RI TAKE (54/60)

1. The requirements for a valid meeting are the following except:

a. It must be held at the stated date and at the appointed time
b. It must be called by the proper person
c. It must be held at the principal place of business only K37
d. The person or persons designated in the by-laws have authority to call stockholders or
members meeting

2. Revocation of proxy may be made through the following, except:

a. Formal notice
b. Verbal communication
c. Conduct ***
d. None of the above K10

3. I. Property acquired by a corporation is the property of stockholders or members.

II. A corporation exercises its powers through its board of directors and/or its duly authorized
officers and agents. true
a. Only 1 is true
b. Only 2 is true K43
c. Both are true
d. Both are false

4. A corporation organized for a charitable or benevolent purpose

a. Eleemosynary corporation K49
b. Civil corporation
c. Lay corporation
d. Ecclesiastical corporation

5. The purpose of proxies are the following, except:

a. It secures voting control
b. For convenience K12
c. It enables those who do not wish to attend the meeting to protect their interest
d. It assures the presence of all

6. It is condition precedent in the acquisition of corporate existence

a. Article of incorporation K38
b. Shares of stock
c. Rules, regulation, discipline
d. By-laws

7. The continuation of a corporation’s legal status despite changes in ownership or management

a. Inheritance
b. Liquidation
 c. Dissolution
d. Succession K41

8. I. The proper custodian of the books, minutes and official records of a corporation is usually
the corporate treasurer.
II. The signature of the corporate president gives the minutes of the meeting probative value
and credibility.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false K30

9. Unit of interest in a corporation

a. Certificate of stock
b. Par value stock
c. Shares of stock K29
d. Treasury stock

10. I. The certificate of stock itself once issued is a continuing affirmation or representation that
the stock described therein is valid and genuine
II. Stock issued without authority and in violation of law is voidable and confers rights on the
person to whom it is issued and subjects him to no liabilities
a. Only I is true K22
b. Only II is true
c. Both are true
d. Both are false

11. I. The governing body of a corporation is its board of directors

II. The board of directors of a corporation is a creation of law
a. Only I is true K13
b. Only II is true
c. Both are true
d. Both are false

12. It is the union of two or more existing entities to form a new entity, called the consolidated
corporation?
a. Business combination
b. Merger
c. Acquisition
d. Consolidation K48

13. A corporation’s board of directors is understood to be that body which:

a. Exercises all powers provided under the Corporation Code
b. Conducts all business of the corporation
 c. Controls and holds all property of the corporation
d. All of the above K17

14. It means that a stockholder who dissented and voted against the proposed corporate
action, may choose to get out of the corporation by demanding payment of the fair value of his
shares.
a. Stockholders right
b. Pre-emptive right
c. Appraisal right K58
d. Right to liquidation

15. Are shares with a value fixed in the articles of incorporation and the certificate of stock?
a. No par value stock***
b. Par value stock K19
c. Class A stock
d. Redeemable stock

16. The following are limitations on no par value shares, except:

a. It cannot be issued as preferred shares
b. It is deemed fully paid and non-assessable
c. It can be issued for consideration of at least 3,000 K47
d. The entire consideration for its issuance constitutes capital that no part of it should be
distributed as dividends

17. I. The provisions governing stock corporations, when pertinent, shall be applicable to non-
stock corporations.
II. A non-stock corporation must have shareholders.
a. Only I is true K52
b. Only II is true
c. Both are true
d. Both are false

18. Is that portion of authorized capital stock which has been both subscribed and paid?
a. Paid-up capital K34
b. Unissued capital
c. Authorized capital stock
d. Outstanding capital

19. The following are the characteristics of a corporation, except:

a. It is an artificial being
b. Created by meeting of the minds K59
c. It has the right of succession
d. It has the powers, attributes and properties expressly authorized by law or incident to its
existence
20. A contract of the corporation with one or more of its directors or trustees or officers.
a. Doctrine of corporate opportunity
b. Doctrine of self-dealing board of directors K55
c. Doctrine of trust funds
d. Doctrine of double compensation

21. Corporate directors are personally liable if found guilty of gross negligence or bad faith in
directing the affairs of the corporation, which results in damage or injury to the corporation, its
stockholders or members, and other persons.
e. Doctrine of corporate opportunity K26
f. Doctrine of self-dealing board of directors
g. Doctrine of trust funds
h. Doctrine of double compensation

22. Is a bidder who shall offer to pay the amount of the balance on the subscription together
with accrued interest, cost of advertisement and expenses of sale for the smaller number of
shares or fraction of a share.
a. Highest bidder K20
b. Losing bidder
c. Lowest bidder
d. Winning bidder

23. A corporation consisting of only one member

a. Corporation aggregate
b. Corporation sole K21
c. Close corporation
d. Open corporation

24. The following are the requirements of increase or decrease of authorized capital stock,
except:
a. No decrease of the capital stock shall be approved if its effect shall prejudice the rights
of corporate directors
b. Ratification by the shareholders holding at least ⅔ of the outstanding capital stock (No
corporation shall increase or decrease its capital stock or incur, create or increase any
bonded indebtedness unless approved by a majority vote of the board of directors and
by two-thirds (2/3) of the outstanding capital stock at a stockholder's meeting duly called
for the purpose.)
c. Approval by a majority vote of board of directors (Certificate of Increase of Capital Stock
signed by majority of the directors and certified by Chairman and Corporate Secretary of
the stockholders meeting.)
d. Approval thereof by the DTI. K7

25. The three tests of voting trust agreements are the following, except:
 a. That the voting rights of the stocks are separated from the other attributes of ownership
b. That the voting rights granted are intended to be irrevocable for a definite period of time
c. That the principal purpose of grant of voting rights is to acquire voting control of the
corporation
d. None of the above K2

26. It is a person who, apart from shareholdings and fees received from the corporation, is
independent of management and free form of any business or other relationship which could, or
reasonably be perceived ro marternally interfere with exercise of independent judgement in
carrying out the responsibilities as a director.
a. Dependent director
b. Independent director K31
c. Authorized director
d. Outstanding director

27. A private corporation which has accepted from the State the grant of franchise or contract
involving the performance of public duties but which are organized
a. De jure corporation
b. De facto corporation
c. Government-owned or controlled corporation
d. quasi -public corporation K11

28. I. Acts of management pertain to the stockholders or members

II. Acts of ownership pertain to the board of directors
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false K16

29. I. The acts of corporate officers within the scope of their authority are binding on the
corporation
II. Any two or more positions may be held concurrently by the same person, except that no one
shall act as president and secretary or as president and vice-president at the same time.
a. Only I is true K33
b. Only II is true
c. Both are true
d. Both are false

30. The requirements for a valid proxy are the following, except:
a. It shall be filed before the scheduled meeting with the corporate treasurer K51
b. It shall be signed by the stockholder or member
c. It shall be in writing
d. Unless otherwise provided in the proxy, it shall be valid only for the meeting to which it
was intended.
31. I. In stock corporations, shareholders may generally transfer their shares
II. Membership in and all rights rising from a non-stock corporation are personal and non-
transferrable
a. Only I is true
b. Only II is true
c. Both are true K3
d. Both are false

32. Subscription to the capital stock a corporation constitutes to a fund to which the creditors
have a right to look for the satisfaction of their claims
a. Doctrine of corporate opportunity
b. Trust fund doctrine K8
c. None of the above
d. Doctrine of indivisibility

33. The amendment of the articles of incorporation, requires merely that:

I. The amendment is not contrary to any provisions or requirement under the Corporation
Code
II. It is for a legitimate purpose
a. Only I is true
b. Only II is true
c. Both are true K42
d. Both are false

34. I. In case of pledged or mortgaged shares in a stock corporation, the pledge or mortgagee
shall have the right to attend and vote at meetings of stockholders.
II. In case of shares of stocked owned jointly by two or more persons, in order to vote the same,
the consent of all the co-owners shall be necessary.
a. Only I is true
b. Only II is true K25
c. Both are true
d. Both are false

35. The factors for the application of the doctrine of piercing the corporate veil are the following,
except:
a. The manner of keeping corporate books and records
b. Identify of corporate K57
c. Stock ownership by one or common ownership of both corporations
d. Identify of directors and officers

36. an artificial being created by the operation of law, having the right of succession and the
powers m attributes and properties expressly authorized by law or incident of existence
a. Corporation sole
 b. Partnership
c. Corporation K35
d. Sole proprietorship

37. All persons who assume to act as a corporation knowing it to be without authority to do shall
be liable as a general partners for all debts, liabilities and damages incurred or arising as a
result thereof
a. Corporation by prescription
b. Foreign corporation
c. Corporation by estoppel K32
d. Domestic corporation

38. Immediately after their election, the directors of a corporation must formally organize and
elect:
a. A president, who must be a director
b. A treasurer, who must be a resident
c. A secretary, who must be citizen and resident of the philippines
d. All of the above K45

39. The following are the limitations of an executive committee, except:

a. Amendment or repeal of by-laws or the adoption of new by-laws
b. Filling of vacancies in the board
c. Amendment or repeal of any resolution of the board K23
d. Approval of any action for which shareholders’ approval is also required

40. I. A certificate of a stock is one, entire and divisible contract

II. The stockholder shall not be entitled to a certificate until he has remitted the full payment of
his subscription together with any interest or expenses, if any is due.

a. Only II is tru
b. Only I is true
c. Both are true
d. Both are false K44

41. I. The power to remove directors or trustees belongs to the officers exclusively.
II. Removal of directors or trustees may be with or without cause.

a. Only I is true
b. Only II is true K4
c. Both are true
d. Both are false

42. Evidence of the holder’s ownership of the stock of his right as a shareholder.
a. Par value stock
 b. Shares of stock
c. Treasury stock
d. Certificate of stock K56

43. The books and records required to be kept by the corporation are the following, except:
a. Log book K36
b. Stock and transfer book, in case of stock corporations
c. Minutes of all meetings of directors and trustees
d. Minutes of meetings of stockholders

44. I. Incorporators who are natural persons must be of legal age

II. Each incorporator of a stock corporation must own or be a subscriber to at least 1 share of
the capital stock
a. Only I is true
b. Only II is true
c. Both are true K18
d. Both are false

45. It is a corporation with a single stockholder

a. Four persons corporation
b. One person corporation K39
c. Two persons corporation
d. Three persons corporation

46. The requirements for board meetings are the following, except:
a. Presence of the required quorum
b. Meeting of the directors or trustees duly assembled as a board
c. Meeting at the place, time,and manner provided in the by laws
d. Decisions of the majority of all the members of the board only.(next) K28

47. I. The corporation shall bear the costs of appraisal, as a rule

II. Clearly, the right of appraisal may be exercised when there is a minor change in the charter
or articles of incorporation substantially prejudicing the rights of stockholders.

a. Only I is true K1
b. Only II is true
c. Both are true
d. Both are false

48. A person shall be disqualified from being a director, trustee or officer of any corporation, if
within 5 years prior to the election or appointment as such, the person was:
a. Conceited by final judgement of an offense is punishable by imprisonment for a period
exceeding 6 years
b. Found administratively liable for any offense involving fraudulent acts
 c. Found by a foreign court or equivalent foreign regulatory authority of acts, violations or
misconduct
d. All of the above. K5

49. Corporations which have capital stock divided into shares and are authorized to distribute to
the holders of such dividend or allotments of the surplus profits on the basis of the shares held
a. Stock corporation K60
b. Corporation by prescription
c. Non-stock corporation
d. Corporation aggregate

50. It applies when persons assume to form a corporation and exercise corporate functions and
enter into business relation with third persons
a. Corporation by prescription
b. De jure corporation
c. De factor corporation
d. Corporation by estoppel (e2) K9

51. The stockholders or members mentioned in the articles of incorporation as originally forming
and composing the corporation and who are signatories thereof
a. Board of directors
b. Corporators
c. Incorporators K15
d. Board of trustees

52. Is the book which records the names and addresses of all stockholders arranged
alphabetically, the installments paid and unpaid on all stock for which subscription has been
made, and the date of payment thereof?
a. Stock and transfer book K40
b. Checkbook
c. Journals
d. Ledgers

53. It constitutes the charter or fundamental law of a corporation.

a. Articles of incorporation K53
b. By-laws
c. Rules, regulation and discipline
d. None of the above

54. I. An action of the board of directors during a meeting, which was illegal for lack of notice,
may not be ratified.
II. Notice of meeting may not be waived, expressly or impliedly, by any stockholder or member.
a. Only I is true
b. Only II is true
 c. Both are true
d. Both are false K6

55. It is a union whereby one or more existing corporations are absorbed by another corporation
that survives and continues the combined business.
a. Business combination
b. Acquisition
c. Merger K46
d. Consolidation

56. Is an action brought by minority shareholders in the name of the corporation to redress
wrongs committed against it for which the directors refuse to use?
a. Representative suit
b. Derivative suit K54
c. Individual suit
d. Class suit

57. The following are the requirements before one can qualify as a de facto corporation, except:
a. The existence of a valid law under which it may be incorporated
b. An attempt in good faith to incorporate
c. Assumption of corporate powers
d. None of the above K27

58. A corporation organized for religious purposes

a. Close corporation
b. Lay corporation
c. Ecclesiastical corporation K24
d. Corporation aggregate

59. Is one which entitles the holder thereof to certain preferences over the holders of the
common stock?
a. Watered stock
b. Common stock
c. Preferred stock K14
d. Treasury stock

60. I. Directors or trustees can attend or vote by proxy at board meetings

II. ⅔ of the numbers of directors or trustees, as fixed in the articles of incorporation, shall
constitute the quorum for the transaction of the corporation.
a. Only I is true
b. Only II is true K50
c. Both are true
d. Both are false