Jubilee M.

Tiongson-Mission
Corporation Reviewer 1. One of the theories on the formation of a Corporation stating that a Corporation is not merely an artificial being but more of an aggregation of persons doing business or an underlying business unit: a. Concession Theory b. Genossenschaft Theory c. Theory of Corporate Enterprise d. Theory of Separate Corporate Personality An incorporators of a corporation must be: a. Not less than ten (10) nor more than fifteen (15) b. Not less than two (2) nor more than fifteen (15) c. Not less than five (5) nor more than fifteen (15) d. Not less than seven (7) nor more than fifteen (15) incorporators All of the following are the essential qualifications of an incorporator, except: a. Must be a citizen of the Philippines b. Must be a natural person c. Must be of legal age d. Must own or be a subscriber to at least one (1) share of the Capital Stock It is a corporation that is able to comply substantially with all the requirements of the law for its incorporation: a. De Facto Corporation b. Corporation by Estoppel c. De jure Corporation d. Corporation by Prescription It is the right of the stockholder to acquire any new shares to be issued by the corporation in proportion to his existing stockholding before such shares may be offered to others: a. Appraisal Right b. Pre-emptive Right c. Voting Right d. Right to Dividend It is a stock issued or a consideration less than its par value or issued value a. Treasury Stock b. Delinquent Stock c. Watered Stock d. Preferred Stock The following vacancies may be filled up by the vote of at least the majority of the remaining directors still constituting the quorum, except: a. By death b. By removal c. By resignation d. By disqualification The following are some of the important features of the board of directors of a stock corporation except: a. The number of the directors must be not less than five (5) nor more than fifteen (15) b. The majority of the directors must be residents of the Philippines c. The term of office of directors is one(1) year unless a valid holdover takes place d. All of the directors may be removed from office by a vote of 2/3 of the outstanding capital stock with or without cause A corporation has a personality of its own that is separate and distinct from its officers and stockholders: a. Doctrine of Corporate Entity b. Doctrine of Corporate Opportunity c. Trust Fund Doctrine d. Doctrine of Apparent Authority 10. The total shares of stock issued to subscribers or stockholders, except treasury shares: a. Capital Stock b. Subscribed Capital Stock c. Outstanding Capital Stock d. Paid-up Capital Stock 11. Unless the Code or the by-laws provide otherwise, quorum in stockholders or members meeting is: a. Two-third of the outstanding capital stock or members b. Majority of the outstanding capital stock or members c. At least sixty (60%) percent of the outstanding capital stock or members d. Fifty (50%) percent of the outstanding capital stock or members 12. All of the following are the characteristics of a proxy except: a. It must be in writing, signed by the stockholder and filed before the scheduled meeting b. It is not allowed in board meetings c. It must be notarized d. A continuing proxy with no fixed period or with a period exceeding 5 years shall be valid only for 5 years 13. X entered into a voting trust agreement with Y, the former transferring the legal title to all his shares to the latter in order to gain control in the corporation. May X run for a seat in the board of directors? a. Yes, as owner of at least one (1) share of stock, X is qualified to be elected as director b. No, X is disqualified to be elected as director because he no longer owns at least one (1) share in the corporation. Legal title to all his shares has already passed to Y c. Yes, the voting trust agreement does not remove the right of X to be elected as director d. Yes, both X and Y are qualified to be elected as directors in the corporation. 14. It is a document that serves as evidence of ownership of the shares of stock in a stock corporation a. Subscription contract b. Certificate of Indebtedness c. Certificate of Stock d. Bond debenture 15. It is a stock issued for a consideration less than its par value or issued value a. Preferred Stock b. Stock Split c. Watered Stock d. Treasury Stock 16. When does a stock become delinquent? a. When unpaid on due date stipulated in the subscription contract b. When the subscription is not paid in full within the 30-day grace period from due date specified in the subscription contract c. When the subscription is not paid in full within the 15-day grace period reflected in the subscription contract d. When the subscription is not paid in full within the 45-day grace period from due date shown in the subscription contract

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17. It is an action brought by one or more stockholders or members in the name and on behalf of the corporation for the protection or vindication of the rights of the corporation in case the management refuses to act or is the one being sued: a. Class Suit b. Individual Suit c. Derivative Suit d. Representative Suit 18. It is an action brought by a stockholder in behalf of himself and other stockholders who have the same cause of action against a corporation: a. Representative Suit b. Derivative Suit c. Class Suit d. Individual Suit 19. It is an action brought by a stockholder against the corporation flowing from his right as stockholder: a. Derivative Suit b. Class Suit c. Individual Suit d. Representative Suit 20. All of the following are valid considerations for the issuance of stock, except: a. Actual cash paid to the corporation b. Property (tangible and intangible) actually received by the corporation c. Promissory Notes d. Labor performed or services actually rendered to the corporation 21. The following rights of unpaid shares (which are not delinquent), except: a. Right to receive dividends b. Pre-emptive Right c. Right to examine company books and records d. Right to sell his shares of stock and be recorded in the corporation s stock and transfer book 22. Delinquent stocks are not entitled to the following rights, except: a. Right to vote and be voted b. Right to receive dividends c. Right to examine corporation books and records d. Pre-emptive Right 23. The following are the effects of the unregistered transfer of shares, except: a. It is invalid and not binding as between the transferor and the transferee b. It is invalid as to the corporation c. It is invalid as against the corporate creditors d. It is invalid as to the attaching or executing creditors of the transferor, as well as the subsequent purchaser in good faith without notice of the transfer. 24. All of the following are proprietary rights of a stockholder, except: a. Right to dividends b. Voting right c. Preemptive Right d. Appraisal Right

25. On corporate records, all the following statements are true, except: a. Any director, trustee, stockholder or member shall have the right to inspect the records during reasonable hours on business days b. The records must be kept at the place mandated by the board of directors c. The stockholder may demand a copy of the excerpts of the records or minutes d. The refusal to allow such right to inspect and to demand such copy shall subject the erring officer or agent to civil and criminal liabilities 26. It is an interest or right which the owners have in the management, surplus, profit, and on dissolution in all of its assets remaining after payment of debts: a. Stock dividend b. Unrestricted retained earnings c. Shares of Stock d. Bonds Payable 27. On certificate of stock issuance, the following statement are true, except: a. The certificate must be signed by the president or vice president, countersigned by the secretary or assistant secretary b. The certificate must be sealed by the corporate seal c. The certificate must be delivered d. The par value, as to par value share or full subscription as to no par value share must be partially paid 28. The following are modes of issuance of share, except: a. By subscription before or after incorporation b. By sale of treasury stock after incorporation c. By subscription to new shares of stock in case of increase in the capital stock d. By exchange or conversion of preferred shares to common shares 29. The following are the ways to become a stockholder of a corporation, except: a. Subscription contract with the corporation b. Purchase on acquisition of shares from existing stockholders c. By proxy d. Purchase of treasury shares from the corporation 30. On voting trust, the following statements are true, except: a. The trustee votes as an agent of the stockholders b. The agreement must be notarized c. The voting rights is divorced from the ownership of stock d. A trustee can vote and exercise all the rights of a stockholder even when the stockholder is present. 31. On the stockholder s exercise of appraisal right, all of the following statements are true, except: a. The dissenting stockholder must have voted against proposed action of the corporation b. Demand for payment must be made within 60 days from the date vote is taken thereon c. Price must be based on the fair value as of day prior to date on which vote was taken d. Submission by withdrawing stockholder of his shares to the corporation for notation of being dissenting stockholder, within 10 days from written demand

32. A dissenting stockholder may exercise his appraisal right in the following instances, except: a. Sale, encumbrance or other dispositions of all or substantially all of the corporate property or assets; b. Merger or consolidation c. Amendments of its articles of incorporation that has the effect of changing or restricting the rights of shareholders or of authorizing preferences over those of outstanding shares; d. Increasing or decreasing of capital stock 33. On Non-Stock Corporation, all of the following statements are true, except: a. It does not have capital divided into shares b. No part of its income is, during its existence, distributable as dividends to its members, trustees or officers c. A non-stock corporation may be formed for any eleemosynary purposes such as charitable, religious, civil service or similar purposes d. The term of the members of the Board of Trustees is two (2) years. 34. In a Close corporation, all of the following statements are true, except: a. The number of stockholders shall not exceed 30 b. Issued stocks are subject to transfer restrictions , with a right of preemption in favor of the stockholders or the corporation c. The stockholders may act as directors without need of election and therefore, are liable as directors d. Quorum may be greater than mere majority 35. All of the following cannot a close corporation, except: a. Banks b. Mining Companies c. Public Utilities d. Finance Companies 36. In a Close Corporation, it is a situation when the directors or stockholders are so divided respecting the management of the business and affairs of the corporation that votes required for any corporate action cannot be obtained: a. Lock-out b. Strike c. Deadlock d. Picket 37. In a Close Corporation, all of the following are the effects where the stockholders are the managers, except: a. No longer necessary to elect directors b. Stockholders concerned shall be deemed the directors c. The stockholders shall have the same liabilities as directors d. Being deemed directors the stockholders are nor personally liable for corporate torts 38. The term of office of the board of trustees in an educational corporation as a special corporations shall be: a. One (1) year b. Three (3) years c. Five (5) years d. Two (2) years 39. The term of office of the board of trustees of a non-stock educational corporation governed by the provisions on non-stock corporation shall be: a. One (1) year b. Five (5) years c. Three (3) years d. Two (2) years

40. It is a special form of corporation, usually associated with the clergy, consisting of one person only and his successors, who is incorporated by law to give some legal capacities and advantages: a. Religious societies b. Corporation Sole c. Corporation De Facto d. Corporation De Jure

1-C 2-C 3-A 4-C 5-B 6-C 7-B 8-D 9-A 10-C

ANSWER KEY 11-B 21-D 12-C 22-B 13-B 23-D 14-C 24-B 15-C 25-B 16-B 26-C 17-C 27-D 18-A 28-D 19-C 29-C 20-C 30-A

31-B 32-D 33-D 34-A 35-D 36-C 37-D 38-C 39-C 40-B