CORPORATION

Which of the following is not an attribute of a corporation?

A. It is created by the agreement of the incorporators.

B. It has the right of succession

C. It has the powers, attributes and properties expressly authorized by law or incidental to its existence.

C. It is an artificial being

A. It is created by the agreement of the incorporators.

It refers to the doctrine to the effect that the separate personality of a corporation will be disregarded if it is used to defeat public convenience, justify a wrong, protect fraud, or defend crime.

A. Doctrine of limited capacity.

B. Doctrine of corporate opportunity.

C. Trust fund doctrine.

D. Doctrine of piercing the veil of corporate entity.

D. Doctrine of piercing the veil of corporate entity.

The doctrine of piercing veil of corporate entity shall apply in the following cases, except;

A. When the separate personality of the corporation is used as a vehicle for the evasion of an existing obligation.

B. When the corporate entity is used to justify a wrong, protect fraud, or defend a crime.

C. Where the corporation is merely a farce since it is a mere business conduit of a person.

D. Where mere majority of the outstanding capital stock is owned by a single individual

D. Where mere majority of the outstanding capital stock is owned by a single individual

Piercing the corporate veil based on the alter ego theory requires the concurrence of the following elements, except:

A. Control of the corporation by the stockholder or parent corporation.

B. Fraud or fundamental unfairness imposed upon the other party by the corporation.

C. Harm or damage caused to the other party by the fraudulent or unfair act of the corporation.

D. The corporate name bears the name of the stockholder or parent corporation.

D. The corporate name bears the name of the stockholder or parent corporation.

These statements are presented to you for evaluation:

Statement I - Frequent transactions between a parent company and its subsidiary are by themselves a sufficient reason for disregarding the fiction of separate corporate personality. tolse

Statement II - For as long as long as the separate personality of a corporation is not used for illegal or fraudulent purpose, the other party to the transaction has no right to pierce the corporate veil. In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

D. Only Statement II is true.

These statements are presented to you:

Statement I - Mere ownership by a single stockholder of all or nearly all of the capital stock of a corporation is by itself sufficient reason for disregarding the fiction of separate corporate personality.

Statement II - The fact that the name of a corporation includes the name of one of the stockholders is a valid ground to pierce the corporate veil.

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

B. Both statements are false

Mr. Sand his family are the owners of the outstanding capital stock of ABC Factory Corporation (ABC) which owed its operations. workers certain benefits under the law. Then ABC ceased The following day, ABC was succeeded by, and its assets were turned over to, XYZ Factory Corporation (XYZ) whose subscribed shares are also owned by Mr. S and his family. XYZ also hired its own workers. The ABC workers now sue XYZ and Mr. S and his family for the unpaid benefits.

A. Both XYZ and Mr. S and his family are liable for the unpaid benefits.

B. Neither XYZ nor Mr. S and his family are liable for the unpaid benefits because they have a personality separate and distinct from ABC, the actual employer of the suing workers.

C. The unpaid benefits of the ABC workers are deemed forfeited in view of the cessation of operations of ABC.

D. Only Mr. S and his family are personally liable since they are the stockholders of both ABC an

C. The unpaid benefits of the ABC workers are deemed forfeited in view of the cessation of operations of ABC.

A corporation commences to exist:

A. upon the execution of the articles of incorporation by the incorporators

B. upon the filing of the articles of incorporation with the Securities and Exchange Commission.

C. upon the issuance of the certificate of incorporation.

D. on the date when the incorporators acknowledged the due execution of the articles of incorporation before a notary public.

C. upon the issuance of the certificate of incorporation.

These statements are presented to you for evaluation:

Statement I - A corporation continues to exist for the period for which it was formed regardless of the changes in the ownership of its shares or in its membership.

Statement II - The existence of a corporation. is not affected by the death, insolvency, or incapacity of the individual stockholders or members.

Which of the foregoing statements refer to the right of succession of a corporation?

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

A. Both statements are true.

A partnership and a corporation are similar except with respect to:

A. having a separate personality.

B. being composed of a group of persons.

C. being artificial persons.

D. having the right of succession.

D. having the right of succession.

The following characteristics are applicable to a corporation, except one which pertains to a partnership. Which one pertains to the latter?

A. The admission of a member to the firm requires the consent of the all the existing members.

B. It has perpetual term of existence.

C. Its members are not liable for the firm's debts.

D. It cannot be dissolved without the consent of the State.

A. The admission of a member to the firm requires the consent of the all the existing members.

A, B, C, D and E want to establish a car repair business. A, B and C each have the amount of P200,000.00 to contribute to the business capital. D is to contribute to the firm his lot and building, while E will contribute his services as a mechanic. All of them are of legal age. They are deciding on what type of business organization to put up.

A. The five can only put up a partnership.

B. The five can only put up a corporation.

C.The five can put up either a partnership or a corporation.

D. The five cannot put up either a partnership or a corporation.

A. The five can only put up a partnership.

These statements are presented to you for evaluation:

Statement I - A stock corporation may be formed by the mere agreement of the incorporators.

Statement II - The insolvency or incapacity of an incorporator or a stockholder dissolves the corporation. In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

B. Both statements are false

One of the following is not a characteristic of a stock corporation. Which is it?

A. It is formed by not more than 15 persons.

B. The stockholders are liable only to the extent of their investment

C. The stockholders directly own the properties of the corporation.

D. It acts through a board of directors.

C. The stockholders directly own the properties of the corporation.

A stock corporation differs from a nonstock corporation in that in a nonstock corporation:

A. There is capital stock divided into shares.

B. There is an authority to distribute dividends or allotments from surplus profits.

C. Its income shall be used only for the furtherance of the purpose for which it was incorporated.

D. It is formed for profit.

C. Its income shall be used only for the furtherance of the purpose for which it was incorporated.

It refers to a corporation which operates within the country under whose laws it was incorporated.

A.Foreign corporation

B. Offshore corporation

C. Public corporation

D. Domestic corporation

D. Domestic corporation

Under this test, the nationality of a corporation follows that of the country under whose laws it was formed.

A. Incorporation Test

B. Control Test

C. Business Domiciliary Test

D. Grandfather Rule

A. Incorporation Test

This is the test applied in determining the nationality of a corporation during wartime where the assets of a corporation may be confiscated by the State under whose laws it was incorporated for purposes of national security.

A. Control Test

B. Incorporation Test

C. Business Domiciliary Test

D. Grandfather Rule

A. Control Test

A corporation that is organized for the government of a portion of the State, like a province, city, municipality or barangay.

A. Public corporation

B. Quasi-public corporation

C. Government-owned corporation

D. Government-controlled corporation

A. Public corporation

A corporation that has been created in strict compliance with all the legal requirements and whose right to exist as a corporation cannot be successfully attacked in a direct proceeding for that purpose by the State.

A. De facto corporation

B. De jure corporation

C. Corporation by prescription

D. Corporation by estoppel

B. De jure corporation

A corporation that is defectively created but there is an actual exercise of corporate rights and franchise resulting from an attempt in good faith to incorporate on the part of its members.

A. De jure corporation

B. Corporation by prescription

C. Corporation by estoppel

D. De facto corporation

D. De facto corporation

Its due existence can be attacked directly in a quo warranto proceeding by the State.

A. De facto corporation

B. De Jure corporation

C. Both de facto and de jure corporation

D. Neither de facto nor de jure corporation

A. De facto corporation

Its due existence can be inquired into collaterally either by the State or private persons.

A. De facto corporation

B. De jure corporation

C. Both de facto and de jure corporation

D. Neither de facto nor de jure corporation

D. Neither de facto nor de jure corporation

Assuming that a certificate of incorporation was issued by the Securities and Exchange Commission, which of the following is not a de facto corporation?

A. A corporation that indicated an erroneous amount of paid-in capital in the treasurer's affidavit.

B. A corporation where an individual incorporator is incapable of giving consent.

C. A corporation where the acknowledgment of the incorporators is defective.

D. A corporation whose articles of incorporation provide for the exercise of a common profession by the incorporators.

D. A corporation whose articles of incorporation provide for the exercise of a common profession by the incorporators.

Donato purchased goods on credit amounting to P100,000.00 from Clover Leaf Corporation whose certificate of incorporation was issued two months earlier by the Securities and Exchange Commission. Donato defaulted in his payment on due date.

Accordingly, Clover Leaf Corporation filed a complaint for collection against him. Donato moved for the dismissal of the complaint on the ground that Clover Leaf Corporation was non-existent. To prove his case, Donato attached to his motion to dismiss a certified true copy of the articles of incorporation and the birth certificate of Antonio Alvarez, one of the incorporators, showing that the latter was under eighteen (18) years of age on the dare of incorporation of Clover Leaf Corporation, contrary to what was stated in the articles of incorporation that all of the incorporators were of legal age. Is Donato correct?

a. Yes, because Clover Leaf really had no right to sue.

b. No, because he cannot make a collateral attack on the due existence of Clover Leaf Corporation in the same action that was brought against him.

c. Yes, because he can make a direct attack on the due existence of Clover Leaf Corporation in the same action brought against him.

d. Yes, because Clover Leaf Corporation is a de facto corporation

b. No, because he cannot make a collateral attack on the due existence of Clover Leaf Corporation in the same action that was brought against him.

One which is not in reality a corporation but is considered as one with respect to those who are precluded by their admission or conduct from denying its existence.

A. Corporation by estoppel

B. Corporation by prescription

C. De jure corporation

D. De facto corporation

A. Corporation by estoppel

Those composing it are liable as general partners.

A. Corporation by estoppel

B. Corporation by prescription

C. De jure corporation

d. De facto corporation

A. Corporation by estoppel

A,B, C, D and E represented themselves to X as directors and stockholders of "Titanic Corporation". In reality, no such corporation is registered with the Securities and Exchange Commission. Later, X granted credit sales to "Titanic Corporation". When "Titanic Corporation" defaulted in 1a payment, X sued "Titanic Corporation." "Titanic Corporation" moved for the dismissal of the complaint on the ground that had no corporate personality. Is the defense of "Titanic Corporation" tenable

A. Yes, because it was not registered with the Securities and Exchange Commission.

B. No, because it is estopped from raising as a defense its lack of corporate personality against X.

C. Yes, because "Titanic Corporation" does not really exist.

D. Yes, because only the Office of the Solicitor General can sue "Titanic Corporation."

B. No, because it is estopped from raising as a defense its lack of corporate personality against X.

Assume the same facts in the preceding number except that it was "Titanic Corporation" which granted credit sales to X. When X defaulted in his payment, "Titanic Corporation" filed a collection case against him. X moved for the dismissal of the complaint on the ground that "Titanic Corporation" was a non-existent corporation. Is the defense of X tenable?

A. Yes, because "Titanic Corporation" was not registered with the Securities and Exchange Commission.

B. No, because X is precluded from raising the defense that "Titanic Corporation" does not exist.

C. Yes, because "Titanic Corporation" does not really exist.

D. Yes, because "Titanic Corporation" lacks separate juridical personality.

B. No, because X is precluded from raising the defense that "Titanic Corporation" does not exist.

The corporation formed under the circumstances is a:

A. corporation by prescription.

B. corporation by estoppel.

C. de facto corporation.

D. de jure corporation.

B. corporation by estoppel.

A corporation that has exercised corporate powers such as a length of time without interference from the state and which, by fiction of law, is given the status of a corporation.

A. Corporation by Estoppel

B. De facto corporation

C. Corporation by prescription

D. De jure corporation

C. Corporation by prescription

In case a corporation is formed for the exercise of a profession, it shall be considered as a:

A. de facto corporation.

B. de jure corporation.

C. either (a) or (b) depending on whether or not a certificate of incorporation was issued.

D. non-existent corporation even if a certificate of incorporation was issued.

D. non-existent corporation

even if a certificate of incorporation was issued.

Those mentioned in the articles of incorporation as originally forming and composing the corporation and are signatories of such document are known as:

A. corporators.

B. stockholders.

C. incorporators.

D. members.

C. incorporators

These statements are presented to you:

Statement 1 - An incorporator of a corporation must be a subscriber to its capital stock in the case of a stock corporation, or a member thereof in the case of a nonstock corporation, at the time of incorporation.

Statemen II - An incorporator remains as such even if he is no longer a stockholder or a member of the corporation.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

A. Both statements are true.

Which of the following statements is incorrect?

A. A promoter is personally liable for contracts he entered into on behalf of a corporation still to be formed if the incorporation does not materialize.

B. A newly-formed corporation is automatically liable for pre-incorporation contracts entered into in its behalf by the promoter who has facilitated the creation of the corporation.

C. A corporation becomes liable for pre-incorporation contracts entered into it its behalf by a promoter once it ratifies the contract.

D. A promoter is released from pre-incorporation contracts he entered into once the corporation ratifies the contract and the other party to the contract absolves him from liability.

B. A newly-formed corporation is automatically liable for pre-incorporation contracts entered into in its behalf by the promoter who has facilitated the creation of the corporation

The total amount of shares which a corporation is allowed to issue if the shares have par value.

A. Subscribed capital stock

B. Unissued capital stock

C. Authorized capital stock

D. Issued capital stock

C. Authorized capital stock

These statements are presented to you for evaluation:

Statement I - Issued capital stock refers to the capital stock that has been fully paid and for which stock certificates have been issued.

Statement II - Subscribed capital stock refers to the capital stock that has been subscribed but has not been fully paid.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

B. Both statements are false.

It refers to the total par value of all issued par value shares, or the total cash or consideration received for all issued no-par value shares.

A. Stated capital

B. Legal capital

C. Paid-up capital

D. Capital

B. Legal capital

It refers to the total shares of stock issued to subscribers or stockholders, whether fully or partially paid (as long as there is a binding subscription agreement), except treasury shares.

A. Outstanding capital stock

B. Issued capital stock

C. Subscribed capital stock

D. Authorized capital stock

A. Outstanding capital stock

The articles of incorporation of Pathfinder Corporation provide, among other information, for an authorized capital stock of P1,000,000.00 divided into 10,000 shares with a par value of P100.00 per share, and seven (7) directors. As of December 31, 2021, 5,000 shares of the corporation had been subscribed at par value of which 4,000 shares had been paid in full, while 1,000 shares were paid up to 80%.

The issued capital stock of Pathfinder Corporation is:

A. P500,000.00.

B. P400,000.00.

C. P480,000.00.

D. P1,000,000.00.

A. P500,000.00.

Refer to the facts in the preceding number.

Assume that for 2022, A, B, C, D, E, F, G and H ran for the position of director in the annual election of directors. If you were a stockholder with 400 shares, how many votes may you possibly cast in the

election?

A. 400 votes

B. 2,800 votes

C. 3,200 votes

D. 8 votes

B. 2,800 votes

44. A share of stock differs from a stock certificate in that a share of stock:

A. is tangible personal property.

B. may not be issued unless the subscription has been fully paid.

C. is the written evidence of a stockholder's rights and interest in a corporation.

D. is one of the units into which the capital stock is divided.

D. is one of the units into which the capital stock is divided.

The ordinary stock of a corporation that entitles the holder to a pro rata division of the dividends, without preference or advantage over other stockholders.

A. Common stock

B. Preferred stock

C. Par value stock

D. No-par value stock

A. Common stock

A stock whose nominal value is stated in the stock certificate.

A. Par value stock

B. Issued stock

C. No-par value stock

D. Redeemable stock

A. Par value stock

Nonvoting shares may vote in the following cases, except:

A. when the articles of incorporation are to be amended.

B. in case of merger of the corporation with another corporation or other corporations.

C. in the election of members of the board of directors.

D. nonvoting shares are not allowed to vote at all, that is why they are classified as nonvoting.

C. in the election of members of the board of directors.

These statements are presented to you for evaluation:

Statement I - A stock corporation may classify all its shares as nonvoting.

Statement II - A stock corporation may not issue both par value and no-par value at the same time.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

B. Both statements are false.

Which of the following statements concerning no-par shares is incorrect?

A. Subscriptions to no-par shares shall be deemed fully paid and non-assessable.

B. The entire consideration received for no-par shares shall all be treated as capital and no part thereof shall be available for distribution as dividends.

C. They may be issued for a consideration of less than P5.00 per share.

D. They may not be issued by banks, trust companies, insurance companies, public utilities, and building and loan associations.

C. They may be issued for a consideration of less than P5.00 per share.

Which of the following statements concerning the power of a corporation to classify its own shares is incorrect?

A. A stock corporation may classify its shares into classes or series of shares, or both.

B. A stock corporation may classify its shares so that a certain class may be subscribed into by foreigners only, while another class may be subscribed into by Filipinos only.

C. As a rule, only shares that are classified as "preferred" or "redeemable" may be deprived of the voting right.

D. A corporation may not give preferences to certain shares because of the rule that each share shall be equal in all respects to every other share.

D. A corporation may not give preferences to certain shares because of the rule that each share shall be equal in all respects to every other share.

These statements are presented to you for evaluation:

Statement 1 - Shares with par value may be issued for a consideration of less than P5.00 per share.

Statement II - Preferred shares may be issued with or without a stated par value.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement Il is true.

C. Only Statement I is true.

Which shares may be reacquired by a corporation even if it has no unrestricted retained earnings in its books?

A. Founders' shares

B. Redeemable shares

C. Convertible shares

D. Par value shares

B. Redeemable shares

Shares that are issued without consideration or with no adequate consideration are known as:

A. watered stock.

B. redeemable stock.

C. founders' stock

D. no-par stock.

A. watered stock.

Which of the following statements concerning treasury shares is incorrect?

A. They have no voting rights as long as they remain in the treasury.

B. They are not outstanding shares.

C. They are not entitled to dividends.

D. They may not be disposed of at a price lower than par value or issued price in the case of no-par shares.

D. They may not be disposed of at a price lower than par value or issued price in the case of no-par shares.

Which of the following documents is not required to be submitted at the time of incorporation?

A. Articles of incorporation

B. Treasurer's affidavit

C. Verification slip authorizing use of corporate name

D. Bylaws

D. Bylaws

Corporations that are required to submit a favorable recommendation from the appropriate government agency before their articles of incorporation are accepted for filing by the Securities and Exchange Commission include the following, except:

A. Trading companies.

B. Banks, banking and quasi-banking institutions.

C. Preneed, insurance and trust companies.

D. Pawnshops.

A. Trading companies.

It refers to the right to exist as a corporation and it is vested in the individuals who compose the corporation and not in the corporation itself.

A. Primary franchise

B. Secondary franchise

C. License

D. Certificate of Authority

A. Primary franchise

The charter of a corporation organized under the general law includes the following, except the:

A. Revised Corporation Code.

B. Other laws applicable to corporations.

C. Articles of incorporation.

D. Bylaws.

D. Bylaws.

These statements are presented to you for evaluation:

Statement I - A partnership, whether or not the articles of partnership are recorded with the Securities and Exchange Commission, may be an incorporator, since partnerships are created by the mere consent of the partners.

Statement II - A corporation may be an incorporator of another corporation.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

D. Only Statement II is true

These statements are presented to you for evaluation:

Statement I - A person authorized to sign the articles of incorporation in behalf of a stock corporation which is an incorporator need not be a subscriber to at least one (1) share of stock of the corporation being formed.

Statement II - A person whose name appears in the articles of incorporation as a subscriber to at least one (1) share of stock may not be an incorporator of the corporation..

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement Il is true.

A. Both statements are true.

What is the effect if a corporation has been issued a certificate of incorporation by the Securities and Exchange Commission despite the fact that its name is identical to that of an existing corporation or one that is protected by law?

A. The corporation shall be deemed dissolved.

B. The corporation will be allowed to change its name by amending its articles of incorporation.

C. The franchise of the corporation will be suspended.

D. The corporation will be considered unincorporated.

B. The corporation will be allowed to change its name by amending its articles of incorporation.

These statements are presented to you for evaluation:

Statement I - A corporation shall have perpetual existence unless the articles of incorporation provide that the corporate term shall be for a definite period.

Statement II - If the term of existence of a corporation as provided in its articles of incorporation is for a definite period, the same may no longer be allowed to be extended upon its expiration.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true

C. Only Statement I is true.

These statements are presented to you for evaluation:

Statement I - An individual who signs the articles of incorporation on behalf of a corporation which is an incorporator, may be named as director in the same, articles of incorporation, unless the said individual is also the owner of at least one (1) share of stock of the corporation being formed.

Statement II - A foreign corporation may be an incorporator of a corporation in the Philippines.

In your evaluation of the foregoing statements:

A.Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement II is true.

.

D. Only Statement II is true.

Which of the following corporations whose term has expired may apply for revival of corporate existence?

A. An expired corporation whose certificate of registration has been revoked for non-filing of reports.

B. An expired corporation which has completed the liquidation of its assets.

C. An expired corporation whose certificate of registration has been revoked for reasons other than non-filing of reports.

D. An expired corporation which had already availed itself of re-registration.

A. An expired corporation whose certificate of registration has been revoked for non-filing of reports.

These statements are presented to you for evaluation:

Statement I - Subscriptions to par value shares of stock of a corporation at the time of incorporation need not be fully paid upon subscription.

Statement II - Stock corporations are not required to have a minimum capital stock, unless otherwise provided by law.

In your evaluation of the foregoing statements: a.

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement Il is true.

A. Both statements are true.

Which of the following corporations whose term has expired may apply for revival of corporate existence?

A. An expired corporation whose certificate of registration has been revoked for non-filing of reports.

B. An expired corporation which has completed the liquidation of its assets.

C. An expired corporation whose certificate of registration has been revoked for reasons other than non-filing of reports.

D. An expired corporation which had already availed itself of re-registration.

A. An expired corporation whose certificate of registration has been revoked for non-filing of reports.

These statements are presented to you for evaluation:

Statement I - Subscriptions to par value shares of stock of a corporation at the time of incorporation need not be fully paid upon subscription.

Statement II - Stock corporations are not required to have a minimum capital stock, unless otherwise provided by law.

In your evaluation of the foregoing statements:

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement Il is true.

A. Both statements are true.

66. The articles of incorporation of Renaissance Corporation provide for a capital stock consisting of 100,000 no-par shares with an issued price of P100.00 per share. At the time of incorporation, 25% of the authorized shares were subscribed. How much should be paid at the time of incorporation?

A. None, because stock corporations are not required to have a minimum capital stock.

B. P2,500,000.00.

C. P625,000.00.

D. Any amount may be paid.

A. None, because stock corporations are not required to have a minimum capital stock.

The articles of incorporation of Exquisite Garments Corporation provide, among other matters, for an authorized capital stock of P1,000,000.00, divided into 10,000 shares at the par value of P100.00 per share and seven (7) directors.

Assuming that at the time of incorporation, 5,000 shares were subscribed at par value of which 4,000 shares had been paid in full, and 1,000 shares had been paid at 60% of the subscription price, the number of issued shares of the corporation is:

A. 5,000 shares.

B. 4,000 shares.

C. 10,000 shares.

D. 4,600 shares.

A. 5,000 shares.

Refer to No. 67. The total number of subscribed shares is:

A. 5,000 shares.

B. 4,000 shares.

C. 10,000 shares.

D. 4,600 shares.

A. 5,000 shares.

69. Refer to No. 67. Assume that Exquisite Garments Corporation reacquired 100 shares of the 4,000 shares paid in full. How many shares are outstanding after the acquisition of the 100 shares?

A. 3,900 shares.

B. 4,900 shares.

C. 9,900 shares.

D. 900 shares.

B. 4,900 shares.

70. Refer to No. 67. If you were a stockholder who owns 200 shares and 8 stockholders were nominated for the position of director during the annual election, you will be entitled to cast a maximum of:

A. 1,600 votes.

B. 1,400 votes.

C. 200 votes.

D. 8 votes.

B. 1,400 votes.

71. Refer to No. 67. Assuming that you were the subscriber of the 1,000 shares for which you paid 60% of the subscription price or a total payment of P60,000.00, you shall be entitled at the time of your subscription to the following rights of a Stockholder, except the right to:

A. receive dividends.

B. vote in stockholders' meetings.

C. attend stockholders' meetings either physically, by proxy, or through remote communication.

D. a stock certificate covering 600 shares.

D. a stock certificate covering 600 shares.

72. Refer to No. 67. In the election of directors, those elected were A, B, C, D, E, F and G. In the first meeting of the board of directors, the minutes of meetings show the following information:

I. Approval of a contract for the purchase of garments from director G, who is an importer of apparel from China. Present during the meeting were A, B, C, D and G, with A, B and G voting for the approval of the contract. The contract is considered fair and reasonable under the circumstances.

II. Appointment of T as the new treasurer, with A, B, and C voting for his appointment.

In your evaluation of the above corporate acts:

A. Both acts are valid.

B. Both acts are not valid.

C. Only I is valid.

D. Only Il is valid.

B. Both acts are not valid.

73. The basic governing document of a private corporation which in effect serves as the application of the incorporators with the government through the Securities and Exchange Commission to become a corporation is the:

A. articles of incorporation.

B. bylaws.

C. certificate of incorporation.

D. verification certificate.

A. articles of incorporation.

74. The purpose or purposes of a corporation, aside from being lawful, must comply with which of the following requirements?

A. The purpose or purposes must be definitely stated.

B. The primary purpose must be stated separately from the secondary purpose or purposes.

C. The purposes must be susceptible of being lawfully combined.

D. All of the foregoing.

D. All of the foregoing.

75. Which of the following provisions of the articles of incorporation cannot be amended?

A. Name of the corporation

B. Corporate term

C. Purpose or purposes of the corporation

D. Number and name of incorporators.

D. Number and name of incorporators.

These statements are presented to you for evaluation:

Statement 1 - An incorporator must also be a member of the board of directors or trustees at the time of incorporation.

Statement II - One's name may be stated in the articles of incorporation as a subscriber or member at the time of incorporation, but he may not be an incorporator.

In your evaluation of the foregoing statements;

A. Both statements are true.

B. Both statements are false.

C. Only Statement I is true.

D. Only Statement Il is true.

D. Only Statement Il is true.

77. The document issued by the Securities and Exchange Commission under its official seal giving the incorporators, stockholders/members and their successors the authority to constitute themselves as a body politic and corporate under the name stated in the articles of incorporation for the period specified therein.

A. Articles of incorporation

B. Bylaws

C. Certificate of incorporation

D. Certificate of registration

C. Certificate of incorporation

78. It is the top governing body of a corporation which exercises corporate powers, conducts corporate business and controls and holds corporate property.

A. Executive committee

B. Board of directors/trustees

C. Council of elders

D. Steering committee

B. Board of directors/trustees

81. Directors of an ordinary stock corporation must possess the

following qualifications, except:

A. They must be the owner of at least one (1) share of stock.

B. The shares of stock they own must stand in their name in the books of the corporation while they are directors.

C. Majority of the directors must be citizens of the Philippines.

D. They must not be more than 15 in number.

C. Majority of the directors must be citizens of the Philippines.

82. The articles of incorporation of Emerald Marketing Corporation provide for nine (9) directors. As of April 30, 2021, the cut-off date for purposes of the annual election of directors, the corporation had 10,000 shares outstanding.

If you own 200 shares and you belong to the minority and you wish to elect two (2) directors, what is the minimum number of shares that you must be able to solicit to be assured of the election of your two (2) candidates for directors?

A. 2,001 shares

B. 2,223 shares

C. 1,800 shares

D. 200 shares

A. 2,001 shares

84. The following are corporations vested with public interest, except:

A. Corporations covered by the Securities Regulations Code Whose shares are registered with the Securities and Exchange Commission.

B. Corporations listed with an exchange.

C. Corporation with assets of at least Five Million Pesos (P5,000,000.00) and having two hundred (200) or more holders of shares, each holding at least one hundred (100) shares of a class of its equity shares.

D. Banks, quasi-banks and other financial intermediaries.

C. Corporation with assets of at least Five Million Pesos (P5,000,000.00) and having two hundred (200) or more holders of shares, each holding at least one hundred (100) shares of a class of its equity shares.

At least twenty percent (20%) of the members of the board of directors of corporations vested with public interest must be:

A. incorporating directors.

B. independent directors.

C. emergency directors.

D. provisional directors.

B. independent directors.

Which of the following is not a requirement for an independent director?

A. He does not own shares of stock of the corporation, but receives fees as a director.

B. He is independent of the management of the corporation.

C. He is free from any business or other relationship which could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

D. He is elected by the shareholders of the corporation.

A. He does not own shares of stock of the corporation, but receives fees as a director.

87. As a rule, the quorum in the meeting of the board of directors or trustees is at least:

A. a majority of the total number of directors or trustees fixed in the articles of incorporation.

B. two-thirds (2/3) of the total number fixed in the articles of incorporation.

C. three-fourths (3/4) of the total number fixed in the articles of incorporation.

D. any number as long as it is fixed in the bylaws.

A. a majority of the total number of directors or trustees fixed in the articles of incorporation.

88.. The bylaws may provide that the quorum in the meetings of directors or trustees may be:

I. less than the majority of the total number of directors fixed in the articles of incorporation.

II. more than the majority of the total number of directors fixed in the articles of incorporation

The statement is true with respect to:

A. both I and II.

B. I only.

C. Il only.

D. neither I nor Il.

B. I only.

89. As a rule, the vote required in the meetings of the board of directors of an ordinary stock corporation for the validity of the corporate act taken should be at least:

A. a majority of the total number of directors fixed in the articles of incorporation.

B. a majority of the number of directors present provided there is a quorum.

C. a majority of the number of directors present even if there is no quorum.

D. two-thirds (2/3) of the total

B. a majority of the number of directors present provided there is a quorum.

90.Who may attend and vote in person, by remote communication or by proxy in meetings?

A. Stockholders or members in the regular or special meetings of the stockholders or members.

B. Directors or trustees in the regular or special meetings of the board of directors or trustees.

C. Both (a) and (b).

D. Neither (a) nor (b).

A. Stockholders or members in the regular or special meetings of the stockholders or members.

91. These statements are presented to you for evaluation:

Statement | - Directors/trustees or stockholders/members who attend their respective meetings online or through remote communication shall be considered present for purposes of determining the quorum.

Statement II - The votes cast online or by remote communication by directors/trustees or stockholders/members during their respective meetings shall be counted in determining the total votes cast to approve a corporate act.

In your evaluation of the foregoing statements:

a.Both statements are true.

b.Both statements are false.

C.Only Statement I is true.

d.Only Statement Il is true.

A.Both statements are true.

94. Who of the following corporate officers must also be a director?

A. President

B. Treasurer

C. Corporate secretary

D. None of the foregoing officers is required to be a director for as long as each owns at least one share of stock in his own name.

A. President

95. The president of a corporation may at the same time be the:

A. Treasurer.

B. Corporate secretary.

C. Both the treasurer and corporate secretary.

D. Chairman of the board of directors.

D. Chairman of the board of directors.

98. The minimum number of members of the executive committee who must all be members of the board of directors is:

A. Two (2).

B. Three (3).

C. majority of the number of the board of directors stated in

D. the articles of incorporation.

majority of the number of the board of directors present when the members of the executive committee were appointed.

B. Three (3)

99. What vote is required in order that the act of the executive committee will be considered valid?

A. Majority of its members

B. All of its members

C. Two-thirds of its members.

D. Majority of its members present during the executive committee meeting.

B. All of its members

100. Which of the following causes of vacancy in the board of directors may be filled by the remaining directors if they still constitute a quorum?

A. Increase in the number of directors

B. Expiration of the term of directors

C. Death of a director

D. Removal of a director

C. Death of a director

101. Which of the following statements concerning the removal of a director is incorrect?

A. The stockholders in a meeting duly called for the purpose may vote for the removal of a director.

B. The directors themselves may vote for the removal of a director provided that those voting for removal constitute the majority of the board of directors.

C. The Securities and Exchange Commission, motu proprio, may remove a director who has been elected despite possessing a disqualification.

D. The Securities and Exchange Commission may, upon a verified complaint and after due notice and hearing, order the removal of a director by reason of a disqualification.

B. The directors themselves may vote for the removal of a director provided that those voting for removal constitute the majority of the board of directors.

102. These statements are presented to you for evaluation:

Statement I - As a rule, directors of a stock corporation may be removed with or without cause.

Statement II - Removal of a director without cause may not be used by the majority stockholders to deprive the minority stockholders of their representation in the board of directors.

In your evaluation of the foregoing statements:

a. Both statements are true.

b. Both statements are false.

c. Only Statement I is true.

d. Only Statement II is true.

Both statements are true.

104. Directors are entitled to compensation in the following cases, except when:

A. There is a provision in the bylaws fixing their compensation.

B. The giving of compensation to directors is approved by the stockholders representing at least a majority of the outstanding capital stock.

C. The compensation refers to a reasonable per diem.

D. The giving of compensation was approved by the directors themselves.

D. The giving of compensation was approved by the directors themselves.

105. The total yearly compensation of directors, as such directors, must not exceed:

a. Ten percent (10%) of the net income before income tax of the corporation during the preceding year.

b. Ten percent (10%) of the net income after income tax of the corporation during the preceding year.

c. Fifteen percent (15%) of the net income before income tax of the corporation during the preceding year.

d. fifteen percent (15%) of the net income after income tax of the corporation during the preceding year.

Ten percent (10%) of the net income before income tax of the corporation during the preceding year.

113. The following are the requisites in order that an emergency board of directors may be created by the remaining directors, except:

A. There is a vacancy in the board of directors.

B.The vacancy prevents the remaining directors from constituting a quorum.

C. The cause of vacancy is the valid removal of some directors.

D. Its creation is required to prevent grave, substantial, and irreparable damage to the corporation.

C. The cause of vacancy is the valid removal of some directors.

114. The emergency director who shall be appointed to the board of directors must be:

A. a creditor of the corporation.

B. a minority stockholder of the corporation.

C. an officer of the corporation.

d. a controlling stockholder of the corporation

C. an officer of the corporation.

115. The term of the emergency director shall cease:

A. within a reasonable time from the termination of the emergency.

B. upon the election of the replacement director.

C. (a) or (b) whichever comes earlier.

D. (a) or (b) whichever comes later.

C. (a) or (b) whichever comes earlier.