Chapter 6 Flashcards
(True or False)
The inadequacy of both the sole proprietorship and partnership to raise the needed large amounts of capital resulted to the development of the corporate form of organization
True
The ownership interest of corporation are by ______
readily transferable shares of stocks
(True or False)
Shares of a corporation can’t be traded freely because it interrupts business operations of the corporation
False-can be traded freely without interrupting
A shareholder may sell his interest in the business, retire from the company, or die without causing any stoppage in the company’s business activities. Due to these attributes, a corporate form of business becomes an ______ type of business.
Enduring
(True or False)
Corporate form of business is not easily dissolved
True
What is Republic Act No. 11232 known as?
The Revised Corporation Code of the Philippines
It repealed the Batas Pambansa Bldg. 68, or “The Corporation Code of the Philippines”
Republic Act No. 11232
It is defined by the Section 2 of the New Code as 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.
Corporation
A corporation is a legal or juridical person with a personality separate from its individual members or shareholders who, as a natural persons, are merged in the corporate body.
Separate Legal Entity
A corporation is not in fact and in reality a person, however, the law treats it as though it is a person.
Separate legal entity
Under its corporate name, it may take or acquire properties, enter into contracts and sue or be sued.
Separate legal entity
The corporation cannot come into existence by mere agreement of the parties. It is created by existing legal principles
Created by operation of law
A corporation has the capacity of continuous existence irrespective of the death, withdrawal, insolvency or incapacity of the individual members or stockholders, and regardless of the transfer of their interest or shares of stock
Continuing lifespan or perpetual existence
A corporation, being a mere creation by law has only powers, attributes, and properties expressly authorized by law or incident to its existence.
Power, attributes, and properties authorized by law
If ever the corporation incurs losses and ultimately fails, shareholders may lose their investments. They will not be liable to pay for debts of the corporation beyond their investments.
Limited Liability
A shareholder or investor may sell his ownership shares without the consent of the other shareholders.
Transferability of ownership
(True or False)
The maximum loss that shareholders may incur will only be to the amount of their investments to the corporation
True
(True or False)
The corporation has a limited existence
False- has continuous existence
(True or False)
Owners of the corporation have unlimited liability
False-limited liability
(True or False)
In corporation, financing is easier to obtain
True
(True or False)
The shareholders are not the general agents of the business
True
Corporations that have capital stock divided into shares and are authorized to distribute to the holder of such shares dividends or allotments of the surplus profits on the basis of shares held.
Stock Corporations
Owners of stock corporation
Stockholders or shareholders
Private corporations which do not issue stocks. They are created not for profit but for public good and welfare.
Non-stock corporations
Owners of non-stock corporation
members
A corporation organized for religious purposes
Ecclesiastical corporation