9412 Special Laws MCQs

CPA REVIEW SCHOOL OF THE PHILIPPINES
REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

COVERAGE: Special Laws
A. Insolvency Law
a. Definition of Insolvency
b. Suspension of Payments
c. Voluntary Insolvency
d. Involuntary Insolvency
B. Corporate Rehabilitation
a. Definition of Terms
b. Stay Order
c. Receiver
d. Rehabilitation Plan
e. Contents of Petition
f. Other Types of Rehabilitation
C. Securities Regulation Code
a. Kinds of Securities
b. Protection of investors
c. Private tender offer
d. Insider trading
e. SEC Circulars and Issuances
f. Code of Corporate Governance
g. Filing of General Information Sheet
h. Filing of Audited Financial Statements
D. Intellectual Property Law (except provisions under Part 1: Intellectual Property Office)
a. The Law on Patents
b. The Law on Trademark, Service Marks and Trade Names
c. The Law on Copyright
E. Foreign Investment Act
Direction: Read and select the best answer for the following questions.
1. It shall refer to either (1) the financial condition of a debtor that is generally unable to pay its or his liabilities as
they fall due in the ordinary course of business or (2) financial condition of a debtor when he has liabilities that
are greater than its or his assets.
a. Liquidity
b. Profitability
c. Insolvency
d. Flexibility
2. What court has original jurisdiction to entertain cases in relation to Financial Rehabilitation and Insolvency Act?
a. Court of Appeals
b. Regional Trial Court
c. Court of Tax Appeals
d. Municipal Trial Court
3. It refers to a petition filed by an individual debtor who has sufficient properties to cover his liabilities but he
foresees the impossibility of meeting when they respectively fall due in order to exempt his property from
execution or attachment to be filed by his creditors.
a. Petition for declaration of statement of suspension of payments
b. Petition for voluntary liquidation of insolvent individual debtor
c. Petition for rehabilitation
d. Petition for involuntary liquidation of insolvent individual debtor
4. What is the ground that must be alleged by an individual debtor in his petition to be declared in a state of
suspension of payments by the Regional Trial Court?
a. When such individual debtor does not have sufficient assets to cover his liabilities exceeding P500,000.
b. When such individual debtor has sufficient properties to cover his liabilities but he foresees the
impossibility of meeting when they respectively fall due.
c. When such individual debtor has already defaulted in the payment of his liabilities.
d. When such individual debtor has sufficient properties to cover his liabilities but he is contemplating
expanding his business.
5. Pedro Santos has total assets worth P1,000,000 and total liabilities amounting to P900,000. However, most of its
assets are in the form of fixed assets that cannot be easily sold while majority of its liabilities will mature within
one month. What legal remedy under Financial Rehabilitation and Insolvency Act shall be availed by Pedro
Santos?
CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 1 of 32

6. What is the effect of issuance by Regional Trial Court of an order suspending any pending execution against
individual debtor who filed a motion for such suspension in a petition for declaration of statement of suspension
of payments?
a. As a general rule, no creditor shall sue or institute proceedings to collect claim from the individual
debtor from the time of the filing of the petition for suspension of payments and for as long as
proceedings remain pending.
b. Any creditor may sue or institute proceedings to collect claim from the individual debtor from the time of
the filing of the petition for suspension of payments and for as long as proceedings remain pending.
c. Any secured creditor cannot foreclose the secured collateral from the time of the filing of the petition for
suspension of payments and for as long as proceedings remain pending.
d. Creditors having claims for personal labor, maintenance, expense of last illness and funeral of the wife or
children of the debtor incurred in the sixty (60) days immediately prior to the filing of the petition may
not sue or institute proceedings to collect claim from the individual debtor from the time of the filing of
the petition for suspension of payments and for as long as proceedings remain pending.
7. Which of the following creditor is covered by the Regional Trial Court's order suspending any pending execution
against individual debtor who filed a motion for such suspension in a petition for declaration of statement of
suspension of payments?
a. Secured creditors
b. Unsecured creditors for electricity or water bills
c. Creditors having claims for personal labor or maintenance incurred in the sixty (60) days immediately
prior to the filing of the petition
d. Creditors having claims for expense of last illness and funeral of the wife or children of the debtor
incurred in the sixty (60) days immediately prior to the filing of the petition
8. What is the duration of the Suspension of Payments or Suspension Order issued by the Regional Trial Court in a
petition for declaration of statement of suspension of payments filed by individual debtor?
a. The suspension order shall lapse when (6) months shall have, passed without the proposed agreement
being accepted by the creditors or as soon as such agreement is denied.
b. The suspension order shall lapse when (12) months shall have, passed without the proposed agreement
c. The suspension order shall lapse when (2) months shall have, passed without the proposed agreement
d. The suspension order shall lapse when (3) months shall have, passed without the proposed
agreement being accepted by the creditors or as soon as such agreement is denied.
9. What is the quorum required for validity of meeting of creditors for the approval of the proposal of individual
debtor who filed a petition for declaration of statement of suspension of payments filed by individual debtor?
a. The presence of creditors holding claims amounting to at least (2/3) of the total liabilities of individual
debtor.
b. The presence of creditors holding claims amounting to at least (3/4) of the total liabilities of individual
debtor.
c. The presence of creditors holding claims amounting to at least (3/5) of the total liabilities of
individual debtor.
d. The presence of creditors holding claims amounting to at least majority of the total liabilities of individual
debtor.
10. What is the required approving vote by the creditors for the approval of the proposal of individual debtor who
filed a petition for declaration of statement of suspension of payments filed by individual debtor?
a. At least 1/3 of the creditors voting unite upon the same proposition and the claims represented by said
majority vote amount to at least 2/5 of the total liabilities of the debtor mentioned in the petition.
b. At least majority of the creditors voting unite upon the same proposition and the claims represented by
said majority vote amount to at least 2/3 of the total liabilities of the debtor mentioned in the petition.
c. At least 1/4 of the creditors voting unite upon the same proposition and the claims represented by said
majority vote amount to at least 3/4 of the total liabilities of the debtor mentioned in the petition.
d. At least 2/3 of the creditors voting unite upon the same proposition and the claims represented by
said majority vote amount to at least 3/5 of the total liabilities of the debtor mentioned in the
petition.
11. What are the instances when the proposal of individual debtor who filed a petition for declaration of statement of
suspension of payments filed by individual debtor is deemed rejected by the creditors?
a. If the number of creditors required for holding a meeting (quorum of at least 3/5 of the total liabilities) do
not attend thereat.
b. If the double majorities (at least 2/3 of the creditors voting unite upon the same proposition and the claims
represented by said majority vote amount to at least 3/5 of the total liabilities of the debtor mentioned in
the petition) required for the approval of the proposed agreement have not been met.
c. Either A or B
d. Neither A nor B

12. What are the effects of creditor's approval of proposal of individual debtor who filed a petition for declaration of
statement of suspension of payments filed by individual debtor?
a. The Regional Trial court shall order that the agreement be carried out and all parties bound thereby to
comply with its terms.
b. The Regional Trial Court may also issue all orders which may be necessary or proper to enforce the
agreement on motion of any affected party.
c. Both A and B
d. Neither A nor B
13. What are the effects of individual debtor's failure to perform the creditor's approved agreement in a petition for
declaration of statement of suspension of payments filed by individual debtor?
a. All the rights which the creditors had against the individual debtor before the agreement shall revest in
them.
b. The individual debtor may be made subject to the insolvency proceedings such as liquidation proceedings
in the manner established by FRIA.
c. Both A and B.
d. Neither A nor B.
14. It refers to a petition filed by an individual debtor who does not have sufficient assets to cover his liabilities
exceeding P500,000 in order for him to be discharged from his liabilities.
15. What is the ground to be alleged by an individual debtor in his verified petition for voluntary liquidation of
insolvent debtor?
a. When such individual debtor does not have sufficient assets to cover his liabilities exceeding
P500,000.
b. When such individual debtor has sufficient properties to cover his liabilities but he foresees the
impossibility of meeting when they respectively fall due.
c. When such individual debtor has already defaulted in the payment of his liabilities.
d. When such individual debtor has sufficient properties to cover his liabilities but he is contemplating
expanding his business.
16. Anton Reyes has total assets worth P2,000,000 and total liabilities amounting to P3,500,000. What legal remedy
under Financial Rehabilitation and Insolvency Act shall be availed by Anton Reyes in order to be discharged from
his liabilities?
17. It refers to a petition filed by any creditor or group of creditors holding claims aggregating to at least P500,000
from an individual debtor who does not have sufficient assets to cover his liabilities in order to satisfy their claims
under FRIA if such individual debtor is exhibiting acts of insolvency.
18. Juan Tamad has total assets worth P200,000 and total liabilities amounting to P500,000. If you are a creditor of
Juan Tamad, what legal remedy will you file under Financial Rehabilitation and Insolvency Act if Juan Tamad is
exhibiting acts of insolvency?
19. What is the minimum claim of a creditor or group of creditors from an insolvent individual debtor in order for
them to be allowed to file a petition for involuntary liquidation of insolvent individual debtor?
a. At least P1,000,000
b. At least P500,000
c. At least P100,000
d. At least P50,000

20. What must be posted by the petitioning creditors in an involuntary liquidation of insolvent individual debtor that
will be conditioned that if the petition for liquidation is dismissed by the court, or withdrawn by the petitioner, or
the debtor shall not be declared an insolvent, the petitioning creditors will pay to the debtor all costs, expenses,
damages occasioned by the proceedings, and attorney's fees?
a. Bail
b. Bond
c. Promise
d. Recognizance
21. Which of the following is an act of insolvency of an individual debtor that must be alleged by his creditor who
will file a petition for involuntary liquidation of insolvent individual debtor?
a. Such individual debtor is about to depart or has departed from the Republic of the Philippines,
with intent to defraud his creditors.
b. Such individual debtor is absent from the Republic of the Philippines, without intent to defraud his
creditors.
c. Such individual debtor deposits his cash or money to a bank in order to avoid robbers.
d. Such individual debtor removes his property from the Philippines in order to minimize taxes.
22. Which of the following is an not act of insolvency of an individual debtor that must be alleged by his creditor
who will file a petition for involuntary liquidation of insolvent individual debtor?
a. Such individual debtor conceals himself to avoid the service of legal process for the purpose of hindering
or delaying the liquidation or of defrauding his creditors.
b. Such individual debtor conceals, or is removing, any of his property to avoid its being attached or taken
on legal process.
c. Such individual debtor has made any assignment, gift, sale, conveyance or transfer of his estate,
property, rights or credits for charitable purposes.
That an execution having been issued against him on final judgment for money, he shall have been found
to be without sufficient property subject to execution to satisfy the judgment.
23. Which of the following is an act of insolvency of an individual debtor that must be alleged by his creditor who
will file a petition for involuntary liquidation of insolvent individual debtor?
a. That being a merchant or tradesman, he has generally defaulted in the payment of his current obligations
for a period of three (3) days.
b. That for a period of two (2) days, he has failed, after demand, to pay any moneys deposited with him or
received by him in a fiduciary capacity.
c. That he has, in contemplation of insolvency, made an payment, gift, grant, sale, conveyance or
transfer of his estate, property, rights or credits.
d. That he has paid his matured obligation in the ordinary course of business.
24. It refers to the restoration of the debtor to a condition of successful operation and solvency, if it is shown that its
continuance of operation is economically feasible and its creditors can recover by way of the present value of
payments projected in the plan, more if the debtor continues as a going concern than if it is immediately
liquidated
a. Liquidation
b. Rehabilitation
c. Incorporation
d. Dissolution
25. It is a type of rehabilitation of a financially distressed or insolvent corporation, partnership or sole proprietorship
which is under the supervision by the Regional Trial Court upon the verified petition by the proper party.
a. Court-Supervised Rehabilitation
b. Pre-negotiated Rehabilitation
c. Out-of-Court Rehabilitation or Informal Restructuring Agreement
d. Inside Rehabilitation
26. It is a type of court-supervised rehabilitation initiated by the insolvent corporation, partnership or sole
proprietorship when it is generally unable to pay its or his liabilities as they fall due in the ordinary course of
business or it has liabilities that are greater than its or his assets so that it can be restored to a condition of
successful operation and solvency.
a. Voluntary court-supervised rehabilitation
b. Involuntary court-supervised rehabilitation
c. Pre-negotiated Rehabilitation
d. Out-of-Court Rehabilitation or Informal Restructuring Agreement

27. What are the grounds that must be alleged by an insolvent corporation, partnership or sole proprietorship in its
petition for voluntary court-supervised rehabilitation?
a. It is generally unable to pay its or his liabilities as they fall due in the ordinary course of business.
b. It has liabilities that are greater than its or his assets.
c. A and/or B
d. Neither A nor B
28. What are the minimum allegations by an insolvent corporation, partnership or sole proprietorship in its petition
for voluntary court-supervised rehabilitation?
a. The petition shall be verified to establish the insolvency of the debtor.
b. The petition shall be verified to establish the viability of the rehabilitation of the insolvent debtor.
c. Both A and B.
d. Neither A nor B.
29. Which of the following is a content of the verified petition for voluntary court-supervised rehabilitation?
a. Liquidation plan
b. Rehabilitation plan
c. Dissolution plan
d. Incorporation plan
30. It refers to plan by which the financial well-being and viability of an insolvent debtor can be restored using
various means including, but not limited to, debt forgiveness, debt rescheduling, reorganization or quasi-
reorganization, dacion en pago, debt-equity conversion and sale of the business (or parts of it) as a going concern,
or setting-up of new business entity as prescribed in Section 62 of FRIA, or other similar arrangements as may be
approved by the court or creditors
a. Liquidation plan
c. Dissolution plan
d. Incorporation plan
31. Which of the following is a not content of the verified petition for voluntary court-supervised rehabilitation?
a. Inventory of all assets including receivables and claims against third parties of the insolvent debtor
b. Identification of the debtor, its principal activities and address
c. Schedule of the debtor's debts and liabilities
d. Medico legal examination results
32. Which of the following is a not content of the verified petition for voluntary court-supervised rehabilitation?
a. Statement of the fact of and the cause of insolvency of debtor
b. Grounds upon which the petition is based
c. Specific reliefs sought pursuant to FRIA
d. Specific elements of crime alleged
33. What is the minimum number of nominees to the position of rehabilitation received whose names must be stated
in the verified petition for rehabilitation?
a. At least 3 nominees
b. At least 5 nominees
c. At least 4 nominees
d. At least 2 nominees
34. It is a type of court-supervised rehabilitation initiated by the creditors of insolvent corporation, partnership or sole
proprietorship when either (1) there is no genuine issue of fact or law on the claims of the petitioner’s, and that
the due and demandable payments thereon have not been made for at least sixty (60) days or that the debtor has
failed generally to meet its liabilities as they fall due; or (2) A creditor, other than the petitioners, has initiated
foreclosure proceedings against the debtor that will prevent the debtor from paying its debts as they become due
or will render it insolvent.
a. Voluntary court-supervised rehabilitation
b. Involuntary court-supervised rehabilitation
c. Pre-negotiated Rehabilitation
d. Out-of-Court Rehabilitation or Informal Restructuring Agreement
35. What is the minimum amount of claim of any creditor or group of creditors before they may be allowed to file a
petition for involuntary court-supervised rehabilitation of insolvent corporation, partnership or sole
proprietorship?
a. At least P10,000,000 or 10% of subscribed capital stock or partner's contributions, whichever is higher
b. At least P100,000,000 or 30% of subscribed capital stock or partner's contributions, whichever is higher
c. At least P100,000 or 20% of subscribed capital stock or partner's contributions, whichever is higher
d. At least P1,000,000 or 25% of subscribed capital stock or partner's contributions, whichever is
higher

36. What are the grounds that must be alleged by any creditor or group of creditors in their petition for involuntary
court-supervised rehabilitation of insolvent corporation, partnership or sole proprietorship?
a. There is no genuine issue of fact or law on the claims of the petitioner’s, and that the due and demandable
payments thereon have not been made for at least sixty (60) days or that the debtor has failed generally to
meet its liabilities as they fall due.
b. A creditor, other than the petitioners, has initiated foreclosure proceedings against the debtor that will
prevent the debtor from paying its debts as they become due or will render it insolvent.
c. Either A or B.
d. Neither A nor B.
37. Which of the following is not a content in a petition for involuntary court-supervised rehabilitation?
a. Identification of the debtor, its principal activities and its address
c. Names of at least 3 nominees for the position of rehabilitation receiver
d. The circumstances sufficient to support the liquidation of the insolvent debtor
38. When will the court-supervised rehabilitation proceedings of an insolvent corporation, partnership or sole
proprietorship commence?
a. Upon filing of petition for rehabilitation before Regional Trial Court
b. Upon issuance by the Regional Trial Court of Commencement Order
c. Upon verification of the petition for rehabilitation
d. Upon docketing for petition for rehabilitation
39. It refers to the order issued by the Regional Trial Court evidencing the commencement of the rehabilitation
proceedings.
a. Suspension or Stay Order
b. Commencement Order
c. Liquidation Order
d. Rehabilitation Order
40. It refers to the order included in the Commencement Order issued by the Regional Trial Court in a rehabilitation
proceedings which has the effect of suspending all actions or proceedings, attachments , in court or otherwise, for
the enforcement of claims against the insolvent debtor.
b. Liquidation Order
c. Rehabilitation Order
d. Freeze Order
41. Which of the following is the effect of issuance by the Regional Trial Court of Commencement Order in a
rehabilitation proceedings?
a. Upon issuance of the Commencement Order by the court, and until the approval of the
Rehabilitation Plan or dismissal of the petition, whichever is earlier, the imposition of all taxes and
fees, including penalties, interests mid charges thereof, due to the national government or to LGUs
shall be considered waived, in furtherance of the objectives of rehabilitation.
b. Legal compensation or setoff with the insolvent debtor may still prosper despite issuance of
commencement order.
c. Lien against debtor's property may still be perfected after the issuance of commencement order.
d. Legal or other recourse may be made by creditors in other forum outside the rehabilitation proceedings.
42. Which of the following is not an effect of issuance by the Regional Trial Court of Commencement Order in a
a. It shall prohibit, or otherwise serve as the legal basis for rendering null and void the results of any
extrajudicial activity or process to seize property, sell encumbered property, or otherwise attempt to
collect on or enforce a claim against the debtor after the commencement.
b. It shall serve as the legal basis for rendering null and void any setoff after the commencement date of any
debt owed to the debtor by any of the debtor's creditors.
c. It shall serve as the legal basis for rendering null and void the perfection of any lien against the debtor's
property after the commencement date.
d. It shall not consolidate the resolution of all legal proceedings by and against the debtor to the
rehabilitation court.

43. Which of the following is not an effect of issuance by the Regional Trial Court of Suspension or Stay Order in a
a. It shall suspend all actions or proceedings, in court or otherwise, for the enforcement of claims against the
debtor.
b. It shall suspend all actions to enforce any judgment, attachment or other provisional remedies against the
debtor.
c. It shall prohibit the debtor from selling, encumbering, transferring or disposing in any manner any of its
properties except in the ordinary course of business.
d. It shall allow the debtor from making any payment of its unsecured liabilities outstanding as of the
commencement date.
44. Which of the following pending cases against an involving an insolvent debtor is not stayed or suspended by the
Suspension or Stay Order by Rehabilitation Court in a rehabilitation proceedings?
a. Any criminal action against the individual debtor or owner, partner, director or officer of a debtor.
b. Any juridical foreclosure filed by a real estate mortgagee against the debtor before Regional Trial Court.
c. Any civil action for damages for breach of contract filed against the debtor before Municipal Trial Court.
d. Any civil action for damages for quasi-delict filed against the debtor before Metropolitatn Trial Court.
45. Which of the following pending cases against an involving an insolvent debtor is stayed or suspended by the
Suspension or Stay Order by Rehabilitation Court in a rehabilitation proceedings?
a. To cases already pending appeal in the Supreme Court as of commencement date.
b. To the enforcement of claims against sureties and other persons solidarily liable with the debtor, and third
party or accommodation mortgagors as well as issuers of letters of credit.
c. To any form of action of customers or clients of a securities market participant to recover or otherwise
claim moneys and securities entrusted to the latter in the ordinary course of the latter's business as well as
any action of such securities market participant or the appropriate regulatory agency or self-regulatory
organization to payor settle such claims or liabilities.
d. To any civil action for damages arising from quasi-contract against the debtor before Regional
Trial Court.
46. He refers to the person or persons, natural or juridical, appointed as such by the rehabilitation court pursuant to
FRIA and which shall be entrusted with such powers and duties including among others to monitor the operations
and the business of the debtor to ensure that no payments or transfers of property are made other than in the
ordinary course of business.
a. Liquidator
b. Rehabilitation receiver
c. Conservator
d. Provisional director
47. Which of the following is a duty of a rehabilitation receiver appointed by rehabilitation court?
a. To take possession, custody and control, and to preserve the value of all the property of the debtor.
b. To operate the business of the debtor even without permission of the rehabilitation court.
c. To invest debtor's assets in a business different from that of debtor.
d. To misappropriate the funds of the debtor.
48. Which of the following is a not a duty of a rehabilitation receiver appointed by rehabilitation court?
a. To evaluate the validity, genuineness and true among of all the claims against the debtor
b. To have access to all information necessary, proper or relevant to the operations and business of the
debtor and for its rehabilitation
c. To monitor the operations and the business of the debtor to ensure that no payments or transfers of
property are made other than in the ordinary course of business
d. To declare and distribute dividends to the shareholders of the debtor despite the debtor's deficit
49. Who has the power to remove the appointed rehabilitation receiver?
a. Insolvent debtor
b. Rehabilitation court
c. Creditors
d. President of the Philippines
50. How may the rehabilitation court remove the appointed rehabilitation receiver?
a. Motu proprio by the rehabilitation court
b. Upon motion by any creditor’s holding more than fifty percent (50%) of the total obligations of the debtor
c. Either A or B
d. Neither A nor B

51. What is the minimum claim by any creditor before he may file a motion to the rehabilitation court for the removal
of the appointed rehabilitation receiver?
a. More than 1/3 of total obligations of the debtor
b. More than 2/3 of total obligations of the debtor
c. More than 50% of total obligations of the debtor
d. More than 3/4 of total obligations of the debtor
52. Which of the following is a ground for removal of appointed rehabilitation receiver?
a. Due diligence, and exercise of proper degree of care in the performance of his duties and powers
b. Possession of special competency required by the specific case
c. Sufficient independence that is necessary for the protection of interest of general body of the stakeholders
d. Conflict of interest that arises after his appointment
53. Which of the following is not a ground for removal of appointed rehabilitation receiver?
a. Illegal acts or conduct in the performance of his duties and powers
b. Incompetence, gross negligence, failure to perform or failure to exercise the proper degree of care in the
performance of his duties and powers
c. Religious or political belief adverse to that of the appointing judge
d. Manifest lack of independence that is detrimental to the general body of the stakeholders
54. Before the hearing for the rehabilitation court's approval of compensation for reasonable fees and expenses of
rehabilitation receiver and his direct employees and independent contractors, the receiver shall receive and his
direct employees shall receive what type of compensation?
a. Equal to that of the salary CEO or CFO of the company
b. Reasonable compensation based on quantum meruit
c. Twice that of the salary of the judge
d. 10% of net income of the debtor
55. What is the treatment of compensation for reasonable fees and expenses of rehabilitation receiver and his direct
employees and independent contractors?
a. Administrative expenses classified as unsecured claims with priority
b. Unsecured claims without priority
c. Fully secured claims
d. Partially secured claims
56. What is the required creditor's vote for the approval of proposed rehabilitation plan in a court-supervised
a. Approval by all classes of creditors whose right are adversely modified or affected by the Plan.
b. Approval by the class of unsecured creditors with priority only.
c. Approval by the class of fully secured creditors only.
d. Approval by the class of unsecured creditors with priority and by the class of fully secured creditors only.
57. For the purpose of determining whether a particular class of creditor has already approved a plan, what is the
required vote within the class of creditor for the rehabilitation plan to be deemed to have been approved by a class
of creditors?
a. If members of the said class holding more than 50% of the total claims of the said class vote in
favor of the rehabilitation plan.
b. If members of the said class holding more than 75% of the total claims of the said class vote in favor of
the rehabilitation plan.
c. If members of the said class holding more than 25% of the total claims of the said class vote in favor of
d. If members of the said class holding more than 60% of the total claims of the said class vote in favor of
58. May the rehabilitation court confirm the rehabilitation plan notwithstanding the rejection by some opposing
creditors to the rehabilitation plan?
a. No because it is violative of right to substantive due process of the creditors affected by the rehabilitation
plan.
b. Yes if the rehabilitation of the debtor will be more favorable to the objecting creditors than
liquidation of the creditor.
c. No because that will be tantamount to grave abuse of discretion on the part of the court.
d. Yes even if the rehabilitation plan will be prejudicial on the part of the objecting creditors.

59. Which of the following is not a requisite for rehabilitation court’s confirmation of the rehabilitation Plan
notwithstanding the rejection by some opposing creditors?
a. The rehabilitation plan complies with the requirement as specified in FRIA.
b. The rehabilitation receiver recommends the confirmation of the Rehabilitation Plan.
c. The shareholders, owners or' partners of the juridical, debtor lose at least their controlling interest as a
result of the Rehabilitation Plan.
d. The Rehabilitation Plan would likely provide the objecting class of creditors with compensation which
has a net present value greater than that which they would have receive4if the debtor were under
liquidation.
e. The rehabilitation plan is reasonably assured by the an independent auditing firm.
60. Which of the following is not a ground for objection by creditors of the rehabilitation plan?
a. The creditors' support was induced by fraud.
b. The rehabilitation plan complies with the requirement as specified in FRIA.
c. The documents or data relied upon in the rehabilitation plan are materially false or misleading.
d. The rehabilitation plan is in fact not supported by the voting creditors.
61. Which of the following is the effect of the rehabilitation court's confirmation of the rehabilitation plan?
a. The Rehabilitation Plan and its provisions shall be binding upon the debtor and all person who may
be affected by it, including the creditors, whether or not such persons have participated in the
proceedings or opposed the Rehabilitation Plan or whether or not their claims have been scheduled.
b. The debtor shall not comply with the provisions of the Rehabilitation Plan and shall take all actions
necessary to carry out the Plan.
c. Payments shall be made to the creditors in contrary to the provisions of the Rehabilitation Plan.
d. Contracts and other arrangements between the debtor and its creditors shall be interpreted as continuing to
apply even if they do conflict with the provisions of the Rehabilitation Plan.
62. Which of the following is not an effect of the rehabilitation court's confirmation of the rehabilitation plan?
a. Any compromises on amounts or rescheduling of timing of payments by the debtor shall be binding on
creditors regardless of whether or not the plan is successfully implemented.
b. Claims arising after approval of the rehabilitation plan that are otherwise not treated by the plan
are subject to any Suspension Order.
c. Contracts and other arrangements between the debtor and its creditors shall be interpreted as continuing to
apply to the extent that they do not conflict with the provisions of the Rehabilitation Plan.
d. The debtor shall comply with the provisions of the Rehabilitation Plan and shall take all actions necessary
to carry out the rehabilitation plan and payments shall be made to the creditors in accordance 'with the
provisions of the Rehabilitation Plan.
63. What is the maximum period allowed by FRIA to rehabilitation court to confirm the rehabilitation plan from the
date of filing of the petition for rehabilitation?
a. Within 6 months from the date of the filing of the petition for rehabilitation
b. Within 3 months from the date of the filing of the petition for rehabilitation
c. Within one year from the date of the filing of the petition for rehabilitation
d. Within two years from the date of the filing of the petition for rehabilitation
64. Which of the following is an instance of failure of rehabilitation justifying termination of rehabilitation
proceedings?
a. The debtor, fails to submit a Rehabilitation Plan.
b. The rehabilitation court has taken due court of the petition.
c. Under the Rehabilitation Plan submitted by the debtor, there is substantial likelihood that the debtor can
be rehabilitated within a reasonable period.
d. The commission of good faith in securing the approval of the Rehabilitation Plan or its amendment.
65. Which of the following is not an instance of failure of rehabilitation justifying termination of rehabilitation
proceedings?
a. Dismissal of the petition by the court
b. The commission of fraud in securing the approval of the Rehabilitation Plan or its amendment
c. Under the Rehabilitation Plan submitted by the debtor, there is no substantial likelihood that the debtor
can be rehabilitated within a reasonable period
d. The Rehabilitation Plan or its amendment is approved, by the court and in the implementation
thereof, the debtor was able to perform its obligations thereunder, and there is a success in
realizing the objectives, targets or goals set forth therein, including the timelines and conditions for
the settlement of the obligations due to the creditors and other claimants.

66. What are the effects of termination of court-supervised rehabilitation proceedings?
a. The discharge of the rehabilitation receiver, subject to his submission of a final accounting.
b. The lifting of the Stay Order and any other court order holding in abeyance any action for the
enforcement of a claim against the debtor.
c. Provided, however, that if the termination of proceedings is due to failure of rehabilitation or dismissal of
the petition for reasons other than technical grounds, the rehabilitation proceedings shall be immediately
converted to liquidation proceedings as provided in Section 92 of FRIA.
d. All of the above.
67. It is a type of rehabilitation wherein an insolvent debtor, by itself or jointly with any of its creditors, files a
verified petition with the Regional Trial Court for the approval of a Pre-negotiated Rehabilitation Plan.
68. What is the required creditor's vote for the approval of pre-negotiated rehabilitation plan?
a. Endorsement or Approval by creditors holding at least (2/3) of the total liabilities of the debtor, including
secured creditors holding more than (50%).
b. Endorsement or Approval by the total secured claims of the debtor and unsecured creditors holding more
than (50%) of the total unsecured claims of the debtor.
c. Either A or B.
d. Neither A nor B.
69. It is a type of rehabilitation which meets the requirements prescribed by FRIA but will not involve filing of
petition before Regional Trial Court for its approval but agreed into by insolvent debtor and its creditors
informally or outside the court of law.
70. What are the minimum requirements for validity of Out-of-Court or Informal Rehabilitation Plans?
a. The debtor must agree to the out-of-court or informal restructuring/workout agreement or Rehabilitation
Plan.
b. It must be approved by creditors representing at least sixty-seven percent (67%) of the secured obligations
of the debtor.
c. It must be approved by creditors representing at least seventy-five percent (75%) of the unsecured
obligations of the debtor.
d. It must be approved by creditors holding at least eighty-five percent (85%) of the total liabilities, secured
and unsecured, of the debtor.
e. All of the above must be present.
71. This legal principle or legal doctrine enunciates that a restructuring/workout agreement or Rehabilitation Plan that
is approved pursuant to an informal workout framework referred to Informal Rehabilitation shall have the same
legal effect as confirmation of a Rehabilitation Plan under Court-Supervised Rehabilitation.
a. Craw down effect
b. Transcendental doctrine
c. Portability theory
d. Trust fund doctrine
72. It refers to the process of converting all the assets of an insolvent debtor into cash and distributing the available
cash to the creditors in accordance to the concurrence and preference of credits provisions of Civil Code and the
remainder to the stockholders.
a. Liquidation
b. Rehabilitation
c. Incorporation
d. Dissolution
73. It refers to a petition filed by an insolvent juridical debtor when it seeks immediate dissolution and termination of
its existence.
a. Petition for voluntary liquidation of insolvent juridical person
b. Petition for involuntary liquidation of insolvent juridical person
d. Petition for dissolution

74. What is the ground to be alleged in the petition filed by an insolvent juridical person for voluntary liquidation?
a. Insolvency of juridical debtor either because (1) its financial condition of general inability to pay its
liabilities as they fall due in the ordinary course of business or (2) its financial condition when it has
liabilities that are greater than its or his assets.
b. Conversion of Rehabilitation Proceedings to Liquidation Proceedings by establishing that the juridical
debtor is seeking immediate dissolution and termination of its corporate existence.
c. Either A or B.
d. Neither A nor B.
75. What is the required vote for filing the petition for voluntary liquidation of insolvent juridical person?
a. At least majority vote of the members of Board of Directors/Trustees and ratification of at least 2/3
of the stockholders/members.
b. At least majority vote of the members of Board of Directors/Trustees and ratification of at least majority
of the stockholders/members.
c. At least majority 2/3 of the members of Board of Directors/Trustees and ratification of at least 2/3 of the
stockholders/members.
d. At least majority 2/3of the members of Board of Directors/Trustees and ratification of at least majority of
the stockholders/members.
76. It refers to a petition filed by creditors of insolvent juridical debtor when there is no genuine issue of fact or law
on the claim/s of the petitioner/s, and that the due and demandable payments thereon have not been made for at
least one hundred eighty (180) days or that the juridical debtor has failed generally to meet its liabilities as they
fall due and there is no substantial likelihood that the juridical debtor maybe rehabilitated.
a. Petition for voluntary liquidation of insolvent juridical person
b. Petition for involuntary liquidation of insolvent juridical person
d. Petition for dissolution
77. What are the minimum requisites or allegations to be alleged by creditors of insolvent juridical debtor in their
petition for involuntary liquidation of insolvent juridical person?
a. There is no genuine issue of fact or law on the claim/s of the petitioner/s, and that the due and
demandable payments thereon have not been made for at least one hundred eighty (180) days or that the
debtor has failed generally to meet its liabilities as they fall due.
b. There is no substantial likelihood that the debtor maybe rehabilitated.
c. Both A and B.
d. Neither A nor B.
78. What is the minimum number of creditors and their minimum claims of creditors of insolvent juridical debtor in
order for them to be able to file a petition for involuntary liquidation of insolvent juridical person?
a. 3 or more creditors the aggregate of whose claims is at least either One million pesos (P1,000,000)
or at least twenty-five percent (25%) of the subscribed capital stock or partner's contributions of
the debtor, whichever is higher.
b. 2 or more creditors the aggregate of whose claims is at least either (P10,000,000) or at least (15%) of the
subscribed capital stock or partner's contributions of the debtor, whichever is higher.
c. 4 or more creditors the aggregate of whose claims is at least either (P100,000,000) or at least twenty-five
percent (35%) of the subscribed capital stock or partner's contributions of the debtor, whichever is higher.
d. 5 or more creditors the aggregate of whose claims is at least either (P100,000) or at least twenty-five
percent (50%) of the subscribed capital stock or partner's contributions of the debtor, whichever is higher.
79. It refers to the order issued by the Regional Trial Court evidencing the commencement of the liquidation
proceedings.
b. Commencement Order
c. Liquidation Order
d. Rehabilitation Order
80. Which of the following is the effect of issuance of liquidation order by the Regional Trial Court?
a. The juridical debtor shall be deemed dissolved and its corporate or juridical existence terminated.
b. Legal title to and control of all the assets of the juridical debtor, except those that may be exempt from
execution, shall be deemed vested in stockholders or members of the juridical person.
c. Foreclosure proceeding shall be allowed within a period of one hundred eighty (180) days from the
issuance of liquidation order.
d. All contracts of the juridical debtor shall be deemed continuous, unless the liquidator, within ninety (90)
days from the date of his assumption of office, declares otherwise that the contracts are terminated.

81. Which of the following is not an effect of issuance of liquidation order by the Regional Trial Court?
a. Legal title to and control of all the assets of the debtor, except those that may be exempt from execution,
shall be deemed vested in the liquidator or, pending his election or appointment with the court.
b. All contracts of the debtor shall be deemed terminated and/or breached, unless the liquidator, within
ninety (90) days from the date of his assumption of office, declares otherwise the contracting party agrees.
c. No foreclosure proceeding shall be allowed for a period of one hundred eighty (180) days from issuance
of liquidation order.
d. Separate action for the collection of an unsecured claim may be allowed in a court other than the
liquidation court.
82. It refers to a claim of a creditor which is secured by a lien or collateral whose realizable value is higher than the
amount of the claim.
a. Unsecured claim without priority
b. Unsecured claim with priority
c. Partially secured claim
d. Fully secured claim
83. It refers to a claim of a creditor which is secured by a lien or collateral whose realizable value is lower than the
amount of the claim.
84. It refers to a claim of a creditor which is not secured by a lien or collateral but prioritize according to the
provisions of Civil Code in the concurrence and preference of credit.
85. It refers to a claim of a creditor which is not secured by a lien or collateral but without priority according to the
provisions of Civil Code in the concurrence and preference of credit.
86. What are the rights of secured creditors in case of liquidation proceedings?
a. They may waive his rights under the security or lien, prove his claim in the liquidation proceedings and
share in the distribution of the assets of the debtor.
b. They may maintain his rights under his security or lien.
c. Either A or B.
d. Neither A nor B.
87. Which of the following is an unsecured claim without priority?

a. Civil liability for utility bills
b. Liability for employee benefits
c. Obligation for taxes
d. Civil obligation for quasi-delict
88. Which of the following is an unsecured claim with priority?

a. Accounts payable
b. Civil liability for corporate crime
c. Interest payable of bond indenture
d. Unearned revenue
89. Which of the following unsecured claims with priority shall be paid first?
a. Employee benefits
b. Civil damages for corporate crime
c. Liability for taxes
d. Civil obligation for quasi-delict
e. Notarized or judgment debt

90. He is the person either appointed by the liquidation court or elected by the creditors of an insolvent debtor with
the obligation to convert the assets of the insolvent debtor into cash and then apply the proceeds to the creditors
on the basis of Civil Code provisions on concurrence and preference of credits.
a. Rehabilitation receiver
b. Conservator
c. Liquidator
d. Rehabilitator
91. If the insolvent debtor under liquidation and creditor are mutually debtor and creditor of each other, what legal
remedy shall be applied during liquidation proceedings?
a. Right of off-set
b. Right of aggregation
c. Right of segregation
d. Right of priority
92. What is the period for submission of liquidation plan by the liquidator to the liquidation court?
a. Within 3 months from liquidator's assumption in office
b. Within 6 months from liquidator's assumption in office
c. Within 1 month from liquidator's assumption in office
d. Within 12 months from liquidator's assumption in office
93. As a general rule, where shall the unencumbered assets of the insolvent debtor be sold and converted the into
money?
a. Public auction
b. Private sale
c. Private market
d. Public market
94. Which of the following is not an objective of Securities Regulation Code a.k.a. R.A. No. 8799?
a. To establish a socially conscious, free market that regulates itself
b. To encourage the widest participation of ownership in enterprises
c. To enhance the democratization of wealth
d. To promote monopoly and oligopoly
95. Which of the following is not an objective of Securities Regulation Code a.k.a. R.A. No. 8799?
a. To promote the development of the capital market
b. To protect investors
c. To ensure full and fair disclosure about securities
d. To encourage insider trading and other fraudulent or manipulative devices and practices which
create distortions in the free market
96. Under Securities Regulation Code, they are defined as shares, participation or interests in a corporation or in a
commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether
written or electronic in character.
a. Securities
b. Instruments
c. Documents
d. Papers
97. Which of the following is considered a security under Securities Regulation Code?
a. Inventory
b. Options and warrants
c. Investment property
d. Prepaid asset
98. Which of the following is not considered a security under Securities Regulation Code?
a. Shares of stocks, bonds, debentures, notes evidences of indebtedness, asset-backed securities
b. Investment contracts, certificates of interest or participation in a profit sharing agreement, certifies of
deposit for a future subscription
c. Fractional undivided interests in oil, gas or other mineral rights
d. Biological asset
99. Which of the following is not considered a security under Securities Regulation Code?
a. Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or
similar instruments
b. Derivatives like option and warrants
c. Agricultural produce
d. Proprietary or nonproprietary membership certificates in corporations

100. He refers to the originator, maker, obligor or creator of the security.
a. Issuer
b. Broker
c. Dealer
d. Associated person of a broker or dealer
101. He refers to the person engaged in the business of buying and selling securities for the account of others.
a. Issuer
b. Broker
c. Dealer
d. Associated person
102. He refers to person who buys sells securities for his/her own account in the ordinary course of business.
a. Issuer
b. Broker
c. Dealer
103. He refers to an employee therefor whom, directly exercises control of supervisory authority, but does not include
a salesman, or an agent or a person whose functions are solely clerical or ministerial.
a. Issuer
b. Broker
c. Dealer
104. He refers to a natural person, employed as such as an agent, by a dealer, issuer or broker to buy and sell securities
a. Issuer
b. Broker
c. Salesman
105. He refers to any person who acts as intermediary in making deliveries upon payment effect settlement in
securities transactions.
a. Exchange
b. Clearing agency
c. Market
d. Auction
106. It refers to an organized market place or facility that brings together buyers and sellers and executes trade of
securities and/or commodities.
a. Exchange
b. Auction
c. Mall
d. Store
107. They refer to contracts which provide for the performance of future services of or the payment of future monetary
considerations at the time actual need, for which plan holders pay in cash or installment at stated prices, with
or without interest or insurance coverage and includes life, pension, education, interment, and other plans
which the Commission may from time to time approve
a. Insurance policies
b. Investment schemes
c. Pre-need plans
d. Money market placements
108. He refers to a person who, acting alone or with others, takes initiative in founding and organizing the business or
enterprise of the issuer and receives consideration therefor.
a. Promoter
b. Underwriter
c. Incorporator
d. Founder
109. He refers to a person who guarantees on a firm commitment and/or declared best effort basis the distribution and
sale of securities of any kind by another company.
a. Promoter
b. Underwriter
c. Incorporator
d. Founder

110. Which government agency is entrusted with the administration of the Securities Regulation Code?
a. Board of Accountancy
b. Securities and Exchange Commission
c. Bangko Sentral ng Pilipinas
d. Insurance Commission
111. Which of the following is a function of Securities and Exchange Commission?

a. To approve, reject, suspend, revoke or require amendments to registration statements, and
registration and licensing applications
b. To convict a person of criminal violation of Securities Regulation Code
c. To entertain intra-corporate disputes and election contests
d. To reverse the decision of board of directors in matters of corporate management
112. Which of the following is not a function of Securities and Exchange Commission?
a. To prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and provide
guidance on and supervise compliance with such rules, regulation and orders in relation to Securities
Regulation Code
b. To compel the officers of any registered corporation or association to call meetings of stockholders or
members thereof under its supervision
c. To suspend or revoke, after proper notice and hearing the franchise or certificate of registration of
corporations, partnership or associations, upon any of the grounds provided by law
d. To enact law amending the Securities Regulation Code and the Corporation Code of the Philippines
113. What is the condition precedent before securities will be allowed to be sold or offered for sale or distribution
within the Philippines?
a. It must be guaranteed by the Government of the Republic of the Philippines.
b. The securities must be risk-free.
c. The securities must be registered first before the Securities and Exchange Commission.
d. The securities must be profitable in all cases.
114. It refers to the application for the registration of securities required to be filed with the Securities and Exchange
Commission before these securities be allowed to be sold or offered for sale or distributed within the
Philippines.
a. Certificate of registration
b. Application form
c. Registration statement
d. Articles of registration
115. It refers to the document made by or an behalf of an issuer, underwriter or dealer to sell or offer securities for sale
to the public through registration statement filed with the Securities and Exchange Commission.
a. Prospectus
b. Brochure
c. Table of specification
d. Syllabus
116. Which of the following may not be done by Securities and Exchange Commission regarding the application for
registration of securities by issuer?
a. The SEC may specify the terms and conditions under which any written communication, including any
summary prospectus, shall be deemed not to constitute an offer for sale.
b. The SEC may audit the financial statements, assets and other information of firm applying for registration
of its securities whenever it deems the same necessary to insure full disclosure or to protect the interest of
the investors and the public in general.
c. The SEC shall deny any application for registration of securities if the applicant is a not a Filipino
citizen.
d. The SEC shall keep Register Securities which shall record the registration of securities and such register
and all documents or information with the respect to the securities registered therein shall be open to
public inspection at reasonable hours on business days.
117. Which of the following securities is required to be registered before the Securities and Exchange Commission?
a. Any security issued or guaranteed by the Government of the Philippines, or by any political subdivision
or agency thereof, or by any person controlled or supervised by, and acting as an instrumentality of said
Government
b. Shares of stocks issued by a banking institution
c. Certificates issued by a receiver or by a trustee in bankruptcy duly approved by the proper adjudicatory
body
d. Any security issued or guaranteed by the government of any country with which the Philippines maintains
diplomatic relations, or by any state, province or political subdivision thereof on the basis of reciprocity

118. Which of the following securities is exempted from registration before Securities and Exchange Commission?
a. Insurance policy
b. Bond indenture
c. Share warrants and share options
d. Fractional undivided interest in oil or mineral rights
119. Which of the following securities is exempted from registration before Securities and Exchange Commission?
a. Participation in profit sharing agreement in a partnership
b. Investment contracts issued by a networking company
c. Trust certificates and voting trust certificates in a mining company
d. Certificate of time deposit or money market placement issued by a bank
120. Which of the following sale of securities is subject to registration with Securities and Exchange Commission?
a. At any judicial sale, or sale by an executor, administrator, guardian or receiver or trustee in insolvency or
bankruptcy
b. The distribution by a corporation actively engaged in the business authorized by its articles of
incorporation, of securities to its stockholders or other security holders as a stock dividend or other
distribution out of surplus
c. The sale of capital stock of a corporation to its own stockholders exclusively, where no commission or
other remuneration is paid or given directly or indirectly in connection with the sale of such capital stock
d. The sale of securities by an issuer to more than twenty (20) persons in the Philippines during any
twelve-month period
121. Which of the following sale of securities is subject to registration with Securities and Exchange Commission?
a. The issuance of bonds or notes secured by mortgage upon real estate or tangible personal property, when
the entire mortgage together with all the bonds or notes secured thereby are sold to a single purchaser at a
single sale
b. Broker’s transaction, executed upon customer’s orders, on any registered Exchange or other trading
market
c. The exchange of securities by the issuer with the new security holders where commission or other
remuneration is paid or given directly or indirectly for soliciting such exchange
d. An isolated transaction in which any security is sold, offered for sale, subscription or delivery by the
owner therefore, or by his representative for the owner’s account, such sale or offer for sale or offer for
sale, subscription or delivery not being made in the course of repeated and successive transaction of a like
character by such owner, or on his account by such representative and such owner or representative not
being the underwriter of such security
122. Which of the following sale of securities is exempted from registration with Securities and Exchange
Commission?
a. By or for the account of a pledge holder, or mortgagee or any of a pledge lien holder selling of
offering for sale or delivery in the ordinary course of business and not for the purpose of avoiding
the provision of this Code, to liquidate a bonafide debt, a security pledged in good faith as security
for such debt
b. Sale of investment contracts to numerous investors by a networking company
c. Sale of subscription contracts by a prospective corporation to the public
d. Subscriptions for shares of the capitals stocks of a corporation prior to the incorporation thereof or in
pursuance of an increase in its authorized capital stocks under the Corporation Code, when expense is
incurred, or commission, compensation or remuneration is paid or given in connection with the sale or
disposition of such securities, and when the purpose for soliciting, giving or taking of such subscription is
other than to comply with the requirements of such law as to the percentage of the capital stock of a
corporation which should be subscribed before it can be registered and duly incorporated, or its
authorized, capital increase
123. In which of the following buyers of securities is sale of securities still required to be registered with Securities and
Exchange Commission?
a. Bank
b. Registered investment house or investment company
c. Insurance company
d. Professionals
124. In which of the following buyers of securities is sale of securities exempted from registration with Securities and
Exchange Commission?
a. Pension fund or retirement plan of Government of the Philippines or any of its political subdivision
b. Real estate company
c. Educational institution
d. Farmers

125. Which of the following is not a ground for the rejection of the registration statement and refuse registration of the
securities of the issuer by the Securities and Exchange Commission?
a. The issuer has been judicially declared solvent.
b. The issuer has violated any of the provision of Securities Regulation Code.
c. The issuer has been or is engaged or about to engage in fraudulent transactions.
d. The issuer has failed to comply with the conditions imposed by SEC for registration of security.
126. Which of the following is a ground for the rejection of the registration statement and refuse registration of the
securities of the issuer by the Securities and Exchange Commission?
a. The issuer has been profitable during the year.
b. The issuer has abided with the lawful order of SEC.
c. The issuer has made any false or misleading representation of material facts in any prospectus
concerning the issuer or its securities
d. The issuer is a non-resident and non-Philippine national juridical person.
127. It means a publicly announced intention by a person acting alone or in concert with other persons to acquire
outstanding equity securities of a public company, or outstanding equity securities of an associate or related
company of such public company which controls the said public company.
a. Tender offer
b. Insider trading
c. Fraudulent practices
d. Issuer tender offer
128. It means a publicly announced intention by an Issuer to reacquire any of its own class of equity securities, or by
an associate of such Issuer to acquire such securities.
a. Tender offer
b. Insider trading
c. Fraudulent practices
d. Issuer tender offer
129. In which of the following instances is tender offer mandatory?

a. Any person or group of persons acting in concert, who intends to acquire (15 %) of equity
securities in a public company in one or more transactions within a period of twelve (12)
months.
b. Any person or group of persons acting in concert, who intends to acquire (5%) of the outstanding
voting shares or such outstanding voting shares that are sufficient to gain control of the board in a
public company in one or more transactions within a period of twelve (12) months.
c. Any person or group of persons acting in concert, who intends to acquire (5%) of the outstanding
public company directly from one or more stockholders.
d. Any acquisition that would result in ownership of over (10%) of the total outstanding equity securities
of a public company
130. In which of the following instances is tender offer not mandatory?

a. Any person or group of persons acting in concert, who intends to acquire (15 %) of equity securities
in a public company in one or more transactions within a period of twelve (12) months.
b. Any person or group of persons acting in concert, who intends to acquire (35%) of the outstanding
public company in one or more transactions within a period of twelve (12) months.
c. Any person or group of persons acting in concert, who intends to acquire (35%) of the outstanding
public company directly from one or more stockholders.
d. Any acquisition that would result in ownership of over (50%) of the total outstanding equity securities
of a public company
e. Any person or group of persons acting in concert, who intends to acquire thirty five percent
(35%) of the outstanding voting shares or such outstanding voting shares that are sufficient to
gain control of the board in a public company through the Exchange trading system if such
person or group of persons acting in concert acquire the remainder through a block sale but
after acquisition through the Exchange trading system, they fail to acquire their target of thirty
five percent (35%) or such outstanding voting shares that is sufficient to gain control of the
board.

131. Which of the following transactions is subject to mandatory tender offer?
a. Any acquisition that would result in ownership of over (50%) of the total outstanding equity
securities of a public company
b. Any purchase of securities from an increase in authorized capital stock
c. Purchase in connection with foreclosure proceedings involving a duly constituted pledge or security
arrangement where the acquisition is made by the debtor or creditor
d. Purchases in connection with corporate rehabilitation under court supervision
e. Purchases in the open market at the prevailing market price
132. Which of the following transactions is exempted from mandatory tender offer?
a. Any purchase of securities from the unissued capital stock even if the acquisition will result to a fifty
percent (50%) or more ownership of securities by the purchaser or such percentage that is sufficient
to gain control of the board
b. Merger or consolidation
c. Any purchase from a publicly listed company
d. Purchase from the biggest company
133. Which of the following transactions is exempted from mandatory tender offer?
a. Purchases in connection with a privatization undertaken by the government of the Philippines
b. Purchases in connection with a banking institutions
c. Purchases that will result to control of a publicly listed company
d. Purchases that will result to parent-subsidiary relationship
134. What is the condition precedent in the tender offer by an Issuer or buyback or reacquisition or repurchase by an
Issuer of its own securities?
a. Presence of unrestricted retained earnings in its books
b. Presence of contributed capital in its books
c. Solvency of the issuer
d. Liquidity of the issuer
135. Which of the following is not a purpose of tender offer by an Issuer or buyback or reacquisition or repurchase by
an Issuer of its own securities?
a. To implement a stock option or stock purchase plan
b. To meet short-term obligations which can be settled by the re-issuance of the repurchased shares
c. To pay dissenting or withdrawing stockholders entitled to payment for their securities under the
Corporation Code
d. To dissolve the corporation
136. Where and when shall the terms and conditions of the tender offer be published by the offeror or issuer in a tender
offer?
a. An Offeror or Issuer shall publish the terms and conditions of the tender offering in (2) national
newspapers of general circulation in the Philippines on the date of commencement of the tender
offer and for (2) consecutive days
b. An Offeror or Issuer shall publish the terms and conditions of the tender offering in (1) national
newspaper of general circulation in the Philippines on the date of commencement of the tender offer
and for (1) day
c. An Offeror or Issuer shall publish the terms and conditions of the tender offering in (3) national
newspapers of general circulation in the Philippines on the date of commencement of the tender offer
and for (3) consecutive days
d. An Offeror or Issuer shall publish the terms and conditions of the tender offering in (4) national
newspapers of general circulation in the Philippines on the date of commencement of the tender offer
and for (4) consecutive days
137. Unless withdrawn earlier, what is the validity or expiration period of tender offer?
a. At least twenty (20) business days from its commencement; Provided, that an offer should as much as
possible be completed within sixty (60) business days from the date the intention to make such offer
is publicly announced
b. At least ten (10) business days from the date the notice of a change in the percentage of the class of
securities being sought or in the consideration offered is first published, sent or given to security
holders
c. Either A or B
d. Neither A nor B

138. In a mandatory tender offer, what price of shares of stocks shall the Offeror shall be compelled to offer?
a. The highest price paid by him for such securities during the preceding six (6) months
b. The lowest price paid by him for such securities during the preceding six (6) months
c. The average price paid by him for such securities during the preceding six (6) months
d. The lowest price paid by him for such securities during the preceding three (3) months
139. What are the requirements of tender offer?

a. Tender offer shall be open to all security holders of the class of securities subject to the tender offer.
b. The consideration paid to any security holder pursuant to the tender offer shall be the highest
consideration paid to any other security holder during such tender offer.
c. Both A and B.
d. Neither A nor B.
140. It refers to the company subject of the tender offer.

a. Target company
b. Desired company
c. Prospective company
d. Forecasted company
141. In case of a tender offer other than by an Issuer, the subject of the tender offer ("the target company") shall not
engage in any of the following transactions during the course of a tender offer, or before its commencement if
its board has reason to believe that an offer might be imminent, except
a. Issue any authorized but unissued shares
b. Issue or grant options in respect to any unissued shares
c. Create or issue, or permit the creation or issuance of, any securities carrying rights of conversion into,
or subscription to shares
d. Sell, dispose of or acquire, or agree to acquire, any asset whose value amounts to five percent (5 %)
or more of the total value of the assets prior to acquisition
e. Enter into contracts that are in the ordinary course of business
142. It refers to the act of an insider or selling or buying a security of the issuer, while in possession of material
information with respect to the issuer or the security that is not generally available to the public.
a. Tender offer
b. Manipulation of price
c. Fraudulent practice
d. Insider trading
143. It refers to (a) the issuer; (b) a director or officer (or any person performing similar functions) of, or a person
controlling the issuer; gives or gave him access to material information about the issuer or the security that is
not generally available to the public; (c) A government employee, director, or officer of an exchange, clearing
agency and/or self-regulatory organization who has access to material information about an issuer or a
security that is not generally available to the public; or (d) a person who learns such information by a
communication from any forgoing insiders.
a. Insider
b. Outsider
c. Independent person
d. Suitably qualified external person
144. Which of the following is not considered an insider?

a. Issuer of the securities
b. A director or officer (or any person performing similar functions) of, or a person controlling the issuer
c. A person who has access to material information about the issuer or the security that is not generally
available to the public
d. A government employee, director, or officer of an exchange, clearing agency and/or self-regulatory
organization who has access to material information about an issuer or a security that is not generally
available to the public
e. Any person who made investment decision on the basis of published audited financial
statements
145. Which of the following is not considered an insider?

a. Internal auditor of the issuer
b. External auditor of the issuer
c. Creditor of the issuer
d. Board of directors of the issuer

146. When is information considered "material nonpublic" for purposes of insider trading?
a. When the information has not been generally disclosed to the public and would likely affect the
market price of the security after being disseminated to the public and the lapse of a reasonable time
for the market to absorb the information
b. When the information would be considered by a reasonable person important under the circumstances
in determining his course of action whether to buy, sell or hold a security
c. Either A or B
d. Neither A nor B
147. Which of the following acts considered insider trading is unlawful?

a. To communicate material nonpublic information about the issuer or the security to any person
who, by virtue of the communication, becomes an insider, where the insider communicating the
information knows or has reason to believe that such person will likely buy or sell a security of
the issuer whole in possession of such information
b. To become an insider
c. To possess material nonpublic information for being an insider
d. All of the above
148. Which of the following acts is not considered unlawful under Securities Regulation Code?
a. To employ any device, scheme or artifice to defraud
b. To invest in bonds and stocks of competing corporations
c. To obtain money or property by means of any untrue statement of a material fact of any omission to
state a material fact necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading
d. To engage in any act, transaction, practice or course of business which operates or would operate as a
fraud or deceit upon any person
149. Which of the following acts is not considered unlawful manipulation of security prices under Securities
Regulation Code?
a. To create a false or misleading appearance of active trading in any listed security traded in an
Exchange of any other trading market
b. To affect, alone or with others, a securities or transactions in securities that: (I) Raises their price to
induce the purchase of a security, whether of the same or a different class of the same issuer or of
controlling, controlled, or commonly controlled company by others; or (iii) Creates active trading to
induce such a purchase or sale through manipulative devices such as marking the close, painting the
tape, squeezing the float, hype and dump, boiler room operations and such other similar devicesTo
obtain money or property by means of any untrue statement of a material fact of any omission to state
a material fact necessary in order to make the statements made, in the light of the circumstances under
which they were made, not misleading
c. To circulate or disseminate information that the price of any security listed in an Exchange will or is
likely to rise or fall because of manipulative market operations of any one or more persons conducted
for the purpose of raising or depressing the price of the security for the purpose of inducing the
purpose of sale of such security
d. To participate in trading of stocks and bonds if the investor is not stock broker
150. Which of the following acts is not considered unlawful manipulation of security prices under Securities
Regulation Code?
a. To make false or misleading statement with respect to any material fact, which he knew or had
reasonable ground to believe was so false or misleading, for the purpose of inducing the purchase or
sale of any security listed or traded in an Exchange
b. To effect, either alone or others, any series of transactions for the purchase and/or sale of any security
traded in an Exchange for the purpose of pegging, fixing or stabilizing the price of such security
c. To use or employ, in connection with the purchase or sale of any security any manipulative or
deceptive device or contrivance
d. To sell securities in order to obtain gain on changes in fair value of the stocks
151. It means any sale of security which the seller does not own or any sale which is consummated by the delivery of a
security borrowed by, or for the account of the seller with the commitment of the seller or securities borrower
to return or deliver said securities or their equivalent to the lender on a determined or determinable future
time.
a. Short sale
b. Long sale
c. Middle sale
d. Narrow sale

152. It includes making or offering to make with any person, or inducing or attempting to induce any person to enter
into or to offer to enter into any agreement for or with a view to acquiring, disposing of, subscribing for
securities.
a. Dealing in securities
b. Promoting securities
c. Advertising securities
d. Investing in securities
153. It refers to the act of seeking or asking for business or information which includes the act of providing
information about a security or investment product being offered for sale with the view of making another
person a client or closing or bringing in a sale or purchase of security or investment product.
a. Solicitation
b. Advertising
c. Marketing
d. Dealing
154. It means a contract, transaction or scheme (collectively "contract") whereby a person invests his money in a
common enterprise and is led to expect profits primarily from the efforts of others. It is presumed to exist
whenever a person seeks to use the money or property of others on the promise of profits.
a. Investment contract
b. Share options
c. Warrants
d. Debentures
155. It refers to the governing body elected by the stockholders in a stock corporation that exercises the corporate
powers of a corporation, conducts all its business and controls its properties.
a. General assembly
b. Board of directors
c. Board of trustees
d. Executive committee
156. It refers to the framework of rules, systems and processes in the corporation that governs the performance by the
Board of Directors and Management of their respective duties and responsibilities to the stockholders.
a. Corporate governance
b. Corporate by-laws
c. Articles of incorporation
d. Corporate regulation
157. Which of the following companies is covered by the Revised Code of Corporate Governance?
a. Corporation whose equity securities are listed on an Exchange Market
b. Barangay Micro Business Enterprise
c. Close corporation
d. Closely held corporation
158. Which of the following companies is not covered by the Revised Code of Corporate Governance?
a. Corporation that is a grantee of secondary licenses from SEC
b. Small and Medium Enterprise
c. Corporation that sells equity and/or debt securities to the public that are required to be registered with
the SEC
d. Corporation that has assets in excess of Fifty Million Pesos and at least two hundred (200)
stockholders who own at least one hundred (100) shares each of equity securities
159. How many independent directors must be present in a corporation covered by Revised Code of Corporate
Governance?
a. One independent director
b. Two independent directors
c. Three independent directors
d. Four independent directors
160. In addition to the qualifications provided by the Corporate Code of the Philippines, what qualifications of a
member of the Board of Directors may be provided by the Corporation in accordance to Revised Code of
Corporate Governance?
a. College education or equivalent academic degree
b. Practical understanding of the business of the corporation
c. Membership in good standing in relevant industry, business or professional organizations
d. Previous business experience
e. All of the above

161. Which of the following is a ground for permanent disqualification of a director under the Revised Code of
a. Conviction by final judgment of an offense punishable by imprisonment for more than six (6)
years
b. Any director accused of violation of the Corporation Code
c. Any director charged of crimes involving violation of Securities Regulation Code
d. Attainment of doctorate degree in a university
162. Which of the following is a ground for permanent disqualification of a director under the Revised Code of
a. Any person earlier elected as independent director who becomes an officer, employee or
consultant of the same corporation
b. Refusal to comply with the disclosure requirements of the Securities Regulation Code and its
Implementing Rules and Regulations
c. Absence in more than fifty (50) percent of all regular and special meetings of the Board during his
incumbency
d. Any director charged of crimes involving violation of Securities Regulation Code
163. Which of the following is a ground for temporary disqualification of a director under the Revised Code of
a. Absence for any twelve (12) month period during his incumbency
b. Any person judicially declared as insolvent
c. Any person convicted by final judgment or order by a court or competent administrative body of an
offense involving moral turpitude, fraud, embezzlement, theft, estafa, counterfeiting,
misappropriation, forgery, bribery, false affirmation, perjury or other fraudulent acts
d. Any person found guilty by final judgment or order of a foreign court or equivalent financial
regulatory authority of fraudulent acts
164. What is the nature of the officer of a director?

a. It is one of trust and confidence.
b. It is one of independence.
c. It is one for public interest.
d. It is one for creditor's interest.
165. Which of the following is a responsibility of a director of a corporation?

a. He should act in the best interest of the corporation in a manner characterized by transparency,
accountability and fairness.
b. He should also exercise leadership, prudence and integrity in directing the corporation towards
sustained progress.
c. Both A and B
d. Neither A nor B
166. Which of the following is not a responsibility of a director of a corporation?

a. He must conduct unfair business transactions with the corporation, and ensure that his
personal interest does conflict with the interests of the corporation.
b. He must devote the time and attention necessary to properly and effectively perform his duties and
responsibilities.
c. He must act judiciously and exercise independent judgment.
d. He must have a working knowledge of the statutory and regulatory requirements that affect the
corporation, including its articles of incorporation and by-laws, the rules and regulations of the SEC
and, where applicable, the requirements of relevant regulatory agencies.
e. He must observe confidentiality.
167. It refers to an executive committee with the responsibility to assist the Board of Directors in the performance of
its oversight responsibility for the financial reporting process, system of internal control, audit process, and
monitoring of compliance with applicable laws, rules and regulations.
a. Finance committee
b. Operation committee
c. Audit committee
d. External committee

168. What is the minimum composition of audit committee of a corporation?
a. At least three directors who shall preferably have accounting and finance backgrounds, one of
whom shall be an independent director and another with audit experience
b. At least five directors who shall preferably have accounting and finance backgrounds, one of whom
shall be an independent director and another with audit experience
c. At least four directors who shall preferably have accounting and finance backgrounds, one of whom
d. At least seven directors who shall preferably have accounting and finance backgrounds, one of whom
169. Who shall be the chairman of the audit committee of a corporation?

a. Chairman of the Board of Directors
b. Independent director
c. President of the Corporation
d. Secretary of the Corporation
170. He refers to a corporate officer who must monitor compliance by the corporation with Revised Code of Corporate
Governance and the rules and regulations of regulatory agencies and, if any violations are found, report the
matter to the Board of Directors and recommend the imposition of appropriate disciplinary action on the
responsible parties and the adoption of measures to prevent a repetition of the violation.
a. Independent director
b. Compliance officer
c. Controller
d. Treasurer
171. To whom shall the compliance report directly?

a. President of the corporation
b. Chairman of the board of directors
c. Independent director
d. Chairman of the audit committee
172. What is the period for submission or filing to SEC of audited financial statements of a corporation whose fiscal
year ends on a date other than December 31?
a. Within 120 calendar days from the end of fiscal year
b. Within 120 working days from the end of fiscal year
c. Within 90 calendar days from the end of fiscal year
d. Within 90 working days from the end of fiscal year
173. When shall the General Information Sheet of a corporation be filed to SEC?
a. Within 30 calendar days from the date of actual meeting of stockholders or members
b. Within 30 working days from the date of actual meeting of stockholders or members
c. Within 30 calendar days from the end of fiscal year
d. Within 30 working days from December 31
174. What is the state's policy under Foreign Investment Act of 1991 a.k.a. R.A. No. 7042?
a. To attract, promote and welcome productive investments from foreign individuals,
partnerships, corporations, and governments, including their political subdivisions, in activities
which significantly contribute to national industrialization and socio-economic development to
the extent that foreign investment is allowed in such activity by the Constitution and relevant
laws
b. To discriminate against foreigners in so far as investment in the Philippines is concerned.
c. To reserve all industries to Filipinos.
d. To discourage globalization.
175. Under the 1987 Constitution, which of the following industry must be fully owned and controlled by Filipinos?
a. Educational institution
b. Mass media
c. Advertising
d. Public utility
e. Exploration, development and utilization of natural resources
176. Under the 1987 Constitution, what is the maximum foreign investment in an advertising company?
a. 100%
b. 30%
c. 40%
d. 60%

177. Under the 1987 Constitution, what is the minimum Filipino ownership in an educational institution?
a. 70%
b. 30%
c. 40%
d. 60%
178. Under the 1987 Constitution, what is the maximum foreign investment in a public utility?
a. 100%
b. 30%
c. 40%
d. 60%
179. Under the 1987 Constitution, what is the minimum Filipino ownership in an entity engaged in explorationm
development and utilization of natural resources?
a. 70%
b. 30%
c. 40%
d. 60%
180. Under the 1987 Constitution, what is the minimum Filipino ownership in a corporation before such corporation
may own private land in the Philippines?
a. 70%
b. 30%
c. 40%
d. 60%
181. Twenty professional doctors are intending to establish an entity for the rendition of medical services. What is the
maximum foreign investment in such entity?
a. 0%
b. 60%
c. 40%
d. 30%
182. Ten scientist are intending to establish a corporation for the manufacturing and disposition of medical
equipments. What the maximum foreign investment in such entity?
a. 100%
b. 30%
c. 40%
d. 0%
183. Under Special Laws, in which of the following companies may a foreigner make investment in the Philippines?
a. Cooperatives
b. Retail trade enterprises with paid up capital less than USA $2,500,000
c. Recording company
d. Small-scale mining
184. It means an equity investment made by non-Philippine national in the form of foreign exchange and/or other
assets actually transferred to the Philippines and duly registered with the Central Bank which shall assess and
appraise the value of such assets other than foreign exchange.
a. Foreign investment
b. Nonresident investment
c. Filipino investment
d. Offshore investment
185. Which of the following is considered Non-Philippine national under Foreign Investment Act?
a. Citizen of the Philippines
b. Domestic Partnership or Association wholly owned by citizens of the Philippines
c. A Corporation organized under the laws of the Philippines of which at least sixty percent (60%) of
the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines
d. A Corporation organized abroad and registered as doing business in the Philippines under the
Corporation Code of which one hundred percent (100%) of the capital stock outstanding and
entitled to vote is wholly owned by Foreigners

186. What is the requirement before a non-Philippine national be allowed to engage in business in the Philippines?
a. Such person must first apply naturalization process to become a Filipino national.
b. Such person must first register and obtain a license from appropriate agency such as SEC or
DTI.
c. Such person must invest first in the Philippines.
d. Such person must set up first a corporation in the Philippines.
187. Which of the following acts is considered doing business?

a. Any other act or acts that imply a continuity of commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the exercise of some of the
functions normally incident to, and in progressive prosecution of commercial gain or of the
purpose and object of the business organization.
b. Mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do
business
c. Having a nominee director or officer to represent its interests in such corporation
d. Appointing a representative or distributor domiciled in the Philippines which transacts business in its
own name and for its own account
188. Which of the following acts is not considered doing business?

a. Participating in the management, supervision or control of any domestic business, firm, entity or
corporation in the Philippines
b. Mere exercise of rights as an investor or stockholder in a Filipino corporation
c. Soliciting orders, service contracts, opening offices, whether called “liaison” offices or branches;
appointing representatives or distributors domiciled in the Philippines or who in any calendar year
stay in the country for a period or periods of one hundred eighty [180] days or more
d. Any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate
to that extent the performance of acts or works, or the exercise of some of the functions normally
incident to, and in progressive prosecution of commercial gain or of the purpose and object of the
business organization
189. This test of nationality of corporation means that corporation is a national of the country under whose laws it has
been organized and registered.
a. Place of incorporation test
b. Control test
c. Dominancy test
d. Grandfather rule test
190. This test of nationality of corporation 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.
b. Control test
c. Dominancy test
191. This test of nationality of corporation is a 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 corporate shareholders are present in the situation,
by attributing the nationality of the second or even subsequent tier of ownership to determine the nationality
of the corporate shareholder.
b. Control test
c. Dominancy test
192. What is the effect if there is non-compliance or violation of minimum Filipino ownership in an existing
corporation?
a. The corporation is ip so facto dissolved by operation of law.
b. The corporate remains to be de jure corporation.
c. The noncompliance is merely a non-automatic ground for dissolution making a corporation a
de facto corporation subject to direct attack by the State through the Office of Solicitor General
via Quo Warranto Proceedings.
d. The corporation becomes an ostensible corporation.

193. Ayala Corporation is 60% owned by Filipinos and 40% owned by Japanese. Globe Corporation is owned 55% by
Ayala Corporation, 10% by other Filipino Citizens and the remaining interest by Americans. Does Globe
Corporation, a public utility, comply with the minimum Filipino ownership?
a. It cannot be determined.
b. Yes under grandfather rule test.
c. No under grandfather rule test.
d. No under incorporation test.
194. MPIC Corporation is 50% owned by Filipinos and 50% owned by Indonesians. Smart Corporation is owned 60%
by MPIC Corporation, 25% by other Filipino Citizens and the remaining interest by Koreans. Does Smart
Corporation, a public utility, comply with the minimum Filipino ownership?
195. MPIC Corporation is 55% owned by Filipinos and 45% owned by Indonesians. Meralco is owned 60% by MPIC
Corporation, 30% by other Filipino Citizens and the remaining interest by Koreans. Does Meralco, a public
utility, comply with the minimum Filipino ownership?
196. It refers to an intellectual property which gives an exclusive right to the inventor over his new, inventive and
useful product, process or an improvement of a product or process.
a. Copyright
b. Trademark
c. Franchise
d. Patent
197. How is a patent as an intellectual property or right created or protected by law?

a. By invention by the inventor
b. By registration with Intellectual Property Office
c. By notarization of the invention
d. By experimenting over the invention
198. What is the legal term of a patent that gives its owner the exclusive right to use the covered invention?
a. 20 years
b. 10 years
c. 15 years
d. 25 years
199. Which of the following is not a requisite of a patentable invention?

a. It must involve a technical solution to a problem in any field of human activity.
b. It must be new or novel.
c. It must involve inventive step.
d. It must be industrially applicable.
e. It must be made by a scientist.
200. When is an invention considered new or novel?

a. When it forms part of prior art.
b. When it does not form part of prior art.
c. Either A or B.
d. Neither A nor B.
201. What consist prior art?

a. Everything which has been made available to the public anywhere in the world, before the filing date
or the priority date of the application claiming the invention.
b. The whole contents of an application for a patent, utility model, or industrial design registration,
published in accordance with Intellectual Property Code, filed or effective in the Philippines, with a
filing or priority date that is earlier than the filing or priority date of the application.
c. Both A and B.
d. Neither A nor B.

202. When does an invention involve inventive step?
a. When it is part of prior art.
b. When it is not obvious to a person skilled in the art at the time of the filing date or priority date
of the application claiming the invention.
c. Either A or B.
d. Neither A nor B.
203. Which of the following may become the subject matter of patent application?
a. Discoveries, scientific theories and mathematical methods
b. Schemes, rules and methods of performing mental acts, playing games or doing business, and
programs for computers
c. Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods
practiced on the human or animal body
d. Microorganisms, non-biological process and microbiological process
e. Plant varieties and animal breeds
204. Which of the following is non-patentable?

a. Aesthetic creations
b. Salt lamp technology
c. Car driven by water-engine
d. Microorganisms
205. If two or more persons have made an invention separately and independently of each other, who shall own the
right to the patent?
a. The first person who invented the technology.
b. The person who filed an application for registration for such invention.
c. The first person who mass produced the technology.
d. The first person who presented the technology to a convention.
206. If two or more persons have made an invention separately and independently of each other, who shall own the
right to the patent where two or more applications for registration are filed for the same invention?
a. The applicant who has the earliest filing date or, the earliest priority date.
b. The applicant who has the latest filing date or, the latest priority date.
c. The first person who invented the technology.
d. The first person who presented the technology to a convention.
207. On January 1, 2001, Mang Tomas invented the technology of Bamboo Lamp and was using it already for three
years. On January 1, 2004, Mang Pedro invented the same technology of Bamboo Lamp. Mang Pedro made
an application for registration with Intellectual Property Office. Who has better right over the patent of the
technology?
a. Mang Pedro
b. Mang Tomas
c. Both Pedro and Tomas equally
d. None of them
208. On January 1, 2001, Steve Jobs invented the technology of Soft Touch which he registered in the Intellectual
Property Office of USA on January 1, 2001. On April 1, 2001, Juan Gaya also invented the same technology
of Soft Touch which he registered in the Intellectual Property Office of the Philippines on April 1, 2001. A
certified copy of Steve Job's application in USA was filed on June 1, 2001 to Intellectual Property Office of
the Philippines. Who has better right over the patent of the Soft Touch in so far as the Philippine jurisdiction
is concerned?
a. Steve Job
b. Juan Gaya
c. Both Steve and Juan equally
d. None of them
209. Cherry Mobile Co. commissioned Engineer Reyes to develop a new phone. Engineer Reyes was able to develop
the commissioned phone. Who owns the patent over the new phone?
a. Always Cherry Mobile Co.
b. Always Engineer Reyes
c. Generally Cherry Mobile Co. unless otherwise provided in the contract
d. Generally Engineer Reyes unless otherwise provided in the contract

210. Samsung Co. employs Engineer Cruz to develop a new phone. Engineer Cruz was able to develop the phone in
the course of performance of his regular duties. Who owns the patent over the new phone?
a. Always Samsung Co.
b. Always Engineer Cruz
c. Generally Samsung Co. unless otherwise provided in the contract
d. Generally Engineer Cruz unless otherwise provided in the contract
211. Sony Co. employs Engineer Santos to develop a new phone. Engineer Santos was able to develop the phone
during his breaktime using the resources of Sony Co. Who owns the patent over the new phone?
a. Always Sony Co.
b. Always Engineer Santos
c. Generally Sony Co. unless otherwise provided in the contract
d. Generally Engineer Santos unless otherwise provided in the contract
212. It means the unauthorized, replication or use of patented invention or process.

a. Patent laundering
b. Patent infringement
c. Patent misappropriation
d. Patent destruction
213. This test of patent infringement means that a resort must be had, in the first instance, to the words of the claim.
a. Literal infringement test
b. Doctrine of equivalents infringement test
c. Dominancy test
d. Holistic test
214. This test of patent infringement means that infringement also takes place when a device appropriates a prior
invention by incorporating its innovative concept and, although with some modification and change, performs
substantially the same function in substantially the same way to achieve substantially the same result.
b. Doctrine of equivalents infringement test
c. Dominancy test
d. Holistic test
215. Which of the following is not a valid defense by the defendant in an action for trademark infringement?
a. The covered invention or technical solution is non-patentable.
b. The covered invention or technical solution is part of prior art.
c. The respondent is the true owner of the patent and has right of priority in registration.
d. The respondent has right of prior use.
e. The respondent acted in good faith.
216. This defense may be set up by a respondent in an action for patent infringement when the respondent is any prior
user, who, in good faith was using the invention or has undertaken serious preparations to use the invention in
his enterprise or business, before the filing date or priority date of the application on which a patent is granted.
a. Doctrine of fair use
b. Doctrine of prior use
c. Doctrine of good faith
d. Doctrine of bad faith
217. It is an intellectual property that refers to any visible sign capable of distinguishing the goods of an enterprise and
shall include a stamped or marked container of goods.
a. Distinguishing mark
b. Trademark
c. Patent
d. Copyright
218. It is an intellectual property that refers to any visible sign capable of distinguishing services of an enterprise and
shall include a stamped or marked container of services.
b. Service mark
c. Patent
d. Copyright

219. It is an intellectual property that refers to any visible sign designated as such in the application for registration and
capable of distinguishing the origin or any other common characteristic, including the quality of goods or
services of different enterprises which use the sign under the control of the registered owner of the collective
mark.
b. Collective mark
c. Patent
d. Copyright
220. It is an intellectual property that refers to the name or designation identifying or distinguishing an enterprise.
a. Distinguishing name
b. Tradename
c. Patent
d. Copyright
221. How is the right over a trademark, service mark or collective mark created or protected by law?
a. By its usage of owner
b. By its registration with Intellectual Property Office
c. By its publication in a newspaper of general circulation
d. By notarization of the mark
222. How is the right over a tradename created or protected by law?

a. By its usage of owner
b. By its registration with Intellectual Property Office
c. By its publication in a newspaper of general circulation
d. By its registration with DTI or SEC
223. What is the term and life of a trademark?

a. It has a term of 10 years which is subject to unlimited times of renewal, thus, it has indefinite
life.
b. It has a term of 5 years which is subject to unlimited times of renewal, thus, it has definite life.
c. It has a term of 20 years which is subject to unlimited times of renewal, thus, it has indefinite life.
d. It has a term of 15 years which is subject to unlimited times of renewal, thus, it has definite life.
224. Which of following marks may be registered before Intellectual Property Office for protection?
a. Marks consisting exclusively of signs that are generic for the goods or services that they seek to
identify
b. Marks consisting of color along
c. Marks consisting of shapes only
d. Marks consisting of combination of color, shapes and drawing
225. Which of the following marks may be registered before Intellectual Property Office for protection?
a. Marks consisting exclusively of signs or of indications that have become customary or usual to
designate the goods or services in everyday language or in bona fide and established trade practice
b. Marks identical or confusingly similar to a well-known mark
c. Marks consisting of a name, portrait or signature identifying a particular living individual with
consent of such individual
d. Marks consisting of portrait of a deceased President of the Philippines, during the life of his widow, if
any without by written consent of the widow
226. Which of the following marks may be registered before Intellectual Property Office for protection?
a. Marks consisting of immoral, deceptive or scandalous matter, or matter which may disparage or
falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or
bring them into contempt or disrepute
b. Marks which are unlikely to mislead the public, particularly as to the nature, quality,
characteristics or geographical origin of the goods or service
c. Marks consisting of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof
d. Marks identical to a registered mark belonging to a different proprietor or a mark with an earlier filing
or priority date
227. This test of trademark infringement focuses on the similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion.
b. Doctrine of equivalents test
c. Dominancy test
d. Holistic test

228. This test of trademark infringement focuses not only on the predominant words but also on the other features
appearing on the labels.
b. Doctrine of equivalents test
c. Dominancy test
d. Holistic test
229. It refers to the unauthorized usage by any person of a mark without the consent of the registrant of mark. It also
pertains to any reproduction, counterfeiting, copying or colorable imitation of any registered mark or trade-
name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as
to the source or origin of such goods or services, or identity of such business.
a. Trademark infringement
b. Unfair competition
c. Trademark misappropriation
d. Unfair theft
230. It refers to the passing off (or palming off) or attempting to pass off upon the public of the goods or business of
one person as the goods or business of another with the end and probable effect of deceiving the public.
a. Trademark infringement
b. Unfair competition
c. Trademark misappropriation
d. Unfair theft
231. Which of the following is not a valid defense by the defendant in an action for trademark infringement?
a. The mark is nonregistrable
b. The respondent is the true owner of the mark.
c. The respondent has right of priority in registration.
d. The respondent acted in good faith.
232. It is an intellectual property that refers to the legal protection extended to the owner of the rights in an
original work.
a. Trademark
b. Copyright
c. Tradename
d. Patent
233. It refers to every production in the literary, scientific and artistic domain such as books and other writings,
musical works, films, paintings and other works, and computer programs.
a. Original work
b. Imitated work
c. Counterfeited work
d. Copied work
234. How is a copyright over original work created or protected by law?

a. It is created and protected from the moment of creation.
b. It is created and protected from the moment of registration with Intellectual Property Office.
c. It is created and protected from the moment of notarization.
d. It is created and protected from the moment of publication.
235. As a general rule, what is the term of copyright?

a. The term of protection of copyright for original and derivative works is the life of the author
plus (50) years after his death.
b. The term of protection of copyright for original and derivative works is the life of the author plus (20)
years after his death.
c. The term of protection of copyright for original and derivative works is the life of the author plus (10)
d. The term of protection of copyright for original and derivative works is the life of the author plus (30)
236. It refers to a type of right provided by a copyright which enables the creator to obtain remuneration from the
exploitation of his works by third parties.
a. Economic rights
b. Moral rights
c. Material rights
d. Intellectual rights

237. It refers to a type of right provided by a copyright which makes it possible for the creator to undertake measures
to maintain and protect the personal connection between himself and the work.
a. Economic rights
b. Moral rights
c. Material rights
d. Intellectual rights
238. Which of the following is not an example of moral rights granted by a copyright to the creator or original work?
a. Right of attribution
b. Right of alteration
c. Right of integrity by objecting to any prejudicial distortion
d. Right to restrain the use of his name
e. Right to rental income
239. Rose commissioned Jack to paint her nude body. Who owns the painting of nude body of Rose?
a. Jack
b. Rose
c. Both Jack and Rose
d. Neither Jack nor Rose
240. Rose commissioned Jack to paint her nude body. Who owns the copyright over the painting of nude body of
Rose?
a. Jack
b. Rose
c. Both Jack and Rose
d. Neither Jack nor Rose
241. Jane Santos is an employed scriptwriter of ABS CBN Co. As part of her regularly assigned duties, she was able to write the
script of the movie One More Chance. Who owns the copyright over the script?
a. Generally Jane Santos in the absence of express or implied agreement to the contrary
b. Generally ABS CBN in the absence of express or implied agreement to the contrary
c. Always Jane Santos
d. Always ABS CBN
242. Cris Reyes is an employed reporter of GMA7. During his breaktime, Cris was able to write a novel titled True Love using
the laptop and printer of GMA7. Who owns the copyright over the novel?
a. Generally Cris Reyes in the absence of express or implied agreement to the contrary
b. Generally GMA7 in the absence of express or implied agreement to the contrary
c. Always Cris Reyes
d. Always GMA7
243. Which of the following works is not copyrightable?

a. any official text of a legislative, administrative or legal nature, as well as any official translation thereof
b. computer programs
c. drawings or plastic works of a scientific or technical character
d. lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other
material form
244. Which of the following works is copyrightable?

a. news of the day and other miscellaneous facts having the character of mere items of press information
b. any idea, procedure, system, method or operation
c. concept, principle, discovery or mere data as such
d. musical compositions, with or without words
245. It consists of unauthorized use of original work without proper consent and attribution to the owner of the original work.
a. Plagiarism
b. Infringement of copyright
c. Misappropriation of copyright
d. Protection of copyright
246. It refers to the defense in a suit in copyright infringement which pertains to a privilege to use the copyrighted material in a
reasonable manner without the consent of the copyright owner or as copying the theme or ideas rather than their
expression. It is an exception to the copyright owner's monopoly of the use of the work to avoid stifling the very
creativity which that law is designed to foster.
a. Doctrine Fair use
b. Doctrine of Unfair use
c. Doctrine of Inappropriate use
d. Doctrine of Authorized use

247. In the winding up or liquidation of a cooperative, to whom shall any cooperative's asset distributable to any creditor,
shareholder or member who is unknown or cannot be found be given?
a. To the city or municipality where the asset is located
b. To the federation or union to which the cooperative is affiliated with
c. It will be escheated in favor of the Republic of the Philippines.
d. To the members of the cooperative
248. In the winding up or liquidation of a cooperative, what will happen to the subsidies, donations, legacies, grants, aids and such
other assistance from any local or foreign institution whether public or private given to such dissolved cooperative?
a. It will be given to city or municipality where the asset is located.
b. It will be given to federation or union to which the cooperative is affiliated with.
c. It will be escheated in favor of the Republic of the Philippines.
d. It will be given to the members of the cooperative.
249. What is the number of cooperators or founders of a primary cooperative?

a. 15 or more natural persons
b. Not less than 5 but not more than 15 natural persons
c. 5 but not more than 10 natural persons
d. 10 or more natural persons
250. What is the maximum foreign investment or ownership in a cooperative?

a. 100%
b. 40%
c. 30%
d. 0%
-Nothing follows-

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CPA REVIEW SCHOOL OF THE PHILIPPINES

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

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87. Which of the following is an unsecured claim without priority?

88. Which of the following is an unsecured claim with priority?

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111. Which of the following is a function of Securities and Exchange Commission?

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CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 16 of 32

129. In which of the following instances is tender offer mandatory?

130. In which of the following instances is tender offer not mandatory?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 17 of 32

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 18 of 32

139. What are the requirements of tender offer?

140. It refers to the company subject of the tender offer.

144. Which of the following is not considered an insider?

145. Which of the following is not considered an insider?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 19 of 32

147. Which of the following acts considered insider trading is unlawful?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 20 of 32

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 21 of 32

164. What is the nature of the officer of a director?

165. Which of the following is a responsibility of a director of a corporation?

166. Which of the following is not a responsibility of a director of a corporation?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 22 of 32

169. Who shall be the chairman of the audit committee of a corporation?

171. To whom shall the compliance report directly?

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187. Which of the following acts is considered doing business?

188. Which of the following acts is not considered doing business?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 25 of 32

197. How is a patent as an intellectual property or right created or protected by law?

199. Which of the following is not a requisite of a patentable invention?

200. When is an invention considered new or novel?

201. What consist prior art?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 26 of 32

204. Which of the following is non-patentable?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 27 of 32

212. It means the unauthorized, replication or use of patented invention or process.

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 28 of 32

222. How is the right over a tradename created or protected by law?

223. What is the term and life of a trademark?

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234. How is a copyright over original work created or protected by law?

235. As a general rule, what is the term of copyright?

CPAR – Regulatory Framework for Business Transactions (RFBT 9412) Page 30 of 32

243. Which of the following works is not copyrightable?

244. Which of the following works is copyrightable?

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