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SEC > PART 2 EQUITY > Flashcards

PART 2 EQUITY Flashcards

1
Q

Types of corporation

A

Limited liability corporation
Close corporation
Public company or listed company
Stock corporation
De jure corporation

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2
Q

Stockholders are not personally liable for corporate obligations and cannot be held liable to third persons who have claims against the corporation beyond their agreed subscriptions or contribution to the corporate capital

A

Limited liability corporation

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3
Q

All the corporations issued stocks of all classes exclusive of treasury shares shall be held of record by not more than a specified number of persons not exceeding 20

A

Close corporation

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4
Q

Corporation shall be deemed not a closed corporation when at least how many of its voting stocks or voting rights is owned or controlled by another corporation which is not close corporation as defined

A

2/3

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5
Q

Close corporation shall not least in any stock exchange or make any public offering of any of its stock of any class

A

True

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6
Q

In close corporation all of the issued stocks of all classes shall be subject to one or more specified restrictions on transfer permitted by the corporation code

A

True

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7
Q

With a class of equity securities listed on any exchange OR

A

Public company or listed company

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8
Q

With assets in excess of 50 million and having 200 or more hoarders at least 200 of which are holding at least (100 shares of a class of its equity securities)

A

Public company or listed company

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9
Q

A company that is authorized to issues shares of stock to investors

A

Stock corporation

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10
Q

Shares of stock represent ownership interest in the corporation

A

Stock corporation

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11
Q

Stock corporations are regulated by the?

A

Securities and exchange commission

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12
Q

What are the formation of a corporation

A

Articles of incorporation
Bylaws
Certificates of incorporation or juridical personality commences
Powers of a corporation

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13
Q

A contract between the state and the corporation

A

Articles of incorporation

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14
Q

A contract between the stockholders members in case of non-sto corporation and the state

A

Articles of incorporation

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15
Q

A contract between a corporation and stockholders members

A

Articles of incorporation

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16
Q

The articles of incorporation do not become effective and binding as the charter of the corporation unless they have been filed and register with what commission?

A

Security and exchange commission

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17
Q

Articles of incorporation shall contain substantially the following matters

A
  • name of the corporation
  • names nationalities and residences of the incorporators
  • number of the directors or trustees
  • names nationalities and residences of the persons who shall act as a director’s or trustees until the first regular director or trust are duly elected and qualified in accordance with the corporation code
  • specific purpose or purposes for which the corporation is being incorporated
  • place where the principal office of the corporation is located which must be within the philippines
  • term for which the corporation is to exist
  • if it be stuck the amount of its capital stock in lawful money of the philippines and capital contribution if it’s non-stock corporation among others
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18
Q

This signifies the rules and regulation or private laws enacted by the corporation to regulate govern and control its own actions affairs and concerns and its stockholders or members and directors and officers with relation there to and among themselves in the relation to it

A

Articles of incorporation

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19
Q

Relatively permanent and continuing rules of action adopted by the corporation for its own government and that of the individuals composing it and having the direction in whole or in part in the management and control of its affairs in activities

A

Articles of incorporation

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20
Q

Adopted before or after incorporation

A

Bylaws

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21
Q

Bylaws

A

The rules of action adopted by a corporation for its internal government

Adopted before or after incorporation

Approved by the stockholders if adopted after incorporation

A condition subsequent in the acquisition by a corporation or a juridical personality

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22
Q

When to adopt bylaws

A

Within one month after receipt of the official notice of the issuance of the certificate of incorporation by the sec

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23
Q

Names mentioned in the articles of incorporation as originally forming the corporation and are signatories

A

Corporators
Stockholders
Members
Incorporators

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24
Q

Corporate doctrines

A

Doctrine of corporate entity

Doctrine of piercing the veil of corporate fiction

Right of succession

Ultra vires acts of a corporation

Doctrine of corporate opportunity

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25
Q

The principle on separate identity of a corporation from its stockholder. The stockholders or members of a corporation are not the same as the corporation itself and the property belonging to a corporation cannot be attached nor held answerable for the depth of the stockholders

A

Doctrine of corporate entity

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26
Q

The principle of separate identity of a corporation from its stockholders may be disregarded when it is used to defeat public convenience justify wrong protect or cover fraud or defend crime or work and injustice

A

Doctrine of piercing the corporate veil

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27
Q

Granted by law to a registered corporation means that a corporation has a continuity of corporate life during its term of existence stated in the articles of incorporation

A

Right of succession

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28
Q

No corporation under the corporation code shall possess or exercise any corporate powers except those conferred by the code or by its articles of incorporation and except such as are necessary or as incidental to the exercise of the powers as conferred

A

Ultra vires acts of a corporation

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29
Q

When a director attempts to acquire or acquires in violation of his duty any interest adverse to the corporation he acquires for himself a business opportunity which should belong to the corporation

A

Doctrine of corporate opportunity

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30
Q

This refers to the total amount of shares which a corporation is allowed to issue if the shares have a par value.

A

Authorized Capital stock

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31
Q

This is the part of capital stock which is subscribed whether paid or unpaid

A

Subscribed capital stock

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32
Q

The part of the subscribed capital stock paid to the corporation

A

Paid up capital stock

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33
Q

That part of the capital stock which is not issued or subscribed

A

Unissued capital stock

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34
Q

This refers to the total shares of stock issued to subscribers or stockholders whether or not fully or partially paid except treasury shares

A

Outstanding capital stock

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35
Q

The term surplus is generally defined as the excess of the net assets of a corporation over its capital or stated capital

A

Paid in surplus

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36
Q

Under this doctrine the capital stock and assets of the corporation are held in trust for the creditors

A

Trust fund doctrine

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37
Q

A _______ is one of the units into which the capital stock of the corporation is divided

A

Shares of stock

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38
Q

Certificate is the written acknowledgement by the corporation of the stockholder’s interest in the corporation and its property

A

Stock certificate

39
Q

Represents the intangible interest or right which an owner has in the management profits and assets of the corporation it is property subject to conversion

A

Shares of stock

40
Q

Tangible personal property

A

Stock certificate

41
Q

This may be issued even if not fully paid except shares without par value which are deemed fully paid and an accessible upon issuance

A

Shares of stock

42
Q

As a rule this is issued only if the subscription is fully paid

A

Stock certificate

43
Q

Classes of shares of stock under the corporation code

A
  1. Preferred stock
  2. Common stock
  3. No par value stock
  4. Redeemable shares
  5. Voting shares
  6. Non voting shares
  7. Founder shares
  8. Par value stock
44
Q

The ordinary stock of a corporation which entitles the holder to a pro rata division of the dividends without any preference or advantage over any other stockholders.

Representation of partial ownership in a company and is the type of stock comes with voting rights.

A

Common stock

45
Q

One which entitles the holder to certain preference over other shareholders

Have a higher claim on distributions for example dividends than common stockholders but less than bondholders

A

Preferred stock

46
Q

Two types of preferred stock

A

Preferred stock as to asset
Preferred as to dividends

47
Q

One which entitles the holder to preference in the distribution of dividends over common stock upon the liquidation of the corporation

A

Preferred stock as to asset

48
Q

One that entitles the holder to preference in the distribution of dividends over common stock

A

Preferred as to dividends

49
Q

One the nominal value of which appears on the articles of incorporation and on stocks certificate

A

Par value stock

50
Q

Unadjusted value of an asset without taking into account deductions and premiums

A

Nominal value

51
Q

One without any nominal or par value appearing in the articles of incorporation or on the stock certificate

A

No par value stock

52
Q

Those which grant the issue incorporation the power redeem or purchase after a certain period

A

Redeemable shares

53
Q

Those entitled to vote in the meetings of the corporation

A

Voting shares

54
Q

Those without voting rights except in certain cases

A

Non voting shares

55
Q

Those that grant to the founders certain rights and privileges not enjoyed by other shares

A

Founders’ shares

56
Q

Those which have been issued and fully paid for but subsequently required by the issuing corporation by purchase redemption donation or through some other lawful means

A

Treasury shares

57
Q

Rules of treasury sales

A
  1. No voting rights as long as they remain in the treasury
  2. Although they are part of the subscribe stock they are not considered outstanding shares
  3. Being owned by the corporation they are not entitled to dividends
  4. They may again be disposed of or a reasonable price fixed by the board of directors
58
Q

Rules of founders shares

A
  1. Founders shares must be classified as such in the articles of incorporation
  2. They may be given rights and privileges not enjoyed by other shares
59
Q

For stock corporations no share may be deprived of voting rights except those classified and issued as…

A

Preferred or redeemable shares

60
Q

Each share of stock is entitled to vote unless denied in the articles of incorporation or declared delinquent under what section of the corporation code?

A

Section 67

61
Q

Only stockholders of record as of date fixed in the _____ shall enjoy the rights to vote at stockholders meeting

A

Bylaws

62
Q

This is the best evidence to establish the stockholders who are entitled to vote at stockholders meeting

A

The stock and transfer book

63
Q

This is the stockholders most basic and fundamental right inherent in and incidental to the ownership of corporate shares of stock this right should not be denied on tenuous and shallow grounds

A

The right to vote

64
Q

_______ is explicit that the moment a stock becomes delinquent the holder of losses his right to vote

A

Section 71 of the corporation code

65
Q

Therefore no _____ for unpaid subscription shall be voted or entitled to vote or represented at any stockholders meeting.

Neither can he or she be voted for us director of the corporation nor continue sitting in the board if he has been previously elected as member thereof.

A

Delinquent stock

66
Q

Delinquent stockholders can vote the shares covering the entire subscription stated in section 67 of the corporation code

A

False

67
Q

The pledgor or mortgagor shall have the right to attend and vote at meetings of stockholders unless the pledgee or mortgagee is expressly given by the pledgor or mortgagor such right in writing which is recorded in the appropriate corporate books

A

True

68
Q

On the death of a shareholder his_________ becomes vested with the legal title to his tax and entitled to vote the same at all meetings and that until a settlement and division of the state is done the legal title to the stocks of the deceased belongs to said ___________

A

Executor or administrator or receivers or other legal representative

69
Q

Refers to the right granted to the stockholders to have the first option to subscribe to any issue once or disposition of shares from the capital stock in proportion to the respective shareholdings in the corporation

A

Preemptive right

70
Q

In order to be valid and enforceable any restriction on the transfer of shares requiring the transferr to first offer the same to the existing stockholders before selling it to third parties must be explicitly provided for in the articles of incorporation and stock certificate

A

Right of first refusal

71
Q

This right does not apply to transfer by donation

A

Right of first refusal

72
Q

It is not an inherent right of a stockholder or a matter of absolute right otherwise a stockholder can easily withdraw from the corporation at any time he desires very turning his shares and getting back his capital

A

Appraisal right

73
Q

As a remedy in case an appraisal right is not allowed a stockholder may avail what section of the corporation code allows transfer of ownership of shares

A

Section 63 of the corporation code

74
Q

Appraisal right is allowed only under the instances provided in what corporation codes

A

Section 37 42 81 and 105

75
Q

All stockholders whose name appear in the stock and transfer book of the corporation and date of the meeting authorizing the issuance of shares are entitled to…

A

Preemptive right under section 39 of the corporation code

76
Q

Subscription deposits are not included in determining the proportionate right of the stockholders in the exercise of…

A

Preemptive right

77
Q

Accumulated profits realized out of normal and continuous operation of the business it refers to the percentage of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay death

A

Retained earnings

78
Q

Dividends must be declared and paid out of the ____ of the corporation

A

Unrestricted retained earnings

79
Q

Retained earnings which are not appropriated for designated purposes such as expansion possible future loss and other contingencies or when prohibited under alone agreement are what are referred to as

A

Unrestricted retained earnings

80
Q

The right to receive dividends is inherent in the ownership of shares hence are entitled to whom

A

Stockholders of record

81
Q

A person who cannot be a recipient of a dividend

A

A person who is not a stockholder of record

82
Q

For purposes of determining who are entitled to dividends is the future date specified in the resolution declaring dividends that the dividend shall be payable to the stockholders of records on a specified future date or as of the date of meeting declaring said dividend

A

A record date

83
Q

What are the dividend features

A
  1. Guaranteed
  2. Cumulative
  3. Non-cumulative
  4. Participating
  5. Non-participating
  6. Cumulative participating
84
Q

Entitled the holder thereof to payment of current dividend as well as dividends in arrears

A

Cumulative

85
Q

Entitled the holder thereof only to the payment of current and not past dividends

A

Non cumulative

86
Q

Entitle the holder thereof to participate with the holders of common shares after their preferred right has been satisfied

A

Participating

87
Q

Entitled the holder of to payment of the stipulated prefer dividends and no more

A

Non-participating

88
Q

Entitled the holder they’re off to payment of dividends in arrears and also after receiving his preferred share of dividends to participate with the holders of common stock in the remaining profits

A

Cumulative participating

89
Q

The requirement of registration under subsection 8.8.1 shall not apply to the sale of any security

A

Section 10 exempt transactions

90
Q

Votes required for the compensation of the board

A

Majority vote of the board and stockholders representing 2/3 of the outstanding capital

91
Q

Votes required for amended articles of incorporation

A

Majority vote of the board and stockholders representing 2/3 of the outstanding capital

92
Q

Votes required for amended ByLaws

A

Majority vote of the board and stockholders representing 2/3 of the outstanding capital

93
Q

Votes required to remove a member of the board

A

stockholders representing 2/3 of the outstanding capital

SEC (8 decks)

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