NAME:

YEAR and SECTION:

PART I – DISCUSSION/DISTINCTION (5 points each)

1. State and discuss the attributes of a Corporation.

2. Give at least 4 distinctions between Partnership and Corporation.
3. Distinguish De Jure Corporation from De Facto Corporation.
4. Distinguish Stock Corporation from Non-Stock Corporation.
5. Distinguish Public Corporation from Private Corporation.
6. Distinguish Ultra Vires Acts from Illegal Acts.
7. Distinguish Merger from Consolidation.
8. Discuss the concept of “Corporate Entity Theory”.
9. Distinguish Parent/Holding Company from Subsidiaries.
10. Distinguish Domestic Corporation from Foreign Corporation

PART II- TRUE OR FALSE. Write TRUE if the statement is true and FALSE if the statement
is false. (2 points each)

___________ 1. Subsidiaries are those corporations which are subject to common control and
operated as part of the system. They are sometimes called as “sister companies”.
___________ 2. Private corporations are defined as those formed and organized for the
government or a portion of the State or any of its political subdivisions and which have for
their purpose the general good and welfare.
___________ 3. Close corporations are those whose shares of stocks are held by limited
number of persons like the family or other close-knit group.
___________ 4. Corporators are those stockholders or members mentioned in the articles of
incorporation as forming and composing the corporation and who are signatories thereof.
___________ 5. Authorized Capital signifies the maximum amount fixed in the articles of
incorporation to be subscribed and paid-in or secured to be paid by the subscribers. It may
also refer to the maximum number of shares that the corporation can issue,
___________ 6. The term of corporate existence cannot exceed more than 50 years unless
sooner dissolved or unless the period indicated in the articles of incorporation is amended
extending the same.
___________ 7. A corporation comes into existence upon issuance of the Articles of
Incorporation.
___________ 8. A corporation has a legal personality separate and distinct from those
composing it.
____________ 9. Corporate Liquidation is the extinguishment of corporate franchise and the
termination of corporate existence.
___________ 10. A dissolved corporation shall continue to be a body corporate for three (3)
years from the time it is dissolved for the purpose of winding up its corporate affairs.

PART III – ESSAY (5 points each)

1. What is the procedure in amending the articles of incorporation to extend/shorten

corporate term?

2. In case of merger, are employees of the absorbed corporation absorbed by the surviving
corporation?

3. C, a Steel and Nail Co., Inc., owned by X had financial obligations to its employees. C
ceased operation and was immediately succeeded on the next day by E Steel Corporation.
Further, all of the assets of C Corporation were turned over to E Corporation. 90% of the
subscribed shares of which were also owned by X.

a. Explain the “Doctrine of Piercing the Veil of Corporate Fiction”.

b. May E Steel Corporation be held liable for the financial obligation of C Steel and Nail
Co. to its employees?
4. Sunny is an incorporator and original director of Business Media Philippines, Inc.
(BMPI). The latter commissioned Printwell for printing of its magazine that BMPI published
and sold. BMPI placed with Printwell several orders on credit, evidenced by invoices and
delivery receipts. For failure to pay the total amount, Printwell sued BMPI for collection of
the unpaid balance in the RTC. Printwell amended the complaint in order to implead as
defendants all the original stockholders and incorporators to recover on their unpaid
subscriptions. The defendants averred that BMPI had a separate personality from those of
its stockholders and that the directors and stockholders of BMPI had resolved to dissolve
BMPI during the annual meeting.

a. Can Printwell validly pierce the veil of corporate fiction by impleading the original
stockholders and incorporators?
b. What are the instances where the corporate veil is pierced?