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LAW Corporation Title I LAW Corporation Title I LAW Corporation Title I LAW Corporation Title I Constitutional Law 2 (JDPL121) TITLE I GENERAL PROVISIONS MULTIPLE CHO...

LAW Corporation Title I LAW Corporation Title I LAW Corporation Title I LAW Corporation Title I Constitutional Law 2 (JDPL121) TITLE I GENERAL PROVISIONS MULTIPLE CHOICE Part 1 1. The factors for the application of the doctrine of piercing the corporate veil are the following, except: a. Stock ownership by one or common ownership of both corporations b. Identity of directors and officers c. The manner of keeping corporate books and records d. Identity of the stockholders 2. I. Any application of the doctrine of piercing the corporate veil should be done with caution. II. A corporation its powers through its board of directors and/or its duly authorized officers and agents. a. Only I is true b. Only Il is true c. Both are true d. Both are false 3. The continuation of a corporation's legal status despite changes in ownership or management. a. Succession b. Inheritance c. Dissolution d. Liquidation 4. I. Property acquired by a corporation is the property of stockholders or members. Il. A corporation exercises said powers through its board of directors and/or its duly authorized officers and agents. a. Only I is true b. Only Il is true c. Both are true d. Both are false 1 0 5. Corporations which have capital stock divided into shares and are authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held. a. Non-stock corporation b. Stock corporation c. Corporation aggregate d. Corporation by prescription 6. Is one where no part of its income is distributable as dividends to its members, trustees, or officers. a. Non-stock corporation b. Stock corporation c. Corporation aggregate d. Corporation by prescription 7. One which has exercised corporate powers for an indefinite period without interference on the part of the government. a. Foreign corporation b. Domestic corporation c. Corporation by prescription d. Corporation by estoppel 8. A corporation incorporated under the laws of the Philippines. a. Foreign corporation b. Domestic corporation c. Corporation by prescription d. Corporation by estoppel 9. A corporation is formed, organized or existing under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or State. a. Foreign corporation b. Domestic corporation c. Corporation by prescription d. Corporation by estoppel 10. A corporation consisting of more than one member. 1 0  a. Open corporation b. Close corporation c. Corporation aggregate d. Corporation sole 11. A corporation consisting of only one member for the purpose of administering and managing, as trustee, the affairs, property and temporalities of any religious denomination, sect or church. a. Open corporation b. Close corporation c. Corporation aggregate d. Corporation sole 12. A corporation organized for religious purposes. a. Ecclesiastical corporation b. Close corporation c. Corporation aggregate d. Lay corporation 13. A corporation organized for charitable purposes. a. Ecclesiastical corporation b. Eleemosynary corporation c. Civil corporation d. Lay corporation 14. It is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incidental to its existence. a. Corporation sole b. Corporation c. Partnership d. Sole proprietorship 15. I. A corporation is a juridical entity vested with a legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. II. Not every stockholder or officer can bind the corporation considering the existence of a corporate entity separate from those who compose it. 1 0  a. Only I is true b. Only Il is true c. Both are true d. Both are false 16. I. Well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just an alter ego of a person or of another corporation. II. It is a basic principle in Corporation Law that a corporation has a personality which is the same as the officers or members who compose it. a. Only I is true b. Only Il is true c. Both are true d. Both are false 17. The following are the characteristics of a corporation, except: a. It is an artificial being b. Created by meeting of the minds c. It has the right of succession d. It has the powers, attributes and properties expressly authorized by law or incident to its existence 18. It refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least 51 per cent of its capital stock. a. Private corporation b. Closed corporation c. Government-owned or controlled corporation d. Local government units 19. Two requisites must concur before one may be classified as a stock corporation, namely: I. That it has capital stock divided into shares II. That it is authorized to distribute dividends and allotments of surplus and profits to its members. 1 0  a. Only I is true b. Only Il is true c. Both are true d. Both are false 20. I. The provisions governing stock corporation, when pertinent, shall be applicable to non-stock corporations. Il. A non-stock corporation must have shareholders. a. Only I is true b. Only Il is true c. Both are true d. Both are false 21. I. Non-stock corporations can distribute 10% of their income to their members. Il. Non-stock corporations are organized for charitable, religious educational, professional, cultural, recreational, fraternal, literary' scientific, social, civil service, or similar purposes. a. Only I is true b. Only Il is true c. Both are true d. Both are false 22. A private corporation which have accepted from the State the grant of franchise or contract involving the performance of public duties but which are organized for profit. a. Government-owned or controlled corporation b. Quasi-public corporation c. De jure corporation d. De facto corporation 23. A corporation created in strict or substantial conformity with the mandatory statutory requirements for incorporation and the right of which to exist as a corporation cannot be successfully attacked or questioned by any party even in a direct proceeding for that purpose by the State. a. Government-owned or controlled corporation b. Quasi-public corporation c. De jure corporation d. De facto corporation 24. 1 0 25. MULTIPLE CHOICE PART2 1. I. In non-stock corporations, the voting rights does not attach to membership. II. Members vote as persons, in accordance with the law and the by- laws of the corporation. a. Only I is true b. Only Il is true c. Both are true d. Both are false 2. I. One of the rights of a stockholder is the right to participate in the control and management of the corporation that is exercised through his vote. Il. The right to vote is a right inherent in and incidental to the ownership of corporate stock, but as such is not a property right. a. Only I is true b. Only Il is true c. Both are true d. Both are false 3. A class of stock entitling the holder to vote on corporate matters, to receive dividends after other claims and dividends have been paid (especially to preferred shareholders), and to share in assets upon liquidation. a. Common stock b. Preferred stock c. Treasury stock d. Watered Stock 4. Is one which entitles the holder thereof to certain preferences over the holders of common stock. a. Common stock b. Preferred stock c. Treasury stock d. Watered stock 1 0 5. They may be purchased or taken up by the corporation upon the expiration of a fixed period, regardless of the existence of Unrestricted retained earnings in the books of the corporation, and upon such other terms and conditions as may be stated in the articles of incorporation, which terms and conditions must also be stated in the certificate of stock representing said shares. a. Par value stock b. No par value stock c. Redeemable stock d. Class A stock 6. Shares with a value fixed in the articles of incorporation and the certificate of stock. a. Par value stock b. No par value stock c. Redeemable stock d. Class A stock 7. The following are limitations on no par value shares, except: a. It can be issued for a consideration of at least P3.00. b. It is deemed fully paid and non-assessable. c. The entire consideration for its issuance constitutes capital so that no part of it should be distributed as dividends. d. It cannot be issued as preferred shares. 8. I. The exclusive right to vote and be voted for in the election of directors must be for a limited period not to exceed 5 years subject to the approval of the SEC. Il. Preferences granted to preferred stockholders gives them a lien upon the property of the corporation nor make them creditors of the corporation. a. Only I is true b. Only Il is true c. Both are true d. Both are false 9. I. The law provides that shares classified and issued as preferred or redeemable shares may be deprived of voting right. Il. Each member shall be entitled to one vote unless so limited, broadened, or denied in the articles of incorporation or bylaws. a. Only I is true b. Only Il is true 1 0  c. Both are true d. Both are false 10. Is one which has no preference and entitle the shareholder to a pro rata division of the profits, if any. a. Preferred stock b. Common stock c. Voting share d. Non-voting share 11. Shares without a right to vote. a. Preferred stock b. Common stock c. Voting share d. Non-voting share 12. I. It acquires a judicial personality either by special law or a general law. Il. The general law under which a private corporation may be formed or organized is the Revised Corporation Code. a. Only I is true b. Only Il is true c. Both are true d. Both are false 13. The stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof. a. Corporators b. Board of directors c. Board of trustees d. Incorporators 14. Is the governing body in a stock corporation. a. Corporators b. Board of directors c. Board of trustees d. Incorporators 15. Is the governing body in a non-stock corporation. a. Corporators b. Board of directors c. Board of trustees 1 0  d. Incorporators 16. Is a person who brings about or cause to bring about the organization of a corporation a. Corporators b. Promoter c. Underwriter d. Incorporators 17. Each share shall be equal in all respects to every other share except otherwise provided in the articles of incorporation and stated certificate of stock. a. Doctrine of indivisibility of shares b. Doctrine of divisibility of shares c. Doctrine of equality of shares d. Doctrine of corporate opportunity 18. I. There shall always be a class or series of shares which have complete voting rights. Il. The right to vote is inherent in and incidental to the ownership of corporate stocks. a. Only I is true b. Only Il is true c. Both are true d. Both are false 19. I. It is settled that unissued stocks may not be voted or considered in determining whether a quorum is present in a stockholders' meeting. Il. Only stock actually issued and outstanding may be voted. a. Only I is true b. Only Il is true c. Both are true d. Both are false 20. Shares classified in the articles of incorporation which may be given certain rights and privileges (e.g. dividend payments) not enjoyed by the owners of other stocks. a. Over-issued stock b. Redeemable share c. Convertible share d. Founders' share 21. Are shares usually preferred, which by their terms are redeemable at a fixed date, or at the option of either issuing corporation, or the stockholder, or both at a certain redemption price. 1 0  a. Over-issued stock b. Redeemable share c. Convertible share d. Founders' share 22. Subscriptions to the capital stock of a corporation constitute a fund to which the creditors have a right to look for the satisfaction of their claims. a. Trust fund doctrine b. Doctrine of indivisibility c. Doctrine of corporate opportunity d. None of the above 23. Are shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing corporation by purchase, redemption, donation or through some other lawful means. a. Treasury stock b. Redeemable share c. Convertible share d. Founders' share 24. Stocks issued for a consideration less than the par or issued price thereof or in any other form other than cash valued in excess of its fair value. a. Preferred stock b. Watered stock c. Optional share d. Founders' share 25. I. Redeemable shares, once redeemed are retired unless reissuance is expressly allowed in the articles of incorporation. Il. The Corporation Code allows redemption of shares only if there are unrestricted retained earnings on the books of the corporation. a. Only I is true b. Only Il is true c. Both are true d. Both are false 1 0  Title II INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS 1. I. Only a natural person, trust, or an estate may form a One Person Corporation. II. Banks and quasi-banks, preneed, trust, insurance, public and Publicly-listed companies, and non- chartered government-owned and Controlled corporations may not incorporate as One Person Corporations. a. Only I is true b. Only II is true c. Both are true d. Both are false 2. This is the maximum amount fixed in the articles of incorporation that may be subscribed and paid by the stockholders of the corporation. a. Outstanding capital stock b. Paid-up capital stock c. Authorized capital stock d. None of the above 3. The following are limitations in the amendment of the articles of incorporation, except: a. The amendment must be for legitimate purposes and must not be contrary to the Corporation Code and special laws. b. The amendment requires the vote stockholders' representing majority of the outstanding capital stock or majority members if it be a non-stock corporation. c. The amendment must be approved by a majority of the board of Directors or board of trustees. d. The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation. 4. I. A corporation shall have perpetual existence unless its articles of Incorporation provides otherwise. II. The general rule as to corporations is that each corporation must have a name by which it is to sue and be sued and do all legal acts. a. Only I is true b. Only II is true c. Both are true d. Both are false 5. I. It is the certificate of incorporation that gives juridical personality to a corporation and places it under the jurisdiction of the Securities and Exchange Commission. II. A corporation commences its corporate existence and juridical personality and is deemed incorporated from the date the DTI issues certificate of incorporation under its official seal. a. Only I is true b. Only Il is true c. Both are true d. Both are false 6. The following are the requirements before one can Facto corporation, except: a. The existence of a valid law under which it may be incorporated. b. An attempt in good faith to incorporate. c. Assumption of corporate powers. d. None of the above. 7. The following are the three-fold nature of the articles of incorporation, Except: a. A contract between the corporations intense. b. A contract between the State and the corporation. c. A contract between the corporation and its stockholders. d. A contract between the stockholders intense. 8. The purpose of the principal of the corporation are the following except: a. To fix the residence of the corporation in a definite place. b. For purposes of stockholders or members meeting. c. To determine the venue of court cases involving the stockholders. d. To determine the place where the books and records of the corporation are ordinarily kept. 9. I. The number of directors shall not be more than 15. II. The number of trustees may be more than 15. a. Only I is true b. Only II is true c. Both are true d. Both are false 10. I. The articles of incorporation of a non-stock corporation may amended by the vote or written assent of majority of the trustees and at least 2/3 of the members. II. The amendment of the articles of incorporation shall take effect upon their approval by the SEC or from the date of filing with the SEC if not acted upon within 9 months from the date of filing for a cause not be attributable to the corporation. a. Only I is true b. Only II is true c Both are true d. Both are false 11. The following are grounds for such disapproval, except: a. The purpose or purposes of the corporation are patently unconstitutional, illegal, immoral or contrary to government rules and regulations. b. The certification concerning the amount of capital stock subscribed and/or paid is false. c. The required percentage of Filipino ownership of the capital stock under existing laws or the constitution has not been complied with. d. The articles of incorporation or any amendment thereto is not substantially in accordance with the form prescribed by the Philippine Cooperative Code. 12. No corporate name shall be allowed by the SEC if it is not distinguishable from that already reserved or registered for the use of another corporation. A name is not distinguishable even if it contains one or more of the following: I. The word "corporation", "company", "incorporated", "limited", "limited liability", or an abbreviation of one of such words: II. Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different tenses, spacing, or number of the same word or phrase. a. Only I is true b. Only II is true c. Both are true d. Both are false 13. I. If a corporation does not formally organize and commence its business within 5 years from the date of its incorporation, its certificate of incorporation shall be deemed revoked. II. If a corporation has commenced its business but subsequently becomes inoperative for a period of at least SEC may, after due notice and hearing, place the corporation under delinquent status. a. Only I is true b. Only II is true C. Both are true d. Both are false 14. I. If a delinquent corporation shall have a period of 2 years to resume operations and comply with all requirements that the SEC shall prescribe. II. Upon compliance by the corporation, the SEC shall issue an order lifting the delinquent status. Failure to comply with the requirements and resume operations within the period given by the SEC shall cause the revocation of the corporation's certificate of incorporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 15. I. Any person, partnership, association or corporation, singly or jointly with others but not more than 15 in number, may organize a corporation for any lawful purpose or purposes. II. Natural persons who are licensed to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allowed to organize as a corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 16. I. Incorporators who are natural persons must be of legal age. II. Each incorporator of a stock corporation must own or be a subscriber to at least 1 share of the capital stock. a. Only I is true b. Only II is true c. Both are true d. Both are false 17. A written contract to purchase newly issued shares of stock. a. Sales contract b. Redemption contract c. Purchase contract d. Subscription contract 18. Is that portion of the authorized capital stock which has been both subscribed and paid. a. Authorized capital stock b. Unissued capital stock c. Paid-up capital d. Outstanding capital 19. I. The contents of the articles of incorporation are binding, not only on the corporation, but also on its shareholders. II. The general rule as to corporations is that each corporation must have a name by which it is to sue and be sued and do all legal acts. a. Only I is true b. Only II is true c. Both are true d. Both are false 20. I. A corporation can change its name by amending its by-laws II. A corporation with a single stockholder is considered a One Person Corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 21. The following are the reasons that a principal office of the corporation ust be stated in its articles of incorporation, except: a. To fix the residence of the corporation in a definite place. b. For purposes of board of directors' meeting. c. To determine the venue of court cases involving corporation. d. To determine the place where the books and records of the corporation are ordinarily kept. 22. I. A corporation is in a metaphysical sense a resident of the place where its principal office is located as stated in the articles of incorporation. II. The place where the principal office of the corporation is to be located is one of the required contents of the by-laws. a. Only I is true b. Only II is true c. Both are true d. Both are false 23. I. The filing of articles of incorporation and the issuance of the Certificate of incorporation are essential for the existence of a de facto corporation. II. An organization not registered with the SEC cannot be considered a Corporation in any concept, not even as a corporation de facto. a. Only I is true b. Only II is true c. Both are true d. Both are false 24. It applies when persons assume to form a corporation and exercise corporate functions and enter into business relations with third persons. a. De facto corporation b. Corporation by prescription C. De Jure Corporation d. Corporation by estoppel 25. I. Stock corporations shall not be required to have a minimum capital Stock. II. All corporations shall file with the Commission articles of Incorporation in any of the official languages. a. Only I is true b. Only II is true c. Both are true d. Both are false 26. I. An unincorporated association, which represented itself to be a corporation, will be estopped from denying its corporate capacity in a suit against it by third person who relied in good faith on such representation. II. A third party who, knowing an association to be unincorporated, nonetheless treated it as a corporation and received benefits from it, may be barred from denying its corporate existence in a suit brought against the alleged corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 27. I. Corporation by estoppel is founded on principles of equity and is designed to prevent injustice and unfairness. II. Consolidation becomes effective not upon mere agreement of the members but only upon issuance of the certificate of consolidation by the SEC. a. Only I is true b. Only II is true c. Both are true d. Both are false 28. The amendment of the articles of incorporation, requires merely that: I. The amendment is not contrary to any provision or requirement under the Corporation Code. II. It is for a legitimate purpose. a. Only I is true b. Only II is true c. Both are true d. Both are false This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0 This study source was downloaded by 100000844379222 from CourseHero.com on 04-13-2022 04:23:37 GMT -05:00 0 0  LAW MCQ - thankyou BS Accountancy (AE 121) TITLE IV. POWERS OF CORPORATION 1. I. A Corporation has no power except those expressly conferred on it by the Corporation code and those that are implied or incidental to its existence. II. In turn, a corporation exercises said powers through its board of directors and/or it's duly authorized officers and agents. a. Only I is true b. Only II is true c. Both are true d. Both are false 2. It is an action brought by a stockholder on behalf of the Corporation to enforce corporate rights against the corporations directors, officers or other insiders. a. Individual suit b. Corporate suit c. Derivative suit d. Representative suit 3. The following are the requisites of the corporate power to extend or shorten corporate term: I. Approval by a 2/3 Vote of the board of directors or trustees. II. Ratification by the stockholders representing at least 2/3 of the members in case of non-stock Corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 4. It means that a stockholder who dissented and voted against the proposed corporate action, may choose to get out of the Corporation by demanding payment of the fair market value of his shares. a. Pre-emptive right b. Appraisal right c. Stockholders right d. Right of liquidation 5. Subscriptions to the capital stock of a Corporation constitute a fund to which the creditors have a right to look for the satisfaction of their claims. 0 0  a. Trust fund doctrine b. Doctrine of corporate opportunity c. Doctrine of piercing the veil of corporate fiction d. Entity doctrine 6. The distribution of corporate capital happens in only in three instances except: a. Amendment of the articles of incorporation to reduce the authorized capital stock b. Purchase of redeemable shares by the Corporation, regardless of the existence of unrestricted retained earnings c. Dissolution and eventual liquidation of the Corporation d. Amendment of the bylaws to reduce the authorized capital stock. 7. The following are the requirements of increase or decrease authorized capital stock, except: a. No decrease of the capital stack shall be approved if its effect shall prejudice the right of corporate creditors b. Approval by a majority vote of the board of directors c. Ratification by the stockholders holding at least 2/3 of the outstanding capital stock d. Approval thereof by the DTI 8. It is the preferential right of all stockholders of a stock corporation to subscribe to all issues or disposition of shares of any class, in proportion to their respective shareholdings. a. Appraisal right b. Right the vote c. Preemptive right d. Voting right 9. I. The purpose of pre-emptive rights Is to enable the shareholder to retain his proportionate control in the corporation. II. A suit to enforce pre-emptive rights in a corporation is a derivative suit. a. Only I is true b. Only II is true c. Both are true d. Both are false 10. The requirements for the sale or other disposition of assets are the following except: 0 0  a. SEC approval is required b. Approval by the majority vote of its board of directors or trustees c. Ratification by the vote of the stockholders representing at least 2/3 of the outstanding capital stock, are in case of nonstock Corporation with a vote of at least of 2/3 of the members. d. Any dissenting stockholder may exercise his approval right. 11. The following are instances when a Corporation may acquire its own shares, except: a. To eliminate fractional shares arising out of stock dividends b. To collect or compromise on indebtedness to the Corporation, arising out of unpaid subscription in a delinquency sale and to purchase delinquents shares sold during said sale c. To pay dissenting or withdrawing stockholders entitled to payment for their shares under the provisions of the Corporation code d. To acquire founders shares 12. I. The Corporation may only acquire its own stocks in the presence of unrestricted retained earnings. II. Preferred shares may be acquired even without surplus profit for as long as it will not result to the insolvency of the corporations. a. Only I is true b. Only II is true c. Both are true d. Both are false 13. I. The requirement of unrestricted retained earnings to cover the shares is based on the doctrine of limited capacity. II. There can be no distribution of assets among the stockholders without first playing corporate creditors. Hence, any disposition of corporate funds to the prejudice of creditors is rescissible. a. Only I is true b. Only II is true c. Both are true d. Both are false 14. The following are the requisites for exercise of a corporate power to invest corporate funds in another corporation, except: 0 0  a. Approval of the majority of the board of directors or trustees b. Ratification by the stockholder representing at these 2/3 of the outstanding capital stock, or by at least 2/3 of the members in the case of nonstop corporations at a stockholders or members meeting duly called for the purpose. c. Written notice of the proposed investment and the time and please of the meeting shall be addressed to each stockholder or member by Mail or served personally. d. Any dissenting stockholder shall have preemptive rights. 15. The retained earnings which have not been reserved or set aside by the board of directors for some corporate purpose. a. Restricted retained earnings b. Unrestricted retained earnings c. All of the above d. None of the above 16. I. The right of appraisal may be exercised when there is a fundamental change in the charter or articles of incorporation substantially prejudicing the rights of the stockholders. II. A Corporation can be purchased its own shares, provided payment is made out of surplus profits and acquisition is for a legitimate corperate purpose. a. Only I is true b. Only II is true c. Both are true d. Both are false 17. Corporate profits set aside, declared, and are there to be paid by the directors for distribution among stockholders at a fixed time. a. Income b. Revenue c. Dividends d. Sales 18. I. Payment of dividends to a stockholder is not a matter of rights but a matter of consensus. II. The declaration on dividends is dependent upon the availability of surplus profit or restricted retained earnings. a. Only I is true 0 0  b. Only II is true c. Both are true d. Both are false 19. The limitations on dividends are the following except: a. The right to dividend is based on duly recorded stockholdings. b. Dividends among stockholders of the same class must always be pro rata equal and without discrimination and regardless of the time when the shares were acquired. The right of the stockholder to be paid dividends accrues as soon as the declaration is made. c. The right to dividend accrues only if there is SEC approval d. Declaration of dividends is discretionary upon the board of directors. 20. It is an agreement whereby a corporation delegates the management of its affairs to another corporation for a certain period of time. a. Management contract b. Voting trust agreement c. Contract of agency d. Self-dealing contract 21. It refers to an outside or beyond corporate powers, including those that may ostensibly be within such power but are, by general or special laws, prohibited or declared illegal. a. Intra vires act b. Ultra vires act c. Doctrine of limited capacity d. Doctrine of piercing the veil of corporate fiction 22. I. Every corporation has the power and capacity to have perpetual existence unless the certificate of incorporation provides otherwise. II. Every corporation has the power and capacity to enter into a partnership, joint venture, merger, consolidation, or any other commercial agreement with natural and juridical persons. a. Only I is true b. Only II is true c. Both are true d. Both are false 0 0 23. I. No management contract shall be entered into for a period longer than 5 years for any 1 term. II. No corporation shall possess or exercise corporate powers other than those incorporation and except as necessary or incidental to the exercise of the powers conferred. a. Only I is true b. Only II is true c. Both are true d. Both are false 24. Where a stockholder or stockholders representing the same interest of both the managing and the managed corporations own or control more than 1/3 of the total outstanding capital stock entitled to vote of managing corporation. a. Interlocking stockholders b. Interlocking board of directors c. Interlocking members d. None of the above 25. Where a majority of the members of the board of directors of the managing corporation also constitute a majority of the board pf directors of the managed corporation. a. Interlocking stockholders b. Interlocking board of directors c. Interlocking members d. None of the above TITLE V. BYLAWS Multiple Choice. 1. The rules and regulations are private laws enacted by the Corporation to regulate, govern and control its own actions, affairs and concerns and its stockholders or members and directors and officers with relation there to and among themselves in their relation to it. a. By-laws b. Articles of incorporation c. Resolution d. Rules, regulation and discipline 2. I. the purpose of a by-law is to regulate the conduct and define the duties of the member towards the Corporation and among themselves. 0 0  II. By-laws are the are relatively permanent and continuing Rules of action adopted by the Corporation for its own government and that of the individuals composing it and having the direction, management and control of its affairs, in whole or in part, in the management and control of its affairs and activities. a. Only I is true b. Only II is true c. Both are true d. Both are false 3. I. the bylaws shall be signed by the stockholders our members voting for them and shall be kept in the principal office of the Corporation. II. A copy of bylaws, duly certified by a majority of the directors or trustees and countersigned veda secretary of the Corporation, shall be filed with the SEC and attached to the original articles of incorporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 4. I. It is a generally accepted rule that turn person are bound by bylaws. II. Bylaws may be necessary for the government of the Corporation but these are subordinate to the articles of incorporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 5. I. Bylaws may be adapted and filed prior to incorporation. II. In all cases, bylaws shall be effective only upon the issuance by the SEC of certification that the bylaws are in accordance with this Revised Corporation code. a. Only I is true b. Only II is true c. Both are true d. Both are false 6. It is a condition precedent in the acquisition of corporate existence. 0 0  a. Bylaws b. Articles of Incorporation c. Shares of stock d. Rules, regulation and discipline 7. I. The owners of majority of the outstanding capital stock or majority of the members in a non stock corporation may delegate to the board of directors or trustees the power to amend or repeal any bylaws or adopt new bylaws. II. The amended our new bylaws shall only be effective upon the issuance by the SEC of certificate that the same are not inconsistent with the revised Corporation code. a. Only I is true b. Only II is true c. Both are true d. Both are false 8. I. Any power delegated to the board of directors or trustees to amend or repeal any bylaws or adopt new bylaws shall be considered as revoked whenever stockholder owning are representing 2/3 of the members in non stock Corporation, show so vote at a regular or special meeting. II. Whenever the bylaws are amended our new bylaws are adopted, the corporation shall file with the SEC such amended or new bylaws. a. Only I is true b. Only II is true c. Both are true d. Both are false 9. It constitutes the charter our fundamental law of the Corporation. a. Articles of incorporation b. Bylaws c. Rules, regulation and discipline d. None of the above 10. A private Corporation may provide the following in its bylaws: a. The modes by which a stockholder, members, director, are dressed the may attend meetings and cast their votes. b. The form for proxies of stockholders an members and the manner of voting them. 0 0  c. The manner of election or appointment and the term of office of all officers other than directors or trustees. d. All of the above. TITLE VI. MEETINGS 1. I. the general rule is that every member of a non stock Corporation and every legal owner of shares in the stock Corporation, has right to be present and to vote in all corporate meeting. II. Voting may be expressed personally, or through proxies vote for their representative capacities. a. Only I is true b. Only II is true c. Both are true d. Both are false 2. I. Directors must act as a body in a meeting called pursuant to the law or the corporations bylaws, otherwise any action taken therein may be questioned by any objecting director or shareholder. II. The general rule is that a Corporation through its board of directors should act in the manner and within the formalities, if any, prescribed by its charter or by the general law. a. Only I is true b. Only II is true c. Both are true d. Both are false 3. I. An action of the board of directors during a meeting, which was illegal for lack of notice may not be ratified. II. Notice of meeting may not be waived, expressly or impliedly by any stockholder or member. a. Only I is true b. Only II is true c. Both are true d. Both are false 4. The requirements for a valid meeting are the following except: a. It must be held always at the principal place of business. b. It must be held at the stated date and at the appointed time. c. It must be called by the proper person. d. The person or persons designated in the bylaws have authority to call stockholders or members meeting. 0 0 5. I. Stockholders or members meeting shall be held in the city or municipality where the principal office of the Corporation is located. II. Regular meetings of stockholders or members sholl be held annually on a date fixed in the bylaws, or if not so fixed, on any date after appeal 15 of every year as determined by the board of directors or trustees. a. Only I is true b. Only II is true c. Both are true d. Both are false 6. I. In regular meetings of stockholders or members, a written notice of regular meetings shall be sent to all stockholders or members of record at least 10 days prior to the meeting. II. Written notice of regular meetings may be sent to all stockholders our members of regard through electronic mail are such other manner as the SEC called allow under its guidelines. a. Only I is true b. Only II is true c. Both are true d. Both are false 7. I. Any city or municipality in Metro Manila, Metro Cebu, Metro Davao and other Metropolitan areas shall for purposes of stockholders or members meeting be considered a city or municipality. II. Notice of meetings shall be sent through the means off communication provided in the bylaws, which notice shall state that time, please and purpose of the meetings. a. Only I is true b. Only II is true c. Both are true d. Both are false 8. I. As a rule, hey quorum shall consist of the stockholders representing a majority of the outstanding capital stock or a majority of the members in the case of non stock corporations. II. Unless the articles of incorporation or the bylaws provides for a greater majority, a majority of the directors or trustees as stated in the articles of incorporation shall be constitute a quorum to transact corporate business. 0 0  a. Only I is true b. Only II is true c. Both are true d. Both are false 9. Is the book which records the names and addresses of all stockholders arranged alphabetically, the instalments paid and unpaid on all stacks for which subscription has been made, and the date of payment there. a. Stock and transfer book b. Check book c. Journals d. Ledgers 10. I. Every decision of at least a majority of the directors or trustees represent at a meeting at which there is a quorum shall be valid as a corporate act. II. The election of officers which requires the vote of majority or the members of the board. a. Only I is true b. Only II is true c. Both are true d. Both are false 11. The requirements for board meetings are the following except: a. Meeting of the directors or trustees duly assembled as a board. b. Presence of the required car room. c. Decision of the majority of all the members of the board. d. Meeting at the place, time and manner provided in the bylaws. 12. I. Meetings of directors or trustees of Corporation maybe held anywhere in or outside of the philipines, unless the bylaws provide otherwise. II. Notice of regular special meetings stating the date, time in place of the meeting must be sent to every director are dressed the at least one day prior to the scheduled meeting, unless a longer time is provided in the bylaws. a. Only I is true b. Only II is true c. Both are true d. Both are false 13. I. In case of pledged are mortgaged shares in stock corporations the pledge or mortgage shall have the right attend and vote at meetings of stockholders. 0 0  II. In case of shares of stock owned jointly by two or more persons in order to vote the same, the consent of all the co- owners shall be necessary. a. Only I is true b. Only II is true c. Both are true d. Both are false 14. I. Treasury shares shall have no voting rights as long as such shares remain in the Treasury. II. Directors or trustees cannot attend or vote by proxy at board meeting but there is no provision for them to act as proxies in stockholders meeting. a. Only I is true b. Only II is true c. Both are true d. Both are false 15. The requirements for a valid proxy are the following except: a. It shall be in writing b. It shall be signed by the stockholder or member c. It shall be filed before the scheduled meeting with the corporate secretary d. Unless otherwise provided in the proxy, it shall be valid only for the meeting which it was intended. 16. The purposes of proxies are the following except: a. For convenience b. It assures the presence of all c. It enables those who do not wish to attend the meeting to protect their interests d. It secures voting control 17. Revocation of proxy may be made through the following except: a. Formal notice b. Verbal communication c. Conduct d. None of the above 18. A trust created by an agreement between a group of the stockholders of a Corporation and the trustee or by a group of identical agreements between individual stockholders and a common trustee, whereby it is provided that for a term of years, or for a period contingent upon a certain event, or until the 0 0  agreement is terminated, control over the stock owned by such stockholders, either for certain purposes or for all purposes, is to be lodged in the trustee, either which are without a reservation to the owners, or persons designated by them of the power to direct how such control shall be issued. a. Proxy b. Voting trust agreement c. Management contract d. Executive committee 19. The following are the requirements imposed on a voting trust agreement except: a. The agreement must be in writing and notarized and specify the terms and conditions thereof b. Is certified copy of such agreement shall be filed with the Corporation and we the Securities and Exchange Commission non compliance however, said agreement is effective and enforceable c. The certificate are certificates of stock covered by the voting trust agreement shall be cancelled and new once shall be issued in the name of the trustee or trustees stating that they are issued pursuant to said agreement d. It shall be noted that the transfer in the name of the trustee or trustees is made pursuant to said voting trust agreement. 20. The three tests of voting trust agreement are the following: a. The voting rights of the stock are separated from the other attributes of ownership b. That the voting rights granted are intended to be a revocable for a definite period of time c. That the principal purpose of the grant of voting rights is to acquire voting control of the Corporation d. All of the above. 21. I. A stockholder or member may propose the holding of a special meeting and items to be included in the agenda. II. Whenever for any cause there is no person authorized or the person authorized unjustly refuses to call a meeting, the SEC upon petitions of a stockholder or member on a showing of good cost therefore may issue an order directing the petitioning stockholder or member to call a meeting of the Corporation by giving proper notice. a. Only I is true 0 0  b. Only II is true c. Both are true d. Both are false 22. I. Unless the bylaws provide a longer period, the stock and transfer book or membership book shall be closed at least 20 days for regular meetings and 7 days for special meetings before the scheduled date of the meeting. II. The right to vote of stockholder our members may be exercised in person, through a proxy, or when so authorized in the bylaws through remote communication are in absentia. a. Only I is true b. Only II is true c. Both are true d. Both are false 23. I. Directors or trustees who cannot physically attend or vote a board meetings can participate in vote through remote communication such as video conferencing, teleconferencing or are there alternative modes of communication that allowed them reasonable opportunities to participate. II. Directors or trustees can attend or vote by proxy at board meetings. a. Only I is true b. Only II is true c. Both are true d. Both are false 24. I. The chairman or in his absence the president shall be preside at all meetings of the directors or trustees as well as of the stockholders or members, unless the bylaws provide otherwise. II. In case a stockholder grants security interest in his or her shares in stock corporations, the stockholder grantor shall be have the right to attend and vote at meetings of stockholders. a. Only I is true b. Only II is true c. Both are true d. Both are false 25. I. Executors, administrators, receivers, and other legal representatives appointed by the court may attend and vote in behalf of the stockholders or members without need of any written proxy. 0 0  II. When the shares are owned in an and/or capacity by the holders there of any one of the joint owners can vote said shares or appoint a proxy therefor. a. Only I is true b. Only II is true c. Both are true d. Both are false 26. I. Stockholders and members may vote in person or by proxy in all meetings of stockholders or members. II. When so authorized in the bylaws or by a majority of the board of directors, the stockholders or members of Corporation may also vote through remote communication or in absentia. III. A stockholder or member who participates through remote communication are in absentia shall be deemed present for purposes of quorum. a. Only I is true b. Only II is true c. Only III is true d. I, II, III are true Title VII. STOCK AND STOCKHOLDERS 1. I. In stock corporations, shareholders may generally transfer their shares. II. Membership in and all rights arising from a non stock corporation are personal and non-transferable. a. Only I is true b. Only II is true c. Both are true d. Both are false 2. Is an action brought by monitory shareholders in the name of the corporation to redress wrongs committed against it, for which the directors refuse to sue. a. Individual suit b. Representative suit c. Class suit d. Derivative suit 3. The following are the requisites of the derivative suit: 0 0  a. The party bringing suit should be a shareholder as of the time of the act or transaction complained of, the number of his shares not being material; b. He has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief but the latter has failed or refused to heed his plea; and c. The cause of action actually devolves on the corporation, the wrongdoing or harm having been, or being caused to the corporation and not to the particular stockholder bringing the suit. d. All of the above 4. Where a stockholder or member is denied the right of inspection, his suit would be individual because the wrong is done to him personally and not to the other stockholders or the corporation. a. Individual suit b. Representative suit c. Class suit d. Derivative suit 5. Where the wrong is done to the group of stockholder, as where preferred stockholders’ rights are violated, a class suit will be proper for the protection of all stockholders belonging to the same group. a. Individual suit b. Representative suit c. Class suit d. Derivative suit 6. Any contract for the acquisition of unissued stock in an existing corporation still to be formed shall be deemed a subscription notwithstanding the fact that the parties refer to it as a purchase or some other contract. a. Contract of sale b. Subscription contract c. Management contract d. None of the above 7. I. As long as the shares are not considered delinquent, stockholders are entitled to all rights granted to it whether or not subscribed capital stocks are fully paid. 0 0  II. Shares of stock shall not be issued in exchange for promissory notes or future service. a. Only I is true b. Only II is true c. Both are true d. Both are false 8. I. Stocks shall not be issued for a consideration less than the par or issues price thereof. II. Where the consideration is other than actual cash, or consists of intangible property such as patents of copyrights, the valuation thereof shall initially be determined by the incorporators or the board of directors, subject to approval of the SEC. a. Only I is true b. Only II is true c. Both are true d. Both are false 9. Unit of interest in a corporation. a. Treasury stock b. Shares of stock c. Certificate of stock d. Par value stock 10. Evidence of the holder’s ownership of the stock and of his right as a shareholder. a. Treasury stock b. Shares of stock c. Certificate of stock d. Par value stock 11. I. The stock and transfer book is the basis for ascertaining the person entitled to the rights and subject to the liabilities of a stockholder. II. On the death of a shareholder, the executor or administrator duty appointed by the Court is vested with the legal title to the stock but not entitled to vote it. a. Only I is true b. Only II is true c. Both are true d. Both are false 0 0 12. For valid transfer of stocks, there must be strict compliance with the mode of transfer prescribed by Law. The following are requirements, except: a. There must be delivery of the stock certificate. b. The certificate must be endorsed by the owner or his attorney in fact or other persons legally authorized to make the transfer. c. To be valid against third parties, the transfer must be recorded in the books of the corporation. d. To be valid against third parties, the transfer must be recorded in the SEC. 13. I. The rule is that the endorsement of the certificate of stock by the owner or his attorney-in-fact or any other person legally authorized to make the transfer shall be sufficient to effect the transfer of shares only if the same is coupled with delivery. II. The delivery of the stock certificate duly endorsed by the owner is the operative act of transfer of shares from the lawful owner to the new transferee. a. Only I is true b. Only II is true c. Both are true d. Both are false 14. I. The certificate of stock itself once issued is a continuing affirmation or representation that the stock described therein valid and genuine. II. Stock issued without authority and in violation of law is voidable and confers no rights on the person to whom it is issued and subjects him to no liabilities. a. Only I is true b. Only II is true c. Both are true d. Both are false 15. I. A certificate of stock is one, entire and divisible contract. II. The stockholder shall not be entitled to a certificate until he has remitted the full payment of his subscription together with any interest or expenses, if any is due. a. Only I is true b. Only II is true c. Both are true 0 0  d. Both are false 16. I. The general rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are their joint liabilities. II. It is basic that a corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. a. Only I is true b. Only II is true c. Both are true d. Both are false 17. The following except one, are the exceptional circumstances warranting the disregard of the doctrine of separate personality. a. When directors and trustees or, in appropriate case, the officers of a corporation vote for or assent to patently unlawful acts of the corporation. b. When a director or officer had consented to the issuance of watered down stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto. c. When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarity liable with the corporation. d. When a director, trustee or officer is made, by specific provision of by-laws, personally liable for his corporate action. 18. Solidary liabilities may be incurred and the veil of corporate fiction may be pierced when directors and trustees or, in appropriate case, the officers of a corporation does the following except: a. Vote for or assent to patently unlawful acts of the corporation. b. Act in bad faith or with gross negligence in directing the corporate affairs. c. Are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and the persons d. Habitual absence in the directors’ meeting. 19. I. As a rule, the doctrine of corporate opportunity is violated where the stocks issued by the corporation for a consideration which is less than its par value. 0 0  II. Subscribers for stock shall pay to the corporation interest on all unpaid subscriptions from the date of subscription, if so required by, and at the rate of interest fixed in the by-laws. a. Only I is true b. Only II is true c. Both are true d. Both are false 20. Bidder who shall offer to pay the full amount of the balance on the subscription together with accrued interest, cost of advertisement and expenses of sale, for the smallest number of shares or fraction of a share. a. Lowest bidder b. Highest bidder c. Winning bidder d. Losing bidder 21. I. A subscription of shares in a corporation still to be formed shall be irrevocable for a period of at least six (6) months from the date of subscription. II. No pre-incorporation subscription may be revoked after the articles of incorporation is submitted to the Commission. a. Only I is true b. Only II is true c. Both are true d. Both are false 22. Consideration for the issuance of stock may be: a. Actual cash paid to the corporation. b. Property, tangible or intangible, actually received by the corporation and necessary or convenient for its use and lawful purposes at a fair valuation equal to the par or issued value of the stock issued. c. Labor performed for or services to be rendered to the corporation. d. Previously incurred indebtedness of the corporation. Title VIII. CORPORATE BOOKS AND RECORDS 0 0 1. I. The proper custodian of the books, minutes and official records of a Corporation is usually the corporate treasurer. II. The signature of the corporate president gives the minutes of the meeting probative value and credibility. a. Only I is true b. Only II is true c. Both are true d. Both are false 2. I. The stockholders right of inspection of the corporation’s books and records is based upon their ownership of the assets and property of the Corporation. Ii. The right of inspection granted to stockholders is absolute. a. Only I is true b. Only II is true c. Both are true d. Both are false 3. The books and records required to be kept by the Corporation or the following except: a. Daily time record b. Minutes of meetings of stockholders or members c. Minutes of all meetings of directors or trustees d. Stock in transfer book in case of stock Corporation. 4. The following are the limitations on the right of inspection by a stockholder except: a. The right must be exercised during reasonable hours during business days b. The person demanding the right has not improperly used any information obtained through any previous examination of the books and records of the Corporation c. The demand is made in good faith or for a legitimate purpose d. The right kind exercised only by the common stockholders 5. I. The corporate secretary has the duty to record and repair the minutes of the meeting. Ii. Without the certification of the Corporation secretary, it is incumbent upon the other directors are stockholders as the case may be to submit proof that the minutes of the meeting is accurate and reflective of what transpired during the meeting. a. Only I is true b. Only II is true 0 0  c. Both are true d. Both are false 6. I. Corporate records regardless of the form in which they are stored shall be open to inspection by the director, trustee, stockholders or members of the Corporation in person or by air presentative at reasonable hours on business days. Ii. The inspecting are reproducing party shall remain bound by confidentially rules under prevailing laws. a. Only I is true b. Only II is true c. Both are true d. Both are false 7. I. Requesting party who is not a stockholder or member of records or is a competitor, director, officer, controlling stockholder or otherwise represents the interests of a competitor shall have no right To inspect or dim and production of corporate records. Ii. If the Corporation denies or does not act on a demand for inspections and or reproduction, the aggrieved party may report such denial or inaction to the SEC. a. Only I is true b. Only II is true c. Both are true d. Both are false 8. Stop corporation must also keep a stack and transfer book which shall contain: a. A record of all stacks in the names of the stockholders alphabetically arranged b. The installments paid an unpaid on all stacks for which subscription has been made, and the date of payment of any installment c. A statement of every alienation, sale or transfer of stock made the date thereof by and to whom made d. All of the above 9. I. a Corporation shall furnish stockholder or member, within 10 days from receipt of their written requests, its most recent financial statement in the form and substance of the financial reporting required by the Commission. Ii. At the regular meeting of stockholders or members the board of directors or trustees shall present to such 0 0  stockholders or members a financial report of the operations of the Corporation for the preceding year, which shall include financial statements. a. Only I is true b. Only II is true c. Both are true d. Both are false Title IX. MERGER AND CONSOLIDATION 1. As a rule, a Corporation that purchases the assets of another will not be liable for the debts of the selling Corporation except when any of the following circumstances is present. Which is the exception? a. Where the purchaser expressly or implied Lee agrees to assume the debts b. Where the transaction amounts to a consolidation or merger of the corporations c. Where the purchasing Corporation is merely a continuation of the selling Corporation d. Where the transaction is validly entered into. 2. I. Two or more corporations may merge into a single Corporation which shall be one of the constituent corporations. Ii. Two or more corporations may consolidate into a new single Corporation which shall be consolidated Corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 3. It is a union whereby one or more existing corporations are absorbed by another Corporation that survives and continues the combined business. a. Merger b. Consolidation c. Acquisition d. Business combination 4. It is the union of two or more existing entities to form a new entity called the consolidated Corporation. 0 0  a. Merger b. Consolidation c. Acquisition d. Business combination 5. I. Merger or consolidation become effective upon the mere agreement of the constituent corporations. Ii. ordinarily in the merger of two or more existing corporations, one of the Corporation survives and continues the combined business while the rest are dissolved and all their rights, properties, and liabilities are acquired by the surviving Corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 6. I. Upon approval by majority vote of each of the board of directors or trustees of the constituent corporations of the plan of merger or consolidation, the same shall be submitted for approval by the stockholders or meetings duly called for the purpose. Ii. The affirmative vote of stockholders representing at least 2/3 of the outstanding capital stock of each Corporation in the case of stock corporations or at least 2/3 of the members in the case of non stop corporations shall be necessary for the approval of such plan. a. Only I is true b. Only II is true c. Both are true d. Both are false 7. I. For a valid merger or consolidation, the approval by the SEC of the articles of merger are consolidation is required. Ii. If upon investigation the SEC has reason to believe that the proposed merger or consolidation is contrary to the provisions of the Corporation code or existing laws, it shall set a hearing to give the corporations concerned the opportunity to be heard. a. Only I is true b. Only II is true c. Both are true d. Both are false 0 0 8. I. The merger shall only be effective upon the issuance of a certificate of the merger by the SEC. Ii. Consolidation becomes effective not upon mere agreement of the members but only upon issuance of the certificate of consolidation by the SEC. a. Only I is true b. Only II is true c. Both are true d. Both are false 9. I. When the SEC is satisfied that the consolidation of the Corporation is not inconsistent with the provisions of the Corporation code and existing laws, it issues is certificate of consolidation which makes the the organization official. Ii. Since there is a dissolution of the absorbed corporations, there is winding up of their affairs or liquidation of their assets. a. Only I is true b. Only II is true c. Both are true d. Both are false 10. I. In the merger of two existing corporations, one of the corporations survives and continues the business, while the other is dissolved and all it's right, properties, and liabilities are acquired by the surviving Corporation. Ii. by operation of law, appion effectivity of the merger, the absorbed Corporation ceases to exist but its rights and properties, as well as liabilities, shall be taken and deemed transferred to end vested in the surviving Corporation. a. Only I is true b. Only II is true c. Both are true d. Both are false 11. I. Any amendment to the plan of merger or consolidation may be made. Ii. The amendment to the plan of merger or consolidation must be approved by a majority vote of respective board of directors or trustees of all the constituent corporations and ratified by the affirmative vote of stockholders representing at least 2/3 0 0  of the outstanding capital stock or of 2/3 of the members of each of the constituent corporations. a. Only I is true b. Only II is true c. Both are true d. Both are false 12. The merger or consolidation shall have the following effects: a. The constituent corporations shall become a single Corporation b. The separate existence of the constituent corporations shall cease c. The surviving are the consolidated Corporation shall possess all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a corporation d. All of the above TITLE X: APPRAISAL RIGHT 1. It means that a stockholder, who dissented and voted against the proposed corporate action, may choose to get out of the corporation by demanding payment of the fair market value of his shares. B. APPRAISAL RIGHT 2. Any stockholder of a corporation shall have the right to dissent and demand payment of the fair value of his shares in the following instances except: B. IN CASE OF INCREASE OF DECREASE OF CAPITAL STOCK 3. The following are the instances of appraisal right, except: B. IN CASE OF INVESTING OF CORPORATE FUNDS IN ANOTHER CORPORATION OR BUSINESS 4. I. In a close corporation, any stockholder of a close corporation may, for any reason, compel the said corporation to purchase his shares at their fair value, which shall not be less than their par or issued value, when the corporation has sufficient assets in its books to cover its debits and liabilities exclusive of capital stock. 0 0  II. The appraisal right may be exercised by any stockholder who shall have voted against the proposed corporate action, by making a written demand on corporation within 30 days after the date on which the vote was taken for payment of the fair value of his shares. C. BOTH ARE TRUE 5. I. If within a period of 60 days from the date the corporate action was approved by the stockholders, the withdrawing stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined and appraised by 5 disinterested persons. II. That no payment shall be made to any dissenting stockholder unless the corporation has unrestricted retained earnings in its books to cover such payment. B. ONLY II IS TRUE 6. I. The dissenting stockholder shall be entitled to receive payment of the fair value of his shares as agreed upon between him and the corporation or as determined by the appraisers chosen by them. II. Payment may be made regardless if the corporation has unrestricted retained earnings in its books to cover the same. A. ONLY I IS TRUE 7. The following are instances where dissenting stockholder who demands payment of his shares is no longer allowed to withdraw from his decision, except: B. THE PROPOSED CORPORATE ACTION IS APPROVED BY THE SEC WHERE ITS APPROVAL IS NECESSARY 8. I. The corporation shall bear the costs of appraisal, as a rule. II. Clearly, the right of appraisal may be exercised when there is a minor change in the charter or articles of incorporation substantially prejudicing the rights of the stockholders. A. ONLY I IS TRUE 9. The effects of transfer to dissenting shares are the following: C. BOTH ARE TRUE 0 0  10. I. From the time of demand of payment of the fair value of a stockholders shares until either the abandonment of the corporate action involved or the purchase of the said shares by the corporation, all rights accruing to such shares, including voting and dividend rights, shall be suspended. II. If the dissenting stockholder is not paid the value of his shares within 10 days after the award, his voting and dividend rights shall immediately be restored. A. ONLY I IS TRUE TITLE XI: NONSTOCK CORPORATION 1. It is one where no part of its income is distributable as dividends to its members, trustees or officers. A. NONSTOCK CORPORATION 2. I. Any profit which is a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper, be used for the furtherance of the purposes for which the corporation was organized. II. A non-stock corporation can be converted into a stock corporation by mere amendment of its articles of incorporation. A. ONLY I IS TRUE 3. The following are the characteristics of a non-stock corporation, except: C. AS A GENERAL RULE, IT IS NOT EMPOWERED TO ENGAGE IN BUSINESS. MOREOVER, IT IS PROHIBITED TO MAKE INCOME OR PROFITS AS AN INCIDENT TO ITS OPERATION. 4. The following are the characteristics of a non-stock corporation, except: C. BY-LAWS MAY PROVIDE THAT THE MEMBERS MAY HOLD THEIR MEETINGS AT ANY PLACE EVEN OUTSIDE THE PLACE WHERE THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, EVEN IF THAT SUCH PLACE IS OUTSIDE THE PHILIPPINES. 5. I. In stock corporations, shareholders may generally transfer their shares. II. Membership in and all rights arising from a non-stock corporation are transferable. A. ONLY I IS TRUE 0 0 6. I. The Plan of Distribution of Asset may be adopted by a majority vote of the board of trustees and approval of majority of the members having voting rights present or represented by proxy at the meeting during which said plan is adopted. II. Members meeting may be held at any place outside the principal office of the corporation provided it shall be within the Philippines. B. ONLY II IS TRUE 7. I. No person shall be elected as trustee unless he is a member of the corporation. II. Unless otherwise provided in the articles of incorporation or the by-laws, officers of a non-stock corporation may be directly elected by the members. A. ONLY I IS TRUE 8. I. Membership shall be terminated in the manner and for the causes provided in the articles of incorporation or the by-laws. II. Termination of membership shall have the effect of extinguishing all rights of a member in the corporation or in its property, unless otherwise provided in the articles of incorporation or the by-laws. C. BOTH ARE TRUE 9. I. The determination of whether or not “dead members” are entitled to exercise their voting rights depends on those articles of incorporation or by-laws. II. In stock corporations, on the death of a shareholder, the executor or administrator duly appointed by the court is vested with the legal title to the stock and entitled to vote it. C. BOTH ARE TRUE 10.I. Membership in and all rights arising from a non-stock corporation are personal and non-transferable. II. Unless otherwise provided in the articles of incorporation or the by-laws, a member may not vote by proxy. C. BOTH ARE TRUE 11.I. The number of trustees shall be fixed in the articles of incorporation or by-laws which may or may not be more than 15. 0 0  II. Except with respect to independent trustees of non-stock corporations vested with public interest, only a member of the corporation shall be elected as trustee. B. BOTH ARE TRUE TITLE XII: CLOSE CORPORATIONS 1. The following are corporations that cannot incorporate as a close corporation except: D. INDUSTRAL COMPANIES 2. The following are characteristics of a close corporation except: A. WHERE ARE THE ARTICLES OF INCORPORATION PROVIDE THAT THE BUSINESS OF THE CORPORATION SHALL BE MANAGED BY THE STOCKHOLDERS THEMSELVES RATHER THAN BY THE BOARD OF DIRECTORS, THEN THE STOCKHOLDERS SHALL BE DEEMED TO BE THE DIRECTORS WITH ALL THE LIABILITIES IMPOSED BY THE CORPORATION CODE ON DIRECTORS. THE STOCKHOLDERS SHALL NOT BE PERSONALLY LIABLE FOR CORPORATE TORTS. 3. The following are characteristics of a close corporation except: B. PRE EMPTIVE-RIGHT DOES NOT EXTEND TO ALLSTOCK ISSUANCES. 4. The articles of incorporation of a close corporation may provide, except for: C. A LESSER QUORUM OR VOTING REQUIREMENTS IN MEETINGS OF STOCKHOLDERS OR DIRECTORS. 5. Any person to whom stock or a close corporation has been issued or transferred has, or is conclusively presumed to have notice. D. ALL OF THE ABOVE 0 0 6. An action by the directors of a close corporation without a meeting shall not be deemed valid if: A. BEFORE OR AFTER SUCH ASCTION IS TAKEN, WRITTEN CONSENT THERETO IS SIGNED BY A MOJORITY THE DIRECTORS. 7. I. The pre-emptive right of stockholders in close corporations shall extend to all stock to be issued, excluding reissuance of treasury shares. II. A close corporation may, at its option, refuse to register the transfer of stock in the name of the transferee if the person is not qualified to be a stockholder and has notice thereof: B. ONLY II IS TRUE 8. An impartial person who is neither a stockholder nor a creditor of the corporation or of any subsidiary or affiliate of the corporation, and whose further qualifications, if any may be determined by the SEC. D. PROVISIONAL DIRECTOR 9. Any stockholder of a close corporation may, by written petition to the SEC, compel the dissolution of such corporation whenever: I. Any of acts of the directors or officers is illegal, or fraudulent, or dishonest, or oppressive or unfairly prejudicial to the corporation or any stockholder. II. Corporate assets are being misapplied or wasted. C. BOTH ARE TRUE 10. I. A provisional director is not a receiver of the corporation and does not have the title and powers of a custodian or receiver. II. A provisional director shall have all the rights and power of a duly elected director of the corporation, including the right to notice of and to vote at meetings of directors, until such time as he shall be removed by order of the Commission or by all the stockholders. C. BOTH ARE TRUE 0 0 11.A close corporation is one whose articles of incorporation provides the following except: D. ALL OF THE ABOVE TITLE XIII - SPECIAL CORPORATIONS 1. I. Trustees of educational institutions organized as non-stock corporations shall not be less than 5 nor more than 15. II. The number of trustees shall be in multiple of 5. C. BOTH ARE TRUE 2. I. The board of trustees shall as soon as organized, so classify themselves that the team of office of 1/5 of their number shall expire every year. II. Religious corporations may be incorporated by one or more persons. Such corporations may be classified into corporation’s sole and religious societies. C. BOTH ARE TRUE 3. A corporation formed by the chief archbishop, bishop, priest, minister, rabbi or other presiding elder of a religious denomination, sect, or church, for the purpose of administering or managing, as trustee, the affairs, properties and temporalities of such religious denomination, sect or church. A. CORPORATE SOLE 4. A corporation formed for the same purpose as corporation sole. It consists of two or more persons. B. CORPORATION AGGREGATE 5. I. For the purpose of administering and managing, as trustee, the affairs, property and temporalities of any religious denomination, sect or church, a corporation sole may be formed by the chief archbishop, bishop, priest, 0 0  minister, rabbi or other presiding elder of any religious denomination, sect or church. II. In order to become a corporation sole, the chief archbishop, bishop, priest minister, rabbi or presiding elder of any religious denomination, sect or church must file the Commission articles of incorporation. C. BOTH ARE TRUE 6. I. Any corporation sole may purchase and hold real estate and personal property for its church, charitable benevolent or educational purposes, and may receive bequests or gifts for such purposes. II. Such corporation sole may sell or mortgage real property held by it by obtaining an order for that purpose from the Regional Trial Court. C. BOTH ARE TRUE 7. A corporation sole must have an article of incorporation setting forth the following: D. ALL OF THE ABOVE 8. I. A majority of the trustees shall constitute a quorum for the transaction of business. II. Trustees elected thereafter in educational corporation to fill vacancies caused by expiration of term shall hold office for 3 years. D. BOTH ARE FALSE 9. I. Any corporation sole may purchase and hold real estate and personal property for its church, charitable, benevolent or educational purposes, and may receive bequests or gifts for such purposes. II. In cases where the rules, regulations and discipline of the religious denomination, sect or church, religious society or order concerned represent by such corporation sole regulate the method of acquiring, holding selling and mortgaging real estate and personal property such rules, regulations and discipline shall control, and the intervention of the court shall not be necessary. C. BOTH ARE TRUE 0 0 10.I. A corporation sole may be dissolved and its affairs settled voluntarily by submitting to the Commission a verified declaration of dissolution. II. Upon approval of such declaration of dissolution by the SEC, the corporation shall cease to carry on its operations except for the purpose of winding up its affairs. C. BOTH ARE TRUE 11. I. A one person corporation is a corporation with a single stockholder. II. Only a natural person, trust, or an estate may form a one person corporation. C. BOTH ARE TRUE 12.I. Banks and quasi banks, preneed, trust, insurance, public and publicly listed companies and non-chartered government owned and controlled corporations may not incorporate as one Person Corporation. II. A natural person who is licensed to exercise a profession may organize as one Person Corporation for the purpose of exercising such profession. A. ONLY I IS TRUE 13.I. A One Person Corporation shall not be required to have a minimum authorized capital stock. II. The One Person Corporation is required to submit and file corporate by- laws. C. BOTH ARE TRUE 14.I. A One Person Corporation shall indicate the letters “OPC” either below or at the end of its corporate name. II. The single stockholder shall be the sole director and president of the One Person Corporation. C. BOTH ARE TRUE 15.I. The One Person Corporation shall appoint a treasurer, corporate secretary, and other officers as it may deem necessary. 0 0  II. The single stockholder may be appointed as the corporate secretary. A. ONLY I IS TRUE 16.In addition to the functions designated by the One Person Corporation, the corporate secretary shall: D. ALL OF THE ABOVE 17.I. The single stockholder shall designate a nominee and an alternate nominee who shall in the event of the single stockholder’s death or incapacity, take the place of the single stockholder as a director and shall manage the corporations affairs. II. The articles of incorporation shall state the names, residence addresses and contact details of the nominee and alternate nominee, as well as the extent and limitations of their authority in managing the affairs of the One Person Corporation. D. BOTH ARE FALSE 18.I. When the incapacity of the single stockholder is temporary, the nominee shall sit as director and manage the affairs of the One Person Corporation until the stockholder, by self-determination, regains the capacity to assume such duties. II. In case of death or permanent incapacity of the single stockholder, the nominee shall sit as director and manage the affairs or the One Person Corporation until the legal heir of the single stockholder have been lawfully determined, and the heirs have designated one of them or have agreed that the estate shall be single stockholder of the One Person Corporation. III. The alternate nominee shall sit as director and manage the One Person Corporation in case of the nominee’s inability, incapacity, death, or refusal to discharge the function as director and manager of the corporation and only for the same term and under the same conditions applicable to the nominee. C. ONLY III IS TRUE 19.I. The single stockholder may, at any time change its nominee and alternate nominee by submitting to the SEC the names 0of the new nominees and their corresponding written consent. 0 0  II. A One Person Corporation shall maintain a minute’s book which shall contain all actions, decisions, and resolutions taken by the One Person Corporation. C. BOTH ARE TRUE 20.I. When action is needed on any matter, it shall be sufficient to prepare a written resolution, signed and dated by the single stockholder, and recorded in the minute’s book of the One Person Corporation. II. The date of recording in the minute’s book shall be deemed to be the date of the meeting for all purposes. C. BOTH ARE TRUE 21.The One Person Corporation shall submit the following within such period as the SEC may prescribe: D. ALL OF THE ABOVE 22.I. A sole shareholder claiming limited liability has been burden of affirmatively showing that the corporation was adequately financed. II. Where the single stockholder cannot prove that the property of the One Person Corporation is independent of the stockholders personal property; the stockholder shall be jointly and severally liable for the debts and other liabilities of the One Person Corporation. C. BOTH ARE TRUE 23.I. The principles of piercing the corporate veil applies which equal force to One Person Corporation as with other corporations. II.The Commission may place the corporation under delinquent status should the corporation fail to submit the reportorial requirements 3 times, consecutively or intermittently, within a period of 5 years. C. BOTH ARE TRUE 24. I. When a single stockholder acquires all the stocks of an ordinary stock corporation, the latter may apply for conversion into a One Person Corporation. 0 0  II.A One Person Corporation may be converted into an ordinary stock corporation after due notice to the SEC of such fact and of the circumstances leading to the conversion, and after compliance with all other requirements for stock corporations. C. BOTH ARE TRUE 25.I. The One Person Corporation converted from an ordinary stock corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion. II. The ordinary Stock Corporation converted from a One Person Corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion. C. BOTH ARE TRUE TITLE XIV. DISSOLUTION MULTIPLE CHOICES: 1. The following are voluntary modes of dissolution of a corporation, except: a. By the vote of the board of directors or trustees and the resolution adopted by the stockholders or members where no creditors are affected. b. By legislative enactment. c. By amending the articles of incorporation to shorten the corporate term. d. In case of a corporation sole, by submitting to the SEC a verified declaration of the dissolution for approval. 2. The following are involuntary modes of dissolution of a corporation, except: a. By expiration of corporate term provided for the articles of incorporation. b. By legislative enactment. c. By failure to formally organize and commence its business within years from the date of incorporation. d. By the judgement of the SEC after hearing of petition for voluntary dissolution where creditors are affected. 3. I. A corporation formed or organized under the Corporation Code may be dissolved voluntarily or involuntarily. 0 0  II. If dissolution of a corporation does not prejudice the rights of any creditor having a claim against it, the dissolution may be affected by majority vote of the board of directors, trustees, and by a resolution adopted by an affirmative vote of the stockholders owing at least majority of the outstanding capital stock or majority of the members. a. Only I is true b. Only II is true c. Both are true d. Both are false 4. I. Where the dissolution of a corporation may prejudice the rights of any creditor, the petition for dissolution shall be filled with the SEC. II. The petition shall be signed by majority of its board of directors or trustees and its dissolution was resolved upon by the affirmative vote of the stockholders representing at least majority of the outstanding capital stock or by at least majority of the members. a. Only I is true b. Only II is true c. Both are true d. Both are false 5. I. In the case of dissolution where creditors are affected, the SEC may appoint a receiver to take charge of the liquidation of the corporation. II. An involuntary dissolution may be affected by amending the articles of incorporation to shorten the corporate term. a. Only I is true b. Only II is true c. Both are true d. Both are false 6. I. No application or dissolution of banks, banking and quasi- banking institutions, preneed, insurance, trust company, nonstock savings and loan associations, pawnshops and other financial intermediaries shall be approved by the SEC unless accompanied by a favorable recommendation of the appropriate government agency. II. In the case of expiration of corporate term, dissolution shall automatically take effect on the day following the last day of the 0 0  corporate term stated in the articles of incorporation, without the need for the issuance by the SEC of a certificate of dissolution. a. Only I is true b. Only II is true c. Both are true d. Both are false 7. I. A withdrawal of the request for dissolution shall be made in writing, duly verified by any incorporator, director, trustee, shareholder, or member and signed by the same number of incorporators, directors, trustees, shareholders, or members necessary to request for dissolution. II. Upon receipt of a withdrawal request for dissolution, the SEC shall withhold action on the request for dissolution. a. Only I is true b. Only II is true c. Both are true d. Both are false 8. The following may ground for involuntary dissolution of the corporation: a. Non-use corporate charter. b. B. Continuous in operation of a corporation. c. Upon receipt of a lawful court order dissolving the corporation. d. All of the above. 9. I. Every corporation whose charter expired pursuant to its articles of incorporation, is annulled by forfeiture, or whose corporate existence is terminated in any other manner, shall nevertheless remain as body corporate for 5 years after the effective date of dissolution. II. Upon winding up of corporate affairs, any asset distributable to any creditor or stockholder or member who is unknown or cannot be found shall be escheated in the favor of the national government. a. Only I is true b. Only II is true c. Both are true d. Both are false TITLE XV. FOREIGN CORPORATIONS MULTIPLE CHOICES: 0 0 1. Is one formed, organized or existing under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state. a. Foreign Corpora