Title IX – MERGER AND CONSOLIDATION

1. It is the union of two or more existing entities to form a new entity called the consolidated
corporation.

a. Merger

b. Acquisition

c. Consolidation

d. Business combination

2. I. Merger or consolidation become effective upon the mere agreement of the constituent
corporations.

II. Ordinarily, in the merger of two or more existing corporations, one of the corporations
survives and continues the combined business, while the rest are dissolved and all their rights,
properties, and liabilities are acquired by the surviving corporation.

a. Only I is true

b. Only II is true

c. Both are true

d. Both are false

3. I. Upon approval by majority vote of each of the board of directors or trustees of the
constituent corporations of the plan of merger or consolidation, the same shall be submitted for
approval by the stockholders or members of each of such corporations at separate corporate
meetings duly called for the purpose.

II. The affirmative vote of stockholders representing at least 2/3 of the outstanding capital stock
of each corporation in the case of stock corporations or at least 2/3 of the members in the case of
non-stock corporations shall be necessary for the approval of such plan.

a. Only I is true

b. Only II is true

c. Both are true

d. Both are false

4. I. In the merger of two existing corporations, one of the corporations survives and continues
the business, while the other is dissolved, and all its rights, properties, and liabilities are acquired

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 by the surviving corporation.

II. By operation of law, upon the affectivity of the merger, the absorbed corporation ceases to
exist but its rights and properties, liabilities, shall be taken and deemed transferred to and vested
in tie surviving corporation.

a. Only I is true

b. Only II is true

c. Both are true

d. Both are false

5. I. Any amendment to the plan of merger or consolidation may be made.

II. The amendment to the plan of merger or consolidation must be approved by a majority vote of
the respective boards of directors or trustees of all the constituent corporations and ratified by the
affirmative vote of stockholders representing at least 2/3 of the outstanding capital stock or of 2/3
of the members of each of the constituent corporations.

a. Only I is true

b. Only II is true

c. Both are true

d. Both are false

6. The merger or consolidation shall have the following effects:

a. The constituent corporations shall become a single corporation.

b. The separate existence of the constituent corporations shall cease.

c. The surviving or the consolidated corporation shall possess all the rights, privileges,
immunities, and powers and shall be subject to all the duties and liabilities of a corporation.

d. All of the above.

7. As a rule, a corporation that purchases the assets of another will not be liable for the debts of
the selling corporation, except when any of the following circumstances is present. Which is the
exception?

a. Where the transaction is validly entered into.

b. Where the purchaser expressly or impliedly agrees to assume the debts.

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 c. Where the transaction amounts to a consolidation or merger of the corporations.

d. Where the purchasing corporation is merely a continuation of the selling corporation.

8. 1. Two or more corporations may merge into a single corporation which shall be one of the
constituent corporations.

II. Two or more corporations may consolidate into a new single corporation which shall be the
consolidated corporation.

a. Only I is true

b. Only II is true

C. Both are true

d. Both are false

9. It is a union whereby one or more existing corporations are absorbed another corporation that
survives and continues the combined a business.

a. Consolidation

b. Acquisition

c. Business combination

d. Merger

10. I. For a valid merger or consolidation, the approval by the SEC of the articles of merger or
consolidation is required.

II. If, upon investigation, the SEC has reason to believe that the proposed merger or
consolidation is contrary to the provisions of the corporation Code or existing laws, it shall set a
hearing to give the corporations concerned the opportunity to be heard.

a. Only I is true

b. Only II is true

c. Both are true

d. Both are false

11. I. The merger shall only be effective upon the issuance of a certificate of merger by the SEC.

II. Consolidation becomes effective not upon mere agreement of the members but only upon
issuance of the certificate of consolidation by the SEC.

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 a. Only I is true

b. Only II is true

c. Both are true

d. Both are false

12. I. When the SEC is satisfied that the consolidation of the corporations is not inconsistent with
the provisions of the Corporation Code and existing laws, it issues a certificate of consolidation
which makes the reorganization official.

II. Since there is a dissolution of the absorbed corporations, there is winding up of their affairs or
liquidation of their assets.

a. Only I is true

b. Only II is true

с. Both are true

d. Both are false

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