Business Law

Final Examination

Name: ________________________ Date:____________________________

Instruction: Answer the hereunder questions as briefly and as responsively as possible:

1) Define the following terms:

a) Authorized capital
b) Subscribed capital
c) Paid- up Capital
d) Watered Stocks
e) Derivative Suit
f) “No Par Value” Shares
g) Close Corporation

2) _____________ is one done by the corporation that exceed the scope of power given to them by laws and
their corporate charter.

3) The powers of a corporation is exercised by the ________________.

4) Give three instances where the concurrence of the stockholders is necessary for the exercise of the
powers of the corporation.

5) Explain the Trust Fund Doctrine.

6) AA Corporation is enageged in the business of printing books. Around 70% of its assests consists of
cash in the bank, 25% printing machine and the remaining are office equipment and supplies. AA
Corporation plans to sell the machine. Can it be considered sale of substantially all of the assets of the
corporation?

7) _________________ is the preferential right of shareholders to subscribe to all issues or disposition of shares
of any class in proportion to their present shareholdings. The purpose of this right is to enable the
shareholder to retain his proportionate control in the corporation and to retain his equity in the surplus.

8) a) Define Appraisal Right; b) Enumerate at least 3 instances when the Appraisal Right may be
exercised.

9) ___________ happens when a corporation absorbs another. On the other hand, ____________ consolidation
occurs when two or more corporations form one new corporation.

10) Define “apparent authority” and the application of the doctrine of estoppel.

11) _______________ is the process by which all the assets of the corporation are converted into liquid assets
in order to facilitate the payment of obligations to creditors and the remaining balance, if any, is to be
distributed to the stockholders.

-Nothing Follow-

“Success is the sum of small efforts, repeated day in and day out.” -Robert Collier