RFBT December 2020 Assessment

Monthly Assessment (December)

1. A, B and C agreed to form a corporation in January 1, 2021. They fully paid for their subscriptions on January 31,
2021 and submitted the documentary requirements for incorporation including the Articles of Incorporation and
the By-Laws on February 15, 2021. On March 15 2021, the SEC issued the Certificate of Registration. When did
the Corporation acquired juridical personality?
A. January 1, 2021
B. January 31, 2021
C. February 15, 2021
D. March 15, 2021

2. Under the Revised Corporation Code, a foreign corporation may now:

A. Form a One Person Corporation
B. Form a partnership or joint venture
C. Form a partnership for the practice of a common profession
D. Make reasonable donations for public welfare including giving aid to political parties

3. A group of persons which holds itself out as a corporation and enters into a contract with third persons on the
strength of such appearance cannot be permitted to deny its existence in an action under the said contract. The
“corporation” these people set themselves out to be is called:
A. De jure corporation
B. De facto corporation
C. Corporation by estoppel
D. Eleemosynary Corporation

4. Rebecca, Jack, Kate, Kevin and Randall are organizing a corporation whose Authorized Capital Stock is P64,000.
How much is the minimum paid-up capital requirement under the Revised Corporation Code if the incorporators
subscribed to 25% of the Authorized Capital Stock?
A. P4,000 C. P16,000
B. P5,000 D. None of the answers

5. The existence of a corporation sole begins from:

A. The time the parties came to an agreement to form a corporation and contribute money or property
B. The filing of the verified articles of incorporation
C. The issuance of a certificate of registration
D. First day of the year following the filing of the Articles of Incorporation

6. Under the Revised Corporation Code, the non-use of the corporate charter or failure to organize for a period of
__ years from the issuance of its Certificate of Registration will result in the automatic dissolution of the
corporation:
A. 2 C. 5
B. 3 D. 10

7. A, B, C, D and E are directors of ABC Corporation. D resigned from his post and E retired. Who will have
authority to fill-up the vacancy?
A. By the stockholders as to both D and E
B. By the BoD as to both D and E
C. By the stockholders as to D and the BoD as to E
D. By the stockholders as to E and the BoD as to D

8. A contract entered into by a person with the corporation where he is a director is generally:
A. Valid C. Voidable
B. Unenforceable D. Rescissible

9. This corporate officer is now required to be a resident of the Philippines under the Revised Corporation Code:
A. Treasurer C. Secretary
B. President D. Internal Auditor

10. The number of incorporators to validly form a corporation under the Revised Corporation Code is:
A. 5 to 15
B. Not more than 5
C. Not more than 15
D. May be more than 15

11. Which of the following is false with regards no-par value shares?
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A. The shares are deemed fully-paid and non-assessable, thus cannot result to issuance of watered
stocks.
B. The consideration should not be less than P5
C. The entire consideration constitutes capital, not available for dividend declaration
D. Cannot be issued by banks, trust companies, insurance companies, public utilities and buildings and loans
associations.

12. A subscriber will be entitled to all the rights of a stockholder even before full-payment of the subscription, except:
A. Right to vote
B. Appraisal right
C. Right to dividends
D. Right to a certificate of stock

13. To delegate the power to amend by-laws to the Board of Directors, the required number of votes from the
stockholders is ________; to revoke the same, the required number of votes is ________.
A. Majority; Majority
B. Majority; Two-thirds
C. Two-thirds; Majority
D. Two-thirds; two-thirds

14. A corporation can retain earnings in excess of 100% of the paid-up capital in the following cases, except:
A. For definite corporate expansion projects
B. When prohibited from declaring dividends by a loan agreement with any financial institution or creditor
C. When necessary under special circumstances such as a special reserve for probable contingencies
D. When declaring dividends would subject the individual stockholders to a separate tax from the
corporate tax already paid

15. In order for the restriction on the transfer of shares in a close corporation to be binding, the prohibition must be
indicated in:
I. Articles of Incorporation
II. By-laws
III. Stock Certificate

A. I, II and III C. I and III only

B. I and II only D. II and III only

16. A corporation has a personality distinct and separate from its stockholders. As such, the liability of the
corporation does not extend to its stockholders and vice versa. This describes:
A. Corporate Entity Theory
B. Piercing the Veil of Corporate Entity
C. Limited Liability Principle
D. All of the choices

17. The stockholders’ meeting is conducted _____ on ______.

A. Annually; the date indicated in the by-laws
B. Monthly; any day as determined by the Board
C. Annually; any date after April 15
D. Monthly; the date indicated in the by-laws

18. Under the Revised Corporation Code, the place of stockholders’ meeting shall be:
A. The principal office
B. The city or municipality where the principal office is located
C. Anywhere in the Philippines
D. Anywhere even outside the Philippines

19. The merger or consolidation of two corporations is deemed effective:

A. On the date the parties agreed to a consolidation or merger
B. On the date the stockholders ratified the Board resolution for consolidation or merger
C. Upon submission of the articles of merger or consolidation to the SEC
D. Upon issuance of the certificate of merger or consolidation

20. A remedy available to the stockholder to vindicate the violation of his rights as such, like the right to inspect the
books of accounts of the corporation:
A. Individual suit
B. Representative suit
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C. Derivative suit
D. None of the choices

21. The number of stockholders in this type of corporation cannot exceed 20:
A. Stock Corporations C. Foreign Corporations
B. Close Corporations D. Non-stock Corporations

22. Under the Revised Corporation Code, the required number of votes in case of voluntary dissolution of a
corporation where no creditors are affected:
A. 25% C. 2/3
B. Majority D. 3/4

23. To qualify as a foreign corporation, the consideration is

A. Ownership of the shares of stock
B. Appointment of a resident agent
C. Agreement of the parties
D. Under what country’s law it was incorporated

24. In the stockholders’ meeting for the election of directors/trustees, the Revised Corporation Code now allows the
stockholders or members to vote through remote communication or in absentia, in case (choose the exception):
A. The by-laws authorize the same
B. The majority of the BOD authorizes the same
C. Even without authorization under the by-laws or from the BOD in case of corporations vested with public
interest
D. None of the above is an exception

25. Under the Revised Corporation Code, alternative certification of the financial statements shall be allowed if:
A. The paid-up capital is less than P50,000
B. The paid-up capital is less than P600,000
C. The total assets or liabilities is less than P50,000
D. The total assets or liabilities is less than P600,000

26. The following are securities exempt from the coverage of the Securities Regulations Code, except:
A. Securities issued by the Philippine Government or Government of any country
B. Certificates issued by a trustee or a receiver in bankruptcy
C. Securities or derivatives, the sale or transfer of which is under the supervision or regulation of the Insurance
Commission, the Housing and Land Use Regulatory Board, or the Bureau of Internal Revenue.
D. Securities issued by a bank, including its own shares of stock.

27. The following are covered by the Mandatory Tender Offer Rule, except:
A. A, B and C plans to acquire 40% of the shares of X corporation over a period of 10 months
B. D, who owns 20% of the shares of X corporation plans to acquire an additional 32%
C. E, who owns 18% of X corporation, plans to acquire 50% of Y corporation which in turn owns
64% of X corporation
D. None of the choices

28. Which of the following may not be considered an insider in relation to material non-public information relative to
an issuer corporation?
A. The director of the issuer corporation
B. The secretary of a director of the issuer corporation
C. Auditor of the issuer corporation
D. None of the choices

29. The sale of securities to any number of the following qualified buyers are exempt from the registration
requirement, except:
A. Bank
B. Investment House
C. Insurance Company
D. Pension fund managed by a corporation

30. Which one best describes an ultra vires act:

A. It is an illegal act of the corporation
B. It is an act which is considered unlawful
C. It is an act outside of the powers of the corporation
D. It is an act violative of law, morals, public policy, public order and good customs
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31. A limited partner may contribute any of the following, except:

A. Money C. Industry
B. Property D. None of the choices

32. When immovable property is contributed by a partner:

A. There is no formal requirement
B. The Articles of Partnership must be registered with the SEC
C. There must be an inventory, signed by the parties, attached to a public instrument
D. The Articles of Partnership must be in writing even if not notarized

33. The following are characteristics of a contract of partnership, except:

A. Consensual C. Onerous
B. Unilateral D. Preparatory

34. In case of tort committed by any partner acting in the ordinary course of business or with authority from his co-
partners, the liability shall be:
A. Solidary amongst all the partners
B. Solidary amongst all the partners and the partnership
C. Joint amongst all the partners
D. Joint amongst all the partners and the partnership

35. On January 15, Rob, Bran and Rickon formed a partnership promising to contribute equal amounts of money due
on January 31. On February 15, for failure of Rob to delivery his share, Bran and Rickon made an extrajudicial
demand. On February 28, Rob gave his share. In this case,
A. Rob is not liable for interest
B. Rob is liable for interest from January 15
C. Rob is liable for interest from January 31
D. Rob is liable for interest from February 15

36. Daenerys and Drogo, married, are prohibited from entering into which of the following partnership?
A. Limited Partnership
B. General Professional Partnership
C. Universal Partnership of All Profits
D. Partnership for a Specific Undertaking

37. Sheldon, Leonard, Howard and Raj are partners of BBT partnership, who agreed on equal distribution of profits
and losses. As regards third parties, the partners agreed that Sheldon, an industrial partner, shall be exempted
from liability. At the end of 2020, the liabilities of the partnership ballooned to P1,200,000 where the assets are
only P1,000,000. Which of the following is not true?
A. The assets amounting to P1,000,000 would first be exhausted to pay creditors.
B. The partners would be liable for the excess P200,000 liability, pro rata.
C. Partnership creditors can go against Leonard, Howard and Raj only.
D. Sheldon can be held liable for P50,000, but he can ask reimbursement from the other partners.

38. An industrial partner:

A. Cannot engage in business for himself of whatever industry except if with consent of the
partners
B. Cannot engage in business of the same industry as that of the partnership except if with consent of the
partners
C. Can engage in business for himself of whatever industry even without the consent of the partners
D. Can engage in business in an industry different from that of the partnership even without the consent of the
partners

39. In distributing the losses of the partnership, this shall take priority:
A. Agreement of the partners as to losses
B. Agreement of the partners as to profits
C. Capital Contributions
D. Equal

40. Eleven is the common debtor of Stranger Things Partnership for P40,000; and Will, the managing partner, for
P10,000. Will collected from Eleven P10,000 and issued the partnership’s receipt. In this case, the amount to be
applied to the partnership credit is:
A. P40,000 C. P8,000
B. P10,000 D. P0
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41. Which of the following property rights of a partner may be the subject of an assignment, attachment or
execution?
A. Right to Specific Partnership Property
B. Partner’s Interest
C. Right to Participate in Management
D. All of the above

42. A stipulation that excludes one or more partners from sharing in the profits and losses which is considered by law
as void:
A. Pactum Commissorium C. Pactum de non Aliendo
B. Pactum Leonina D. Pacta Sunt Servanda

43. A partner who does not participate in the management of the business:
A. Silent Partner C. Dormant Partner
B. Secret Parter D. Ostensible Partner

44. Sabrina, Hilda and Zelda are partners, who had equal contributions to the partnership. Sabrina was appointed as
the managing partner after the partnership was formed. In order to revoke the authority of Sabrina, which of the
following is required?
A. Just and lawful cause
B. Vote of the controlling interest
C. Unanimous decision of the partners
D. A and B
E. A and C

45. A partnership is different from a corporation in all of the following, except:

A. It is formed generally by mere consent of the parties
B. Death of a partner dissolves the partnership
C. The partners can directly sue the managing partner in case of mismanagement
D. It has a separate juridical personality from the individual members

46. Ted, Robin, Barney, Lily and Marshall are partners with equal contributions. Ted, Barney and Marshall were
appointed as managing partners, without any specification as to their duties and no stipulation that no one
managing partner can act without the consent of the others. In this case,
A. Any one of the managing partners can perform acts of administration
B. The majority vote of the managing partners is necessary to perform acts of administration
C. No one can perform acts of administration without the consent of the other managing partners
D. No one can perform acts of administration without the vote of the partners representing the controlling
interest

47. An incoming partner’s liability as to debts contracted after his admission:

A. Upto his capital contributions
B. Upto his personal property
C. No liability at all
D. None of the choices

48. Which of the following is not an extrajudicial cause for dissolution of a partnership?
A. Death C. Insanity
B. Civil Interdiction D. Insolvency

49. That stage in the life of a partnership where the assets are sold and the proceeds are applied to the liabilities and
any excess is distributed to the partners in accordance with the order stated in the law:
A. Perfection C. Winding-Up/Liquidation
B. Dissolution D. Termination

50. Asher Millstone is a limited partner in Keating 5 Partnership. He lent the partnership P100,000 and an asset of
Keating 5 Partnership was subjected to a pledge to secure the payment of the loan. What is the status of the
contract of pledge?
A. Valid C. Unenforceable
B. Rescissible D. Void

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