Law on Corp - Corporate Books and Records

Question 1

What are the required books and records to be kept by Corporations?

A. Under RCC

Answer 1

1. Articles of incorporation and by-laws
2. Information regarding composition of the corp
3. Information regarding governing board
4. A record of all business transactions
5. Record of resolutions
6. Reportorial Requirements
7. Minutes of all meetings of stockholders or members and board meetings
8. Stock and transfer book, in case of stock corporations and membership book or list of members, in case of non-stock corp

Question 2

Corp’s duty of keeping books and records is imperative and mandatory

True or False?

Answer 2

True

Question 3

Proper custodian of the books is usually the corporate secretary

True or False?

Answer 3

True

Question 4

All books must be kept at the?

Answer 4

Principal office, except that stock and transfer book may be kept in the principal office or office of its stock transfer agent

Question 5

Corp Books and Records are open to inspection by any director, trustee, stockholder or member of the corp

True or False?

Answer 5

True

Question 6

What are the right to Inspect Corporate Books?

Answer 6

1. Right to inspect
2. Right to demand in writing, at his expense

Question 7

Under Basis of Ownership of Corporate Asset

A. Beneficial Ownership of Corp Assets

Stockholders or member have a right to be fully informed as to the condition of the corp

True or False?

Answer 7

True

Question 8

Under Basis of Ownership of Corporate Asset

A. Beneficial Ownership of Corp Assets

Rights of SH to inspect rests on fact of ownership of assets and property of the corp through ownership of shares

True or False?

Answer 8

True

> therefore an incident of ownership of the corp property, whether the ownership or interest be termed an equitable ownership, beneficial or quasi

Question 9

Under Basis of Ownership of Corporate Asset

B. Protection of Stockholders and General Public from Mismanagement, Fraud, and Other Wrongful Acts

Right to inspect to investigate the conduct of the management, determine the financial condition of the corp, and generally take an account of the stewardship of the officers and directors.

True or False?

Answer 9

True

Question 10

Under Basis of Ownership of Corporate Asset

B. Protection of Stockholders and General Public from Mismanagement, Fraud, and Other Wrongful Acts

Right to examine

True or False?

Answer 10

True

Question 11

What are the remedies and sanctions for Enforcement of Right?

Under:
A. Reporting to and Summary Investigation by the SEC

Answer 11

5 days from receipt of such report, SEC shall conduct a summary investigation

Question 12

What are the remedies and sanctions for Enforcement of Right?

Under:
B. Liability for damages and for an offense punishable under the RCC action filed in court

Any officer who shall refuse shall be liable for damages

True or False?

Answer 12

True

Question 13

What are the remedies and sanctions for Enforcement of Right?

Under:
B. Liability for damages and for an offense punishable under the RCC action filed in court

Guilty of an offense which shall be punishable at what amount?

Answer 13

10,000 to 200,000

Question 14

What are the remedies and sanctions for Enforcement of Right?

Under:
B. Liability for damages and for an offense punishable under the RCC action filed in court

When violation is injurious or detrimental to the public, penalty is at what amount?

Answer 14

20,000 to 400,000

Question 15

What are the limitations on the Right to Inspection?

Answer 15

A. Purpose of Inspection

• must be legitimate or proper purpose
• Purpose is to find out the actual financial condition of the corp and how his investment is being used

Question 16

What are the limitations on the Right to Inspection?

Answer 16

B. Books of Foreign Corporation
- right does not apply where the corp is not organized under Philippine Law

Question 17

What are the limitations on the Right to Inspection?

Answer 17

C. Confidentiality Rules
- Inspecting or reproducing party shall remain bound by confidentiality rules, as the rules on trade secrets or processes under Intellectual Property Code of the PH

Question 18

What are the limitations on the Right to Inspection?

Answer 18

D. Place of Inspection
- Requires every stock corporation to keep its stock and transfer books in the principal office

Question 19

What are the limitations on the Right to Inspection?

Answer 19

E. Reasonable Regulations
- As to time, place, and proper purpose which the corp through the bylaws may prescribe (at all times)
- right may only be exercised at reasonable hours on business days

Question 20

What are the Extent of the Right of Inspection?

Answer 20

A. Copies, Abstracts, and Memoranda
B. Agent or Representative
C. All pertinent books, papers, etc

Question 21

What are the Extent of the Right of Inspection?

Under:
A. Copies, Abstracts, and Memoranda

Answer 21

• The right to make copies, abstracts, and memoranda of their contents
• But stockholder or member cannot, without order of the court
• Any stockholder or member has the right to receive the corporation’s most recent financial statement

Question 22

What are the Extent of the Right of Inspection?

Under:
B. Agent or Representative

Answer 22

The inspection and examination may be made by any proper representative or attorney-in-fact, and either with or without the attendance of the director

Question 23

What are the Extent of the Right of Inspection?

Under:
C. All pertinent books, papers, etc

Answer 23

• Extends to all books, papers, contracts, minutes, books or other instruments from which he can derive any information that will enable him to better protect his interest

Question 24

To Whom right is not available about the inspection of corporate books and records?

Answer 24

A. Requesting party who is not a stockholder or member, or is a competitor director, officer, controlling stockholder or otherwise represents the interest of a competitor

B. Person who has improperly used information secured through any prior examination

C. A person is not acting in good faith or for legitimate purpose

Question 25

What are the liability for abuse of right of inspection?

Answer 25

Imposition of a fine ranging from P5,000 to 2,000,000, and not more than 1,000 for each day of continuing violation but in no case to exceed 2,000,000 and the issuance of a upermanent cease-and-desist order, without prejudice

Question 26

A record of all stocks in the names of the stockholders alphabetically arranged, the installments paid and unpaid on all stocks for which subscription has been made, and the date of payment of any installment; a statement of every alienation, sale or transfer of stock made, the date thereof, by and to whom made; and such other entries as the by-laws may prescribe. True or False?

Answer 26

True

Question 27

The stock and transfer book shall be kept in the principal office of the corporation or in the office of its stock transfer agent and shall be open for inspection by any director or stockholder of the corporation at reasonable hours on business days. True or False?

Answer 27

True

Question 28

One engaged principally in the business of registering transfers of stocks behalf of a stock corporation. True or False?

Answer 28

True

Question 29

No stock transfer agent shall be allowed to operate in the Philippines unless he secures a license from the SEC and pays a fee as may be fixed by the SEC which shall be renewable annually. A stock corporation is not precluded from performing or making transfer of its own stocks, in which case all the rules and regulations imposed on stock transfer agents, except the payment of a license fee herein provided, shall be applicable. True or False?

Answer 29

True

Question 30

The financial statements must be duly signed and certified in accordance with me RCCP, and the rules the SEC may prescribe, except that if the total assets or total liabilities of the corporation is less than 600,000, or such other amount as may be determined appropriate by the Department of Finance, the financial statements may be certified under oath by the treasurer and the president. True or False?

Answer 30

True - Under Section 177, the financial statements must be audited by an independent certified public accountant if the total assets or total liabilities of the corporation is P600,000 and above.

Question 31

Within what days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most recent financial statement, in the form and substance of the financial reporting required by the SEC?

Answer 31

10 days

Question 32

At the regular meeting of stockholders or members, the board of directors or trustees shall present to such stockholders or members a financial report of the operations of the corporation for the preceding year, which shall include financial statements, duly signed and certified in accordance with the RCCP, and the rules the SEC may prescribe. True or False?

Answer 32

True