Answer the questions like your client’s life, liberty, or property depends on it
“POSSIBLE” questions
Pages 267-588
Questions are from the code, the book, and
from osama bin ladia
Total Questions: 166
Most of the suggested answers has reference
Good luck!
A. sale or other disposition of assets (4Qs)
1. when is the sale or other disposition of asset
be deemed substantially all the corporate
property?
2. when does the procedure and requirements
set forth by sec 40 does not apply?
3. in transfer of a corp of all of its assets to
another corp, render the transferee liable for
the debts of the transferor?
4. give the exception
B. power to acquire own shares (5Qs)
1. May a corp acquire its own share?
2. what is the restriction in reacquiring its own
share?
3. may a corp acquire its own share without
unrestricted retain earnings?
4. for what purpose may a corp purchase its
own shares
5. if the shares is reacquired what happens
C. power to invest corporate funds in another
corp or business or for any other purpose (3Qs)
1. what is needed if the investment is other
than the primary purpose?
2. what if it is connected to its primary
purpose?
Understanding the question is half an answer – Socrates
3. what is meant by MAY INVEST ITS FUNDS in
sec 42?
D. power to declare dividends (12Qs)
1. what are dividends?
2. types of dividends? define each
3. when to declare dividends?
4. corp A invest in corp B. corp B declared stock
dividends. Corp A wants to the dividends
obtained to corp B, to also declare it as
dividends. Does corp A need the consent of its
stockholders in declaring such?
5. what happens to cash dividends given to a
delinquent stockholder?
6. what happens to stock dividends given to a
delinquent stockholder?
7. may a corp retain surplus profits in excess of
100%?
8. is the declaration of dividends conclusive? Is
there any exceptions?
9. may dividends be revoked?
10. does transfer of shares, transfer any
dividends earned?
11. may the board be compelled to declare
dividends?
12. what happens in over issuance of shares? Is
it legal?
E. power to enter into management contract
(2Qs)
1. Is the voting requirements of a majority
stockholder ABSOLUTE?
2. what is the duration of management
contract?
F. ultra vires act of corporation (3Qs)
 Answer the questions like your client’s life, liberty, or property depends on it
1. ultra vires act of the corp, is it illegal?
2. when it is illegal?
3. what are the consequences of ultra vires act?
G. adoption of by-laws (4Qs)
1. does absence of by0laws automatically
dissolves the corp?
2. elements of a valid by law?
3. can the board amend the by laws?
4. when amended by law be effective?
H. stockholder’s meeting (7Qs)
1. when is the date of regular stockholder
meeting?
2. when is the date of special stockholder
meeting?
3. notice for regular meeting. Notice for special
meeting
4. may the notice requirement be lessen?
5. what is the effect to the act, if the notice
requirement is not complied?
6. requirements of a valid stockholder meeting
7. can stockholders hold a meeting outside phil?
I. directors’/trustess’ meeting (3Qs)
1. diff regular meeting to special meeting
2. who shall preside the meetings?
3. proxy allowed?
J. stockholder’s right to vote and manner of
voting (12Qs)
1. as a general rule, a shareholder can vote his
share the way he pleases, are there any
exceptions?
2. in pledged or mortgaged shares, who has the
right to vote?
Understanding the question is half an answer – Socrates
3. is/are there any case that, no one can
represent or vote the shares of an incapacitated
or deceased shareholder?
4. what if the shares are owned by two or more
persons jointly, how may the shareholders
vote?
5. may a co-owner of shares be proxied?
6. shareholder A, shareholder B, and
shareholder C, holds 10M shares and/or of
SMC. A wants to cast all his votes to Binay, B
wants to cast all his votes to Roxas, and C wants
to cast all of his votes to Du30. Is this possible?
Will there be a fractional shares/votes?
7. can proxy voting be denied?
8. what is the duration of proxy voting?
9. criteria of a voting trust agreement
10. does a VTA need to be notarized?
11. what is transferred in VTA?
12. May the corporation enforce the voting
trust agreements executed by its stockholders?
K. stock and stockholders (23Qs)
1. how may a person may become a stockholder
in a corporation
2. what is a subscription
3. what is a subscription contract
4. does a subscription contract needed to be in
writing?
5. what the effect to the subscriber if it is a
conditional subscription?
6. I will pay my subscription after sale of fish, is
it a valid conditional subscription?
7. on what consideration a stock may be paid?
8. May shares of stocks be issued without
consideration?
 Answer the questions like your client’s life, liberty, or property depends on it
9. what is the status of a stock that is issued
without consideration?
10. who are liable to for issuing watered stocks?
11. requisites of a valid certificate of stock?
12. Is the issuance of a certificate of stock
necessary to consider the subscriber a
stockholder?
13. Are there any instances when a stockholder
not be able to exercise his rights as such
stockholder
14. is a certificate of stock a negotiable
instrument?
15. why register the transfer of cert of stock?
16. proper remedy if the corp or the corp sec
refuses to record the transfer of stock?
17. modes of transfer of cert of stock?
18. does mortgage transfer a cert of stock?
19. a valid transfer but not registered to the
corp, is the transferee a stockholder?
20. can the transfer of cert of stocks be
regulated? May it be non-transferrable?
21. may a cert of stock be transferred by a
notarized deed?
22. is it possible to transfer a cert of stock w/o
delivery and/or endorsement?
23. is there a time period when to register the
transfer of cert of stock?
L. forged and unauthorized transfers (3Qs)
1. differentiate forged and unauthorized
transfers to unauthorized issuance of stock cert.
2. does the innocent purchaser of value in good
faith of forged or unauthorized transfer acquire
rights?
Understanding the question is half an answer – Socrates
3. if the corp issues certificates by virtue of
forged or unauthorized transfer, does the
innocent purchaser acquires rights as a
stockholder?
M. issuance of stock certificates (2Qs)
1. when to issue certificate of stocks?
2. are the stocks divisible?
N. watered stocks (2Qs)
1. how watered stocks are issued?
2. state the reasons why issuing watered stocks
is illegal?
O. enforcement of payment of subscription
(7Qs)
1. when subscriptions are to be paid?
2. what are the possible remedies available to
the corp to enforce payment of subscription?
3. after call of payment and the stockholder fails
to pay, what is his status?
4. who is the winning bidder in delinquency sale
of stocks?
5. what if there is no bidder?
6. what is the effect of delinquent stockholder?
7. procedure to obtain a new cert stock in case
of lost destroyed or stolen cert of stock
P. corp books and records (7Qs)
1. where are the corp books and records to be
kept?
2. what are the records to be kept?
3. what is a stock and transfer book?
4. how to inspect the books?
5. who will certify such statement if the paid up
capital is less then 50k?
 Answer the questions like your client’s life, liberty, or property depends on it
6. is the rights to inspect absolute?
7. may right to inspect the books be denied?
Q. merger and consolidation (4Qs)
1. what happens in merger of corps?
2. what happens in consolidation of corps?
3. how merger or consolidation commences?
4. what happens to the rights properties and
liabilities by the absorbed or consolidated
corps?
R. Appraisal Right (11Qs)
1. what is appraisal right?
2. when to exercise such right?
3. changing the principal address of the corp.
may a stockholder exercise his right to
appraisal?
4. what is the purpose of exercising such right?
5. is the enumeration in sec 81 exclusive?
6. how is the right exercised?
7. what is the effect of exercising such right?
8. may a stockholder who has not paid his
whole amount of subscription exercise such
right?
9. when the right of payment of such rights
ceases? Can the corp use this as an advantage?
How?
10. who bears the cost of appraisal?
11. what does the law require to the dissenting
stockholder who demands payment ffor the fair
value of his shares?
S. Non-stock corp (8Qs)
1. what is a non-stock corp?
Understanding the question is half an answer – Socrates
2. would the provisions governing stock corps
applies to non-stock?
3. is cumulative voting allowed?
4. purpose of non-stock corp?
5. may vote by proxy be denied?
6. is membership of a non-stock corp
transferable?
7. may the board of trustees be more than 15
persons?
T. close corps (15Qs)
1. what are the qualifying conditions to be
organized as a close corp?
2. What if 2/3 of the outstanding capital stock is
owned by another corporation which is also a
close corporation, will it be a close corporation?
3. what if the 2/3 of the voting stock is owned
by a corp that is not a close corp?
4. may a close corp classify its directors?
5. may a close corp provide for a greater
quorum of stockholders?
6. what is the liability of a director of a close
corp?
7. how to restrict the transfer of shares?
8. may a stockholder in close corp sell his shares
to 3rd persons?
9. 20 stockholders in a close corp, 2 strangers
obtained stocks. May this 2 strangers compel
the corp to register them as stockholders?
10. may a stockholder sell its shares to another?
11. if one dissented what is his recourse?
12. do pre-incorporation agreements be
survived by the corp?
13. in close corp, when a board meeting
unnecessary or improperly held be valid?
 Answer the questions like your client’s life, liberty, or property depends on it
14. may stockholders of a close corp pre-
emptive rights be denied?
15. what if there is a deadlock in voting of a
corp action.
U. Special corps (11Qs)
1. what are the types of special corps?
2. how is the board of an educ institution
instituted?
3. what are these religious corps?
4. are they required to file AoI to SEC? what
should the AoI contain?
5. are they required to indicate its term?
6. when does it acquire its juridical personality?
7. does a corp sole possess the same power
rights and privilege to own acquire and hold
real properties like an ordinary corp?
8. in corp sole, will the registration of the
property in the name of the corp sole vest unto
the head the ownership of the property?
9. If there is vacancy who will fill it up? What if
there is no successor?
10. may a court order dissolve a corp sole?
11. does religious societies required to file its
AoI to SEC?
V. dissolution (8Qs)
1. how may a corp be dissolved?
2. when a corp is dissolved can it continue to be
a juridical person?
3. modes of voluntary dissolution
4. grounds of involuntary dissolution
5. after dissolution, what next?
6. ways of liquidation be undertaken
Understanding the question is half an answer – Socrates
7. may a corp defend or prosecute cases
beyond 3 years given by the law?
8. after the 3 yr period, what happens to the
properties of the corp?
W. foreign corp (8Qs)
1. distinguish grandfather rule to control test or
liberal rule
2. if a foreign corp wants to do business in PH,
what it must do or obtain?
3. is a resident agent required to be assigned by
the foreign corp? why?
4. who may be a resident agent?
5. give the instances when a foreign corp can
sue or not, and if can be sued or not.
6. what constitutes doing business or
transacting business?
7. is an isolated transaction in pursuant of the
usual business constitutes doing business of
which it would bar the foreign corp to gain
access to PH courts?
8. if the foreign corp has exclusive distributor in
PH, does it constitute doing business ing PH?
Suggested “ANSWER/S”
A.
1. when it will rendered incapable of continuing
the business or accomplishing the purpose for
which it was incorporated, sec 40
2. In case the sale is NOT covering all or
substantially all of the assets of a corporation as
to render it incapable of continuing the
business or accomplishing the purpose for
which it was incorporated; or if the proceeds
are to be used to continue the conduct of the
remaining business of the company; If the sale
is in the usual and regular course of business of
the company. Sec 40
 Answer the questions like your client’s life, liberty, or property depends on it
3. Generally where on corporation sells or
otherwise transfers all o its assets to another
corporation, the latter is not liable for the debts
and liabilities of the transferor. Edward j nell co
case page 271
4. (1) where the purchaser expressly or
impliedly agrees to assumes such debts; (2)
where the transaction amounts to a
consolidation or merger of the corporations; (3)
where the purchasing corporation is merely a
continuation of the selling corporation; and (4)
where the transaction is entered into
fraudulently in order to escape liability for such
debts. Edward j nell co case page 271
B.
1. Yes, sec 41
2. That the corp has unrestricted retained
earnings in its books to cover the share to be
purchase or acquire, sec 41
3. yes, a close corp can sec 105, redeemable
shares can be sec 8, and in case of deadlock sec
104
4. 1. To eliminate fractional shares arising out of
stock dividends; 2. To collect or compromise an
indebtedness to the corporation, arising out of
unpaid subscription, in a delinquency sale, and
to purchase delinquent shares sold during said
sale; and 3. To pay dissenting or withdrawing
stockholders entitled to payment for their
shares under the provisions of this Code. Sec 41
5. it becomes treasury shares sec 9
C.
1. consent and approval of stockholders are
necessary sec 42
2. only a board resolution is necessary sec 42
3. held by SEC to mean an investment in the
form of money, stock, bonds and other liquid
Understanding the question is half an answer – Socrates
assets and does not include real properties or
other fixed assets. Page 277
D.
1. corporate profits set aside, declared and
ordered by the BOARD to be paid to the
stockholder. page 283
2. cash- payable in lawful money, property- pain
in form of property, and stock- corporation’s
own shares of stock out of the remaining
unissued shares which would require the
approval of the stockholders representing 2/3
of the outstanding capital stock at a regular or
special meeting duly called for that purpose.
This is to be valued at par value or issue price
sec 43
3. when the corp has unrestricted retained
earnings sec 43
4. no, it’s a property dividend sec 43.
5. it shall first be applied to the unpaid balance
on the subscription plus costs and expenses sec
43
6. it shall be withheld until his subscription is
fully paid sec 43
7. yes in corporate expansion projects or
programs approved by the board, or when the
corp is prohibited under any loan agreement
with any financial institution or creditor, or
when it can be clear;y shown that such
retention is necessary under special
circumstances obtaining in the corp
8. yes. Except when they act in bad faith or for a
dishonest purpose or act fraudulently
oppressively unreasonably or unjustly or abuse
of discretion can be shown so as to impair the
rights of the complaining stockholders to their
just proportion of corp profits page 285
9. yes, if it has not been made public or
communicated to the stockholders. Vested
rights. page 285
 Answer the questions like your client’s life, liberty, or property depends on it
10. no, the dividends belongs to the owner of
the shares at the time of the declaration. page
285
11. yes, a stockholder of preferred share,
mandatory if earned, or if it exceeds 100% of
the paid up capital
12. when a corp issues shares beyond its
authorized capital stock, even in form of stock
dividends. It is illegal.
E.
1. Not only a majority but 2/3 of the
outstanding capital stock or 2/3 of the members
in a non-stock corporation would be required
for the approval of a management contract in
the following instances:
Where the stockholders representing the same
interest of either the managing and managed
corporation own or control more than 1/3 of
the total outstanding capital stock of the
managing corporation;
and Where a majority of the members of the
board of directors of the managing corporation
also constitute a majority of the directors of the
managed corporation
Where the contract would constitute the
management or operation of all or substantially
all of the business of another corporation,
whether such contracts are called service
contracts. If it will not constitute the
management of all or substantially all of the
business of another corporation the first
paragraph of section 44 will apply and not that
of the second, that is, only the vote of the
stockholders holding or representing at least a
majority of the outstanding capital stock or
majority of the members in the case of non-
stock corporation will be required. Sec 44
2. not more than 5 years, except in exploration,
development, exploitation or utilization of
natural resources. Sec 44
Understanding the question is half an answer – Socrates
F.
1. Ultra-vires acts which are not illegal per se
may become binding and enforceable either by
satisfaction, estoppels or equitable grounds sec
2. when the subject matter is illegal
3. on the corp- The proper forum, in accordance
with the provisions of PD 902-A, as amended
and R.A. No. 8799 may suspend or revoke, after
proper notice and hearing, the franchise or
certificate of registration of the corporation for
serious misrepresentation as to what the
corporation can do or is doing to the great
damage or prejudice of the general public
On the rights of stockholder- A stockholder may
bring either an individual or derivative suit to
enjoin a threatened ultra-vires act or contract. If
the act or contract has already been performed,
a derivative suit for damages against the
directors may be filed, but their liability will
depend on whether they acted in good faith
and with reasonable diligence in entering into
the contract
On the immediate parties- The courts have not
agreed as to the legal effect of a corporate
contract outside of its authorized business but
Ballatine gives the following summary of the
doctrines evolved:
If the contract is fully executed on both sides,
the contract is effective and the courts will no
interfere to deprive either party of what has
been acquired under it
If the contract is executory on both sides, as a
rule, neither party can maintain an action for its
non-performance
Where the contract is executor on one side
only, and has been fully performed on the
other, the courts differ as to whether an action
will lie on the contract against the party who
has received benefits of performance under it.
Majority of the courts, however, hold that the
 Answer the questions like your client’s life, liberty, or property depends on it
party who has received benefits from the
performance is estopped to set up that the
contract is ultra-vires to defeat an action on the
contract. This is more in conformity with the
doctrine that no person shall be allowed to
enrich himself at the expense of another. Page
291
G.
1. no, it is merely a ground. Loyola grand villas
case page 304
2. it must not be contrary to law- el hogar case,
it must not be inconsistent with the AoI, it must
be general and uniform in its effect, it must not
impair obligations and contracts or vested
rights- gokongwei case, it must be reasonable.
All in page 317
3. yes they may, if they are granted such power
baretto case. Page 154
4. upon approval of SEC. sec 48
H.
1. fixed by the by-laws or in april because april
is the month where the audited financial
statement have been prepared sec 50
2. at any time necessary or as provided by the
by-laws sec 50
3. 2 weeks prior the meeting. 1 week prior the
meeting sec 50
4. yes, by a by-law provision sec 50
5. voidable, subject to ratification sec 50
6. it must be held on the date fixed in the by
laws or in accordance with law, prior notice
must be given page 319 it must be held at the
proper place sec 51 it must be called by the
proper party sec 50 last par quorum and voting
requirement must be met sec 52
7. no. for stock corp, within city or municipality
where the principal office of the corp. for non
Understanding the question is half an answer – Socrates
stock anywhere within phil as provided by the
by laws and proper notice. Sec51 sec 93
I.
1. those held monthly or provided by the by-
laws. Those that are held at any time upon call
of the president or the person authorized
provided by the by-law sec 53
2. shall be presided by the president at all
meetings, unless otherwise provided by the by
laws
3. proxy voting is not allowed because he his
elected because of his expertise in management
or in doing business such that he is expected to
personally attend and vote on matters brought
before the meeting. Business judgment rule
J.
1. non-voting shares are not entitled to vote
except in those instances provided in sec 6
Treasury shares have no voting rights while they
remain in the treasury sec 57 shares of stock
declared delinquent are not entitled to vote at
any meeting sec 67 unregistered transferees of
shares of stock sec 63
2. the pledger or mortgagor is entitled to vote
in absence of an agreement to the contrary. Sec
55
3. yes, absence of appointment of the court,
nobody can represent or vote the shares of
such shareholders. Sec 55 page 329
4. they must vote jointly, in order that the
shares may be voted, they must agree upon the
vote
5. yes they it may, consent of the other co-
owners are required, however, it is not required
if there is a written proxy signed by all co-
owners or when the shares are owned in an
and/or capacity where any one of the joint
owners can vote the shares or appoint a proxy
thereof. Sec 56
 Answer the questions like your client’s life, liberty, or property depends on it
6. yes it is possible. No there will be no
fractional votes/shares, as it is a fact that SMC
has to vote 15 members of the board. 10 x 15 =
150. 150 / 3 = 50. A, B, and C are entitled to
50M votes. Ladia tricky question
7. in stock corp, no they cannot be denied. It is
absolute, a right granted by law. Sec 58. In non-
stock corp, yes they may. Sec 89
8. maximum of 5 years. Sec 58
9. That the voting rights of the stock are
separated from the other attributes of
ownership; That the voting rights granted are
intended to be irrevocable for a definite period
of time; and That the principal purpose of the
grant of voting rights is to acquire voting control
of the corporation lee vs ca page 156
10. yes sec 59
11. only legal ownership is transferred sec 59
12. No. because the corp is not a privy to the
contract. Rights liabilities of a stockholder are
there in their individual capacity- corporate
entity theory.
K.
1. By a contract of subscription with the
corporation;
By purchase of treasury shares from the
corporation; and
By purchase or acquisition of shares from
existing stockholders page 339
2. the mutal agreement of the subscriber to
take and pay for the stocks of a corp page 339
3. sec 60
4. no, salvatierra case
5. the effect is that, it does not make the
subscriber a stockholder or render him to pay
the amount of his subscription, until
Understanding the question is half an answer – Socrates
performance or fulfillment of the condition
page 339
6. no condition to pay is solely on the will of the
debtor trillana vs qc inc page 340
7. sec 62.
8. stocks may not be issued without
consideration for the following reasons: (1) it is
discriminatory against other stockholders; and
(2) it prejudices the rights of creditors. National
exchange co vs dexter page 345 trust fund
doctrine
9. it will be considered as watered stocks sec 65
10. the director consenting its issuance sec 65
11. It must be signed by the president or vice-
president and countersigned by the secretary or
assistant secretary; It must be sealed with the
corporate seal; and the entire value thereof
together with interest or expenses, if any
should have been paid. Page 347
12. NO, shall be considered a stockholder even
without a certificate of stock page 348
13. Declared delinquent/When he exercises his
appraisal right sec 71 sec 83
14. no its quasi negotiable, it may be
transferred by endorsement coupled with
delivery page 348
15. To enable the corporation to know who its
stockholders are;
To enable the transferee to exercise his rights
as stockholders;
To afford the corporation an opportunity to
object or refuse registration of the transfer in
case allowed by law;
To avoid fictitious and fraudulent transfers; and,
To protect creditors who have the right to look
upon stockholders, in case of no-payment or
 Answer the questions like your client’s life, liberty, or property depends on it
watered shares, for the satisfaction of their
claims. Page 349
16. mandamus page 348
17. endorsement with delivery or duly notarized
deed sec 63
18. no, it is merely a security of a loan.
Monserrat case page 351
19. no it must be registered. The transfer is only
valid to the parties, the corp is not binded until
it is to be registered unson case page 356
20. yes it may, a reasonable agreement of the
parties, and it is also a protection of the corp, as
well as of the individual parties to the contract,
and is reasonable as to the length of time of the
suspension of transfer. No the restraint of
trade, suspending the power to sell the stock is
an illegal stipulation. Padgett case page 358 and
Lambert case page 360
21. yes it is, provided that there was no
certificate of stock issued by the corp page 350
endorsement only no delivery
22. yes it is, provided that the transferor is a
stockholder of the corp and has custody voer
the cert. tan case 376
23. no there is none, the law does not state that
the right to register such transfer shall be
immediately or within a definite period. The
existence of a right is one thing, and the
duration of said right is another. Won vs
wackwack case 379
L.
1. In the former, what is forged or unauthorized
is the transfer of the certificate from the true
and lawful owner to another person. While the
latter refers to the act of the corporation in
issuing the certificate, either fraudulently or by
mistake. Page 383
Understanding the question is half an answer – Socrates
2. no it will have no rights as against the lawful
owner by virtue of the doctrine of non
negotiability of cert of stock. Page 383
3. yes, since the corp will be estopped to deny
the validity thereof, page 383
M.
1. when the full amount of the subscription
together with interest and expenses has been
paid.
2. no they aren’t. page 384
N.
1. For a monetary consideration less than its par
or issued value;
For a consideration in property, tangible or
intangible, valued in excess of its fair market
value;
Gratuitously or under an agreement that
nothing shall be paid at all; or
In the guise of stock dividends when there are
no surplus profits of the corporation. Page 387
2. Corporation is prejudiced
Stockholders, dilution of interest
Creditors are prejudiced, virtue of right to look
upon corporations properties for the
satisfaction of their claims page 388
O.
1. on the date fixed in the contract of
subscription or the date that may be specified
by the board of directors pursuant to a call
declaring any or all unpaid portion page 389
2. sec 67 to 69 board action and sec 70
collection case
3. he is a delinquent stockholder sec 67
 Answer the questions like your client’s life, liberty, or property depends on it
4. the bidder who offers the full amount for the
smallest number of shares is the winning
bidder. Page 392
5. sec 68 last paragraph provided it has
unrestricted retained earnings sec 41
6. sec 71
7. sec 73
P.
1. sec 74 1st par.
2. sec 74 2nd par.
3. sec 74 penultimate par
4. written request to the corp sec 75
5. sec 75 last par.
6. as to a stockholder, no, they may be validly
be denied of inspection. As to a director, no
they cannot be denied page 410
7. yes, they may not gain access to highly
sensitive and confidential information.
Gokungwei case page 415, that the person
demanding has improperly used any info
secured through any prior examination of the
records or minutes of such corp or of any other
corp, that he was not acting in good faith or for
a legit purpose in making his demand or the
right is limited or restricted by special law or the
law of its creation Gonzalez vs pnb case page
417
Q.
1. a union effected by absorbing one or more
existing corps by another which survives and
continues the combined business page 425
2. uniting of two or more existing corps to form
a new corp page 4216
3. sec 76 and 77
Understanding the question is half an answer – Socrates
4. all rights properties and liabilities are
acquired by the surviving corp assoc bank vs ca
page 427
R.
1. sec 81
2. sec 81
3. no, it must be changing or affecting the rights
of a stockholder sec 81
4. to protect the property rights of dissenting
stockholders from actions by the majority
shareholders which alters the nature and
character of their investment. Page 430
5. no sec 42 investment to another corp, and
purchase of shares at par value sec 105
6. sec 82
7. sec 83
8. yes by reconciling sec 72 sec 82 and sec 86
9. sec 84 when the corp gives its consent to
withdrawal of such right. Yes the corp may use
it. When shareholder A uses his appraisal rights
for reasons under the law jan 2016 because the
corp is going down. But with few changes and
determination of the management they manage
to turn the corp around and make it profitable
again. Shareholder wants to withdraw his
demand for payment, but the corp never gave
its consent. The corp plans to distribute 100M
of dividends. The worth of shareholder A is only
2M, if he be given dividends, He will be earning
more. The corp pays his appraisal right,
shareholder A cannot refuse such payment.
Belat niya, Ladia example.
10. sec 85
11. sec 86 to submit his certificate in order that
his accruing to said shares may be effectively
suspended. Page 433
S.
 Answer the questions like your client’s life, liberty, or property depends on it

1. sec 87 8. yes sec 98 if the corp or the existing

2. yes, absence of an applicable provision
governing that of non-stock, it would sec 87 2 nd
par
stockholders fails to exercise the option to
purchase, it can be sold to a third person
9. no. sec 96 max of 20 stockholders only.

3. generally no, but if such right is not limited, 10. yes, with consent of all the stockholders sec
broadened or denied, then it is possible grant 99
by the articles of incorporation or its by-law
11. rescission of the contract or he may use sec
provision sec 89
105 compel the corp
4. sec 88
12. yes sec 100. Pre-incorporation agreements
nd
5. yes it may sec 89 2 par survive and continue to be valid and binding if,
such be the intent of the stockholders, provided
6. no, they are personal to the holder, it is
that the agreement is not inconsistent with the
subject to its criteria sec 89 3rd par sec 36 par 6
articles of incorporation page 455
7. yes sec 92
13. sec 101
8. that he is a member, that majority of them
14. no it cannot as their pre-emptive rights of
must be residents of the phil, and other
the stockholders thereof is broadened to
qualifications provided for in the by-laws sec 98
include all issues without exception unless,
T. denied or limited by the articles of
incorporations sec 102 page 456
1. sec 96 that all the corp’s issued stock of all
classes, exclusive of treasury shares, shall be 15. sec 104
held of record by not more than a specified
U.
number of persons, not exceeding twenty, all
the issued stock of all classes shall be subject to 1. educ corp and religious corp. sec 106 sec 109
one or more specified restrictions on transfer
2. in a non-stock educ corp, multiples of 5
permitted, and the corp shall not list in any
between 5-15 in stock educ corp anywhere
stock exchange or make any public offering of
between 5-15. Sec 108 bp 232
nay of its stock of any class.
3. religious society and corp sole sec 109 sec
2. no, what is material is that the voting shares
110
must be 2/3 not the ownership of capital stocks
sec 96 4. yes, sec 111 and 112
3. still no, the corp must be a close corp sec 96 5. no because they are supposed to exist
forever page 472
4. yes it may, sec 97
6. upon filing its verified AoI. Midterm question.
5. yes it may, sec 97
Sec 112 page 472
6. they are liable as a general partner
7. no court order is required sec 113
7. sec 98 restriction in the articles and
restriction the by-laws and restriction on the
certificate of stocks

Understanding the question is half an answer – Socrates

 Answer the questions like your client’s life, liberty, or property depends on it
8. no it will no vest unto the head, as he is
merely acting as a guardian. Roman cath case
page 473
9. sec 114
10. no it cannot be. Separation of church and
state. Except in cases in which the purpose is
being carried out and is instead being used for
illegal purpose, police power
11. no. sec 116 keyword, “may”
V.
1. sec 117 or expiration of its term.
2. no, it ceases to be one, it will continue as a
body corporate for another period of 3 years
from the time it is dissolved but only for the
purpose of winding up its affairs and the
liquidation of its assets sec 122
3. sec 118 no creditors are affected (next to
impossible scenario).
sec 119 creditors are affected
sec 120 shortening its corporate term in re:
special amendments sec 37
4. sec 6 PD 902-A page 493. In cases of close
corps Sec 105
5. liquidation and winding up sec 122
6. page 513 by the corp through its BOD
By a trustee appointed by the corp
By appointment of a receiver
7. if there is a assignee trustee or appointee,
the corp can continue to prosecute suit/ defend
itself even beyond 3 years because he becomes
the legal owner of the rights of the assets and
properties conveyed to him. National abaca
case sumera case board of liquidators case
gelano case
Understanding the question is half an answer – Socrates
8. if there are no other claimants, it would be
escheated to the govt. according to ladia
lecture. Clemente case page 528 says otherwise
W.
1. "shares belonging to corporations or
partnerships at least 60% of the capital of which
is owned by Filipino citizens shall be considered
as of Philippine nationality," pertains to the
control test or the liberal rule. if the percentage
of the Filipino ownership in the corporation or
partnership is less than 60%, only the number
of shares corresponding to such percentage
shall be counted as Philippine nationality,"
pertains to the stricter, more stringent
grandfather rule. Narra nickel case gr no
195580 april 21 2014
2. it must obtain a license sec 125
3. yes sec 128, because he is the person whom
summons and other legal processes may be
served in all actions or legal proceedings against
such corp page 536
4. sec 127
5. foreign corp doing business in PH with
license can sue, foreign corp doing business in
PH w/o license cannot sue in Ph courts, foreign
corps not transacting business in PH w/o license
can sue.
Foreign corp transacting business in PH with
license can be sued, foreign corp transacting
business without a license can be sued, a
foreign corp not transacting business cannot be
sued in PH. Page 539
6.no general rule or governing principle,
applying the true test, however, seems to be
whether the foreign corp is continuing the body
or substance of the business or enterprise for
which it was organized or whether it has
substantially retired from it and turned it over
to another. Page 539
 Answer the questions like your client’s life, liberty, or property depends on it

7. no, isolated transactions does not constitutes

doing business that would deny them from
access to ph courts. Page 540 bulakhidas case

8. no, is an independent entity which buys and

then markets not only products of the
petitioner but also many other products bearing
equally well-known and established trademarks
and trade-names. le chemise lacoste case page
569

FIN.

Understanding the question is half an answer – Socrates