BM1905

QUIZ ON CORPORATION: GENERAL PROVISIONS

NAME: SECTION: DATE: SCORE:

MULTIPLE CHOICE: Encircle the letter of the correct answer. (25 items x 1 point)
1. Which of the following is NOT an attribute of a corporation?
a. It is an artificial being. c. It enjoys the right of succession.
b. It is created by entering into a contract, whether d. It has the powers, attributes, and properties expressly
oral or written. authorized by law or incident to its existence.
2. As an artificial being, which of the following constitutional rights is NOT available to a corporation?
a. Right to due process of law c. Right against unreasonable searches and seizures
b. Right to equal protection of the law d. Right against self-incrimination
3. Which of the following statements is CORRECT?
I. A corporation is not entitled to moral damages due II. A corporation can be held liable for a crime through
to it not being a natural person. penal sanction.
a. Statement I c. Both statements
b. Statement II d. None of the statements
4. Which of the following is NOT an advantage of forming a corporation?
a. It has a strong juridical personality. c. Its management is centralized, and there is ease in
b. It has a legal capacity to act and contract as a transferability of shares.
distinct unit in its own name. d. It is subject to greater degree of governmental
supervision.
5. Are the stockholders, directors, or officers personally liable for the liabilities of the corporation after the
assets of the corporation are exhausted?
a. Yes, because they are considered to be general c. Yes, under all instances
partners d. No as a general rule, unless exceptional cases warrant
b. No, under all instances the piercing of the veil of corporation entity
6. It is a corporation which has a capital stock divided into shares and are authorized to distribute to the
holders of such shares dividends or allotments or the surplus profits based on the shares held.
a. Non-stock corporation c. Open corporation
b. Close corporation d. Stock corporation
7. Which of the following best describes a lay corporation?
I. It is a religious organization governed by board. II. It is organized for a purpose other than a religion.
a. Statement I c. Both statements
b. Statement II d. None of the statements
8. HONDA Philippines is fully owned by Japanese nationals. Its main office is located in Tokyo, Japan, but
it was incorporated under the provisions of the Corporation Code of the Philippines. It engages its
business in the Philippines. What is the classification of the corporation under the Corporation Code?
a. Resident corporation c. Non-resident corporation
b. Foreign corporation d. Domestic corporation
9. Which of the following DOES NOT have juridical personality as a corporation?
a. Corporation by prescription c. Ostensible corporation
b. De facto corporation d. De jure corporation
10. It is a corporation established for business or profit.
a. Eleemosynary corporation c. Ecclesiastical corporation
b. Civil corporation d. Lay corporation
11. It is a corporation created in strict compliance with all the legal requirements and whose right to exist as
a corporation cannot be successfully attacked in a direct proceeding for that purpose by the State.
a. De jure corporation c. Corporation by estoppel
b. De facto corporation d. Corporation by prescription
12. One of the distinctions between a partnership and a corporation is that a partnership:
a. Is managed by a board of directors c. Has the right of succession
b. Is characterized by the principles of delectus d. May be dissolved only with the consent of the state
personae

05 Quiz 1 *Property of STI

Page 1 of 2
 BM1905

13. Which of the following is NOT an advantage of a corporation?

a. Centralized management c. Double taxation
b. Strong juridical personality d. Limited liability to investors
14. Which of the following corporations has 60% of outstanding capital stock as Filipino ownership
percentage?
a. Rural banks c. Corporations engaged in the pawnshop business
b. Educational corporations d. Corporations under the Flag Law
15. Which of the following corporations has 70% of voting capital stock as Filipino ownership percentage?
a. Rural banks c. Corporations engaged in the pawnshop business
b. Educational corporations d. Corporations under the Flag Law
16. Which of the following corporations has 75% of outstanding capital stock as Filipino ownership
percentage?
a. Rural banks c. Corporations engaged in the pawnshop business
b. Educational corporations d. Corporations under the Flag Law
17. Which of the following corporations has 40% of voting stock and 60% of outstanding capital stock as
Filipino ownership percentage?
a. Rural banks c. Corporations engaged in the pawnshop business
b. Educational corporations d. Corporations under the Flag Law
18. This refers to a corporation as a legal or juridical person with a personality separate and apart from its
individual stockholders.
a. Concession Theory c. Doctrine of Corporate Entity
b. Theory of Corporate Enterprise d. Grandfather Rule
19. Which of the following is NOT an attribute of a corporation?
a. It is an artificial being. c. It enjoys the right of succession.
b. It is created by entering into a contract, whether d. It has the powers, attributes, and properties expressly
oral or written. authorized by law or incident to its existence.
20. Which of the following is NOT a disadvantage of forming a corporation?
a. There is high cost and formation and operations. c. Its credit is weakened by the limited liability feature.
b. Stockholders have little voice in the conduct of the d. It makes feasible gigantic financial undertakings due to
business. numerous investors.
21. Which of the following legal principles best describes the strong juridical personality of a corporation?
a. Limited liability rule c. Business judgment rule
b. Separate entity theory d. Right of succession or continuity of existence
22. Are stockholders, directors, or officers personally liable for the liabilities of the corporation after the assets
of the corporation are exhausted?
a. Yes, under all instances c. No, under all instances
b. Yes, because they are considered to be general d. No as a general rule, unless exceptional cases warrant
partners the piercing of the veil of corporate fiction
23. It refers to a group of persons that assumes to act as a corporation knowing it to be without authority to
do so and enters into a transaction with a third person on the strength of such appearance.
a. De jure corporation c. Corporation by estoppel
b. Open corporation d. Corporation by prescription
24. It is a corporation established for or devoted to charitable purposes or those supported by charity.
a. Eleemosynary corporation c. Ecclesiastical corporation
b. Civil corporation d. Lay corporation
25. It is a corporation composed entirely of spiritual persons and is established for the furtherance of religion.
a. Eleemosynary corporation c. Ecclesiastical corporation
b. Civil corporation d. Lay corporation

05 Quiz 1 *Property of STI

Page 2 of 2