AvLaw - Entity of Choice and Transportation Law

Question 1

Form of Organization has a single owner

Answer 1

Sole Proprietorship

Question 2

What do you call the single owner of a Sole Proprietorship entity?

Answer 2

Proprietor - also the manager

Question 3

How is sole proprietor ship distinct from its proprietor?

Answer 3

accounting records for the sole proprietorship does not include the proprietor’s personal financial records

Question 4

are those with assets of p3m or less and not more than 9 workers

Answer 4

micro enterprises

Question 5

are those with assets above p3m to p15m and have 1-99 workers

Answer 5

small enterprises

Question 6

are those with assets above p15m to p100m and employ 100-199 workers

Answer 6

medium enterprises

Question 7

is a business owned and operated by two or more
persons who bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits
among themselves.

Answer 7

Partnership

Question 8

T or F
Each partner is liable for their individual debt
incurred during the partnership.

Answer 8

False. Solitarily (Solidary) liable or personally liable for ANY debt

Question 9

An artificial being crated by operation of law, having the rights of success and the powers, attributes, and properties expressly authorized by law, or incident to its existence

Answer 9

Corporation

Question 10

T or F - Stockholders are personally liable for the corporation’s debts

Answer 10

F - liable only to the extent of their share

Question 11

New type of corporation with a single stockholder

Answer 11

One Person Corporation

Question 12

What is the benefit of OPC?

Answer 12

Control and Authority of sole proprietorship and limited liability of a corporation

Question 13

T or F - a sole proprietor cannot be sued using his OWN NAME since he has limited liabilities when it comes to the debts of the business.

Answer 13

F - proprietors have unlimited liabilities that is why the business’ debts are not distinct from their own personality; thus, they can be sued using their own name.

Question 14

Who may form an OPC?

Answer 14

Natural Person
Trust (Subject managed by trustee)
Estate

Question 15

Basic document req for OPC

Answer 15

Cover sheet
Articles of incorporation
written consent from nominee and alternate nominee

Question 16

Fill in the blanks:
The single stockholder claiming limited liability has the burden
of affirmatively showing that the corporation __________

Answer 16

was adequately
financed.

Question 17

Fill in the blanks:
Within 15 days of issuance of Certificate of Incorporation, the OPC shall ______________.

Answer 17

appoint a Treasurer, Corporate Secretary and other officers

Question 18

T or F:
The single stockholder shall be appointed as Corporate Secretary and may assume the role of a Treasurer (bond required if self is appointed).

Answer 18

F - secretary must be other than the single stockholder but he can assume the role of a treasurer.

Question 19

Persons elected by shareholders and responsible for overall management, but not hands on more
philosophic) of the corporation;

Answer 19

Directors

Question 20

Persons hired by the board of directors and responsible for day to day operations of the
corporation and carrying out the vision of the directors

Answer 20

Officers

Question 21

Owners of the corporation in proportion to their ownership of corporate stock outstanding.

Answer 21

Shareholders

Question 22

Rights of a stockholder

Answer 22

1. Vote in election of board of directors at annual meeting, and
   actions that require stockholder approval
2. Share the corporate earnings through dividends
3. Keep the same percent of ownership when new shares of stock are
   issued - preemptive right
4. Share in assets upon liquidation in proportion to their holdings. Called residual claim as they are paid after all claims have been
   paid.

Question 23

Corporate profits distributed to shareholders in proportion to their shares held usually in cash;

Answer 23

Dividends

Question 24

Corporate profits not (yet) distributed to
shareholders.

Answer 24

Retained Earnings

Question 25

A corporation formed by and owned by individuals and other private interests.

Answer 25

Private Corporation

Question 26

A corporation whose shares are sold to and held by, or on behalf of, the general public, and are traded on a public exchange.

Answer 26

Publicly-Held Corporation

Question 27

A corporation whose shares are not publicly-traded, and may generally only be bought from or sold to the corporation.

Answer 27

Privately-Held Corporation

Question 28

A privately-held corporation with a small number of shareholders, often members of the same family

Answer 28

Close Corporation

Question 29

A corporation formed by a government to serve some public purpose.

Answer 29

Public Corporation

Question 30

A corporation formed, in many cases, for charitable, educational, religious, or similar purposes, and organized and operated without the goal of making a profit.

Answer 30

Non-Profit Corporation

Question 31

A debt security that represents borrowing by the corporation

Answer 31

bond

Question 32

an equity security that represents the purchase of a share of ownership in a corporation by a shareholder.

Answer 32

Stock

Question 33

explain the Doctrine of Separate Corporate Entity

Answer 33

Shareholders have distinct and separate personality from the corporation. Hence, the liability of the shareholders are limited only to the amount of their investments.

Question 34

Explain the Doctrine of Piercing the Corporate Veil

Answer 34

Allows the state to disregard the doctrine of separate corporate entity for justifiable reasons.

Question 35

Grounds of the Doctrine of Piercing the Corporate Veil

Answer 35

Fraud, Control, Alter Ego, Objective test

Question 36

Law governing transportation contracts.

Answer 36

Transportation Law

Question 37

Jurisdiction of Transportation Law of the Philippines

Answer 37

[i] if within the Philippines; or [ii] if the transportation of goods be from a foreign country to the Philippines.

Question 38

Laws governing Transport Contracts

Answer 38

1. Provisions of the New Civil Code on Common Carriers; 2. Code of Commerce

Question 39

are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public

Answer 39

Common Carrier

Question 40

Elements of Common Carrier

Answer 40

1. Entity 2. Engaged in transportation 3. means is by land, water, and/or air 4. for fee 5. offered to public without distinction

Question 41

One is still considered a common carrier even if:

Answer 41

* The mode of transportation is not a motor vehicle (FPIC vs. CA) * It has no fixed and publicly known route, maintains no terminals, and issues no tickets. (Asia Lighterage vs. CA) * It is not in the business of public transportation. (Calvo vs. CA)

Question 42

is one who, without making the activity a vocation, or without holding himself or itself out to the public as ready to act for all who may desire his or its services, undertakes, by special agreement in a particular instance only, to transport goods or persons from one place to another either gratuitously or for hire

Answer 42

Private Carrier

Question 43

Differentiate Private and Common carrier in terms of diligence required

Answer 43

extraordinary diligence for common carrier ordinary diligence for private carrier

Question 44

Differentiate Private and Common carrier in terms of presumption of negligence

Answer 44

common carrier - presumed negligent if lost, destroyed, deteriorated, death or injury private carrier - no presumption of negligence

Question 45

Reasons for the requirement of extraordinary diligence

Answer 45

* Nature of the business of common carrier which is public service; * Public policy - the common carriers are supposed to serve the public interest and therefore, they have to exercise extraordinary diligence

Question 46

Caso Fortuito includes

Answer 46

1. The cause of the breach of the obligation must be independent of the will of the debtor; 2. The event must be unforeseen or unavoidable; 3. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and 4. The debtor must be free from any participation in, or aggravation of the injury to the creditor.

Question 47

Should there be injury to or death of passenger so that Common Carrier will be liable?

Answer 47

No - Case of Singson and Cathay Pacific regarding the plane ticket