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RFBT (Oct 2023 CPALE) > Revised Corporation Code > Flashcards

Revised Corporation Code Flashcards

1
Q

This attribute of a corporation states that it has a juridical personality, separate and distinct from the persons composing it.

A

Artificial Being

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2
Q

Corporation is possessed with a juridical personality separate and distinct from the individual stockholders or members

A

Corporate Entity Theory

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3
Q

If the entity is used to defeat public convenience, justify wrong, protect fraud, defend crime, the law will regard the corporation as a mere association of persons.

A

Piercing the Veil of Corporate Entity

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4
Q

Applies when the corporation is a dummy or as an alter-ego for the benefit of the stockholders

A

Piercing the Veil of Corporate Entity

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5
Q

When is the commencement of corporate existence for corporations that is not a sole corporation

A

Issuance of Certificate of Incorporation

What is being pertained here is a regular corporation created by general law.

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6
Q

True or false: Death, incapacity, or civil interdiction of one or more of a corporation’s stockholders does not result in dissolution.

A

True

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7
Q

Powers which are expressly authorized by the Corporation Code and other laws, and its AOI.

A

Express Powers

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8
Q

Powers which are inferred from or necessary for exercise of express powers

A

Implied Powers

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9
Q

The following are the powers and capacities of a Corporation under the RCC, except:

a. Sue, but not be sued in its corporate name
b. Enter into merger or consolidation with other corporations
c. Adopt and use a corporate seal
d. Amend its AOI

A

a.

Sue and be sued in its corporate name

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10
Q

True or false: Under the RCC, a corporation still can’t enter into a partnership and joint venture

A

False

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11
Q

True or false: a domestic corporation can give donations in aid of any political party or candidate or for purposes of partisan political activity

A

True

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12
Q

True or false: Not all illegal acts are ultra vires acts, but all ultra vires acts are illegal

A

False

Not all ultra vires acts are illegal, but all illegal acts are ultra vires acts

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13
Q

Corporations that are not authorized to distribute surplus profits

A

Non-stock corporations

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14
Q

Formed, organized, or existing under Philippine laws

A

Domestic Corporation

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15
Q

Corporation where there are no public investors, and shareholders are active in conduct of corporate affairs

A

Close Corporations

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16
Q

Attributes of a private corporation, except:

a. Artificial being
b. Created by operation of law
c. Power to do business and manage affairs is vested in BOD or BOT
d. No personality separate and distinct from owners

A

d.

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17
Q

This principle best describes the strong juridical personality of a corporation.

a. Business judgment rule
b. Limited liability rule
c. Right of succession theory
d. Separate entity theory

A

c.

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18
Q

True or false: Stockholders, directors, or officers may be personally liable for liabilities of the corporation after exhaustion of the corporation’s assets.

A

True, if doctrine of piercing the veil is warranted. If not, then it would be false.

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19
Q

Which of the following scenarios would the doctrine of piercing the veil of corporate fiction be justified in courts?

a. J, a single stockholder, owns and controls 4 corporations

b. L, director of E Corp., controls the corporation to steal corporate assets

c. J Co. & K Co. are sister companies, who share the same personnel and resources

d. F, a corporate officer of Y Corp., is also a corporate officer of C Corp.

A

b.

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20
Q

What is the definition of a lay corporation?

a. One organized for purposes other than a religion
b. Organized for religious purposes
c. Organized for charitable purposes
d. None of the choices

A

a.

Hint:

Choice b defines “Ecclesiastical Corporation”. ECCLESIAstic -> “Iglesia” means “church”-> Religion

Choice c pertains to “Eleemosynary Corporation”. eLEEMOSynary -> “Limos” -> to beg -> charity

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21
Q

True or false: a corporation by prescription is required to file articles of incorporation to obtain juridical personality as a private corporation

A

False.

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22
Q

The following corporations have a juridical personality, except for one:

a. Ostensible corporation
b. De facto corporation
c. De jure corporation
d. Options a and c

A

a.

Ostensible corporation is also known as “corporation by estoppel”

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23
Q

These are the persons who, acting alone or with another, take initiative in founding and organizing the business or enterprise of the issuer and receive consideration therefor.

a. Corporators
b. Promoters
c. Board of Directors
d. Shareholders

A

b.

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24
Q

J, F, M, C, L, and E are named in the Articles of Incorporation as originally forming and composing the corporation, having signed the AoI and acknowledged the same before the notary public. In this case, these people named are:

a. Directors
b. Trustees
c. Incorporators
d. Corporators

A

c.

Hint: When you “incorporate” something (e.g. incorporate an ingredient while cooking), you are about to make a meal. When you “incorporate” along with other people, you are about to make a corporation.

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25
Q

Shares that have no extraordinary rights and privileges are called?

A

Common shares

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26
Q

Shares which has complete voting rights and is required to be present in every stock corporation is called?

A

Common shares

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27
Q

Shares that is issued with some privileges in the distribution of dividends and net assets of the corporation is called?

A

Preferred shares

28
Q

True or false: Preferred stock must not have a stated par value of below Php5.00.

A

False.

Preferred shares of stock may be issued only with a stated par value. There is no mention about preferred shares having a stated par value that must be at least Php5.00.

29
Q

Par value shares, as a general rule, are not allowed to be issued below par value. TRUE OR FALSE?

A

True

30
Q

True or false: Both common and preferred stock may be classified as par value and no-par value.

A

False.

Preferred stock can only be issued @ par value.

31
Q

When no-par value common stock are issued, what is the minimum issue price?

a. P10
b. P1
c. P5
d. No limit

A

c.

32
Q

The following are means by which the issued price of no-par value common stock is determined, except:

a. Fixed in AOI
b. Fixed by BOD based on authority given in AOI
c. Fixed by stockholders representing at least majority of the OCS at a meeting duly called for the purpose
d. None of the choices

A

d.

33
Q

The legal capital of par-value and no-par value shares is comprised of the following. Choose the exception.

a. For par-value shares: total par value of shares issued and subscribed
b. No-par value shares: entire consideration received
c. Par value shares: entire consideration received
d. Choices a & b
e. Choices b & c

A

c.

34
Q

The following corporations are allowed to issue no-par value common shares, except:

a. J Co., a manufacturing corporation
b. L Co., a merchandising corporation
c. Metrobank, a bank
d. Realtalk Co., a real estate corporation

A

c.

35
Q

Corporate acts when stocks classified as without voting stocks or those with limited voting rights are still allowed to vote or participate: (I3 AM SAD)

A
  1. Incurring bond indebtedness
  2. Investments of corporate funds in another corporation or business purpose
  3. Increase/decrease capital stock
  4. Amendment of AOI for legitimate purposes including (but not limited to) shortening/extension of corporate term
  5. Merger/consolidation of corporations
  6. Sale, disposition, conveyance, pledge or mortgage of all or substantially all of corporate property or assets
  7. Adoption and amendment of by-laws
  8. Dissolution, liquidation or rehabilitation of the corporation
36
Q

If founder’s shares classified as such in the AOI is given exclusive rights to vote and be voted in the election of the BOD, what is the max. period or limit of that right?

a. 10 years from SEC Approval
b. 3 years from SEC Approval
c. 5 years from SEC Approval
d. 1 year from SEC Approval

A

c.

37
Q

Stocks which is a result of overstatement of assets or capital, or understatement of liabilities of the corporation.

A

Watered stock

38
Q

Stock which might be issued by a corporation for competitive reasons in order to conceal from other businesses that it is in a better financial position than on what it shows in the FS.

A

Secret reserves

39
Q

In the absence of a provision, in the AOI and Certificate of Stock, what is the presumption of law as to different shares of stock?

a. Redeemable shares are non-voting
b., Preferred shares are non-voting
c. Each type of share shall be equal in all respect to every other share
d. None of the choices

A

c

40
Q

Corporate acts where stocks classified as without or non-voting stocks or those with limited rights are not allowed to participate are the following:

A
  1. Granting compensation to directors
  2. Removal of a director
  3. Ratification of disloyalty of a director or contract with self-dealing director or contract between corporation with interlocking director
  4. Approval of management contract
  5. Distribution/declaration of stock dividends
  6. Election of BOD
41
Q

Erica is a member of the Board of Directors of LMN Corp. At the same time, she is also a director in OPQ Corp. Erica is a _____________________

a. Cross director
b. Interlocking director
c. Cross-company director
d. Associate

A

b.

42
Q

If a director violated the doctrine of corporate opportunity, his act cannot be ratified. True or false?

A

False

43
Q

Action brought by a stockholder on behalf of the corporation to enforce corporate rights against the corporation’s directors/officers/insiders.

a. Criminal suit
b. Derivative suit
c. Corporate suit
d. Lawsuit

A

b.

44
Q

Right of a stockholder to get out of the corporation if he dissented and voted against the proposed corporate action.

a. Corporate right
b. Pre-emptive right
c. Delectus personae
d. Appraisal right

A

d.

45
Q

What is needed in order for a corporation to sell all or substantially all of the corporation’s properties and assets?

a. Stockholder’s & Member’s votes
b. Manager’s vote
c. Stockholder’s votes only
d. Member’s votes only

A

a.

46
Q

An act that is outside or beyond corporate powers.

a. Ultra virus act
b. Ultra vires act
c. Ultima vires act
d. Ultima virus act

A

b.

47
Q

Meetings of directors, trustees, stockholders, or members may be at a:

a. Regular or fixed date
b. Fixed or pre-emptive
c. Early or late
d. Regular or special meeting

A

d.

48
Q

Requirements for stockholders’ (or members’) meetings are the following, except:

a. With previous notice
b. Called by proper person
c. Held at a stated date, but with no stated time
d. Held at a proper place

A

c.

49
Q

At least one (1)-week written notice shall be sent to all stockholders or members in this kind of meeting.

a. Special meeting
b. Regular meeting
c. Annual meeting
d. Pre-emptive meeting

A

a.

50
Q

Who presides over meetings?

a. Presiding manager appointed in AOI
b. Chairman
c. Manager
d. Vice President

A

b.

51
Q

On July 1, Konny subscribed to 1,000 P10 par value shares of P Corp. On July 7, Konny paid half of the balance and demanded that a stock certificate be issued to him. Is he correct or not?

A

No. A certificate of stock shall only be issued until the full amount of subscription, interest, and expenses has been paid.

52
Q

What is the life of a private corporation under RA 11232?

A

Perpetual life

53
Q

The period for renewal of term of a private corporation prior to expiration of term is:

A

3 years

54
Q

Under the RCC, what is the min. authorized capital stock of an ordinary stock corporation?

A

0

55
Q

If KLM Corp. has an authorized share capital of P300,000, what is the min. subscribed capital stock?

A

0

56
Q

If L Corp. has authorized share capital of P200,000 with subscription of P60,000, how much is the minimum paid up capital?

A

0

57
Q

The documents to be submitted for primary registration with the SEC are the following under the RCC, except:

a. Treasurer’s Affidavit
b. Articles of Incorporation
c. By-Laws
d. Cover sheet for registration

A

a.

58
Q

If Macmac Corp. wants to amend its AOI, what vote is needed by the Stockholders and BOD?

A

2/3 vote/members for Stockholders/members, Majority vote of BOD

59
Q

If McClarence Corp. wants to dissolve, what vote is needed by the BOD and Stockholders?

A

BOD = Majority; Stockholders/members = 2/3 OCS/members

60
Q

If REX Corp, a non-stock corporation, wants to adopt plan of distribution of assets of non-stock corporation, what vote is needed by the BOT and the members?

A

Majority vote of trustees; 2/3 of members having voting rights

61
Q

S Corp wants to merge with T Corp. In this case, how many votes of the BOD and Stockholders are needed?

A

BOD = Majority of constituent corporations; Shareholders: 2/3 OCS/members of constituent corporations

62
Q

When the corporate act involves sale, lease, exchange, mortgage, pledge, disposition of all or substantially all of corporate assets, what are the required votes?

A

BOD = Majority
Stockholders/members = 2/3 OCS/members

63
Q

If the corporate act involves the increase/decrease of capital stock, what vote is required?

A

BOD = Majority
Stockholders/members = 2/3 OCS/members

64
Q

When the corporate act is to incur, create, increase bond indebtedness, what vote is required?

A

BOD = Majority
Stockholders/members = 2/3 OCS/members

65
Q
A
66
Q
A

RFBT (Oct 2023 CPALE) (13 decks)

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