Law on Corporations Flashcards
An ultra vires act is an act or a transaction of a corporation which:
A.Is considered illegal
B. Is contrary to morals, public policy, good customs
C. Not within the express, implied or incidental powers of the corporation
D. All of the above
C
Under the Revised Corporation Code, a foreign corporation has power and capacity to do all of the following, except:
A. Form joint ventures
B. Adopt and use a corporate seal
C. Give aid for political partisan activities
D. Acquire properties in its own name
C
Under the Revised Corporation Code, a foreign corporation has power and capacity to do al of the following, except:
A. Form joint ventures
B. Adopt and use a corporate seal
C. Give aid for political partisan activities
D. Acquire properties in its own name
C
Mr. X was invited by his friends to invest in XYZ Corp., a newly organized firm where he was appointed president. He entered into a contract of sale with ABC Corp. to purchase equipment, in accordance with the primary purpose of the corporation. Later on, however, it was discovered that the Articles of Incorporation had not been filed by his friends. He hurriedly attended to the matter and when the SEC issued the Certificate of Registration, the corporation became bankrupt and Mr. Xis now being sued by ABC Corp. in his personal capacity. In this case,
A. Mr. X cannot be made liable since XYZ Corp. is considered a de facto corporation which has a separate personality.
B. Mr. X cannot be made liable since the de facto status of the corporation has not been attacked by the State.
C. Mr. X can be made liable upto his personal assets since he is the president af XYZ Corporation which is a corporation by estoppel.
D. Mr. X can be made liable only upto his investment since he had no knowledge that the corporation was not validly incorporated.
D
Mr. Xinvested his property in exchange for shares in ABC Corporation. Later on, the same property mortgaged as security for the loan of ABC Corporation from MBank. For failure to pay, the mortgage was foreclosed and proceeds were less than the amount of the outstanding balance of the loan which M Bank sought from Mr. X contending that the property was invested by him. M.r Xcannot be made liable under which principle:
A. Corporate Entity Theory
B. Piercing the Veil of Corporate Entity
C. Limited Liability Principle
D. All of the choices
A
Under the Revised Corporation Code, a corporation has:
A. A maximum of 50 years of existence
B. A maximum of 50 years of existence but renewable not earlier than 5 years prior to expiration of the term
C. A maximum of 50 years of existence but renewable not earlier than 3 years prior to expiration of the term
D. Perpetual existence
D
Which of the following is still a requirement that applies to incorporators under the Revised Corporation Code:
A. Majority must be residents of the Philippines
B. Must be natural persons
C. Natural persons must be of legal age
D. None of the choices
C
A, B, C, D and E is organizing a corporation whose Authorized Capital Stock is P64,000. How much is the minimum paid- up capital requirement under the Revised Corporation Code for the corporation to incorporate?
A. P0
B. P4,000
C. P5,000
D. P16,000
A
A restriction as to transfer of shares in an ordinary stock corporation must be indicated in:
I. Articles of Incorporation
II. By-Laws
III. Certificate of Stock
A. I, II, and III
B. I and II
C. I and III
D. II and III
C
The existence of a corporation sole begins from:
A. The time the parties came to an agreement to form a corporation and contribute money or property.
B. Filing of the verified articles of incorporation.
C. Issuance of a certificate of registration.
D. First day of the year following the filing of the Articles of Incorporation
B
The following are qualifications of a director, except:
A. They must own at least 1% share.
B. They meet all the qualifications under the by-laws
C. They do not possess any of the disqualifications under the Corporation Code.
D. None of the choices is an exception
A
A, is a stockholder of Silvestre Corporation, who holds 10,000 shares thereof. Astockholders meeting was called to elect members of a 5-man Board. How many votes can Acast in favor of Bif they employ cumulative voting?.
A. 10,000 votes
B. 25,000 votes
C. 50,000 votes
D. 100,000 votes
C
A, B, C, D and E are members of the Board of Directors. A retired and D died. In this case, who shall fill-up the vacancy?
A. Stockholders in a meeting called for the purpose, regardless if the directors still have a quorum
B. A, Band C, since they still constitute a quorum
C. A, B and C, regardless if they still constitute a quorum
D. Stockholders in a meeting called for the purpose since the directors no longer have a quorum
B
A, B, C, D, E, F, G, H, I are members of the Board of Directors. In the meeting to appoint corporate officers, only A, B, C, Dand Eare present. How many votes are required to elect corporate offices?
A. 2
B. 3
C. 4
D. 5
D
A, B, C, D, and E are directors of REALTY CORP., Z wanted to sell his property first to A, who acquired it for P90M and eventually sold the same for P100M. In this case,
A. A can keep the profits provided the sale is ratified by the stockholders.
В. A can keep the profits because it was offered to him and not to REALTY CORP.
C. The sale is not subject to ratification and A may be required to remit the profits to REALTY CORP
D. None of the above
A
Mr. Xis a Director of both XYZ Corporation and ABC Corporation. XYZ and ABC entered into a contract of sale, the contract between XYZ and ABC, is considered valid absent fraud and provided it is reasonable under the circumstances. But it is considered voidable if the shareholdings of Mr. Xin the two corporations are:
АВС XYZ
A. 25% 25%
B. 5% 5%
C. 25% 5%
D. 3% 20%
C
Which of the following corporate officer position may be held by the same person?
A. President and Secretary
B. Treasurer and Secretary
C. President and Treasurer
D. None of the choices
B
M.r X, as the president of ABC Corporation, signed the check in his official capacity. Later on, the check bounced due to insufficiency of funds and he is now being sued for violation of BP Big. 2. Can Mr. Xbe made personally liable?
A. Yes, because he acted in bad faith in allowing the issuance of a worthless check
B. No, because he merely signed in his official capacity
C. Yes, because he is made personally liable by law
D. No, because of the corporate entity theory
C
Which of the following is false with regards preferred shares?
A. Preferred share is a stock that gives the holder preference over the holder of common stocks with respect to the payment of dividends and/or with respect to distribution of capital upon liquidation.
B. A preferred share can be issued without a par value provided it is not issued for less than P5.
C. The preference must be stated in the Articles of Incorporation and the Certificate of Stock.
D. None of the above.
B
A no-par stock is issued without any designated minimum value.
As a general rule, preferred shares do not give the holder the right to vote. However, they shall have the right to vote on
the following, except:
A. Amendment of the Articles of Incorporation
B. Adoption and amendment of the by-laws
C. Sale of all or substantially all of the inventories
D. Increase or decrease of capital stock
C
X Co. has P10M Authorized Capital Stock divided into: (1) 5M shares at P1.00 par value; and (2) 1M no par value shares with issued value at P5.00. If Aacquired 100,000 no par value shares at P4.00 and the same were issued. In this case,
A. There is no issuance of watered stocks
B. A and the directors of XCo. are solidarily liable for the P1.00 per share difference.
C. Only A is liable for the P1.00 per share difference.
D. Only the directors of XCo. is liable for the P1.00 per share difference
D
Mr. Asubscribed to 10,000 shares of P1 par value for P10 per share. He was able to pay 50% of the subscription price. In
this case, which of the following is not a right granted to M.r A?
A. He can receive dividends attributable to the whole 10,000 shares
B. He has the right to vote equivalent to the 10,000 shares
C. He can demand the issuance of certificate of stock for the 5,000 shares already paid
D. None of the choices.
C
Which of the following grounds to deny pre-emptive right requires the approval of 2/3 of the outstanding capital stock?
A. Shares to be issued in order to comply with the laws requiring stock offering er minimum stock ownership by the public
B. Shares issued in good faith in exchange for property needed for corporate purposes
C. In case the right is denied in the By-Laws
D. None of the choice
B
The appraisal right of a stockholder may
be exercised in the following actions of the corporation, except:
A. In case of merger or consolidation.
B. Sale of all or substantially al the assets of the corporation.
C. Investment of funds in another corporation or business or for any other purpose other than the primary purpose.
D. Amendments to the Articles of Incorporation to change the name of the corporation
D
