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RFBT-Republic-Act-No.11232-Revised-Corporation-Code-of-the-Philippines (with answers)
Bachelor of Science in Accountancy (BSA)
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COVERAGE: Republic Act No. 11232: Revised Corporation Code of the Philippines Direction: Read and select the best answer for the following questions.
It 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 incident to its existence. a. Corporation b. Cooperative c. Partnership d. Joint Venture
The following are the attributes of a private corporation, except a. It is an artificial being. b. It is created by operation of law. c. It acquires juridical personality from the moment the SEC issues its certificate of registration. d. It requires not more than fifteen (15) incorporators or founders under RA 11232. e. Its owners are generally liable only up to the extent of their capital contribution. f. Its owners are generally allowed to transfer their interests even without the consent of the other owners. g. It enjoys the right of succession. h. It may exist in perpetuity under RA 11232 unless a fixed term is stated in the articles of incorporation. i. It has no powers, attributes and properties except those powers, attributes, and properties expressly authorized by law or incident to its existence. j. Its power to do business and manage its affairs is vested in the board of directors or board of trustees. k. It can only be legally dissolved with the consent of the state. It has no personality separate and distinct from its owners.
This theory which is recognized by Corporation Code states that a corporation is not in fact and in reality a person, but the law treats it as though it were a person by process of fiction, or by regarding it as an artificial person distinct and separate from its individual stockholders. It owes its existence to law and the extent of its existence, powers and liberties is fixed by its charter. a. Concession theory or fiat theory or government paternity theory or franchise theory b. Symbol theory c. Genessonchaft theory d. Realist or inherence theory e. Contract theory f. Theory of enterprise entity
How may a corporation be created under Philippine setting? a. In case of private corporation, by operation of general corporation law particularly the Corporation Code of the Philippines (BP 68). b. In case of public corporation, by law or enactment of special law. c. Either A or B. d. By mere consent of the contracting parties
As an artificial being, which of the following constitutional rights is not available to a corporation? a. Right to due process of law b. Right to equal protection of the law. c. Right against unreasonable searches and seizures d. Right against self-incrimination
Which of the following statements concerning the implications of being an artificial being of a corporation is correct? a. As a general rule, a corporation is not entitled to moral damages because, not being a natural person, it cannot experience physical suffering or sentiments like wounded feelings, serious anxiety, mental anguish and moral shock except when a corporation has a reputation that is debased, resulting in its humiliation in the business realm particularly in the case of libel or defamation. b. As a general rule, a corporation cannot be held liable for a crime because of impossibility of imposing the penal sanction of imprisonment and because a crime committed in the name of corporation is actually committed by the individuals who act for and in behalf of such corporation. However, it may become liable for fines to be imposed in the criminal action. c. Both A and B. d. Neither A nor B.
Which of the following corporate legal doctrines refers to the doctrine of separate juridical personality? a. It means that a corporation is a juridical entity with legal personality separate and distinct from those acting for and, in its behalf and, in general, from the people comprising it; and that obligations incurred by the corporation, acting through its directors, officers and employees are its sole liabilities. b. It means that a stockholder is personally liable for the financial obligations of the corporation to the extent only of his unpaid subscription or that a stockholder's liability for corporate debts extends only up to the amount of his capital contribution.
c. It means that the capital stock of a corporation or the assets of an insolvent corporation representing its capital is a trust fund reserved for the benefit of company's creditors. d. It means that the corporation has the capacity for continuous existence despite the death or replacement of its shareholders or members, for it has a personality separate and distinct from those who compose it.
The following are the advantages of forming a corporation, except a. The stockholder's limited liability on the obligation of the corporation. b. It has a strong juridical personality through continuity of existence. c. It has a legal capacity to act and contract as a distinct unit in its own name. d. Its management is centralized. e. There is ease in transferability of shares of stocks. f. It is subject to greater degree of governmental supervision and regulation.
The following are the disadvantages of forming a corporation, except a. There is high cost of formation and operations. b. It is subject to higher taxes or sometimes indirect double taxation. c. Stockholders have little voice in the conduct of the business. d. Its credit is weakened by the limited liability feature. e. It makes feasible gigantic financial undertakings due to numerous investors.
Which of the following legal principles best describes the strong juridical personality of a corporation? a. Limited liability rule b. Separate entity theory c. Business judgment rule d. Right of succession or continuity of existence
Are the stockholders, directors or officers personally liable for the liabilities of the corporation after the assets of the corporation are exhausted? a. Yes because they are considered to be general partners. b. No under all instances. c. Yes under all instances. d. No as a general rule unless exceptional cases warrant the piercing of the veil of corporate fiction.
What are the exceptional cases wherein the courts may pierce the veil of corporate fiction so that the stockholders, directors or officers will become personally liable for corporate debts? a. When the corporate entity is used to commit fraud or to justify a wrong or to defend a crime or to commit tax evasion. (Fraud cases) b. When the corporate entity is used as a mere alter ego, business conduit or instrumentality of a person or another entity. (Alter ego cases) c. When the corporate entity is used to defeat public convenience such as in case of labor case. (Defeat public convenience cases) d. When piercing of the corporate fiction is necessary to achieve justice or equity. (Equity cases) e. Any of the above.
Which of the following instances on itself alone may justify the court in piercing the veil of corporate fiction? a. The mere fact that one or more corporations are owned and controlled by a single stockholder. b. The mere fact that two corporations may be sister companies and that they may be sharing personnel and resources. c. The existence of interlocking directors, corporate officers and shareholders between the two corporations. d. The control of the corporation is used by the director to commit fraud or to defeat public convenience.
Which of the following statements concerning the prayer for piercing the veil of corporation fiction is incorrect? a. Piercing application is essentially a judicial prerogative. b. Piercing must be shown to be necessary and with factual basis. c. Piercing is an equitable remedy and may be awarded only in cases filed by a person with victim standing. d. Piercing is a substantive right provided by BP 68 available as a matter of right.
Which of the following refers to " place of incorporation test or doctrine of incorporation test " in determining the nationality of a corporation? a. It is the principal doctrine as enunciated in BP 68 which provides that a corporation is a national of the country under whose laws it has been organized and registered. b. It means that the nationality of a corporation is determined by the nationality of the majority of the stockholders on whom equity control is vested and it is normally used as war-time test or to determine the compliance with minimum requirement of Filipino ownership in industry reserved for Filipinos. c. It is a three-level relationship test by which the percentage of Filipino equity is computed in a corporation engaged in fully or partly nationalized areas of activities provided in the Constitution and other nationalization laws, in cases where
Which of the following does not have juridical personality as a corporation? a. Corporation by prescription b. De facto corporation c. Ostensible corporation or corporation by estoppel d. De jure corporation
It refers to a group of persons that assumes to act as a corporation knowing it to be without authority to do so, and enters into a transaction with a third person on the strength of such appearance. It has no juridical personality but the persons composing it will be liable like general partners, meaning pro-rata and subsidiarily, to third persons. a. De jure corporation b. Corporation be prescription c. Ostensible corporation or corporation by estoppel d. Open corporation
Which of the following statements refers to a holding company or parent corporation? a. It is a corporation which controls another as a subsidiary by the power to elect management. It is the one that holds stocks in other companies for purposes of control rather than for mere investment. b. It is a company which is subject to a common control of a mother or holding company and operated as party of a system or a corporation that is directly or indirectly, through one or more intermediaries, is controlled or is under the common control of another corporation. c. It is a corporation which is being controlled by the parent corporation. d. It is a corporation which is being influenced by the investor.
Which of the following statements refers to promoters? a. They are the corporators of a nonstock corporation. b. They are the corporators of a stock corporation. c. They 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. d. They are the persons who agreed to take and pay for original and unissued shares of a corporation formed or to be formed. e. They are persons who guaranteed on a firm commitment and/or declared best effort basis the distribution and sale of securities of any kind by another company. f. They are those stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof.
They refer to the persons mentioned in the Articles of Incorporation as originally forming and composing the corporation, having signed the Articles and acknowledged the same before notary public. a. Incorporators b. Corporators c. Stockholders d. Directors
It refers to the basic class of ordinary shares usually without extraordinary rights and privileges, and the owners thereof are entitled to pro-rata share in the profits of the corporation and in its asses upon dissolution and likewise in the management of its affairs. This type of shares which has complete voting rights is required to be present in every stock corporation. a. Preferred shares b. Common shares c. Special shares d. Privileged shares
It refers to a type of shares of stocks that is issued with some privileges in the distribution of dividends and net assets of the corporation. a. Preferred shares b. Common shares c. Special shares d. Privileged shares
Which of the following statements refers to cumulative preference shares? a. It is one which entitles the owner thereof to payment not only of current dividends but also back dividends not previously paid whether or not during the past year's dividends were declared or paid. b. It is one which grants the holders of such shares only to the payment of current dividends but not back dividends when and if dividends are paid to the extent agreed upon before any other stockholders are paid the same. c. It is one which entitles the shareholders to share with the common shares in excess distribution at some predetermined or at a fixed ratio as may be determined. d. It is one which entitles the shareholder thereof to receive the stipulated or fixed preferred dividends and no more.
If the preferred shares are classified as cumulative and participating as to dividends, when do the preferred stockholders become entitled to the cumulative and participating dividends? a. When the corporation recognizes net profit.
b. When the corporation has credit balance in unrestricted retaining earnings. c. When the corporation's total assets exceed total liabilities. d. When there is declaration of dividends by board of directors.
Under the Corporation Code, what is the requirement for the issuance of preferred shares? a. Preferred shares of stock may be issued only with a stated par value. b. Preferred shares of stock may be issued either with par or stated value. c. Preferred shares of stock may be issued only with a stated value. d. Preferred shares of stock may be issued only with discounted value.
It refers to a type of shares of stocks issued with an arbitrary amount stated in its certificate of stock. This type share of stocks cannot be issued below that said face value appearing in the certificate of stock and stated in the Articles of Incorporation. Preferred stocks must always be classified as this type of stocks while common may or may not be this type of stocks. a. Par value shares b. No par value shares c. Issued value shares d. Present value shares
It refers to the arbitrary amount assigned to the share and is expressed in the certificate covering the share. The law does not provide for its minimum amount but it is fixed in the articles of incorporation. Once this amount is fixed, as a general rule, shares are not allowed to be issued below this amount. Otherwise, it will be a violation of trust fund doctrine. a. Par value b. Market value c. Liquidation value d. Issued or stated value
It refers to a type of shares of stocks issued without an arbitrary amount stated in its certificate of stock but must have an issue price. Only common stocks may be classified as this type of shares of stocks while preferred stocks cannot be classified as this type of shares of stocks. a. Par value shares b. No par value shares c. Issued value shares d. Present value shares
What shares may be classified as No-Par value shares of stocks? a. Common stocks b. Preferred stocks c. Both common stocks and preferred stocks d. Neither common stocks nor preferred stocks
When no-par value common shares of stocks are issued, what is the minimum issue price? a. P1. b. P10. c. P5. d. P2.
What is/are the means by which the issue price of no-par value common value shares is determined? a. It may be fixed in the articles of incorporation or by-laws. b. It may be fixed by the Board of Directors based on the authority given in the articles of incorporation. c. It may be fixed by stockholders representing at least a majority of the outstanding capital stock at a meeting duly called for the purpose. d. Any of the above.
Which of the following statements concerning no-par value shares is false? a. The entire consideration received by the corporation for its no-par value shares shall be treated as legal capital shall not be available for distribution as dividends. b. The articles of incorporation must state the fact that it issued no par value shares as well as the number of said shares. c. Shares of capital stock issued without par value shall be deemed fully paid and nonassessable and the holder of such shares shall not be liable to the corporation or to its creditors in respect thereto. d. No-par value shares can be issued by any type of corporation.
Which is correct as regards to legal capital of par-value shares of stocks and no-par value shares of stocks? a. In case of par-value shares of stocks, the legal capital is the total par value of shares issued and subscribed. b. In case of no par-value shares of stocks, the legal capital is the entire consideration received. c. Both A and B
d. It is a type of share classified as such in the articles of incorporation which is issued by the corporation and which may be purchased or taken up by the corporation upon the expiration of a fixed period, regardless of the existence of unrestricted retained earnings in the books of the corporation as long as the corporation's total assets exceeds total liabilities after the redemption, and upon such other terms and conditions as may be stated in the articles of incorporation, which terms and conditions must also be stated in the certificate of stock representing said shares.
If founder's share classified as such in the Articles of Incorporation is given exclusive right to vote and be voted in the election of the board of directors, what is the maximum period or limit of that right? a. 10 years from the approval of SEC b. 5 years from the approval of SEC c. 3 years from the approval of SEC d. 2 years from the approval of SEC
It refers to a stock issued not in exchange for its equivalent value either in cash, property, share, stock dividends, or ser vices. It resulted to overstatement of assets, overstatement of capital or understatement of liabilities of the corporation. The issuance of this type of shares of stocks is considered violation of trust fund doctrine. a. Watered stock b. Secret reserves c. Par value shares d. Over-issued stocks
It refers to a stock issued that resulted to understatement of assets, understatement of capital or overstatement of liabilities of the corporation. An entity might issue this stock for competitive reasons, to hide from other businesses that it is in a better financial position than appears in its financial statements. a. Watered stock b. Secret reserves c. Par value shares d. Over-issued stocks
It refers to those shares held by a third person to be released only upon the performance of a suspensive condition or the happening of a certain event contained in the agreement. It has no voting rights until the fulfillment of the suspensive condition. a. Watered stock b. Secret reserves c. Par value shares d. Escrow shares
It is a share of stocks which have been issued and fully paid for, but subsequently reacquired by the issuing corporation by purchase, redemption, donation or through some other lawful mean. The reacquisition of this type of shares must be supported by restriction of unappropriated retained earnings in order not to violate mist fund doctrine. a. Promotion share b. Founder's share c. Treasury share d. Convertible share
These shares have no voting rights of whatsoever. They may be subsequently issued by the corporation at a price even below its par value as long as the price is reasonable without violation of trust fund doctrine because they are supported by restricted retained earnings at the time of its reacquisition by the corporation. a. Preferred shares b. Common shares c. Redeemable preference shares d. Treasury shares
Which of the following statements refers to the authorized capital stock? a. It refers to the amount fixed in the articles of incorporation that may be subscribed and paid by the stockholders of the corporation. b. It refers to the portion of the capital stock or total shares of stock issued to subscribers or stockholders, whether fully paid or partially paid, except treasury shares. It pertains to capital stock entitled to dividends or right to vote. c. It refers to the total amount of the capital that persons have agreed to take and pay for, which need not necessarily be, and can be more than, the par value of the shares. d. It refers to the portion of the authorized capital stock which has been both subscribed and paid. e. It refers to the amount equal to the aggregate par value of total shares issued and subscribed in case of par value shares or total consideration received in case of no-par value shares and it cannot be returned to shareholders until dissolution.
It refers to the performance of conditions, acts, deeds, and writings by incorporators, and the official acts, certification or records, which give the corporation its existence. a. Incorporation b. Operation c. Dissolution d. Liquidation
Under the Revised Corporation Code, the following are the qualifications of incorporators or founders of a private corporation, except a. Any person, partnership, association or corporation, singly or jointly may become incorporators but not more than fifteen (15) in number may become incorporators. b. Majority must be residents of the Philippines in case of corporate aggregate and all must be of legal age. c. In stock corporations, each must own or subscribe to at least one share, while in nonstock corporations, members are not owners of shares of stocks, and their membership depends on terms provided in the articles of incorporation. d. Compliance with the required minimum ownership of Filipino or maximum ownership of foreigners in industries reserved to Filipinos as provided in the Constitution or Foreign Investment Act or Special Laws e. All incorporators must be Filipino citizens.
Which of the following statements concerning an incorporator is correct? a. An incorporator remains to be an incorporator even if he will later on cease to be a corporator or stockholder because being an incorporator is an accomplished fact. b. An incorporator is required to be a stockholder throughout the lifetime of the corporation. c. An incorporator is not required to be a stockholder or member at the time of incorporation. d. An incorporator is not allowed to become a director of the corporation.
Under the Revised Corporation Code, what is the life of a private corporation? a. It has maximum life of 50 years. b. It has maximum life of 20 years. c. It has maximum life of 30 years. d. It has perpetual existence unless its articles of incorporation provides for a specific term.
What is the period for renewal of term of a private corporation prior its term expiration? a. Within 3 -year period b. Within 1 -year period c. Within 2-year period d. Within 5-year period
Under the Revised Corporation Code, may the corporation with a fixed term whose term has expired file an application for revival of certificate of incorporation with SEC? a. No because the corporation is ipso facto dissolved by operation of law upon failure to renew the term within the deadline. b. Yes a corporation whose term has expired may apply with SEC for the revival of its certificate of incorporation and subject to all of its duties, debts, and liabilities existing prior to its revival. c. No in the absence of court order. d. Yes but only with the consent of the Congress of the Philippines.
What is the implied minimum authorized capital stock of an ordinary stock corporation? a. P50, b. P15, c. None d. P200,
ART Inc. has an authorized capital stock of P160,000. What is the minimum subscribed capital stock? a. P20, b. P30, c. None d. P25,
TEN Inc. has authorized capital stock of P60,000 with actual subscription of P40,000. What is the minimum paid up capital? a. P10, b. P5, c. None d. P2,
ART Inc. has authorized capital stock of P100,000 but the actual subscription is not given. What is the implied minimum paid up capital for the approval of its articles of incorporation? a. P20, b. P25, c. None d. P40,
ABC Inc. has an authorized capital stock of P60,000. Under Revised Corporation Code, which of the following comply with the capital requirements of law for valid incorporation? a. Actual subscription of P24,000 and paid up capital of P5, b. Actual subscription of P122,000 and paid up capital of P5, c. Actual subscription of P15,000 and paid up capital of P3, d. Any of the above
a. Certificate of incorporation or registration also known as primary franchise b. Secondary license c. Secondary franchise d. Articles of incorporation
It refers to the document issued by appropriate government agencies as a permit to a newly formed corporation to engage in a particular industry. It is issued in order for those corporations to legally transact their business. a. Certificate of incorporation or registration or primary franchise b. Secondary license or secondary franchise c. Articles of incorporation d. By-Laws
What is required vote for fundamental amendment of the articles of incorporation? a. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or the vote or written assent of at least two-thirds (2/3) of the members if it be a non-stock corporation. b. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the ratification of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or the ratification of at least two-thirds (2/3) of the members if it be a non-stock corporation. c. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the vote or written assent of the stockholders representing at least majority of the outstanding capital stock or the vote or written assent of at least majority of the members if it be a non-stock corporation. d. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the ratification of th e stockholders representing at least majority of the outstanding capital stock or the ratification of at least majority of the members if it be a non-stock corporation.
What is required vote for simple amendment of the articles of incorporation for legitimate purposes? a. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or the vote or written assent of at least two-thirds (2/3) of the members if it be a non-stock corporation. b. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the ratification of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or the ratification of at least two-thirds (2/3) of the members if it be a non-stock corporation. c. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the vote or written assent of the stockholders representing at least majority of the outstanding capital stock or the vote or written assent of at least majority of the members if it be a non-stock corporation. d. At least majority vote of the board of directors/trustees provided in Articles of Incorporation and the ratification of the stockholders representing at least majority of the outstanding capital stock or the ratification of at least majority of the members if it be a non-stock corporation.
When shall the amendments of the articles of incorporation take effect? a. Upon approval by the SEC. b. Upon lapse of six (6) months from the date of filing to the SEC if there is no action by SEC for a cause not attributable to the corporation. c. Either A or B d. Neither A nor B
The following are matters in articles of incorporation that are beyond amendment because they are accomplished facts at the time of incorporation, except a. Names of the incorporators, incorporating directors/trustees, original subscribers and their subscribed and paid-up capital b. The treasurer-in -Gust elected by the original subscribers. c. Members who contributed to the initial capital of a nonstock corporation. d. Witnesses and the acknowledgement thereof e. Purpose clause and name of corporation
As a general rule, who is the real party-in -interest entitled to question any amendment in the articles of incorporation or bylaws? a. Shareholder or member b. Creditor c. Any third person d. Customer
Which is the primary government agency authorized to approve or reject the amendment in the articles of incorporation of a corporation? a. Securities and Exchange Commission b. Department of Trade and Industry
c. Bureau of Internal Revenue d. Department of Finance
The following are the grounds when articles of incorporation/or its amendment may be rejected or disapproved by Securities and Exchange Commission, except a. The Articles of Incorporation or any amendment thereto does not substantially comply with the form prescribed by Securities and Exchange Commission. b. The required percentage of ownership of the capital stock to be owned by Filipino citizens has not been complied with. c. The treasurer's affidavit concerning the amount of capital stock subscribed and or paid is false. d. The purpose of the corporation is patently illegal, immoral, unconstitutional or contrary to government rules and regulations. e. If a favorable recommendation of the appropriate government agency does not accompany the submitted amendment by banks, banking and quasi-banking institutions, building and loan associations, trust companies and other financial intermediaries, insurance companies, public utilities, educational institutions, and other corporations governed by special laws. f. The amendment of the articles of incorporation was approved only by at least majority of the board of directors/trustees and vote or written assent by at least 2/3 of stockholders or members but the unanimous vote of stockholders or members was not met.
The following corporate names are not allowed to be used by a proposed corporation, except a. Names that are identical or deceptively or confusingly similar to that of any existing corporation or to any other name protected by law. b. Names that are deceptive, confusing and contrary to law. c. Names that are contrary to moral, good customs, public order or public policy. d. Names similar to that of the founder.
Under the Revised Corporation Code, the addition of which will make the corporation distinguishable? a. If the name of the corporation contains the word "corporation", "company", "incorporated", "limited”, or an abbreviation of one of such words. b. If the name of the corporation contains Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different tenses, spacing, or number of the same word or phrase. c. Either A or B d. Neither A nor B
Under the SEC Revised Guidelines, the corporate name shall contain any of the following words, except a. Corporation b. Corp. c. Incorporated d. Inc. e. Ltd.
Which of the following statements is correct under the Revised Corporation Code? a. A person or group of persons may ask SEC for verification of intended corporate name prior to submission of Articles of Incorporation and By-laws and after SEC's verification, ask for reservation of corporate name. b. The corporation shall be required to make an undertaking to change the name of corporation immediately upon receipt of notice from SEC that another corporation, partnership or person has acquired a prior right to the use of such name. c. The SEC has the power to summarily order the corporation to immediately cease and desist from using name that (l) is not distinguishable, (2) is already protected by law, or (3) contrary to law, rules and regulations. d. All of the above.
When a change in the corporate name is approved, the SEC shall issue an amended certificate of incorporation under the amended name. What is the effect of the mere change of the corporate name approved by SEC? a. It will result to dissolution of the previous corporation. b. It results to the creation of a new corporation. c. It has no effect on the identity of the corporation, or on its property, rights or liabilities. d. It will extinguish all the liabilities of the said corporation.
When does a private corporation formed under the Corporation Code obtain its corporate existence or juridical personality?
a. From the date of consent of the incorporators to the articles of incorporation. b. From the date of submission of the articles of incorporation to the SEC. c. From the date of submission of the by-laws to the SEC. d. From the date of issuance by the SEC of the certificate of incorporation under SEC's official seal.
- When does a public corporation obtain its corporate existence or juridical personality?
a. IV, V, VI and VII b. IV and V c. I, II, III, VI, and VII d. I, II, III and IV
What is the liability of officers and directors of a de facto corporation to creditors? a. They are liable only up to the extent of their subscription even they acted in bad faith. b. They are liable only up to the extent of their subscription unless they acted in bad faith. c. They are not liable. d. They are liable like general partners meaning pro-rata and subsidiarilly.
It refers to all persons who assume to act as a corporation knowing it to be without authority. It has no juridical personality. It has no corporate existence and is not considered an artificial being in contemplation of BP 68. a. De facto corporation b. De jure corporation c. Corporation by estoppel or ostensible corporation d. Corporation by nature
What is the nature of liability of officers and directors of corporation by estoppel also known as ostensible corporation to the they entered into in behalf of such entity? a. They are liable only up to the extent of their subscription even they acted in bad faith. b. They are liable only up to the extent of their subscription unless they acted in bad faith. c. They are not liable. d. They are liable like general partners meaning pro-rata and subsidiarilly.
What is the status of contract entered into between an ostensible corporation/corporation by estoppel and another person? a. Null and void because of lack of juridical capacity of the ostensible corporation b. Voidable on the part of the other person c. Unenforceable against the persons composing the ostensible corporation d. Valid and binding by reason of estoppel on both parties
In case of contract entered into by an ostensible corporation or corporation by estoppel, which is correct? a. When such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not be allowed to use as defense its lack of corporate personality. b. When persons entered into a contract or obligation with ostensible corporation as such, such persons cannot resist performance of the obligation on the ground that there was in fact no corporation. c. Both A and B. d. Neither A nor B.
What is the mandatory period for a newly formed corporation to formally organize and to commence business transaction from the date of its incorporation to prevent automatic dissolution of the corporation? a. 5 years b. 6 years c. 4 years d. 2 years
What is the effect if a corporation does not formally organize and commence the transaction of its business or the construction of its works within five (5) years from the date of its incorporation or issuance of certificate of registration by SEC under SEC's official seal for causes within the corporation's control? a. The corporation is ipso facto dissolved by operation of law. b. That shall be a non-automatic ground for suspension or revocation of corporate charter or corporate dissolution making such entity a de facto corporation. c. The corporation is considered de facto corporation. d. The corporation shall be criminally liable.
What is the effect if a corporation has commenced the transaction of its business within five (5) years from the date of its incorporation but subsequently becomes continuously inoperative for a period of at least five (5) years? a. The corporation is ipso facto dissolved by operation of law. b. That shall be a non-automatic ground for suspension or revocation of corporate charter or corporate dissolution making such entity a de facto corporation. c. The corporation is considered an ostensible corporation. d. The corporation shall be criminally liable.
Under the Revised Corporation Code, it refers to a corporation that becomes continuously inoperative for a period of at least five (5) years after its formal organization within the period provided by law. a. Delinquent corporation b. Deficient corporation
c. Delayed corporation d. Defaulting corporation
Under the Revised Corporation Code, what is the period allowed by law to a delinquent corporation to resume its operation from the notice given by SEC in order for SEC to lift the delinquency status of such delinquent corporation? a. Within 2 years b. Within 1 year c. Within 3 years d. Within 5 years
What is the policy-making or governing body of a private corporation? a. General partners b. Board of Directors’ Trustees c. General manager d. Council of elders
Under Revised Corporate Code, the following are the qualifications of directors of a stock corporation, except a. He must own at least one share of the capital stock of the corporation. b. He must be of legal age. c. Majority must be residents of the Philippines. d. They must be not more than 15 directors. e. Compliance with the required minimum ownership of Filipino or maximum ownership of foreigners in industries reserved to Filipinos f. He must be an incorporator of the corporation.
Under Revised Corporation Code, he refers to a person who, apart from shareholdings and fees received from the corporation, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director. a. Independent director b. Provisional director c. Disloyal director d. Rehabilitation receiver
Under Revised Corporation Code, what is minimum number of Independent Directors in corporations vested with public interest? a. At least 20% of the directors b. At least 10% of the directors c. At least 25% of the directors d. At least 1/3 of the directors
Under Revised Corporation Code, the following are the corporations vested with public interest that are required to have independent directors in its Board of Directors, except a. Corporations covered by Section 17 of "Securities Regulation Code" namely those whose securities are registered with SEC, corporations listed with an exchange (PSE) or with assets of at least P50,000000 and having 200 or more shareholders, each holding at least 100 shares of a class of its equity shares. b. Banks and quasi-banks, nonstock savings and loan associations, pawnshops, corporations engaged in money service business, preneed, trust and insurance companies, and other financial intermediaries c. Other corporations engaged in business vested with public interest similar to the above, as may be determined by the SEC, after taking into account relevant factors which are germane to the objective and purpose of requiring the election of an independent director, such as the extent of minority ownership. type of financial products, or securities issued or offered to investors, public interest involved in the nature of business operations, and other analogous factors. d. Closely-held corporation or family-owned corporation or One Person Corporation (OPC).
May the articles of incorporation and corporate by-laws provide for additional qualifications as a director in addition to the qualifications stated by BP 68? a. No because it violates the provision of Corporate Code b. Yes even if it is violative of the provision of Corporate Code c. Yes provided the additional qualifications are reasonable and not contrary to Corporation Code
d. Never.
- Which of the following may become a director of a corporation? a. Creditor of the corporation b. Resident Filipino Minor stockholder c. Nonresident Foreign stockholder d. Nonresident Filipino Insane stockholder
a. The election must be by ballot if requested by any voting member or stockholder. b. The candidates receiving the higher number of votes shall be declared elected and a majority vote is not necessary as long as there is a quorum during the election. c. Delinquent stocks may be voted. d. At any meeting of stockholder or members called for the election of directors or trustees, there must be present either in person or by representative authorized to act by Witten proxy, the owners of a majority of the outstanding capital stock or majority of members entitled to vote.
Under cumulative voting, the formula to determine the number of shares needed to elect a single director is as follows: (S/(D+1)) + 1 wherein S=total number of shares voting while D=numbers of directors to be elected. If there are 1, outstanding voting shares in the corporation and five directors will be elected, and all the shares are present and are going to vote, what is the minimum required number of voting shares to elect one director? (1,000 / (5+1)) a. 167 voting shares b. 201 voting shares c. 151 voting shares d. 251 voting shares
Under cumulative voting, the formula to determine the number of shares needed to elect a desired number of directors is as follows: (S(Desired Number of Directors) +1 (D+1) wherein S=total number of shares voting while D=numbers of directors to be elected. If there are 1,000 outstanding voting shares in the corporation and five directors will be elected, and all the shares are present and are going to vote, what is the minimum required number of voting shares necessary to elect two directors? ( 2 x (1,000/ (5+1)) a. 334 voting shares b. 402 voting shares c. 302 voting shares d. 501 voting shares
Under cumulative voting, what is the maximum number of sits in the 5-sit Board of Directors will a majority stockholder be assured if he owns 68 shares out of 100 outstanding shares? D1=((D+1)x(S1-1))/S wherein S=total number of shares voting while D=numbers of directors to be elected while Sl=refers to the numbers of shares held by a majority stockholder and Dl=desired sits in the Board a. 4 sits b. 3 sits c. 2 sits d. 5 sits
What is the effect if the election of Board of Directors does not result to completely elected directors? a. The election is void. b. The election would still be valid and the directors, though incomplete, can still perform their functions provided that a quorum remains. c. The corporation shall be deemed dissolved. d. That will be a ground for automatic dissolution.
If a stockholders' meeting was called but the directors were not elected during the meeting, the meeting can be a. Adjourned to a definite day only b. Adjourned sine die or indefinitely only c. Either A or B. d. Neither A nor B.
Under the Revised Corporation Code, what is the period for reporting to SEC of non-holding of elections of directors/trustees and the reasons therefore? a. within 30 days from the date of the scheduled election b. within 20 days from the date of the scheduled election c. within 10 days from the date of the scheduled election d. within 40 days from the date of the scheduled election
Under the Revised Corporation Code, what is the latest period for the holding of new election in case of non-holding of elections of directors/trustees? a. It shall not be later than 60 days from the scheduled date or original date. b. It shall not be later than 50 days from the scheduled date or original date. c. It shall not be later than 40 days from the scheduled date or original date. d. It shall not be later than 30 days from the scheduled date or original date.
It refers to any controversy or dispute involving title or claims to any elective office in a stock or nonstock corporation, the validation of proxies, the manner and validity of elections, and the qualifications of candidates, including the proclamation of winners, to the office of directors, trustee or other officer directly elected by the stockholders in a close corporation or by members of a nonstock corporation. a. Election contest b. Intracorporate dispute c. Intercorporate dispute
d. Civil case
Where shall complaints involving election contests be filed? a. Securities and Exchange Commission b. Regional Trial Court designated as special commercial court c. Municipal Trial Court d. Court of Tax Appeals
In the absence of quorum stipulated in the articles of incorporation, what is required quorum for the validity of the meeting conducted by Board of Directors regarding a corporate act or act of administration or management? a. At least majority of the number of directors as fixed in the articles of incorporation b. At least majority of the number of directors filled up. c. At least 2/3 of the number of directors as fixed in the articles of incorporation. d. At least 2/3 of the number of directors filled up.
For the validity of the decision of the Board of Directors regarding corporate acts or acts of administration, what is the required vote? a. At least majority of the number of directors as fixed in the articles of incorporation b. At least majority of the number of directors filled up. c. At least 2/3 of the number of directors as fixed in the articles of incorporation. d. At least majority of the present members of board of directors in a meeting where there is a quorum.
How must the contracts or acts of a corporation be made to be binding against it? a. It must be made by the Board of Directors. b. It must be made by a corporate officer duly authorized by the board. c. It must be made by an individual director even not in the ordinary course of authorized duties. d. Either A or B.
What is the number of vote of each director of a corporation regarding act of management of corporation? a. One vote for each director b. It is dependent upon the stocks owned by a director. c. None d. Five votes for each director
What are the theories about the source of power of the Board of Directors/Trustees? a. Theory of original power which means that the source of the power comes directly from the law. b. Theory of delegated power which means that the power is derived or delegated from the stockholders/members. c. Both A and B. d. Neither A nor B.
Under this principle, courts cannot undertake to control the discretion of the board of directors about administrative matters as to which they have legitimate powers of action. It also means that questions of policy or management are left solely to the honest decision of officers and directors of a corporation and the courts are without authority to substitute their judgment for the judgment of the board of directors. a. Business judgment rule or Principle of Management Prerogative b. Doctrine of separate entity c. Limited liability rule d. Theory of concession
When may the courts exceptionally interfere to the contracts entered into by the board of directors? a. When the contracts are considered ultra vires. b. When the contracts are so unconscionable and oppressive as to amount to a wanton destruction of rights of the minority. c. Either A or B. d. Neither A nor B.
Which of the following statements is correct? a. Resolution is a formal action by a Board authorizing a particular act of a corporation and the signing of it is required. b. Minutes of meetings are a brief statement of what transpired in a meeting of Board, stockholders or executive committee and signing of it by the board members is not required. c. Both A and B. d. Neither A nor B.
The following are the three-fold duties of corporate directors, trustees and officers, except a. Duty of obedience b. Duty of diligence c. Duty of loyalty d. Duty of independence
Under the Revised Corporation Code, what are the duties to be performed by the directors or trustees? a. Duties prescribed by law b. Duties prescribed by rules of good governance
d. Secretary
Which of the following is allowed concurrent positions to a single person? a. President and Secretary b. President and Treasurer c. Secretary and Treasurer d. None of above
What is the period for reporting the names, nationalities and residences of directors, trustees and officers elected to the SEC by the corporate secretary or any other officer? a. Within 30 days after the election b. Within 20 days after the election c. Within 10 days after the election d. Within 40 days after the election
What is the period for reporting the death, resignation or ceasing as such of directors, trustees and officers to the SEC by the corporate secretary or any other officer? a. Within 30 days after the said death, resignation or cessation b. Within 20 days after the said death, resignation or cessation c. Within t 0 days after the said death, resignation or cessation d. Immediately but without mandatory period
Under the Revised Corporation Code, which of the following is/are considered temporary grounds for disqualification of directors, trustees or corporate officers for a period of at least five (5) years? a. Convicted by final judgment of: (l) an offense punishable by imprisonment for a period exceeding six (6) years, (2) Violation of Revised Corporation Code; and (3) Violation of "The Securities Regulation Code" b. Found administratively liable for any offense involving fraudulent acts c. By a foreign court or equivalent foreign regulatory for acts, violations or misconduct similar to those enumerate in letter (a) and (b) above. d. All of the above
Under the Revised Corporation Code, how may SEC remove a director or trustee elected despite the disqualification, or whose disqualification arose or is discovered subsequent to an election? a. The SEC may remove him moto proprio or on its own initiative after due notice and hearing. b. The SEC may remove him upon verified complaint after due notice and hearing. c. Either A or B d. Neither A nor B
What is the required number of vote for the removal of incumbent director or trustee? a. Owners of at least majority of the outstanding capital stock or at least majority of members. b. Owners of at least 2/3 of the outstanding capital stock entitled to vote or at least 2/3 of members entitled to vote. c. At least majority vote of the members of the board and at least 2/3 of the outstanding capital stock entitled to vote or at least 2/3 of members. d. At least majority vote of the members of the board.
The following statements concerning the removal of a director or trustee are correct, except a. The removal may take place either at a regular meeting of a corporation or a special meeting called for that purpose. b. A special meeting called for the purpose of removal of a director or trustee must be called by the secretary on order of president or on the written demand of the stockholders. Should the secretary refuse to make the call, the demanding stockholder may do the call directly to the stockholders. c. The removal of a director not representing a minority interest may be with or without cause. d. The director or trustee representing a minority interest may be removed with or without cause.
Under Revised Corporation Code, when shall the election to fill-up vacancy in the board of directors/trustees be held if the reason is due to expiration of term? a. It shall be held no later than the day of such expiration of term at a meeting called for that purpose. b. It shall be held no later than 30 days after expiration of such term at a meeting called for that purpose. c. It shall be held no later than 20 days after expiration of such term at a meeting called for that purpose. d. It shall be held no later than 10 days after expiration of such term at a meeting called for that purpose.
Under Revised Corporation Code, when shall the election to fill-up vacancy in the board of directors/trustees be held if the reason is for causes other than the expiration of term (removal, increase in sits, resignation, abandonment of office, or death)? a. It shall be held no later than 45 days from the time the vacancy arose. b. It shall be held no later than 1 5 days from the time the vacancy arose. c. It shall be held no later than 30 days from the time the vacancy arose. d. It shall be held no later than 20 days from the time the vacancy arose.
Under Revised Corporate Code, it refers to the board created by the remaining directors who do not constitute a quorum when emergency action is required to prevent grave, substantial, and irreparable loss or damage to the corporation. a. Emergency board b. Preventive board c. Provisionary board d. Temporary board
Under Revised Corporation Code, when may the vacancy in the board be filled up by the unanimous vote of the remaining directors or trustees who do not constitute a quorum to form an emergency board? a. When emergency action is required to prevent grave, substantial, and irreparable loss or damage to the corporation. b. When the remaining directors/trustees do not constitute a quorum. c. When the remaining directors/trustees constitutes a quorum. d. When Board of Directors/Trustees can easily call an election.
Under Revised Corporation Code, who are the persons that may be appointed temporarily by the remaining board of directors to create an emergency board? a. Officers of the corporation b. Stockholders of the corporation c. External auditors of the corporation d. Government officials
Under Revised Corporation Code, what is the required vote for the temporary appointment of officers of the corporation in board to create an emergency board? a. Unanimous vote of remaining directors or trustees b. At least majority vote of remaining directors or trustees c. At least 2/3 vote of remaining directors or trustees d. At least % vote of remaining directors or trustees
As a general rule, the vacancy in the board of directors/trustees may be filled up only by the stockholders/members through an election called for that purpose. The following are the instances wherein vacancy in the board of directors/trustees shall be filled up only by stockholders or members but not by the remaining director or trustee with quorum, except a. If the vacancy results from the removal by the stockholders or expiration of term. b. If the vacancy results from the expiration of term. c. If the vacancy is created by reason of an increase in the number of directors or trustees. d. If the vacancy is referred by the board of directors to the shareholders. e. If the vacancy results from death, resignation, abandonment, or disqualification and the remaining members of the board still constitutes a quorum.
As a general rule, the vacancy in the board of directors/trustees may be filled up only by the stockholders/members through an election called for that purpose. However, the following are the reasons for vacancy in the board of directors which may exceptionally allow the remaining members of the board of directors/trustees with quorum to fill the vacancy in addition to the power of stockholders or members to fill such vacancy, except a. Death of a director b. Resignation of a director c. Removal of a director by a stockholder or expiration of term or vacancy due to increase in number of directors d. Abandonment of office by a director e. Disqualification of a director
The following are the reasons for board vacancy which will disqualify the remaining members of the board with quorum to fill up the vacancy in the board, (REI) except a. R emoval of a director b. E xpiration of term of a director c. I ncrease in the sits of the board d. Disqualification of a director
The Articles of Incorporation and By-Laws provide for a maximum of 15 directors for JZ Inc. During 2014, 3 directors resigned and 4 directors died. How may the vacancies be filled up? a. By Securities and Exchange Commission b. By plurality vote of the majority of the outstanding capital stock entitled to vote c. By vote of the remaining board of directors d. Either B or C
The Articles of Incorporation and By-Laws provide for a maximum of 15 directors for JZ Inc. During 2014, 3 directors were removed by stockholders' vote and 2 directors' term expired. How shall the vacancies be filled up? a. By Securities and Exchange Commission b. By plurality vote of the majority of the outstanding capital stock entitled to vote c. By majority vote of the remaining board of directors d. Either B or C
The Articles of Incorporation and By-Laws provide for a maximum of 15 directors for JZ Inc. During 2014, 2 directors resigned, 2 directors died and 4 directors were disqualified. How shall the vacancies be filled up?
RFBT-Republic-Act-No.11232-Revised-Corporation-Code-of-the-Philippines (with answers)
Course: Bachelor of Science in Accountancy (BSA)
University: Philippine School of Business Administration
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