A. Incidental power
B. Express power
C. Implied power
D. Discretionary power
3. D As regards treasury shares, which is not correct?
A. Proxy
B. Share of stock
C. Voting trust agreement
D. Certificate of stock
7. A These are the persons who sign the articles of incorporation and therefore must be subscribers of shares
A. Incorporators
B. Directors
C. Stockholders
D. Corporate officers
8. B They provide and regulate the internal matters of the corporation
A. Articles of incorporation
B. By-laws of the corporation
C. Certificate of incorporation
D. Certificate of filing of by-laws
9. B This is a public instrument giving authority to vote for stockholder
A. Proxy
B. Voting trust agreement
C. Stock certificate
D. Voting trust certificate
10. C A gratuitous reissue of treasury shares will result in
A. Capital surplus
B. Stock dividend
C. Watered stock
D. Property dividend
11. B A certificate of stock is not a negotiable instrument because it lacks the requirement of
A. True, false
B. False, true
C. True, true
D. False, false
15. B The following are requirements for incorporators. Which is not?
A. Domicile test
B. Incorporation test
C. Management test
D. Control test
20. D S1: Directors as a rule are entitled to compensation as directors but not exceeding ten percent of the net income before tax of the
preceding year
S2: All private corporations in the Philippines shall be incorporated under the Corporation Code, which is a general law
A. Only S1 is false
B. Both are true
C. Both are false
D. Only the first is true
24. A Vacancy in the board of directors can be filled up by the remaining directors in the following cases, except.
A. Only S1 is true
B. Only S1 is false
C. Both are true
D. Both are false
28. D A subscribed to 1,000 shares of stock of X corporation. She paid 25% of the said subscription. During the stockholders meeting,
can A vote all her subscribed shares?
A. Preferred shares
B. Redeemable shares
C. Treasury shares
D. Common shares
35. C The executive committee cannot act on this matter except
A. Industrial companies
B. Insurance companies
C. Trust companies
D. Public utilities
37. B The corporation has a nine-member board. Two of the members have sold their shares while two others are abroad. To have a
quorum, the number required is
A. Seven
B. Five
C. Three
D. Four
38. C S1: A majority of the directors or trustees of all corporations organized in the Philippines must be citizens of the Philippines
S2: Any two or more positions may be held concurrrently by the same person, except that no one shall act as president and
secretary or as secretary and treasurer at the same time
A. Only S1 is true
B. Only S2 is true
C. Both are false
D. Both are true
39. D S1: When par value shares are issued above par, the premium or excess is to be considered as part of the legal capital
S2: Shares issued without par value shall be deemed fully paid and non-assessable and the holder of such shares shall not be
liable to the corporation or its creditors in respect thereto.
A. Stock dividend
B. Sale of capital assets
C. Sale of treasury stock
D. Property dividend
42. D They are issued to those who helped in incorporating the corporation or for services rendered in launching the welfare of the
same
A. Preferred shares
B. Stock in escrow
C. Founder's shares
D. Promotion stock
43. C A director of a corporation may be removed from the office by a vote of the stockholders representing
A. The subservience of minority stockholders to the wishes of the majority subject only to equitable restraints
B. The free and ready transferability of ownership
C. The shareholders are not liable for the debts of the business
D. The owner of succession the existence of the entirety is not affected by the personal vicissitudes of the individual stockholders
46. C One of the following does not require stockholder's approval
A. Shares of stock
B. Dividend
C. Capital
D. Certificate of stock
50. B The right of a corporation to exist as juridical person during its term as stated in the articles of incorporation despite the death of
any of its stockholders is
A. Right of existence
B. Right of succesion
C. Pre-emptive right
D. Right of redemption,
51. B A corporate doctrine which the stockholders are not personally liable for corporate debts
A. A minor
B. A corporation
C. Partnership
D. Foreigner
55. A A corporation code requires that
A. False, true
B. True, false
C. True, true
D. False, false
58. B An individual or a domestic corporation designated in a written power of attorney by a foreign corporation authorized to transact
business in the Philippines, on whom any summons and other legal processes may be served in all actions or other legal
proceedings against such corporation is called
A. Resident director
B. Resident agent
C. Receiver
D. Trustee
59. D The holder of non-voting shares shall nevertheless be entitled to vote on the following matter
A. If the corporation has commenced its business and subsequently become continuously inoperative for two years
B. If the corporation has ceased operations continuously for a period of at least 5 years
C. If the corporation did not commenced its business transactions for 2 years
D. If the corporation did not formally organize after incorporation
64. B The following defect will preclude the creation of even a de facto corporation
A. The incorporators of a certain number of them are not residents of the Philippines
B. Lack of certificate of incorporation from the SEC
C. Name of the corporation closely resembles that of a preexisting corporation and may deceive the public
D. There is actual use of corporate powers
65. D 1. The meetings of the BOD of a stock corporation may be held anywhere in the world
2. The meeting of the members of a non-stock corporation may be held anywhere within the Philippines
A. True, False
B. False, True
C. Both are false
D. Both are true
66. C (1) Appraisal right means that whenever the capital stock of a corporation is increased and new shares of stock are issued, the new
issue must first be offered to the stockholders in proportion to their existing shareholdings before subscriptions are received from
the general public
(2) Ultra vires acts are illegal and therefore void
(3) Certificate of incorporation is the document prepared by the persons establishing the corporation and filed with the SEC
containing the matter required by the Corporation Code
A. False, True
B. True, False
C. False, false
D. True, true
68. D Which of the following statement is correct
How much atleast shall be subscribed by the incorporators at the time of the incorporation?
A. P300,000
B. P350,000
C. P200,000
D. P250,000
71. C A,B,C,D,E and F, Filipino citizens , X,Y,Z, Amrican citizens, and R&S Japanese citizens agreed to form a domestic corporation with
an authorized capital stock of P1,000,000 divided into one hundred thousand shares with a par value of P10 per share. B
subscribed for 2,000 shares and he paid P12,000. X subscribed for 5,000 shares and he issued a promissory note in the amount
of P30,000. F joined the group but he did not subscribe for any number of shares.
A. 625,000
B. 62500
C. 6250
D. 625
72. A A,B,C,D,E and F, Filipino citizens , X,Y,Z, Amrican citizens, and R&S Japanese citizens agreed to form a domestic corporation with
an authorized capital stock of P1,000,000 divided into one hundred thousand shares with a par value of P10 per share. B
subscribed for 2,000 shares and he paid P12,000. X subscribed for 5,000 shares and he issued a promissory note in the amount
of P30,000. F joined the group but he did not subscribe for any number of shares.
A. No, because certificate of stock shall be issued onlyafter payment of the full amount of the subscription
b. No, because the 800 shares subscribed by him are already delinquent
C. Yes, because he can surrender the 800 shares to the corporation and limit his subscription to 1,200 shares only
D. Yes, because he has paid P12,000 representing the full value of 1,200 shares
73. D A,B,C,D,E and F, Filipino citizens , X,Y,Z, Amrican citizens, and R&S Japanese citizens agreed to form a domestic corporation with
an authorized capital stock of P1,000,000 divided into one hundred thousand shares with a par value of P10 per share. B
subscribed for 2,000 shares and he paid P12,000. X subscribed for 5,000 shares and he issued a promissory note in the amount
of P30,000. F joined the group but he did not subscribe for any number of shares.
Assuming that the corporation has been organized, how many shares can B validly vote in the election of the members of the
board of directors?
A. 2/3 vote of the board of directors and ratified by majority of the outstanding capital stock
B. Majority vote of the board of directors and ratified by majority of the outstanding capital stock
C. Majority vote of the board of directors and ratified by 2/3 of the outstanding capital stock
D. Majority vote of the board of directors and ratified by 2/3 of the stockholders
78. C (1) The doctrine of corporate opportunity rests on the unfairness of an officer or director of a corporation taking advantage of an
opportunity for his own personal benefit adverse to the corporation
(2) The by-laws must be filed with the SEC for the corporation to acquire juridical bpersonality