FATHER SATURNINO URIOS UNIVERSITY
ACCOUNTANCY PROGRAM
ACCOUNTING INTENSIVE REVIEW (AIR)
REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS
Topic: CORPORATION
228. What is the requirement before a stock transfer agent or
one engaged principally in the business of registering transfer
of stocks in behalf of a stock corporation to operate in the
Philippines?
a. There must be a license renewable annually
from SEC and payment of registration fees.
b. The agent must be a corporation.
c. The agent must be a sole proprietor.
d. The agent must be a partnership.
229. What is the effect if an officer or agent without justifiable
reason refuses to allow any director or stockholder to examine
and copy excepts from its corporate record or meetings?
a. Such officer or agent is liable for civil damages.
b. Such officer or agent is liable criminally for
violation of Corporation Code
c. Both A and B
d. Neither A nor B
230. The following are the persons given the right to inspect
corporate books, except
a. Any director, trustee, stockholder or member
b. Delinquent stockholder in all cases
c. Voting trust certificate holder
d. Stockholder of a sequestered company
e. Beneficial owner of shares
231. What is the period for the compliance by the corporation
of the demand by a stockholder of its most recent financial
statement?
a. Within 10 days from receipt of written demand
b. Within 20 days from receipt of written demand
c. Within 30 days from receipt of written demand
d. Within 60 days from receipt of written demand
232. When shall the board of directors present to the
stockholders the financial report of the operation of the
corporation for the preceding year which shall include
financial statements duly signed and certified by an
independent CPA?
a. In every special meeting called by the President
b. At the regular meeting of stockholders
c. At the end of the year
d. At the April 15 of the succeeding year
233. How much is paid-up capital of the corporation for the
financial statements to be required to be audited by CPA
under Corporation Code?
a. At least P50,000
b. At least P100,000
c. At least P1,000,000
d. At least P500,000
234. If the paid-up capital of the corporation is less than P50,
000, what minimum financial statements may be presented to
be stockholders?
a. At Least audited by CPA who is a sole practitioner
b. At least audited by a notary public
c. At least audited by a bid auditing film
d. At least certified under oath by the corporate
treasurer or other responsible officer
235. The following are the rights of stockholders to corporate
books and records except:
a. Right of inspection
b. Right to demand a list of stockholders
c. Right to duplication of trade secrets
d. Right to demand a detailed auditing of business
expenditures
e. Right to examine books of the corporations
subsidiary
f. Right to financial statements
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236. The following are the limitations on the right of
inspection, except:
a. The right must be exercised during reasonable
hours on business days.
b. The person demanding the right has not improperly
used any information obtained through any previous
examination of the books and records of the
corporation.
c. The demand is made in good faith or for legitimate
purpose.
d. The demand must always be made by the
stockholders only.
237. It refers to a business combination whereby one or more
existing corporations are absorbed by another corporation
which survives and continues the combined business. Merger
238. It refers to a business combination whereby two or more
existing corporations form a new corporation different from the
combining corporation? Merger
239. Which of the following is not a requisite for merger or
consolidation?
a. It must be approved by the board of each
corporation by majority vote.
b. There must be ratification by vote of stockholders
representing 2/3 of outstanding capital stock or
members.
c. There must be approval by the Securities and
Exchange Commission.
d. There must be consent or approval of the
creditors of the corporation.
240. When one corporation buys all the shares of another
corporation, what is the effect, as a general rule?
a. This will result automatically to merger.
b. This will result automatically to consolidation.
c. This will operate to dissolve the acquired
corporation.
d. The entities will maintain their separate entities
and one will not answer for the debts of the
other.
241. A corporation shall be liable to the liabilities of another
corporation in the following cases, except:
a. If the purchase was in fraud in creditors.
b. If the purchase results to control or significant
influence.
c. If there is an express assumption of liabilities.
d. If there is a consolidation or merger.
e. If the purchaser is merely a continuation of the
seller.
242. In which of the following types of acquisition shall be the
purchaser be liable to the debts of the acquiree?
a. Asset-level only which involves property only
purchase
b. Business-enterprise level which involves
business-enterprise level.
c. Equity level which involves share purchase.
243. The following are the legal effects of merger or
consolidation, except:
a. There is automatic assumption of the liabilities of the
absorbed corporation or constituent corporations
which are dissolved.
b. The absorbed or constituent corporations are ipso
facto dissolved by operation of law without necessity
of any further act or deed.
c. It permits the transfer of the assets to the purchaser
and the distribution of the consideration received in
a single operation.
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 d. It involves exchanges of properties, a transfer of the
assets of the constituent corporations in exchange
for securities in the new or surviving corporation but
neither involves winding up of the affairs of the
constituent corporations in the sense that their
assets are distributed to the stockholders.
e. Consent of the creditors is necessary and
required.
244. What is the affectivity date of the merger or
consolidation?
a. Date of submission of the articles of merger or
consolidation to the SEC.
b. Upon publication of the articles of merger or
consolidation.
c. 2 weeks after the publication of the articles of
merger or consolidation.
d. Date of issuance by SEC of certificate of merger
or consolidation.
245. It refers to the rights to demand payment of the fair value
of his shares, after dissenting from a proposed corporate
action involving a fundamental change in the corporation in
the cases provided by law. Appraisal right
246. The following are the instances where appraisal right is
available, except:
a. An amendment to the articles that has the effect of
changing or restricting the rights of shareholder, or
of authorizing preference over those of outstanding
shares or changing the term(shortening or
extending) of corporate existence.
b. Sale, encumbrance or other disposition of all or
substantially all of the corporate property or assets.
c. Investment of corporate funds in another corporation
or in a purpose other than the primary purpose.
d. Increasing or decreasing authorized capital
stock or incurring/increasing bond
indebtedness.
e. Merger or consolidations
f. In a close corporation, a stockholder may for any
reason, compel corporation to purchase his shares
when the corporation has sufficient assets in its
books to cover its debts and liabilities exclusive of
capital stock.
247. Which of the following statements concerning the
exercise of appraisal right is incorrect?
a. Payment may be made regardless of the
presence of unrestricted retained earnings of the
corporation.
b. The dissenting stockholder shall make a written
demand on the corporation within 30 days after the
date on which the vote was taken for the payment of
the fair value of his shares.
c. Price must be based on fair values as of day prior to
date on which vote was taken.
d. Stockholder must transfer his shares to the
corporation upon payment by the corporation.
e. The withdrawing stockholder must submit his shares
to the corporation for notation of being dissenting
stockholder within 10 days from his written demand.
248. If within 60 days from the approval of corporation action
by stockholders, the dissenting stockholder and the
corporation cannot agree on the fair value of the shares, who
shall determine the price of shares?
a. Three disinterested persons, one named by the
stockholder, one name by the corporation and
the third chosen by the two whose decision by
majority is binding and final.
b. The dissenting shareholder
c. The Securities and Exchange Commission
d. The Commercial Court
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249. How many days from the approval or decision of the
appraisers of stocks shall the amount be paid to the
dissenting shareholders? 30 days
250. What is the valuation date for the determination of fair
value of shares in the exercise of appraisal right?
a. Day on which the vote was taken
b. Subsequent day of the date on which the vote was
taken
c. Prior day of the date on which the vote was
taken
d. Date of declaration of dividends
251. The following are the effects of exercise of appraisal
right, except:
a. All rights accruing to such shares shall be
suspended from time of demand for payment of the
fair value of the shares until either the abandonment
of the corporate action.
b. The dissenting stockholder shall be entitled to
receive payment of the fair value of his shares.
c. Upon payment of the fair value of shares, all the
rights of dissenting stockholders are terminated and
not merely suspended.
d. If the dissenting shareholder is not paid the fair
value of the shares within 30 days from the award,
his voting and dividend rights shall be immediately
restored.
e. A dissenting shareholder who demands
payment of fair value of his shares is allowed to
withdraw from his decision even without the
consent of the corporation.
252. Who shall bear the cost and expenses of appraisal of the
fair value of the shares of a dissenting shareholder?
a. Dissenting stockholder unless stipulated
b. Always corporation
c. Always dissenting stockholder
d. Corporation except when the price offered by
the corporation approximates the fair value
determined by the appraiser.
253. It is a corporation where no part of its income is
distributable as dividends to its members.= Non stock
corporation
254. Which of the following are the requisites of a non-stock
corporation?
a. It does not have a capital stock dividend into shares.
b. No part of whose income is, during its existence,
distributable as dividends to its members, trustees,
or officers.
c. Bot A & B
d. Neither A nor B
255. Which of the following statement is true?
a. A stock corporation may be converted to Non-
stock Corporation by mere amendment of
articles of incorporation.
b. A non-stock corporation may be converted to Stock
Corporation by mere amendment of articles of
incorporation.
c. Both A & B
d. Neither A nor B
256. How can a non-stock corporation be converted to Stock
Corporation?
a. By mere amendment of articles of incorporation
b. By dissolving the corporation and forming a new
one
c. By contractual agreement among the shareholders
d. By amendment of by-laws
257. The following statements pertaining Stock Corporation
are correct, except:
a. Owners may deprive of the right to vote by proxy in
the articles or by-laws.
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 b. Owners cannot transfer their ownership unless
allowed by the articles or by-laws
c. Voting by mail or other similar means in the election
of the board may be authorized by by-laws with
approval of SEC.
d. Membership shall be terminated in the manner and
for the causes provided in the articles of
incorporation or by the laws.
e. Officers of the non-stock corporation may be elected
directly by the members unless otherwise provided
in the by-laws.
f. Cumulative voting is available in the election of
the members of the board.
258. Unless otherwise provided in the articles of incorporation
or by-laws, what is the number of the board of trustees?
a. It should be not less than 5 but not more than 15.
b. It should be not less than 5 but may exceed 15
as provided in the articles of incorporation or
by-laws.
c. It should be not less than 5 but not more than 10.
d. It should be not less than 5 but not more than 20.
259. What is the term of office members of the Board of
Trustees of Non-stock Corporation? 3 years
260. What is the location of the regular or special meetings of
members of a Non-Stock Corporation?
a. The place shall be in the principal office of the
corporation.
b. At any place even outside the principal office of
the corporation as long as provided in the by-
laws and within the Philippines.
c. The place shall be in the residence of the founding
members.
d. The place shall be in the residence of the President.
261. The following rules are applicable only to Non-Stock
corporation, except:
a. Prohibition against distribution of dividends.
b. Non-profit character of corporation.
c. The right to vote cannot be limited or even
denied in the articles of incorporation or by-
laws.
d. A corporation is not qualified to occupy the position
of trustee.
262. The order of priority for the distribution of Non-Stock
corporation’s assets in case of dissolution is provided below.
(No answer, just indication of priority)
a. All liabilities and obligations of the corporation shall
be paid, satisfied and discharged, or adequate
provision shall be made therefore.
b. Assets held by the corporation upon a condition
requiring return, transfer or conveyance, and which
condition occurs by reason of the dissolution, shall
be returned, transferred or conveyed in accordance
with such requirements.
c. Assets received and held by the corporation subject
to limitations permitting their use only for charitable,
religious, benevolent, educational or similar
purposes, but not held upon a condition requiring
return, transfer or conveyance by reason of the
dissolution, shall be transferred or conveyed to one
or more corporations, societies or organizations
engaged in activities in the Philippine substantially
similar to those of the dissolving corporation
according to a plan of distribution adopted pursuant
to the Corporation Code.
d. Assets other than those mentioned in the preceding
paragraphs, if any, shall be distributed in
accordance with provisions of the articles of
incorporation or the by-laws, to the extent that the
articles of incorporation or the by-laws, determine
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the distributive rights of members, or any class or
classes of members, or provide distribution.
e. In any other case, assets may be distributed to such
persons, societies, organizations or corporations,
whether or not organized for profit, as may be
specified in a plan of distribution adopted pursuant
to the Corporation code.
263. What is the required vote for the approval of the
resolution recommending a plan of distribution of Non-Stock
Corporation assets?
a. Approval by majority vote of the trustees and
ratification by stockholders representing 2/3 of
the members having voting rights.
b. Approval by majority vote of the trustees and
ratification by stockholders 2/3 of the members
having voting rights.
c. Approval by majority vote of the trustees and
ratification by stockholders 2/3 of the members
having voting rights
d. Approval by majority vote of the trustees and
ratification by stockholders 2/3 of the members
having voting rights
264. The following are the requisites of a close corporation,
except:
a. The number of stockholder may exceed 20.
b. Issues stocks are subject to transfer restrictions with
a right of pre-emption in favour of the stockholders
or the corporation
c. The corporation shall not be listed in the stock
exchange or its stocks should not be public offered.
d. At least 2/3 of the voting stocks or voting rights are
not owned or controlled by another corporation
which is not a close corporation.
265. The are the characteristics of a close corporation,
except.
a. Stockholders may act as directors without need of
election and therefore liable as directors.
b. Stockholders involved in the management of the
corporation are liable as directors.
c. Quorum may be greater than mere majority.
d. The corporate officers or employers may be
elected or employed directly by the stockholders
instead by the board of directors.
e. Transfers of stocks to others, which would
increase the number of stockholders to more than
the maximum are invalid.
f. Corporate actuations may be binding even without
a formal board meeting.
g. Preemptive right extends to all stock issues.
h. Deadlocks are settled by the SEC.
i. Stockholder is not allowed to withdraw and
exercise his appraisal right.
266. The following cannot be incorporated as a close
corporation, except
a. Mining companies
b. Retail business
c. Oil companies
d. Stock exchange
e. Banks
f. Insurance companies
g. Public utilities
h. Educational institution
i. Corporations vested with public interest
267. The following are the requisites for validity of restrictions
on transfers of shares of close corporation and
in order to bind purchaser thereof in good faith,
except.
a. It shall not be more onerous than granting the
existing shareholders or the corporation the option
to purchase the shares of the transferring
stockholders within the option period.
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 b. It must appear in the articles of incorporation.
c. It must be provided in the be-laws.
d. it shall be provided in the certificate of stock.
e. it shall prohibit the stockholder from selling
the shares.
268. The following are the effects where stockholders are
managers in a stock corporation, except.
a. There is no need to elect directors.
b. Stockholders concerned shall be deemed the
directors.
c. The stockholder shall have the same liabilities as
directors.
d. The stockholder is not personally liable for
corporate torts.
269. Unless otherwise provided in the by-laws, the following
actions by the directors of a close corporation even
without Board of Director’s meeting shall be valid.
a. Before or after such action is taken, written
consent thereto is signed be all the directors.
b. All the stockholders have actual or implied
knowledge of the action and make no prompt
objection thereto in writing.
c. The directors are accustomed to take informal
action with the express or implied acquiescence of
all the stockholders.
d. All the directors have express or implied
knowledge of the action in question and none of
them makes prompt objection thereto in writing.
e. The action of the director is in bad faith
against the close corporation and without the
knowledge of other directors.
270. If a board of director’s meeting of a close corporation is
held without proper call or notice, when is a
corporate action decided in that meeting deemed
ratified by a director who failed to attend?
a. if he promptly gives his written objection with the
corporate secretary after having a knowledge
thereof.
b. if the action is committed to defraud the
corporation.
c. if the action is outside the corporate powers of the
corporation.
d. if the action is within the corporate powers
and the absent directors failed to give his written
objection with the corporate secretary after
having knowledge thereof.
271. What is the nature of the preemptive right in a close
corporation?
a. its existence depends upon the provision of
articles of incorporation.
b. it is based on the provision in the by laws
c. it is absolute unless limited or curtailed by the
articles of incorporation.
d. it depends upon the contractual agreement.
272. What is the required vote for the ratification of the
amendment of the article of incorporation of a close
corporation?
a. always affirmative vote of at least 2/3 of the
outstanding capital stock whether with or without
voting rights.
b. always affirmative vote of at least 2/3 of the
outstanding capital stock whether with voting rights.
c. always affirmative vote of at least majority of the
outstanding capital stock whether with or without
voting rights.
d. affirmative vote of at least 2/3 of the
outstanding capital stock whether with or without
voting rights or of such greater proportion of shares as
may be specifically provided in the articles of
incorporation
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273. It happens when the directors of the stock holders of a
close corporation are so divided respecting the management
of the business and affairs of the corporation that the votes
required for any corporate action cannot be obtained and as a
result, business and affairs can no longer be conducted to the
advantages of the stockholder.
a. deadlock
b. equal
c. tie
d. same
274. Who has the authority to break the deadlock in a close
corporation?
a. president upon petition by any stockholder
b. chairman of the board upon petition by any
stockholder
c. founder upon petition by any stockholder
d. SEC upon petition by any stockholder
275. The following are the orders or actions that may be done
by the SEC in case of deadlock in a close corporation,
except?
a. cancelling or altering any provision contained in
the articles of incorporation, by laws, or any
stockholders
b. cancelling, altering or enjoying any resolution or
act of the corporation or its board of directors,
stockholders or officers
c. directing or prohibiting any act of the corporation
or its board of directors, stockholders, officers, or other
persons party to the action.
d. requiring the purchase at their fair value of shares
of any stockholder. Either by the corporation
regardless of the availability of unrestricted retained
earnings in its books, or by other stockholders
e appointing a provisional director
f. dissolving the corporation
g. granting such other relief as the circumstances
may warrant
h. render judgement convicting the corporate
officer for criminal violation of corporation code
276. He is an impartial person appointed by SEC in case of
deadlock in a close corporation who is neither a stockholder
nor a creditor of a close corporation or any subsidiary of
affiliate of such corporation. He is not a receiver or custodian
of a corporation but shall have all the rights and powers of
duly elected director of a close corporation.
a. Independent director
b. Provisional director
c. External director
d. Executive director
277. When may a stockholder of a close corporation exercise
is right of appraisal to compel the close corporation to acquire
his shares held at fair value which should not be less than
their par or issued value?
a. Only for those reasons enumerated under
Corporation wherein appraisal right is available.
b. For any reason regardless of the capital structure
of the close corporation.
c. For any reason provided that the corporation’s
total assets exceed total liabilities.
d. For any reason provided there are
unrestricted retained earnings.
278. When may a stockholder file a written petition to the SEC
to compel the dissolution of a close corporation?
a. Only if that stockholder’s written petition is ratified
by at least majority of the outstanding capital stock.
b. Only if that stockholder’s written petition is ratified
by at least 2/3 of the outstanding capital stock.
c. Whenever any of the acts of the directors,
officers or those in control of the close
corporation is illegal, fraudulent, dishonest, or
oppressive or unfairly prejudicial to the
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 corporation or any stockholder or whenever the
corporate assets are being misapplied or
wasted.
d. Only if that stockholder’s written petition is ratified
by at least ¼ of the outstanding capital stock.
279. It is a stock or non-stock corporation organized to provide
facilities for teaching or instruction and which requires
favourable recommendation by DEPED or CHED before its
articles of incorporation may be approved by SEC.
a. Educational corporation
b. Charitable corporation
c. Religious corporation
d. Civil corporation
280. What is the composition of board of trustees of non-stock
educational corporations?
a. It shall not be less than 5 but not more
than 15 regardless of the number.
b. It shall not be less than 5 but may
exceed 15.
c. It shall not be less than 5 but not more
than 15 but shall be in multiples of 5.
d. It shall not be less than 5 but not more
than 10.
281. Unless otherwise provide in the articles of incorporation or by-
laws, what is the normal term of office of Board of Trustees
of a non-stock educational institution?
a. 5 years
b. 3 years
c. 1 year
d. 2 years
282. 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. Corporation sole
b. Religious societies/corporate aggregate
c. Ordinary non-stock religious corporation
d. Charitable corporation
283. A non-stock corporation governed by a board but with
religious purposes.
a. Corporate sole
b. Religious societies/corporate
aggregate
c. Ordinary non-stock religious corporation
d. Charitable corporation
284. What is the required vote for the incorporation of
religious society as a corporate aggregate?
a. At least 2/3 of its membership.
b. At least majority of its membership.
c. At least 1/3 of its membership.
d. At least ¼ of its membership.
285 . How can a corporation sole be converted into a
corporate aggregate?
a. By mere amendment of articles of
incorporation
b. By dissolving the corporation and forming
a new one
c. By contractual agreement among the
shareholders
d. By amendment of by-laws
286. It refers to the extinguishment of the corporate franchise
and the termination of corporate existence.
a. Winding up
b. Dissolution
c. Liquidation
d. Elimination
287. The following are involuntary methods of dissolution.
Which one is voluntary?
a. Expiration of the corporate term
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b. Legislative dissolution
c. Failure to organize and commence business
within 2 years from the date of issuance of the
certificate of incorporation
d. Quo warranto suit against a defacto corporation
e. Minority stockholders’ suit for dissolution on
justifiable grounds
f. SEC dissolution upon filing of verified complaint
and after due notice and hearing
g. Shortening of the corporate term by
amending the articles of incorporation
288. When a corporation is voluntary dissolved by amending its articles
of incorporation to shorten its corporate term, when will the
corporation be deemed dissolved?
a. Upon approval of the amended articles of
incorporation or the expiration of the
shortened term, as the case may be, the
corporation shall be deemed dissolved
without any further proceedings, subject to
the provisions of this Code on liquidation.
b. There must be court order.
c. There must be decision by the SEC.
d. There must be approval by the corporate creditors.
289. What is the required vote for the voluntary dissolution of a
corporation?
a. Majority of the board of directors/trustees and
ratification of stockholders owning 2/3 of the
capital stock or majority of members.
b. 2/3 of the board of directors/trustees and
ratification of stockholders owning majority of the
capital stock or majority of members.
c. Majority of the board of directors/trustees and
ratifications of stockholders owning majority of
the capital stock or majority of members.
d. 2/3 of the board of directors/trustees and ratification
of stockholders owning 2/3 of the capital stock or
majority of members.
290. It refers to the process by which all the assets of the corporation
are converted into liquid assets in order to facilitate the
payment of obligations to creditors, and the remaining
balances, if any, is to be distributed to the stockholders or
members.
a. Incorporation
b. Dissolution
c. Liquidation
d. Elimination
291. After the dissolution of a corporation, what is the remaining period
of the corporate body?
a. 2 years from the time it is dissolved for the purpose
of liquidation of its corporate affairs
b. 3 years from the time it is dissolved for the
purpose of liquidation of its corporate affairs
c. 1 years from the time it is dissolved for the purpose
of liquidation of its corporate affairs
d. 4 years from the time it is dissolved for the purpose
of liquidation of its corporate affairs
292. Upon winding up of the corporate affairs, any asset distributable
to any creditor or stockholder or member who is known and
cannot be found shall be escheated and forfeited in favour of
the
a. Barangay where such property is located
b. Province where such property is located
c. City or municipality where such property is
located
d. National government
293. It refers to the reopening or reorganization. It contemplates a
continuance of corporate life in an effort to restore the
corporation to its former successful operation.
a. Incorporation
b. Dissolution
c. Liquidation
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 d. Rehabilitation
294. It is a corporation formed, organized or existing under any law
other than those of the Philippines and whose laws allows
Filipino citizens and corporation to do business in its own
country or state.
a. Domestic corporation
b. Resident corporation
c. Foreign corporation
d. Illegal corporation
295. In determining the nationality of a corporation in the Philippines,
whether domestic or foreign, what is the test applied by the
Corporation Code?
a. Incorporation test
b. Residency test
c. Control test
d. Grandfather rule test
296 296. How can a foreign corporation be allowed to transact or do
business in the Philippines?
a. By securing a license for that purpose from the SEC and a
certificate of authority from appropriate government
agency.
b. By submitting by-laws to the SEC
c. By registering with Department of Trade and Industry
d. By asking for permission from the Bureau of Internal Revenue
297. Which of the following can be considered a resident
agent of a foreign corporation?
a. An individual who must be of good moral
character and of sound financial standing,
residing in the Philippines
b. A domestic corporation lawfully transacting
business in the Philippines designated in a
written power of attorney to do a business in
the Philippines
c. Both A and B
d. Neither A nor B
298. The following are the grounds for revocation of license of
a foreign corporation, except
a. Failure to file annual reports required by the
Corporation Code
b. Failure to appoint and maintain a resident
agent
c. Failure to inform the SEC of the change of
residence of the resident agent
d. Failure to establish a branch in the Philippine
e. Failure to submit a copy of amended articles of
incorporation or by-laws or articles of merger or
consolidation
f. Failure to pay taxes, imposts and assessments
g. Engaging in business unauthorized by SE
h. Acting as dummy of a foreign corporation
299. What is the period for the submission of the General
Information Sheet of the Corporation to the SEC?
a. Within the 30 calendar days from the actual
annual stockholders’ or members meeting
b. Within the 60 calendar days from the actual
annual stockholders’ or members meeting
c. Within the 90 calendar days from the actual
annual stockholders’ or members meeting
d. Within the 120 calendar days from the actual
annual stockholders’ or members meeting
300. What is the period for the submission of the Audited
Financial Statements stamped “Received by the
BIR” of the Corporation to the SEC?
a. Within 30 calendar days after the end of the
fiscal years, as indicated in the Financial
Statements
b. Within 60 calendar days after the end of the
fiscal years, as indicated in the Financial
Statements
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c. Within 120 calendar days after the end of the
fiscal years, as indicated in the Financial
Statements
d. Within 120 calendar days after the end of the
fiscal years, as indicated in the Financial
Statements
301. Which of the following effects of lack of license on
the part of foreign corporation doing business in the
Philippines are correct?
a. It may not sue or intervene in any action in any
court of administrative agency of the
Philippines.
b. It may be sued on any valid cause of action
recognized in the Philippines.
c. Both A and B
d. Neither A nor B
302. Which of the following effects of lack of license on
the part of foreign corporation not doing business in
the Philippines are correct?
a. It may sue and be sued in any court or
administrative agency of the Philippines.
b. It may be sue and be sue only for isolated
transactions, as well as for those which are
casual or incidental thereto.
c. Both A and B
d. Neither A nor B
303. Under RA No. 7042 also known as Foreign
Investment Act of 1991, the phrase “doing business”
shall include the following, except
a. Soliciting orders, service contracts, opening
offices, whether called “liaison” offices or
branches.
b. Appointing representatives or distributors
domiciled in the Philippines or who in any
calendar year stay in the country for a period or
periods totaling one hundred eighty [180] days
or more.
c. Participating in the management, supervision or
control of any domestic business, firm, entity or
corporation of the Philippines.
d. Any other acts or acts that imply continuity of
commercial dealing or arrangements and
contemplate to that extent the performance of
acts of 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.
e. Mere investments as a shareholder by a
foreign entity in domestic corporation duly
registered to do business, and/or the
exercise of rights as such investor; nor
having a nominee director or officer to
represent its interest in such corporation;
nor appointing representative or distributor
domiciled in the Philippines which transacts
business on its own name and for its own
account.
304. Under RA No. 7042 also known as Foreign
Investment Act of 1991, the following are considered
Philippine National, except.
a. Citizen of the Philippines
b. A domestic partnership or association wholly
owned by citizen of the Philippines
c. A corporation organized under Corporation
Code of the Philippines of which at least sixty
percent (60%) of the capital stock outstanding
and entitled to vote is owned and held by
citizen of the Philippines.
d. A corporation organized abroad and registered
as doing business in the Philippines under the
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 Corporation Code of which one hundred
percent (100%) of the capital stock outstanding
and entitled to vote is wholly owned by a
Filipinos or a trustee of funds for pension or
other employee retirement or separation
benefits, where the trustee is a Philippine
national and at least sixty per cent (60%) of the
fund will accrue to the benefit of Philippine
nationals.
e. Another corporation owned by another SEC-
registered corporation and non- Filipino
nationals provided at least sixty pecent (60%)
of the capital stock outstanding and entitled to
vote of each of both corporations must be
owned and held by citizen of the Philippines
and at least (60%) of the members of the board
of the directors of each of both corporations
must be citizen of the Philippines.
f. A corporation organized abroad and 60%of
the outstanding capital stock is owned by
Filipino nationals.
305. What is the requirement before a non-Philippine
national as defined by RA No. 7042 be allowed to do
business in the Philippines?
a. It must registered first before DTI for sole
proprietorship o SEC for copulation an
necessary license to to appropriate
government agency.
b. It must obtain permit first before the
Department of Finance.
c. It must obtain permit first before the office of
the Precedent.
d. It must obtain permit first before the office of
the Department of Foreign Affairs.
306. For purposes of computing the minimum percentage
to be owned by Philippine Nationals in investment
areas/ activities reserved to Philippine Nationals,
what class of stocks shall be considered?
a. Preferred stocks only.
b. Common stocks only.
c. Common stocks and preferred stocks if the
latter have voting rights in the election of
Boards of Directors.
d. Common stocks and preferred stocks even if
the latter have no voting rights in the election f
the Board of Directors.
307. What is the penalty for criminal violation of the
Corporation Code?
a. Fine not less than P1, 000 but not more than
P10,000 or by imprisonment for not less
than 30 days but not more than 5 years or
both.
b. Fine not less than P10, 000 but not more than
P100, 000 or by imprisonment for not less than
60 days but not more than 3 years or both.
c. Fine not less than P 100,000 but not more than
1,000,000 or by imprisonment for not less than
20 years but not more than 2 years or both.
d. Fine not less than P1, 000,000 but not more
than P10, 000,000 or by imprisonment for not
less than 9- days but not more than 10 years or
both.

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