only P500,000 for only one account</p> Signup and view all the answers

    Which of the following must the prosecution show for the presumption of knowledge of insufficient funds?

    <p>Offender received an oral notice of dishonor</p> Signup and view all the answers

    Is Plunder considered an unlawful activity under AMLA if it is at least P75 Million?

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

    Which of these options are correct regarding violation of Section 19 (A)(3) of Republic Act No. 10697?

    <p>All are correct</p> Signup and view all the answers

    What refers to a provisional remedy aimed at preserving monetary instruments or properties related to unlawful activity?

    <p>Freeze Order</p> Signup and view all the answers

    What is a bank that has no physical presence in the country in which it is incorporated?

    <p>Shell Bank</p> Signup and view all the answers

    Which of the following statements is correct regarding temporary restraining orders and petitions for freeze order?

    <p>All are correct</p> Signup and view all the answers

    What term describes a risk-based approach in customer relationships?

    <p>Customer Due Diligence</p> Signup and view all the answers

    Which of the following statements regarding business permits is correct?

    <p>All are correct</p> Signup and view all the answers

    In a closed bank scenario, which statement regarding depositor claims is correct?

    <p>Only S1 is correct</p> Signup and view all the answers

    Which of the following accurately reflects the legal status of ratification and unenforceable contracts?

    <p>S1 is true, S2 is false</p> Signup and view all the answers

    Which of the following does not fall under the Statute of Fraud?

    <p>Donation of immovable property</p> Signup and view all the answers

    How is the Latin term for 'one's personal choice to become or accept a partner' described?

    <p>Delectus Personae</p> Signup and view all the answers

    Which of the following corporate acts does not require a 2/3 stockholder vote?

    <p>Adoption, amendment or repeal of by-laws</p> Signup and view all the answers

    What describes a suit brought by one or more stockholders on behalf of a corporation?

    <p>Derivative Suit</p> Signup and view all the answers

    In a limited partnership scenario, a creditor of a limited partner may charge the interest of the limited partner. How can this interest be redeemed?

    <p>Both partnership property and separate property of a general partner cumulatively</p> Signup and view all the answers

    Which of the following is not a requisite for consignation as a mode of payment?

    <p>Prior notice has not been made</p> Signup and view all the answers

    What describes the right of a creditor to indemnity for damages due to a debtor's fault?

    <p>The value of the last thing that disappeared</p> Signup and view all the answers

    In the case of joint creditors A and B, what can be said about their collection rights?

    <p>A can only collect from X P3,600 and from Y P5,400</p> Signup and view all the answers

    What can be inferred about the contract where A, guardian of B, sold B’s property below market value?

    <p>The contract cannot be rescinded because there is no fraud, mistake, or undue influence</p> Signup and view all the answers

    Regarding the promise made by Y to give X land for services, which statement is correct under the Statue of Frauds?

    <p>The Statute of Frauds is inapplicable here because the promise is not a sale</p> Signup and view all the answers

    Is Mr. CD’s demand for payment from Mr. AB valid considering the mortgage and subsequent loss?

    <p>No. The obligation is with a definite period</p> Signup and view all the answers

    What is the reason that a certificate of stock is not considered a negotiable instrument?

    <p>It must be payable on demand or at a fixed future time</p> Signup and view all the answers

    In the case of advanced payments by a debtor, which case is the exception?

    <p>The advance payments were made reciprocity</p> Signup and view all the answers

    If A owes B, and C pays B, what correct claim can be made about collection?

    <p>C should be preferred</p> Signup and view all the answers

    Which of the following is not a requisite for Pledge?

    <p>The disposal of the property by the pledgee</p> Signup and view all the answers

    Which of the following is not an element of legal compensation?

    <p>There is controversy or adverse claim over the debts</p> Signup and view all the answers

    What can be inferred about capital contributions and liabilities in a partnership?

    <p>A, B, and C are liable to X, and C may ask reimbursement from A and B</p> Signup and view all the answers

    Which characteristic applies only to a check among negotiable instruments?

    <p>It is always drawn against a bank</p> Signup and view all the answers

    Is the oral contract of partnership valid given that it was not registered with the SEC?

    <p>No, registration with the SEC is essential for validity</p> Signup and view all the answers

    Is there a partnership between A and B, who share profits as co-heirs?

    <p>There is no partnership as co-ownership does not establish one</p> Signup and view all the answers

    In case of loss in partnership, how much is C liable given equal profit-sharing?

    <p>Nothing, as an industrial partner is exempt from losses</p> Signup and view all the answers

    Can A vote all his subscribed shares if only 25% is paid?

    <p>No, because the subscription has not been fully paid</p> Signup and view all the answers

    In the case of B selling pants delivered by A that were lost due to an accident, what is B's obligation?

    <p>B has no obligation to pay since it was a fortuitous event</p> Signup and view all the answers

    Was the sale of property from A to C valid after B passed the CPA exam?

    <p>It was valid if C was in good faith without knowledge of the promise</p> Signup and view all the answers

    In three of the following corporate proposals, which is the exception regarding stockholder rights?

    <p>Entering into management contract with another corporation</p> Signup and view all the answers

    Which of the following is considered prima facie evidence of being a partner?

    <p>When a person receives a share in profits</p> Signup and view all the answers

    Under which circumstance must profits be distributed based on capital contributions?

    <p>Excludes one industrial partner from share in profits</p> Signup and view all the answers

    Which right can a partner's assignee exercise?

    <p>To share in the profit according to contract</p> Signup and view all the answers

    Which of the following is not typically included in a corporation's articles of incorporation?

    <p>Duration of the corporation</p> Signup and view all the answers

    What is the nominal interest of an interlocking director in a corporation?

    <p>Does not exceed 25% of the outstanding capital stock</p> Signup and view all the answers

    Is the refusal to issue a stock certificate valid if A has only paid 25% of his subscription?

    <p>Not valid, because the stock certificate can be issued for the paid portion of the subscription.</p> Signup and view all the answers

    An Associate member in a Cooperative is?

    <p>One who has no right to vote nor be voted upon.</p> Signup and view all the answers

    What is the number of Board of Directors of a bank, including independent directors?

    <p>5-15, two of whom are independent directors.</p> Signup and view all the answers

    Are both statements about PDIC correct?

    <p>All statements are correct.</p> Signup and view all the answers

    When one of the parties has brought an action to enforce the contract, can he subsequently ask for its reformation?

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

    Is X liable for the loan of SSS Corporation because of his ownership?

    <p>SSS Corporation and TTT Corporation are distinct and cannot be held liable interchangeably.</p> Signup and view all the answers

    Is D liable for deficiency after the auction of the foreclosed car?

    <p>Yes, in the absence of contrary stipulation.</p> Signup and view all the answers

    Can directors of a cooperative receive per diem if the cooperative reported a net loss?

    <p>Both are correct.</p> Signup and view all the answers

    The contract made by P, the president of X Corporation, to purchase machineries is?

    <p>Valid.</p> Signup and view all the answers

    The holders of non-voting shares are entitled to vote on matters, except:

    <p>Increase or decrease of capital stock.</p> Signup and view all the answers

    What does the appraisal right mean?

    <p>New shares must be offered to existing stockholders before public subscription.</p> Signup and view all the answers

    What term refers to an individual or domestic corporation designated to receive legal processes for foreign corporations?

    <p>Resident agent.</p> Signup and view all the answers

    Which statement is correct?

    <p>Civil corporation is established under Philippine laws.</p> Signup and view all the answers

    Which statement is correct about issuing stocks and corporate actions?

    <p>For disposition of corporate assets, majority approval is needed.</p> Signup and view all the answers

    Is it illegal to issue watered stocks?

    <p>Only letter B is correct.</p> Signup and view all the answers

    What is the nature of the donation of the watch worth Php 25,000?

    <p>Valid, because there was intention to donate.</p> Signup and view all the answers

    What should the Board of Directors of SUJU Corporation do regarding stock dividends?

    <p>Increase the authorized capital stock.</p> Signup and view all the answers

    Which of the following is NOT an indicator of a foreign corporation transacting business?

    <p>Subscribing shares of stock from a domestic corporation.</p> Signup and view all the answers

    What is NOT a common requisite to pledge and mortgage?

    <p>Property may be alienated when the principal obligation is due.</p> Signup and view all the answers

    What is false about Balingit's sale of the property?

    <p>The sale is void because it is a conditional sale.</p> Signup and view all the answers

    Are both statements regarding the office term of BOD in a Cooperative correct?

    <p>S1 is correct, S2 is incorrect.</p> Signup and view all the answers

    Are both statements about the grounds for removal valid?

    <p>Both are correct.</p> Signup and view all the answers

    What are the requirements for a cooperative that has not commenced operations?

    <p>Both are incorrect.</p> Signup and view all the answers

    Under what grounds can a cooperative be dissolved?

    <p>Death or insanity of a member in a primary cooperative.</p> Signup and view all the answers

    A cooperative may be organized for the following, except?

    <p>To divide profits and losses among themselves.</p> Signup and view all the answers

    What lesson does the story of the Indian father and his son convey?

    <p>Aim higher.</p> Signup and view all the answers

    What is the highest policy-making body of the cooperative?

    <p>The General Assembly</p> Signup and view all the answers

    What is the quorum of the general assembly?

    <p>Majority of all members entitled to vote</p> Signup and view all the answers

    Any vacancy in the board of directors may be filled by the vote of at least a majority of remaining directors, except?

    <p>Removal of director</p> Signup and view all the answers

    Payment shall be made to, except:

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

    Which of the following is not really a special payment?

    <p>Application for payment</p> Signup and view all the answers

    The debtor who cedes or assigns his property to his creditor in payment of his debt shall be released from his obligation,

    <p>Only to the extent of the net proceeds of the thing assigned.</p> Signup and view all the answers

    What is the effect of the new debtor’s default upon the original debtor?

    <p>The original debtor remains liable since he gave no consent to the substitution.</p> Signup and view all the answers

    Three of the following are requisites of cession in payment. Which is the exception?

    <p>Abandonment of all debtor's property not exempt from execution</p> Signup and view all the answers

    Consignation alone extinguished obligation under the following, except:

    <p>When the debt is already due and demandable.</p> Signup and view all the answers

    To which of these modes of special payment is the law on sales applicable?

    <p>Dacion en pago</p> Signup and view all the answers

    What happens when Sandy pays Drago's obligation to Carlo?

    <p>Drago's obligation to Carlo is extinguished but he may be compelled to pay Sandy P50,000.</p> Signup and view all the answers

    Which of the following is not a requisite of application for payment?

    <p>There must be at least two debtors or creditors.</p> Signup and view all the answers

    In the case of Toblerone's lease, which mode of payment should Toblerone avail himself of?

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

    When the obligation consists of the delivery of a generic thing whose quality and circumstances have not been agreed upon:

    <p>The purpose and other circumstances shall be taken into consideration in determining the quality of the object to be delivered.</p> Signup and view all the answers

    A delinquent corporation shall have the period of ___ to resume operations and comply with all requirements prescribed by the Commission.

    <p>3 years</p> Signup and view all the answers

    In case of continuous inoperation of the corporation, how long will it be allowed to comply?

    <p>3 years</p> Signup and view all the answers

    Existing corporations prior to the effectivity of the Revised Corporation Code shall have how long to decide whether to retain their corporate term?

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

    The vote required for existing corporations to decide on retaining the corporate term is?

    <p>2/3 of the OCS</p> Signup and view all the answers

    When shall amendments to the Articles of Incorporation take effect?

    <p>One month from the date of filing</p> Signup and view all the answers

    What is the first step in the registration under the Revised Corporation Code?

    <p>Filing of the Articles of Incorporation</p> Signup and view all the answers

    The following are amendable provisions in the Articles of Incorporation, except:

    <p>Name of the incorporators</p> Signup and view all the answers

    Emergency Board is created upon the vote of:

    <p>Majority vote of the BOD</p> Signup and view all the answers

    What is the period to report non-holding of the election of BOD?

    <p>30 days</p> Signup and view all the answers

    What is the right of a corporation to exist as a juridical person during its term despite the death of any of its stockholders?

    <p>Right of succession</p> Signup and view all the answers

    Which one is a characteristic of treasury shares?

    <p>They may be reissued or sold again</p> Signup and view all the answers

    The holders of non-voting shares shall nevertheless be entitled to vote on which matter, except:

    <p>Dividend declaration</p> Signup and view all the answers

    What corporate doctrine states that stockholders are not personally liable for corporate debts?

    <p>Separate legal entity</p> Signup and view all the answers

    S1 - Redeemable shares may be taken up or purchased by the corporation, even in the absence of unrestricted retained earnings. S2 - Treasury shares may be reissued for a reasonable price even below par value. Which statement is true?

    <p>Both are true</p> Signup and view all the answers

    Vacancy in the board of directors can be filled up by the remaining directors in the following cases except:

    <p>Increase in the number of directors</p> Signup and view all the answers

    Statement 1: If the partner is the sole manager of the partnership and he associates another person with him in his share in the partnership, the person associated automatically becomes a partner. Statement 2: A partner appointed as manager in a contract other than the articles of partnership may be removed with or without cause. Which is correct?

    <p>No.1 is true; No.2 is false</p> Signup and view all the answers

    Statement 1: The conveyance of the whole interest of a partner in the partnership of itself dissolves the partnership. Statement 2: A partner has an interest in specific partnership property which he can assign to anybody, according to his will or discretion. Which is correct?

    <p>No. 1 is false; No.2 is true</p> Signup and view all the answers

    Statement 1: The contractual liability of the partners to third persons is joint and subsidiary. Statement 2: A person may become both a limited and an industrial partner in the same limited partnership. Which is correct?

    <p>Both are false</p> Signup and view all the answers

    What are the rights of partners when A, the managing partner, invites C to associate with him in his share in the partnership?

    <p>A may have C as an associate in his share even without B’s consent.</p> Signup and view all the answers

    Statement 1: In case of loss of the business of the partnership, any partner who refuses to contribute an additional share to the capital of the partnership shall be obliged to sell his interest in the partnership. Statement 2: The partners are solidarily liable in case of contractual liability. Statement 3: The liability of the partnership for culpa aquiliana is solidary. Which is correct?

    <p>All are true.</p> Signup and view all the answers

    A profit or loss must be distributed based on capital contribution and not based on agreement between the partners under which except:

    <p>If the designation of the profit and loss was entrusted to a third person by agreement between the partners.</p> Signup and view all the answers

    One of the following is not a characteristic of a contract of partnership.

    <p>Preparatory, because it is a means by which other contracts will be entered into.</p> Signup and view all the answers

    Which of the following is not a requisite of a contract of partnership?

    <p>The articles are kept secret among the members.</p> Signup and view all the answers

    A and B put up a partnership to engage in the distribution of books and school supplies. A wants to put up a restaurant while B wants to have a bakery. Which of the following is correct?

    <p>Both A and B can put their restaurant and bakery business without needing to secure each other’s consent.</p> Signup and view all the answers

    A partnership formed for the exercise of a profession which is duly registered is an example of?

    <p>Particular partnership</p> Signup and view all the answers

    A owes B two debts. The first is secured by mortgage, the second is not. Which statement is correct?

    <p>B cannot refuse the application because of the option of the debtor.</p> Signup and view all the answers

    The following are characteristics of a cooperative, except:

    <p>With a common enjoyment of property</p> Signup and view all the answers

    What is a legal writ authorizing a sheriff to take into custody property in litigation belonging to a defendant until compliance with court orders?

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

    Who makes important decisions for the cooperative?

    <p>General Assembly</p> Signup and view all the answers

    Which option refers to alteration of literary & artistic works, works derived from other existing sources?

    <p>Derivative right</p> Signup and view all the answers

    S1 - Membership of banks to PDIC is mandatory. S2 - According to RA 9576, insured banks with branches outside the country may elect to include for insurance its deposit obligations payable at such branches. S3 - Foreign currency deposits are also insured by PDIC. Which option accurately describes these statements?

    <p>Both are correct</p> Signup and view all the answers

    S1 - Bank accounts may not be garnished by creditors as this constitutes a violation of the Bank Secrecy Law. S2 - AMLC may inquire into deposits upon order of the court when there is probable cause related to unlawful activities. Which statement is true?

    <p>Both are correct</p> Signup and view all the answers

    The Anti-Money Laundering Council is authorized to issue an ex parte order to freeze accounts without delay for a period of ___ days. Which duration is correct?

    <p>30 days</p> Signup and view all the answers

    Under the Unclaimed Balances Law, if the president, cashier, or managing officer of the bank neglects or refuses to make and file the required sworn statement, what happens?

    <p>They may be held liable for any unclaimed balances</p> Signup and view all the answers

    These corporations are prohibited from issuing no par shares, except:

    <p>Trust corporations</p> Signup and view all the answers

    The boards of Directors are allowed to fill up the following vacancies:

    <p>III and IV</p> Signup and view all the answers

    This corporation has for its basic purpose charity or charitable works.

    <p>Eleemosynary corporation</p> Signup and view all the answers

    When valid grounds exist, such as when a corporation is established to commit fraud, justify a wrong, defend a crime or defeat public convenience, the separate juridical personality of a corporation shall be considered as the same. This is known as:

    <p>Piercing the veil of corporate entity</p> Signup and view all the answers

    Which of these is not an essential element of a de facto corporation?

    <p>That there must be exercise of corporate powers.</p> Signup and view all the answers

    Under the Revised Corporation Code, if the corporation opted for a fixed term, then the period of extension is:

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

    The requirement for independent directors in corporations vested with public interest constituting at ____ of such board:

    <p>10%</p> Signup and view all the answers

    The non-holding of elections under the Revised Corporation Code and the reasons therefor shall be reported to the Commission ______ from the date of the scheduled election.

    <p>15 days</p> Signup and view all the answers

    Based on the previous question, the report shall specify a new date for the election, which shall not be later than ____ days from the scheduled date.

    <p>30 days</p> Signup and view all the answers

    The period to question the decision of the third person in partnership when its decision is manifestly inequitable as to the sharing of profits and losses:

    <p>3 months</p> Signup and view all the answers

    Corporations governed by special laws must present before the Securities and Exchange Commission:

    <p>A favorable recommendation of the appropriate government agency to the effect that such article or amendment is in accordance with law.</p> Signup and view all the answers

    In the matter of management of the business affairs of the corporation, this is supreme:

    <p>Board of Directors</p> Signup and view all the answers

    A gratuitous issue of Treasury shares will result in:

    <p>Stock dividend</p> Signup and view all the answers

    A & B are partners in a real estate business. A & B were approached by X who offered to buy a parcel of land owned by the partnership. Thereafter, B sold to A, B’s share in the partnership. Then A sold the land to X at a big profit. A is liable to B for B’s share in the profits.

    <p>A is liable to B for B’s share in the profits</p> Signup and view all the answers

    A is the capitalist partner and B is the industrial partner. A engaged personally in the same kind of business the partnership is engaged in.

    <p>A will be excluded from the partnership and pay damages</p> Signup and view all the answers

    A is the managing partner of ABC and Company. X owes A personally and ABC and Company P20,000 each. A collected and received from X P10,000 and he issued a receipt wherein it is stated that the amount is applied against his personal credit.

    <p>The amount received will be applied in proportion to both credits</p> Signup and view all the answers

    When cash or property worth P3,000 or more is contributed as capital, the Articles of Co-Partnership shall be in a public instrument and registered with the Securities and Exchange Commission. If the said requirements are not complied with:

    <p>It will not give a legal personality to the partnership</p> Signup and view all the answers

    Corporations organized by private persons performing public functions and for profit to private persons are:

    <p>Quasi-Public Corporations</p> Signup and view all the answers

    Issued to those who in some way worked for incorporating the company or for services rendered in launching the welfare of the corporation is called:

    <p>Founder stock</p> Signup and view all the answers

    Statement 1: De jure corporations are not subject to attack, not even by the government. Statement 2: De facto corporations are subject to direct attack by the government, although not subject to collateral attack by private individuals.

    <p>Statement 1 is true, but statement 2 is false</p> Signup and view all the answers

    One of the characteristics of treasury shares is that:

    <p>They participate neither in dividends nor in the meetings of the corporation as voting stocks.</p> Signup and view all the answers

    The following are advantages of par value shares of stock, except one:

    <p>Ease of sale</p> Signup and view all the answers

    In order to commit causal fraud:

    <p>Serious and bilateral</p> Signup and view all the answers

    A contract which is onerous in nature is interpreted:

    <p>Against the party who made it onerous</p> Signup and view all the answers

    A contract must bind both parties, its validity cannot be left to one of the parties.

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

    Contracts take effect only between the parties, their heirs and assigns.

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

    Statement 1: Chattel mortgage is a consensual contract and the creditor gets possession of the thing mortgaged. Statement 2: Pledge is a consensual contract and gives a personal right. Statement 3: Real estate mortgage is a real contract and creates a real right if registered with the Registry of Property. Statement 4: Antichresis is an accessory and gives a real right.

    <p>Three statements are true</p> Signup and view all the answers

    Simulation of a contract may be absolute or relative. It is relative when:

    <p>The parties conceal their true agreement</p> Signup and view all the answers

    Before acceptance is conveyed, an offer becomes ineffective upon the death, insanity, insolvency or civil interdiction:

    <p>Of either party</p> Signup and view all the answers

    Statement No. 1: A single act can give rise to several offenses, such as estafa under the Revised Penal Code and violation of B.P. 22. Statement No. 2: Unlike estafa, under B.P. 22 one need not prove that the check was issued in payment of an obligation or that there was damage; the damage done is to the banking system.

    <p>First is true, second is false</p> Signup and view all the answers

    The vote required so that the maximum deposit insurance cover may be adjusted in such amount, for such period, and/or for such deposit products:

    <p>The adjustments are approved by a 2/3 vote of the Board of Directors of PDIC in a meeting called for the purpose and chaired by the Secretary of Finance</p> Signup and view all the answers

    A feature or characteristic of a bill of exchange not found in a promissory note:

    <p>Order to pay</p> Signup and view all the answers

    A promissory note is distinguished from a bill of exchange:

    <p>The one who issues it is primarily liable</p> Signup and view all the answers

    A Seller sold to a Buyer a piece of jewelry at a price of P20,000. The contract provides that the Buyer will pay the Seller cash of P15,000 and for the balance the Buyer will give the Seller a microwave oven worth P5,000. What is the nature of the contract?

    <p>Partly sale and partly barter</p> Signup and view all the answers

    A sold and delivered her diamond ring to B. It was agreed upon that within 10 days B will state and fix the price. On the 10th day, B called up by telephone A and stated the price at P20,000 which A agreed. Is the sale perfected?

    <p>Yes, the price stated and fixed by the buyer was accepted by the seller.</p> Signup and view all the answers

    S orally offered to sell a certain diamond ring to B for P50,000.00. B accepted the offer and to prove that he was in earnest, he gave S P1,000.00. The parties agreed that the delivery of the ring and the payment of the price would be made 30 days later. On due date:

    <p>S may collect from B P50,000.00.</p> Signup and view all the answers

    Can future inheritance be the subject of a contract of sale?

    <p>No, since it will put the predecessor at the risk of harm from a tempted buyer, contrary to public policy.</p> Signup and view all the answers

    B bought a refrigerator on installment from S and to secure his indebtedness, B executed a chattel mortgage on the refrigerator in favor of S. Upon default by B on his two (2) payments, the refrigerator was foreclosed and sold for P8,000 which was less than the balance due to S. How much can S still collect from B?

    <p>2,000</p> Signup and view all the answers

    In one of the following cases, delivery of the goods to a carrier for the purpose of transmission to the buyer transfers ownership to the latter. Which one is it?

    <p>When the owner does not reserve the right of possession or ownership of the thing sold upon delivery to the carrier.</p> Signup and view all the answers

    The following items pertain to either a contract of sale or a contract to sell. I. Ownership of the thing sold is transferred upon delivery II. Ownership of the thing is transferred to the buyer some future time. III. The risk of loss is on the buyer. IV. The risk of loss is on the seller. Based on the above data, which of the following is correct?

    <p>Items I and III pertain to a contract of sale.</p> Signup and view all the answers

    No merger or consolidation shall be valid unless:

    <p>Approved by a two-thirds (2/3) vote of all the members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings.</p> Signup and view all the answers

    Cooperatives may fall under any of the following types, except:

    <p>Primary Cooperative</p> Signup and view all the answers

    Which of the following is not correct?

    <p>A cooperative organized by minors shall be considered a laboratory cooperative and must be affiliated with a registered cooperative.</p> Signup and view all the answers

    Under the Philippine Cooperative Code of 2008 (R.A. 9520), which of the following complies with the minimum requirement of the law to form a cooperative?

    <p>P100,000 Authorized share capital, P25,000 Subscribed capital, P10,000 Paid-in capital</p> Signup and view all the answers

    Which of the following may be considered valid grounds for termination of membership of a primary cooperative?

    <p>Insanity of a member</p> Signup and view all the answers

    Study Notes

    Corporate Governance

    • Corporations are restricted from issuing no par shares, with exceptions for banks, trust companies, stock exchanges, and insurance companies.
    • Board of Directors can fill vacancies resulting from stockholder removal, term expiry, or an increase in directors.
    • Elections under the Revised Corporation Code must be reported within specific timeframes, typically 10 to 30 days, with a stipulated timeframe for rescheduling.

    Types of Corporations

    • Eleemosynary corporations focus on charitable purposes.
    • Publicly relevant corporations must ensure independent directors make up a minimum percentage of their board, typically around 20%.
    • Private corporations operate for profit, while quasi-public corporations serve both public and private interests.
    • The doctrine of piercing the corporate veil allows courts to disregard a corporation's separate legal personality in cases of fraud or public convenience.
    • De jure corporations are immune from government attacks, while de facto corporations can be directly challenged.

    Financial Aspects of Corporations

    • Treasury shares neither receive dividends nor have voting rights and can be reissued.
    • Gratuitous issuance of treasury shares results in capital surplus.
    • Par value shares offer protection for creditors, maintaining unpaid subscriber liabilities.

    Contracts and Obligations

    • A contract’s binding nature requires mutual agreement, often distinguished by the reliance on autonomy and relativity in obligations.
    • Onerous contracts are interpreted against the party that made them onerous.
    • Chattel mortgages and pledges create distinct rights and obligations; a valid chattel mortgage requires registration to be enforceable.

    Cooperative Organizations

    • Cooperatives must be formed with a minimum capital requirement, and procedures for membership termination typically include death, insanity, or insolvency.
    • The general assembly serves as the highest authority in cooperative governance, requiring a quorum of voting members for valid decisions.

    Sale and Transfer of Property

    • Contracts involving sale and barter are distinguished by the transfer of ownership, which occurs upon delivery for sales.
    • Future inheritances cannot be contracted for sale as the seller has no ownership rights until after the predecessor's death.
    • Delivery to a carrier typically signifies ownership transfer, barring specific conditions related to the sale terms.

    Duties and Responsibilities in Partnerships

    • Partners must share profits unless agreements designate otherwise, and a partner's action can dissolve the partnership if done without consensus.
    • Any decision taken by partners regarding shared property must account for the interests of all partners involved.
    • The analysis of fraudulent behavior within contracts requires both serious and mutual agreement on the actions taken.
    • A proposal that substitutes a debtor without consent may still hold the original debtor liable upon the new debtor's default if accepted by the creditor.

    This compilation encapsulates critical themes from the examination, focusing on corporate structure, legal aspects of contracts, the functionality of cooperatives, and obligations within partnerships.### Debtor and Obligation

    • Novation frees the original debtor from liability and relieves him of obligations.
    • Original debtor can perform the obligation with recourse to the new debtor.
    • Liability of the original debtor persists if there's no consent to substitution.
    • To avoid unjust enrichment, the original debtor may need to pay or perform a portion of the obligation.

    Requisites of Cession in Payment

    • Involves one debtor and one creditor.
    • Exception occurs in cases of complete or partial insolvency.
    • Requires more than one debt for cession.

    Consignation Effects

    • Consignation extinguishes obligations but not if the creditor is incapacitated or refuses without just cause.
    • Valid as long as the debt is due and demandable.

    Modes of Special Payment

    • Dacion en pago is the applicable mode under the law on sales.
    • Other modes: cession en pago, tender of payment and consignation, application of payment.

    Third-Party Payment

    • Sandy's payment to Carlo extinguishes Drago's obligation, but Drago may be compelled to reimburse Sandy.
    • Payment acceptance by Carlo does not infer Drago's acceptance of Sandy's action.

    Application for Payment Requisites

    • Must involve at least two creditors or debtors.
    • All debts must be of the same kind.
    • Debtor’s payment must not cover all debts to apply correctly.

    Lease Payment Scenario

    • Toblerone can utilize consignation when uncertain to whom payment should be made.
    • Payment should be directed appropriately to prevent further complications.

    Delivery of Generic Things

    • The creditor can demand higher quality if specific quality wasn't determined.
    • The debtor may deliver higher quality against creditor's will if not specified.

    Delinquent Corporation Regulations

    • Delinquent corporations have a maximum of 2 years to resume operations.
    • Continuously inactive corporations are declared delinquent after 1 year.

    Revised Corporation Code

    • Existing corporation terms become perpetual unless opted otherwise within a specific period.
    • Majority of shares is needed to change the corporate term.

    Amendments to Articles of Incorporation

    • Changes take effect upon approval or after two months if unacted upon by the SEC.

    Cooperative Governance

    • Important cooperative decisions are made by the General Assembly.
    • Any alterations in literary and artistic works represent derivative rights.

    Financial Institutions

    • Membership in the PDIC is mandatory for banks.
    • Banks with foreign branches can elect to include their foreign deposits under insurance.
    • Bank accounts cannot be garnished as per the Bank Secrecy Law unless legally mandated.
    • Liability based on damages has distinct sources including negligence and delay.

    Partnership Rights

    • Partners must secure one another's consent for certain business ventures.
    • A partnership automatically dissolves if a partner conveys their entire interest.

    Profit and Loss Distribution

    • Must follow agreed terms, differentiating between industrial and capitalist partners.

    Characteristics of Treasury Shares

    • Treasury shares can be reissued but do not have voting rights or partake in dividends.

    Corporate Existence Rights

    • Corporations possess a right of succession, ensuring continuity despite stockholder changes.

    Notices and Reporting

    • Deadline for reporting non-holding of Board of Directors elections is 30 days.
    • The right of a corporate entity to exist persists under the partnership's terms.

    Financial Statements

    • Independent CPA verification is not always required for small total assets or liabilities.

    Share Transfer Processes

    • Shares must be transferred to heirs within a stipulated period following protocols.

    Key Examination Notes

    • Conditions imposed on obligations and details around collective creditor and debtor relationships need attention for legal implications.
    • Understanding of distinctive obligations, rights, and regulations concerning partnerships, corporations, and cooperatives is vital for legal compliance.### Debt Liability and Delegation
    • A proposed delegation of debt to a third party (X) with a guarantee of their solvency, while X was insolvent at the time of the agreement.
    • A can be held liable due to the presumption of guaranteeing X’s solvency.
    • A's lack of knowledge regarding X's insolvency does not absolve him of liability under certain conditions.

    Oral Sale of Land

    • Oral contracts for the sale of land are generally invalid as per the Statute of Frauds.
    • Exceptionally, the contract may be considered valid if the sale is perfected and executed.

    Types of Defective Contracts

    • Voidable Contract: Valid but can be annulled due to certain external factors causing prejudice.
    • Rescissible Contract: Enforceable but may be nullified under specific conditions.

    Fraud in Contracts

    • Fraud must be serious to make a contract voidable and should not involve both parties acting in bad faith.

    Bouncing Checks Law Violation

    • A is liable for issuing a bouncing check despite notifying B not to deposit it, as lack of intent to defraud does not negate liability.

    Partnership Agreements

    • Partnership contracts are generally covered by the Statute of Frauds.
    • A limited partner is not liable for the partnership's debts unless they take part in management.

    Automatic Dissolution of Corporations

    • A corporation can be automatically dissolved for certain acts, including failure to comply with SEC orders or persistent non-operation.

    Intellectual Property Rights

    • Patentable inventions must be new, involve an inventive step, and be applicable in industry.
    • Copyright protects original works in literature and art, while trademarks distinguish goods.

    Securities Market Manipulation

    • Actions like "squeezing the float" and "painting the tape" exploit market conditions to create undue price influences.

    Bank Deposit Secrecy

    • Bank secrecy is upheld except in cases where court orders are obtained, such as in annulment or bribery cases.

    Money Laundering Regulations

    • Money laundering can occur when failing to report suspicious transactions; both unlawful activity and money laundering can be charged.

    Deposit Insurance Coverage

    • Maximum recoverable from PDIC per depositor is P500,000, regardless of the number of accounts held.

    Examination of Checks

    • The prosecution must show certain elements to establish knowledge of insufficient funds, such as dishonored checks within 90 days of maturity.

    Provisional Remedies and Asset Preservation

    • An asset preservation order is a remedy for preserving assets connected to unlawful activities during legal proceedings.

    Corporate Voting and Stockholder Acts

    • Certain corporate acts require a two-thirds stockholder vote, excluding some administrative decisions like by-law amendments.

    Derivative Suits

    • Stockholders can initiate derivative suits on behalf of corporations to address wrongs when corporate executives fail to act.

    Consignation Requirements

    • Consignation, as a mode of payment, requires certain conditions to validly extinguish obligations.

    Final Notes on Contractual Effects

    • Contracts typically bind only the parties involved, with some exceptions allowing third-party benefits under certain conditions.

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