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BUSSINESS LAW > final > Flashcards

final Flashcards

1
Q
A
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2
Q

What is the title of the Revised Corporation Code of the Philippines?

A

This Code shall be known as the ‘Revised Corporation Code of the Philippines’.

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3
Q

How is a corporation defined?

A

A corporation 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.

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4
Q

What are the classes of corporations under this Code?

A

Corporations may be stock or nonstock corporations. Stock corporations have capital stock divided into shares and can distribute dividends, while nonstock corporations do not.

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5
Q

How are corporations created by special laws or charters governed?

A

They are governed primarily by the provisions of the special law or charter creating them, supplemented by this Code.

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6
Q

Who are corporators and incorporators?

A

Corporators are those who compose a corporation, while incorporators are the stockholders or members mentioned in the articles of incorporation as originally forming the corporation.

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7
Q

What must be indicated in the articles of incorporation regarding shares?

A

The classification of shares, their corresponding rights, privileges, restrictions, and stated par value must be indicated.

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8
Q

What voting rights do holders of nonvoting shares have?

A

Holders of nonvoting shares may vote on matters such as amendment of articles of incorporation, adoption of bylaws, and dissolution of the corporation.

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9
Q

What is the requirement for banks and other corporations regarding no-par value shares?

A

They shall not be permitted to issue no-par value shares of stock.

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10
Q

What are preferred shares of stock?

A

Preferred shares may have preference in the distribution of dividends and corporate assets in liquidation, and may only be issued with a stated par value.

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11
Q

What are redeemable shares?

A

Redeemable shares may be purchased by the corporation from the holders upon expiration of a fixed period, as stated in the articles of incorporation.

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12
Q

What are treasury shares?

A

Treasury shares are shares that have been issued and fully paid for but subsequently reacquired by the issuing corporation.

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13
Q

What is the maximum number of incorporators allowed?

A

Not more than fifteen (15) incorporators may organize a corporation.

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14
Q

What is the corporate term unless otherwise stated?

A

A corporation shall have perpetual existence unless its articles of incorporation provide otherwise.

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15
Q

What must the articles of incorporation contain?

A

They must include the name of the corporation, specific purposes, principal office location, term of existence, names and addresses of incorporators, and other required matters.

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16
Q

What is the form of the articles of incorporation?

A

The articles must comply with a specified form including details such as the name of the corporation, purpose, office location, and authorized capital stock.

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17
Q

What is required for amendments to the articles of incorporation?

A

Amendments must comply with this Code or special laws.

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18
Q

What is the purpose of signing the Articles of Incorporation?

A

To formally establish a corporation in the Republic of the Philippines.

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19
Q

What is required for amending Articles of Incorporation?

A

A majority vote of the board of directors and two-thirds (2/3) of stockholders’ written assent.

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20
Q

What must be included in the original and amended Articles of Incorporation?

A

All provisions required by law.

21
Q

How should amendments to the Articles of Incorporation be indicated?

A

By underscoring the changes made.

22
Q

When do amendments take effect?

A

Upon approval by the Commission or from the date of filing if not acted upon within six (6) months.

23
Q

What grounds can lead to disapproval of Articles of Incorporation?

A

Non-compliance with the Code, illegal purposes, false capital certification, or failure to meet Filipino ownership requirements.

24
Q

What is the requirement for a corporate name?

A

It must be distinguishable from names already reserved or registered.

25
Q

What happens if a corporate name is not distinguishable?

A

The Commission may order the corporation to cease using that name and register a new one.

26
Q

What is required for the registration and incorporation of a corporation?

A

Submission of the intended corporate name and Articles of Incorporation to the Commission.

27
Q

When does a private corporation commence its existence?

A

From the date the Commission issues the certificate of incorporation.

28
Q

What is a de facto corporation?

A

A corporation claiming to be incorporated under the Code, whose incorporation is not required to be proven in private suits.

29
Q

What is the liability for acting as a corporation without authority?

A

Liability as general partners for debts and damages incurred.

30
Q

What happens if a corporation does not commence business within five years?

A

Its certificate of incorporation is deemed revoked.

31
Q

What is the status of a corporation that becomes inoperative for five years?

A

It may be placed under delinquent status by the Commission.

32
Q

What is the role of the Board of Directors or Trustees?

A

To exercise corporate powers, conduct business, and control properties.

33
Q

What is the term length for directors and trustees?

A

Directors for one (1) year; trustees for up to three (3) years.

34
Q

What is required for independent directors in certain corporations?

A

At least twenty percent (20%) of the board must be independent directors.

35
Q

What must happen immediately after the election of directors?

A

The board must formally organize and elect corporate officers.

36
Q

What are the required officers of a corporation?

A

A president, treasurer, and secretary, among others.

37
Q

What must be reported to the Commission after elections?

A

Names, nationalities, shareholdings, and addresses of elected directors and officers.

38
Q

What disqualifies a person from being a director or officer?

A

Conviction of serious offenses or administrative liability for fraudulent acts.

39
Q

What are the conditions for a person to be considered convicted by final judgment?

A

A person is convicted by final judgment if they are: (1) convicted of an offense punishable by imprisonment for a period exceeding six (6) years; (2) found guilty of violating this Code; and (3) found guilty of violating Republic Act No. 8799, known as ‘The Securities Regulation Code’.

40
Q

What constitutes administrative liability for a person?

A

A person is found administratively liable for any offense involving fraudulent acts.

41
Q

What is the basis for removal of a director or trustee?

A

Any director or trustee may be removed by a vote of stockholders holding at least two-thirds (2/3) of the outstanding capital stock, or by a vote of at least two-thirds (2/3) of the members entitled to vote in a nonstock corporation.

42
Q

What is required for a special meeting to remove a director or trustee?

A

A special meeting must be called by the secretary on order of the president or upon written demand of stockholders or members representing a majority of the outstanding capital stock.

43
Q

What happens if there is no secretary to call a special meeting?

A

If there is no secretary, the stockholder or member may call the special meeting by directly addressing the stockholders or members.

44
Q

What is the time frame for holding an election to fill a vacancy due to removal?

A

The election may be held on the same day of the meeting authorizing the removal, and this must be stated in the agenda and notice.

45
Q

What is the procedure for filling vacancies in the board of directors or trustees?

A

Vacancies may be filled by a majority vote of the remaining directors or trustees if a quorum is present; otherwise, they must be filled by stockholders or members in a meeting.

46
Q

What is the term for a director or trustee elected to fill a vacancy?

A

A director or trustee elected to fill a vacancy is referred to as a replacement director or trustee and serves only for the unexpired term of the predecessor.

47
Q

What is the limit on the total yearly compensation of directors?

A

The total yearly compensation of directors shall not exceed ten percent (10%) of the net income before income tax of the corporation during the preceding year.

48
Q

What is the liability of directors or trustees for unlawful acts?

A

Directors or trustees who willfully vote for unlawful acts or are guilty of gross negligence shall be liable jointly and severally for damages suffered by the corporation or its members.

49
Q

What must corporations vested with public interest do regarding compensation?

A

They must submit an annual report of the total compensation of each of their directors or trustees to their shareholders and the Commission.

BUSSINESS LAW (4 decks)

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