Corporation Code – General Provision – Activity 1

1. It is an artificial being created by operation of law, having the right of succession

and the powers, attributes and properties expressly authorized by law or incidental to
its existence.
a. Corporation sole
b. Corporation
c. Partnership
d. Sole proprietorship

2. I. A corporation is a juridical entity vested with a legal personality separate and

distinct from those acting for and in its behalf and, in general, from the people
comprising it.
II. Not every stockholder or officer can bind the corporation considering the
existence of a corporate entity separate from those who compose it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

3. I. Well-settled is the principle that the corporate 'mask may be removed or the
corporate veil pierced when the corporation is just an alter ego of a person or of
another corporation.
II. It is a basic principle in Corporation Law that a corporation has a personality
which is the same as the officers or members Who compose it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

4. The following are the Characteristics of a corporation, except:

a. It is an artificial being
b. Created by meeting of the minds
c. It has the right of succession
d. It has the powers, attributes and properties expressly authorized by law or incident
to its existence

5. It refers to any agency organized as a stock or non-stock corporation, vested with

functions relating to public needs whether governmental or proprietary in nature, and
owned by the Government directly or through its instrumentalities either wholly, or,
where applicable as in the case of stock corporations, to the extent of at least 51 per
cent of its capital stock.
a. Private corporation
b. Closed corporation
c. Government-owned or controlled corporation
d. Local government units
6. Two requisites must concur before one may be classified as a stock corporation,
namely:
I- That it has capital stock divided into shares
II. That it is authorized to distribute dividends and allotments of surplus and profits to
its members.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

7. The factors for the application of the doctrine of piercing the corporate veil are the
following, except:
a. Stock ownership by one or common ownership of both corporations
b. Identity of directors and officers
c. The manner of keeping corporate books and records
d. Identity of the stockholders

8. I. Any application of the doctrine of piercing the corporate veil should be done with
caution.
II. A corporation its powers through its board of directors and/or its duly
authorized officers and agents.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

9. The continuation of a corporation's legal status despite changes in ownership or

management.
a. Succession
b. Inheritance
c. Dissolution
d. Liquidation

10. I. Property acquired by a corporation is the property of stockholders or members.

II. A corporation exercises said powers through its board of directors and/or its
duly authorized officers and agents.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

11. Corporations which have capital stock divided into shares and are authorized to
distribute to the holders of such shares dividends or allotments of the surplus profits
on the basis of the shares held.
a. Non-stock corporation
b. Stock corporation
c. Corporation aggregate
d. Corporation by prescription

12. Is one where no part of its income is distributable as dividends to its members,
trustees, or officers.
a. Non-stock corporation
b. Stock corporation
c. Corporation aggregate
d. Corporation by prescription

13. I. The provisions governing stock corporation, when pertinent, shall be applicable
to non-stock corporations.
II. A non-stock corporation must have shareholders.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

14. I. Non-stock corporations can distribute 10% of their income to their members.
II. Non-stock corporations are organized for charitable, religious, educational,
professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or
similar purposes.
a. Only I is true
b. Only 11 is true
c. Both are true
d. Both are false

15. A private corporation which have accepted from the State the grant of franchise or
contract involving the performance of public duties but which are organized for profit
a. Government-owned or controlled corporation
b. Quasi-public corporation
c. De jure corporation
d. De facto corporation

16. A corporation created in strict or substantial conformity with the mandatory

statutory requirements for incorporation and the right of which to exist as a
corporation cannot be successfully attacked or questioned by any party even in a
direct proceeding for that purpose by the State.
a. Government-owned or controlled corporation
b. Quasi-public Corporation
c. De jure Corporation
d. De Facto Corporation
17. The due incorporation of any corporation claiming In good faith m be a
corporation, and its right to exercise corporate powers, shall not be inquired into
collaterally in any private suit to which such corporation may be a party.
a. Government-owned or controlled corporation
b. Quasi-public corporation
c. De jure corporation
d. De facto corporation

18. All persons who assume to act as a corporation knowing it to be without authority
to do so shall be liable as general partners for a debts, liabilities and damages
incurred or arising as a result thereof
a. Foreign corporation
b. Domestic corporation
c. Corporation by prescription
d. Corporation by estoppel

19. One which has exercised corporate powers for an indefinite period without
interference on the part of the government.
a. Foreign corporation
b. Domestic corporation
c. Corporation by prescription
d. Corporation by estoppel

20. A corporation incorporated under the laws of the Philippines.

a. Foreign corporation
b. Domestic corporation
c. Corporation by prescription
d. Corporation by estoppel

21. A corporation is formed, organized or existing under any laws other than those of
the Philippines and whose laws allow Filipino citizens and corporations to do business
in its own country or State.
a. Foreign corporation
b. Domestic corporation
c. Corporation by prescription
d. Corporation by estoppel

22. A corporation consisting of more than one member.

a. Open corporation
b. Close corporation
c. Corporation aggregate
d. Corporation Sole

23. A corporation consisting of only one member for the purpose of administering and
managing, as trustee, the affairs, property and temporalities of any religious
denomination, sec’t or church.
a. Open corporation
b. Close corporation
c. Corporation aggregate
d. Corporation sole

24. A corporation organized for religious purposes.

a. Ecclesiastical corporation
b. Close corporation
c. Corporation aggregate
d. Lay corporation

25. A corporation organized for charitable purposes.

a. Ecclesiastical corporation
b. Eleemosynary corporation
c. Civil corporation
d. Lay corporation

26. I. It acquires a judicial personality either by special law or a general law.

II. The general law under which a private corporation may be formed or organized
is the Revised Corporation Code.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

27. The stockholders or members mentioned in the articles of incorporation as

originally forming and composing the corporation and who are signatories thereof.
a. Corporators
b. Board of directors
c. Board of trustees
d. Incorporators

28. Is the governing body in a stock corporation.

a. Corporators
b. Board of directors
c. Board of trustees
d. lncorporators

29. Is the governing body in a non-stock corporation

a. Corporators
b. Board of directors
c. Board of trustees
d. lncorporators

30. Is a person who brings about or cause to bring about the formation and
organization of a corporation
a. Corporators
b. Promoter
c. Underwriter
d. lncorporators

31. Each share shall be equal in all respects to every other share except otherwise
provided in the articles of incorporation and stated in a certificate of stock.
a. Doctrine of indivisibility of shares
b. Doctrine of divisibility of shares
c. Doctrine of equality of shares
d. Doctrine of corporate opportunity

32. I - There shall always be a class or series of shares which have complete voting
rights.
II - The right to vote is inherent in and incidental to the ownership of corporate
stocks.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

33. I. it is settled that unissued stocks may not be voted or considered in determining
whether a quorum is present in a stockholders’ meeting.
II. Only stock actually issued and outstanding may be voted.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

34. I. In non-stock corporations, the voting rights does not attach to membership.
II. Members vote as persons, in accordance with the law and the bi laws of the
corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

35. I. One of the rights of a stockholder Is the right to participate in the control and
management of the corporation that Is exercised through his vote.
II. The right to vote Is a right Inherent in and Incidental to the ownership of corporate
stock, but as such is not a property right.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
36. A class of stock entitling the holder to vote on corporate matters, to receive
dividends after other claims and dividends have been paid (especially to preferred
shareholders), and to share in assets upon liquidation.
a. Common stock
b. Preferred stock
c. Treasury stock
d. Watered stock

37. Is one which entitles the holder thereof to certain preferences over the holders of
common stock.
a. Common stock
b. Preferred stock
c. Treasury stock
d. Watered stock

38. They may be purchased or taken up by the corporation upon the expiration of a
fixed period, regardless of the existence of unrestricted retained earnings in the books
of the corporation, and upon such other terms and conditions as may be stated in the
articles of incorporation, which terms and conditions must also be stated in the
certificate of stock representing said shares.
a. Par value stock
b. No par value stock
c. Redeemable stock
d. Class A stock

39. Shares with a value fixed in the articles of incorporation and the certificate of
stock.
a. Par value stock
b. No par value stock
c. Redeemable stock
d. Class A stock

40. The following are limitations on no par value shares, except:

a. It can be issued for a consideration of at least P300.
b. It is deemed fully paid and non-assessable.
c. The entire consideration for its issuance constitutes capital so that no part of it
should be distributed as dividends.
d. It cannot be issued as preferred shares

41. Shares classified in the articles of incorporation which may be given certain rights
and privileges (e. g. dividend payments) not enjoyed by the owners of other stocks.
a. Over-issued stock
b. Redeemable share
c. Convertible share
d. Founders' share
42. Are shares usually preferred, which by their terms are redeemable at fixed date, or
at the option of either issuing corporation, or the stockholder, or both at a certain
redemption price.
a. Over-issued stock
b. Redeemable share
c. Convertible share
d. Founders’ share

43. Subscriptions to the capital stock of a corporation constitute a fund to which the
creditors have a right to look for the satisfaction of their claims.
a. Trust fund doctrine
b. Doctrine of indivisibility
c. Doctrine of corporate opportunity
d. None of the above

44. Are shares of stock which have been issued and fully paid for, but subsequently
reacquired by the issuing corporation by purchase, redemption, donation or through
some other lawful means.
a. Treasury stock
b. Redeemable share
c. Convertible share
d. Founders’ share

45. Stocks issued for a consideration less than the par or issued price thereof or in
any other form other than cash valued in excess of its fair value.
a. Preferred stock
b. Watered stock
c. Optional share
d. Founders' share

46. I. Redeemable shares, once redeemed are retired unless reissuance IS expressly
allowed in the articles of incorporation.
II. The Corporation Code allows redemption of shares only if there are unrestricted
retained earnings on the books of the corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

47. I. The exclusive right to vote and be voted for in the election of directors must be
for a limited period not to exceed 5 years subject to the approval of the SEC.
II. Preferences granted to preferred stockholders gives them a lien upon the
property of the corporation nor make them creditors of the corporation.
a. Only l is true
b. Only II is true
c. Both are true
d. Both are false

48. I. The law provides that shares classified and issued as preferred or redeemable
shares may be deprived of voting right.
II. Each member shall be entitled to one vote unless so limited, broadened, or
denied in the articles of incorporation or by laws.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

49. Is one which has no preference and entitle the shareholder to a pro rata division of
the profits, if any.
a. Preferred stock
b. Common stock
c. Voting share
d. Non-voting share

50. Shares without a right to vote.

a. Preferred stock
b. Common stock
c. Voting share
d. Non-voting share