Revised Corporation Code of the Philippines
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Questions and Answers

A corporation is a natural being created by operation of law.

False (B)

Stock corporations may be organized under the Revised Corporation Code of the Philippines.

True (A)

Nonstock corporations are authorized to distribute dividends to the holders of shares.

False (B)

Corporations created by special laws are governed solely by the provisions of this Code.

<p>False (B)</p> Signup and view all the answers

Corporators may be stockholders in a nonstock corporation.

<p>False (B)</p> Signup and view all the answers

All corporations formed under this Code are required to have capital stock divided into shares.

<p>False (B)</p> Signup and view all the answers

Incorporators are stockholders or members mentioned in the articles of incorporation.

<p>True (A)</p> Signup and view all the answers

The classification of shares, their corresponding rights, privileges, restrictions, and their stated par value, if any, must be indicated in the articles of incorporation.

<p>True (A)</p> Signup and view all the answers

Each share shall be equal in all respects to every other share, except as otherwise provided in the articles of incorporation and in the certificate of stock.

<p>True (A)</p> Signup and view all the answers

Nonvoting shares are entitled to vote on matters such as amendment of the articles of incorporation and adoption and amendment of bylaws.

<p>True (A)</p> Signup and view all the answers

Preferred shares of stock may be issued only with a stated par value.

<p>True (A)</p> Signup and view all the answers

Banks, trust, insurance, and preneed companies are permitted to issue no-par value shares of stock.

<p>False (B)</p> Signup and view all the answers

The board of directors can fix the terms and conditions of preferred shares of stock only with the approval of the incorporators.

<p>False (B)</p> Signup and view all the answers

All shares or series of shares issued by corporations must have a par value.

<p>False (B)</p> Signup and view all the answers

No share may be deprived of voting rights except those classified and issued as 'preferred' or 'redeemable' shares.

<p>False (B)</p> Signup and view all the answers

Holders of nonvoting shares are not entitled to vote on the dissolution of the corporation.

<p>False (B)</p> Signup and view all the answers

Flashcards

Is a corporation a natural being?

A corporation is a legal entity created by a government through legislative enactment, not naturally occurring.

Can stock corporations be formed under the Revised Corporation Code of the Philippines?

Stock corporations can be formed under the Revised Corporation Code of the Philippines, allowing them to issue shares of stock.

Do nonstock corporations distribute dividends?

Nonstock corporations are formed for non-profit purposes and do not distribute dividends to members.

Are corporations created by special laws solely governed by the Revised Corporation Code?

Corporations created by specific laws are subject to those laws alongside the general provisions of the Revised Corporation Code.

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Can corporators be stockholders in a nonstock corporation?

Corporators, who establish a corporation, are not allowed to be stockholders in a nonstock corporation.

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Do all corporations formed under the Revised Corporation Code have capital stock?

Corporations formed under the Revised Corporation Code are not always required to have a capital stock divided into shares, as nonstock corporations don't have stock.

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Who are incorporators in a corporation?

Incorporators are those who outline the initial framework of a corporation by listing themselves in the articles of incorporation.

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Where are the details of share classes and par value found?

The articles of incorporation must explicitly detail the different classes of shares, their rights, restrictions, and their par value, if applicable.

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Are all shares equal in a corporation?

Each share in a corporation is treated equally unless stated otherwise in the corporation's primary documents.

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Do nonvoting shares have any voting rights?

Nonvoting shares, though limited in voting power, have the right to vote on significant matters like changes to the corporation's structure.

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Can preferred shares have no par value?

Preferred shares, a type of stock offering certain advantages, can only be issued with a designated par value.

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Can financial institutions issue no-par value shares?

Banks, trust, insurance, and preneed companies, due to their unique structures, are not allowed to issue shares without a designated par value.

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Who determines the terms of preferred shares?

The board of directors is responsible for setting the terms and conditions of preferred shares without requiring approval from the incorporators.

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Do all shares need a par value?

Not all shares issued by a corporation need to have a par value. Some can be issued as 'no-par value' shares.

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Can any share be deprived of voting rights?

Shares can be deprived of voting rights when specifically classified as 'preferred' or 'redeemable' according to the corporation's rules.

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Can holders of nonvoting shares vote on the corporation's dissolution?

Holders of nonvoting shares, despite their limited voting power, still maintain the right to vote on the dissolution of the corporation.

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Study Notes

Corporation Overview

  • A corporation is a legal entity created by operation of law.
  • Stock corporations in the Philippines are organized under the Revised Corporation Code.
  • Nonstock corporations can distribute dividends to their shareholders.
  • Corporations established by special laws are governed exclusively by the provisions of the Code.

Incorporators and Capital Stock

  • Incorporators serve as stockholders or members listed in the articles of incorporation.
  • All corporations must possess capital stock that is divided into shares.
  • Classification of shares, rights, privileges, restrictions, and par value must be detailed in the articles of incorporation.

Shares and Voting Rights

  • Each share is equal to all others unless specified differently in the articles or certificate of stock.
  • Nonvoting shares have limited rights; they can vote on significant issues like amending articles and bylaws.
  • Preferred shares can only be issued with a stated par value and require approval from incorporators for terms.
  • Banks, trust companies, insurance firms, and preneed companies may issue no-par value shares.

Voting and Shareholder Rights

  • All issued shares or series must possess a par value.
  • Shares classified as 'preferred' or 'redeemable' can be deprived of voting rights.
  • Holders of nonvoting shares do not have the right to vote on corporate dissolution matters.

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Description

Test your knowledge of the provisions and definitions in the Revised Corporation Code of the Philippines with this quiz. Explore the classes of corporations and their characteristics according to the code.

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