TITLE IV.

POWERS OF CORPORATION
1. I. A Corporation has no power except those expressly conferred on it by
the Corporation code and those that are implied or incidental to its
existence.
II. In turn, a corporation exercises said powers through its board of
directors and/or it's duly authorized officers and agents.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

2. It is an action brought by a stockholder on behalf of the Corporation to

enforce corporate rights against the corporations directors, officers or
other insiders.
a. Individual suit
b. Corporate suit
c. Derivative suit
d. Representative suit
3. The following are the requisites of the corporate power to extend or
shorten corporate term:
I. Approval by a 2/3 Vote of the board of directors or trustees.
II. Ratification by the stockholders representing at least 2/3 of the
members in case of non-stock Corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
4. It means that a stockholder who dissented and voted against the
proposed corporate action, may choose to get out of the Corporation by
demanding payment of the fair market value of his shares.
a. Pre-emptive right
b. Appraisal right
c. Stockholders right
d. Right of liquidation
5. 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 corporate opportunity
 c. Doctrine of piercing the veil of corporate fiction
d. Entity doctrine
6. The distribution of corporate capital happens in only in three instances
except:
a. Amendment of the articles of incorporation to reduce the
authorized capital stock
b. Purchase of redeemable shares by the Corporation, regardless of
the existence of unrestricted retained earnings
c. Dissolution and eventual liquidation of the Corporation
d. Amendment of the bylaws to reduce the authorized capital stock.
7. The following are the requirements of increase or decrease authorized
capital stock, except:
a. No decrease of the capital stack shall be approved if its effect shall
prejudice the right of corporate creditors
b. Approval by a majority vote of the board of directors
c. Ratification by the stockholders holding at least 2/3 of the
outstanding capital stock
d. Approval thereof by the DTI
8. It is the preferential right of all stockholders of a stock corporation to
subscribe to all issues or disposition of shares of any class, in proportion
to their respective shareholdings.
a. Appraisal right
b. Right the vote
c. Preemptive right
d. Voting right
9. I. The purpose of pre-emptive rights Is to enable the shareholder to retain
his proportionate control in the corporation.
II. A suit to enforce pre-emptive rights in a corporation is a derivative
suit.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
10. The requirements for the sale or other disposition of assets are the
following except:
a. SEC approval is required
b. Approval by the majority vote of its board of directors or trustees
 c. Ratification by the vote of the stockholders representing at least
2/3 of the outstanding capital stock, are in case of nonstock
Corporation with a vote of at least of 2/3 of the members.
d. Any dissenting stockholder may exercise his approval right.
11. The following are instances when a Corporation may acquire its own
shares, except:
a. To eliminate fractional shares arising out of stock dividends
b. To collect or compromise on indebtedness to the Corporation,
arising out of unpaid subscription in a delinquency sale and to
purchase delinquents shares sold during said sale
c. To pay dissenting or withdrawing stockholders entitled to payment
for their shares under the provisions of the Corporation code
d. To acquire founders shares
12. I. The Corporation may only acquire its own stocks in the presence of
unrestricted retained earnings.
II. Preferred shares may be acquired even without surplus profit for as
long as it will not result to the insolvency of the corporations.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
13. I. The requirement of unrestricted retained earnings to cover the
shares is based on the doctrine of limited capacity.
II. There can be no distribution of assets among the stockholders
without first playing corporate creditors. Hence, any disposition of
corporate funds to the prejudice of creditors is rescissible.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
14. The following are the requisites for exercise of a corporate power to
invest corporate funds in another corporation, except:
a. Approval of the majority of the board of directors or trustees
b. Ratification by the stockholder representing at these 2/3 of the
outstanding capital stock, or by at least 2/3 of the members in the
case of nonstop corporations at a stockholders or members
meeting duly called for the purpose.
 c. Written notice of the proposed investment and the time and please
of the meeting shall be addressed to each stockholder or member
by Mail or served personally.
d. Any dissenting stockholder shall have preemptive rights.
15. The retained earnings which have not been reserved or set aside by the
board of directors for some corporate purpose.
a. Restricted retained earnings
b. Unrestricted retained earnings
c. All of the above
d. None of the above
16. I. The right of appraisal may be exercised when there is a fundamental
change in the charter or articles of incorporation substantially prejudicing
the rights of the stockholders.
II. A Corporation can be purchased its own shares, provided payment is
made out of surplus profits and acquisition is for a legitimate corperate
purpose.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
17. Corporate profits set aside, declared, and are there to be paid by the
directors for distribution among stockholders at a fixed time.
a. Income
b. Revenue
c. Dividends
d. Sales
18. I. Payment of dividends to a stockholder is not a matter of rights but a
matter of consensus.
II. The declaration on dividends is dependent upon the availability of
surplus profit or restricted retained earnings.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
19. The limitations on dividends are the following except:
a. The right to dividend is based on duly recorded stockholdings.
b. Dividends among stockholders of the same class must always be
pro rata equal and without discrimination and regardless of the
 time when the shares were acquired. The right of the stockholder
to be paid dividends accrues as soon as the declaration is made.
c. The right to dividend accrues only if there is SEC approval
d. Declaration of dividends is discretionary upon the board of
directors.
20. It is an agreement whereby a corporation delegates the management
of its affairs to another corporation for a certain period of time.
a. Management contract
b. Voting trust agreement
c. Contract of agency
d. Self-dealing contract
21. It refers to an outside or beyond corporate powers, including those
that may ostensibly be within such power but are, by general or special
laws, prohibited or declared illegal.
a. Intra vires act
b. Ultra vires act
c. Doctrine of limited capacity
d. Doctrine of piercing the veil of corporate fiction
22. I. Every corporation has the power and capacity to have perpetual
existence unless the certificate of incorporation provides otherwise.
II. Every corporation has the power and capacity to enter into a
partnership, joint venture, merger, consolidation, or any other
commercial agreement with natural and juridical persons.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
23. I. No management contract shall be entered into for a period longer
than 5 years for any 1 term.
II. No corporation shall possess or exercise corporate powers other
than those incorporation and except as necessary or incidental to the
exercise of the powers conferred.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
24. Where a stockholder or stockholders representing the same interest of
both the managing and the managed corporations own or control more
 than 1/3 of the total outstanding capital stock entitled to vote of
managing corporation.
a. Interlocking stockholders
b. Interlocking board of directors
c. Interlocking members
d. None of the above
25. Where a majority of the members of the board of directors of the
managing corporation also constitute a majority of the board pf directors
of the managed corporation.
a. Interlocking stockholders
b. Interlocking board of directors
c. Interlocking members
d. None of the above

TITLE V. BYLAWS
Multiple Choice.

1. The rules and regulations are private laws enacted by the Corporation
to regulate, govern and control its own actions, affairs and concerns
and its stockholders or members and directors and officers with
relation there to and among themselves in their relation to it.
a. By-laws
b. Articles of incorporation
c. Resolution
d. Rules, regulation and discipline
2. I. the purpose of a by-law is to regulate the conduct and define the
duties of the member towards the Corporation and among themselves.
II. By-laws are the are relatively permanent and continuing Rules of
action adopted by the Corporation for its own government and that of
the individuals composing it and having the direction, management
and control of its affairs, in whole or in part, in the management and
control of its affairs and activities.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. I. the bylaws shall be signed by the stockholders our members voting
for them and shall be kept in the principal office of the Corporation.
 II. A copy of bylaws, duly certified by a majority of the directors or
trustees and countersigned veda secretary of the Corporation, shall be
filed with the SEC and attached to the original articles of incorporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
4. I. It is a generally accepted rule that turn person are bound by bylaws.
II. Bylaws may be necessary for the government of the Corporation but
these are subordinate to the articles of incorporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
5. I. Bylaws may be adapted and filed prior to incorporation.
II. In all cases, bylaws shall be effective only upon the issuance by the
SEC of certification that the bylaws are in accordance with this Revised
Corporation code.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. It is a condition precedent in the acquisition of corporate existence.
a. Bylaws
b. Articles of Incorporation
c. Shares of stock
d. Rules, regulation and discipline
7. I. The owners of majority of the outstanding capital stock or majority
of the members in a non stock corporation may delegate to the board
of directors or trustees the power to amend or repeal any bylaws or
adopt new bylaws.
II. The amended our new bylaws shall only be effective upon the
issuance by the SEC of certificate that the same are not inconsistent
with the revised Corporation code.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
 8. I. Any power delegated to the board of directors or trustees to amend
or repeal any bylaws or adopt new bylaws shall be considered as
revoked whenever stockholder owning are representing 2/3 of the
members in non stock Corporation, show so vote at a regular or special
meeting.
II. Whenever the bylaws are amended our new bylaws are adopted,
the corporation shall file with the SEC such amended or new bylaws.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. It constitutes the charter our fundamental law of the Corporation.
a. Articles of incorporation
b. Bylaws
c. Rules, regulation and discipline
d. None of the above
10. A private Corporation may provide the following in its bylaws:
a. The modes by which a stockholder, members, director, are dressed the
may attend meetings and cast their votes.
b. The form for proxies of stockholders an members and the manner of
voting them.
c. The manner of election or appointment and the term of office of all
officers other than directors or trustees.
d. All of the above.

TITLE VI. MEETINGS

1. I. the general rule is that every member of a non stock Corporation and
every legal owner of shares in the stock Corporation, has right to be
present and to vote in all corporate meeting.
II. Voting may be expressed personally, or through proxies vote for
their representative capacities.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
2. I. Directors must act as a body in a meeting called pursuant to the law or
the corporations bylaws, otherwise any action taken therein may be
questioned by any objecting director or shareholder.
 II. The general rule is that a Corporation through its board of directors
should act in the manner and within the formalities, if any, prescribed
by its charter or by the general law.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. I. An action of the board of directors during a meeting, which was illegal
for lack of notice may not be ratified.
II. Notice of meeting may not be waived, expressly or impliedly by any
stockholder or member.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
4. The requirements for a valid meeting are the following except:
a. It must be held always at the principal place of business.
b. It must be held at the stated date and at the appointed time.
c. It must be called by the proper person.
d. The person or persons designated in the bylaws have authority to call
stockholders or members meeting.
5. I. Stockholders or members meeting shall be held in the city or
municipality where the principal office of the Corporation is located.
II. Regular meetings of stockholders or members sholl be held annually
on a date fixed in the bylaws, or if not so fixed, on any date after
appeal 15 of every year as determined by the board of directors or
trustees.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. I. In regular meetings of stockholders or members, a written notice of
regular meetings shall be sent to all stockholders or members of record at
least 10 days prior to the meeting.
II. Written notice of regular meetings may be sent to all stockholders
our members of regard through electronic mail are such other manner
as the SEC called allow under its guidelines.
a. Only I is true
b. Only II is true
 c. Both are true
d. Both are false
7. I. Any city or municipality in Metro Manila, Metro Cebu, Metro Davao and
other Metropolitan areas shall for purposes of stockholders or members
meeting be considered a city or municipality.
II. Notice of meetings shall be sent through the means off
communication provided in the bylaws, which notice shall state that
time, please and purpose of the meetings.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. I. As a rule, hey quorum shall consist of the stockholders representing a
majority of the outstanding capital stock or a majority of the members in
the case of non stock corporations.
II. Unless the articles of incorporation or the bylaws provides for a
greater majority, a majority of the directors or trustees as stated in the
articles of incorporation shall be constitute a quorum to transact
corporate business.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. Is the book which records the names and addresses of all stockholders
arranged alphabetically, the instalments paid and unpaid on all stacks for
which subscription has been made, and the date of payment there.
a. Stock and transfer book
b. Check book
c. Journals
d. Ledgers
10. I. Every decision of at least a majority of the directors or trustees
represent at a meeting at which there is a quorum shall be valid as a
corporate act.
II. The election of officers which requires the vote of majority or the
members of the board.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
11. The requirements for board meetings are the following except:
a. Meeting of the directors or trustees duly assembled as a board.
b. Presence of the required car room.
c. Decision of the majority of all the members of the board.
d. Meeting at the place, time and manner provided in the bylaws.
12. I. Meetings of directors or trustees of Corporation maybe held
anywhere in or outside of the philipines, unless the bylaws provide
otherwise.
II. Notice of regular special meetings stating the date, time in place of
the meeting must be sent to every director are dressed the at least one
day prior to the scheduled meeting, unless a longer time is provided in
the bylaws.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
13. I. In case of pledged are mortgaged shares in stock corporations the
pledge or mortgage shall have the right attend and vote at meetings of
stockholders.
II. In case of shares of stock owned jointly by two or more persons in
order to vote the same, the consent of all the co-owners shall be
necessary.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
14. I. Treasury shares shall have no voting rights as long as such shares
remain in the Treasury.
II. Directors or trustees cannot attend or vote by proxy at board
meeting but there is no provision for them to act as proxies in
stockholders meeting.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
15. The requirements for a valid proxy are the following except:
a. It shall be in writing
b. It shall be signed by the stockholder or member
c. It shall be filed before the scheduled meeting with the corporate secretary
 d. Unless otherwise provided in the proxy, it shall be valid only for the
meeting which it was intended.
16. The purposes of proxies are the following except:
a. For convenience
b. It assures the presence of all
c. It enables those who do not wish to attend the meeting to protect their
interests
d. It secures voting control
17. Revocation of proxy may be made through the following except:
a. Formal notice
b. Verbal communication
c. Conduct
d. None of the above
18. A trust created by an agreement between a group of the stockholders
of a Corporation and the trustee or by a group of identical agreements
between individual stockholders and a common trustee, whereby it is
provided that for a term of years, or for a period contingent upon a certain
event, or until the agreement is terminated, control over the stock owned
by such stockholders, either for certain purposes or for all purposes, is to
be lodged in the trustee, either which are without a reservation to the
owners, or persons designated by them of the power to direct how such
control shall be issued.
a. Proxy
b. Voting trust agreement
c. Management contract
d. Executive committee
19. The following are the requirements imposed on a voting trust
agreement except:
a. The agreement must be in writing and notarized and specify the terms
and conditions thereof
b. Is certified copy of such agreement shall be filed with the
Corporation and we the Securities and Exchange Commission non
compliance however, said agreement is effective and enforceable
c. The certificate are certificates of stock covered by the voting trust
agreement shall be cancelled and new once shall be issued in the name of
the trustee or trustees stating that they are issued pursuant to said
agreement
d. It shall be noted that the transfer in the name of the trustee or trustees is
made pursuant to said voting trust agreement.
20. The three tests of voting trust agreement are the following:
a. The voting rights of the stock are separated from the other attributes of
ownership
b. That the voting rights granted are intended to be a revocable for a
definite period of time
c. That the principal purpose of the grant of voting rights is to acquire voting
control of the Corporation
d. All of the above.
21. I. A stockholder or member may propose the holding of a special
meeting and items to be included in the agenda.
II. Whenever for any cause there is no person authorized or the person
authorized unjustly refuses to call a meeting, the SEC upon petitions of
a stockholder or member on a showing of good cost therefore may
issue an order directing the petitioning stockholder or member to call a
meeting of the Corporation by giving proper notice.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
22. I. Unless the bylaws provide a longer period, the stock and transfer
book or membership book shall be closed at least 20 days for regular
meetings and 7 days for special meetings before the scheduled date of the
meeting.
II. The right to vote of stockholder our members may be exercised in
person, through a proxy, or when so authorized in the bylaws through
remote communication are in absentia.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
23. I. Directors or trustees who cannot physically attend or vote a board
meetings can participate in vote through remote communication such as
video conferencing, teleconferencing or are there alternative modes of
communication that allowed them reasonable opportunities to participate.
II. Directors or trustees can attend or vote by proxy at board meetings.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
24. I. The chairman or in his absence the president shall be preside at all
meetings of the directors or trustees as well as of the stockholders or
members, unless the bylaws provide otherwise.
II. In case a stockholder grants security interest in his or her shares in
stock corporations, the stockholder grantor shall be have the right to
attend and vote at meetings of stockholders.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
25. I. Executors, administrators, receivers, and other legal representatives
appointed by the court may attend and vote in behalf of the stockholders
or members without need of any written proxy.
II. When the shares are owned in an and/or capacity by the holders
there of any one of the joint owners can vote said shares or appoint a
proxy therefor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
26. I. Stockholders and members may vote in person or by proxy in all
meetings of stockholders or members.
II. When so authorized in the bylaws or by a majority of the board of
directors, the stockholders or members of Corporation may also vote
through remote communication or in absentia.
III. A stockholder or member who participates through remote
communication are in absentia shall be deemed present for purposes of
quorum.
a. Only I is true
b. Only II is true
c. Only III is true
d. I, II, III are true

Title VII. STOCK AND STOCKHOLDERS

1. I. In stock corporations, shareholders may generally transfer their
shares.
II. Membership in and all rights arising from a non stock corporation
are personal and non-transferable.
 a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
2. Is an action brought by monitory shareholders in the name of the
corporation to redress wrongs committed against it, for which the
directors refuse to sue.
a. Individual suit
b. Representative suit
c. Class suit
d. Derivative suit
3. The following are the requisites of the derivative suit:
a. The party bringing suit should be a shareholder as of the time of the act
or transaction complained of, the number of his shares not being material;
b. He has tried to exhaust intra-corporate remedies, i.e., has made a
demand on the board of directors for the appropriate relief but the latter
has failed or refused to heed his plea; and
c. The cause of action actually devolves on the corporation, the wrongdoing
or harm having been, or being caused to the corporation and not to the
particular stockholder bringing the suit.
d. All of the above

4. Where a stockholder or member is denied the right of inspection, his

suit would be individual because the wrong is done to him personally
and not to the other stockholders or the corporation.
a. Individual suit
b. Representative suit
c. Class suit
d. Derivative suit
5. Where the wrong is done to the group of stockholder, as where
preferred stockholders’ rights are violated, a class suit will be proper
for the protection of all stockholders belonging to the same group.
a. Individual suit
b. Representative suit
c. Class suit
d. Derivative suit
6. Any contract for the acquisition of unissued stock in an existing
corporation still to be formed shall be deemed a subscription
 notwithstanding the fact that the parties refer to it as a purchase or
some other contract.
a. Contract of sale
b. Subscription contract
c. Management contract
d. None of the above
7. I. As long as the shares are not considered delinquent, stockholders are
entitled to all rights granted to it whether or not subscribed capital
stocks are fully paid.
II. Shares of stock shall not be issued in exchange for promissory notes
or future service.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. I. Stocks shall not be issued for a consideration less than the par or
issues price thereof.
II. Where the consideration is other than actual cash, or consists of
intangible property such as patents of copyrights, the valuation thereof
shall initially be determined by the incorporators or the board of
directors, subject to approval of the SEC.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. Unit of interest in a corporation.
a. Treasury stock
b. Shares of stock
c. Certificate of stock
d. Par value stock
10. Evidence of the holder’s ownership of the stock and of his right
as a shareholder.
a. Treasury stock
b. Shares of stock
c. Certificate of stock
d. Par value stock
11. I. The stock and transfer book is the basis for ascertaining the
person entitled to the rights and subject to the liabilities of a
stockholder.
 II. On the death of a shareholder, the executor or administrator duty
appointed by the Court is vested with the legal title to the stock but not
entitled to vote it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

12. For valid transfer of stocks, there must be strict compliance with
the mode of transfer prescribed by Law. The following are
requirements, except:
a. There must be delivery of the stock certificate.
b. The certificate must be endorsed by the owner or his attorney in fact or
other persons legally authorized to make the transfer.
c. To be valid against third parties, the transfer must be recorded in the
books of the corporation.
d. To be valid against third parties, the transfer must be recorded in
the SEC.
13. I. The rule is that the endorsement of the certificate of stock by
the owner or his attorney-in-fact or any other person legally authorized
to make the transfer shall be sufficient to effect the transfer of shares
only if the same is coupled with delivery.
II. The delivery of the stock certificate duly endorsed by the owner is
the operative act of transfer of shares from the lawful owner to the
new transferee.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
14. I. The certificate of stock itself once issued is a continuing
affirmation or representation that the stock described therein valid and
genuine.
II. Stock issued without authority and in violation of law is voidable
and confers no rights on the person to whom it is issued and subjects
him to no liabilities.
a. Only I is true
b. Only II is true
c. Both are true
 d. Both are false
15. I. A certificate of stock is one, entire and divisible contract.
II. The stockholder shall not be entitled to a certificate until he has
remitted the full payment of his subscription together with any interest
or expenses, if any is due.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
16. I. The general rule is that obligations incurred by the
corporation, acting through its directors, officers and employees, are
their joint liabilities.
II. It is basic that a corporation is a juridical entity with legal
personality separate and distinct from those acting for and in its behalf
and, in general, from the people comprising it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
17. The following except one, are the exceptional circumstances
warranting the disregard of the doctrine of separate personality.
a. When directors and trustees or, in appropriate case, the officers
of a corporation vote for or assent to patently unlawful acts of
the corporation.
b. When a director or officer had consented to the issuance of watered down
stocks or who, having knowledge thereof, did not forthwith file with the
corporate secretary his written objection thereto.
c. When a director, trustee or officer has contractually agreed or stipulated
to hold himself personally and solidarity liable with the corporation.
d. When a director, trustee or officer is made, by specific provision of by-
laws, personally liable for his corporate action.
18. Solidary liabilities may be incurred and the veil of corporate
fiction may be pierced when directors and trustees or, in appropriate
case, the officers of a corporation does the following except:
a. Vote for or assent to patently unlawful acts of the corporation.
b. Act in bad faith or with gross negligence in directing the corporate affairs.
c. Are guilty of conflict of interest to the prejudice of the corporation, its
stockholders or members, and the persons
d. Habitual absence in the directors’ meeting.
19. I. As a rule, the doctrine of corporate opportunity is violated
where the stocks issued by the corporation for a consideration which is
less than its par value.
II. Subscribers for stock shall pay to the corporation interest on all
unpaid subscriptions from the date of subscription, if so required by,
and at the rate of interest fixed in the by-laws.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
20. Bidder who shall offer to pay the full amount of the balance on
the subscription together with accrued interest, cost of advertisement
and expenses of sale, for the smallest number of shares or fraction of a
share.
a. Lowest bidder
b. Highest bidder
c. Winning bidder
d. Losing bidder

21. I. A subscription of shares in a corporation still to be formed

shall be irrevocable for a period of at least six (6) months from the date
of subscription.
II. No pre-incorporation subscription may be revoked after the articles
of incorporation is submitted to the Commission.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

22. Consideration for the issuance of stock may be:

a. Actual cash paid to the corporation.
b. Property, tangible or intangible, actually received by the corporation and
necessary or convenient for its use and lawful purposes at a fair valuation
equal to the par or issued value of the stock issued.
c. Labor performed for or services to be rendered to the corporation.
d. Previously incurred indebtedness of the corporation.
Title VIII. CORPORATE BOOKS AND RECORDS
1. I. The proper custodian of the books, minutes and official records of a
Corporation is usually the corporate treasurer.
II. The signature of the corporate president gives the minutes of the
meeting probative value and credibility.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
2. I. The stockholders right of inspection of the corporation’s books and
records is based upon their ownership of the assets and property of the
Corporation.
Ii. The right of inspection granted to stockholders is absolute.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. The books and records required to be kept by the Corporation or the
following except:
a. Daily time record
b. Minutes of meetings of stockholders or members
c. Minutes of all meetings of directors or trustees
d. Stock in transfer book in case of stock Corporation.
4. The following are the limitations on the right of inspection by a
stockholder except:
a. The right must be exercised during reasonable hours during business days
b. The person demanding the right has not improperly used any information
obtained through any previous examination of the books and records of
the Corporation
c. The demand is made in good faith or for a legitimate purpose
d. The right kind exercised only by the common stockholders
5. I. The corporate secretary has the duty to record and repair the
minutes of the meeting.
Ii. Without the certification of the Corporation secretary, it is
incumbent upon the other directors are stockholders as the case may
be to submit proof that the minutes of the meeting is accurate and
reflective of what transpired during the meeting.
a. Only I is true
 b. Only II is true
c. Both are true
d. Both are false
6. I. Corporate records regardless of the form in which they are stored
shall be open to inspection by the director, trustee, stockholders or
members of the Corporation in person or by air presentative at
reasonable hours on business days.
Ii. The inspecting are reproducing party shall remain bound by
confidentially rules under prevailing laws.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
7. I. Requesting party who is not a stockholder or member of records or is
a competitor, director, officer, controlling stockholder or otherwise
represents the interests of a competitor shall have no right To inspect
or dim and production of corporate records.
Ii. If the Corporation denies or does not act on a demand for
inspections and or reproduction, the aggrieved party may report such
denial or inaction to the SEC.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. Stop corporation must also keep a stack and transfer book which shall
contain:
a. A record of all stacks in the names of the stockholders alphabetically
arranged
b. The installments paid an unpaid on all stacks for which subscription has
been made, and the date of payment of any installment
c. A statement of every alienation, sale or transfer of stock made the date
thereof by and to whom made
d. All of the above
9. I. a Corporation shall furnish stockholder or member, within 10 days
from receipt of their written requests, its most recent financial
statement in the form and substance of the financial reporting required
by the Commission.
Ii. At the regular meeting of stockholders or members the board of
directors or trustees shall present to such stockholders or members a
 financial report of the operations of the Corporation for the preceding
year, which shall include financial statements.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Title IX. MERGER AND CONSOLIDATION

1. As a rule, a Corporation that purchases the assets of another will not
be liable for the debts of the selling Corporation except when any of
the following circumstances is present. Which is the exception?
a. Where the purchaser expressly or implied Lee agrees to assume the debts
b. Where the transaction amounts to a consolidation or merger of the
corporations
c. Where the purchasing Corporation is merely a continuation of the selling
Corporation
d. Where the transaction is validly entered into.
2. I. Two or more corporations may merge into a single Corporation which
shall be one of the constituent corporations.
Ii. Two or more corporations may consolidate into a new single
Corporation which shall be consolidated Corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. It is a union whereby one or more existing corporations are absorbed
by another Corporation that survives and continues the combined
business.
a. Merger
b. Consolidation
c. Acquisition
d. Business combination
4. It is the union of two or more existing entities to form a new entity
called the consolidated Corporation.
a. Merger
 b. Consolidation
c. Acquisition
d. Business combination
5. I. Merger or consolidation become effective upon the mere agreement
of the constituent corporations.
Ii. ordinarily in the merger of two or more existing corporations, one of
the Corporation survives and continues the combined business while
the rest are dissolved and all their rights, properties, and liabilities are
acquired by the surviving Corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. I. Upon approval by majority vote of each of the board of directors or
trustees of the constituent corporations of the plan of merger or
consolidation, the same shall be submitted for approval by the
stockholders or meetings duly called for the purpose.
Ii. The affirmative vote of stockholders representing at least 2/3 of the
outstanding capital stock of each Corporation in the case of stock
corporations or at least 2/3 of the members in the case of non stop
corporations shall be necessary for the approval of such plan.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
7. I. For a valid merger or consolidation, the approval by the SEC of the
articles of merger are consolidation is required.
Ii. If upon investigation the SEC has reason to believe that the
proposed merger or consolidation is contrary to the provisions of the
Corporation code or existing laws, it shall set a hearing to give the
corporations concerned the opportunity to be heard.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

8. I. The merger shall only be effective upon the issuance of a certificate

of the merger by the SEC.
 Ii. Consolidation becomes effective not upon mere agreement of the
members but only upon issuance of the certificate of consolidation by
the SEC.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. I. When the SEC is satisfied that the consolidation of the Corporation is
not inconsistent with the provisions of the Corporation code and
existing laws, it issues is certificate of consolidation which makes the
the organization official.
Ii. Since there is a dissolution of the absorbed corporations, there is
winding up of their affairs or liquidation of their assets.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
10. I. In the merger of two existing corporations, one of the
corporations survives and continues the business, while the other is
dissolved and all it's right, properties, and liabilities are acquired by the
surviving Corporation.
Ii. by operation of law, appion effectivity of the merger, the absorbed
Corporation ceases to exist but its rights and properties, as well as
liabilities, shall be taken and deemed transferred to end vested in the
surviving Corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
11. I. Any amendment to the plan of merger or consolidation may be
made.
Ii. The amendment to the plan of merger or consolidation must be
approved by a majority vote of respective board of directors or trustees
of all the constituent corporations and ratified by the affirmative vote
of stockholders representing at least 2/3 of the outstanding capital
stock or of 2/3 of the members of each of the constituent corporations.
a. Only I is true
b. Only II is true
c. Both are true
 d. Both are false
12. The merger or consolidation shall have the following effects:
a. The constituent corporations shall become a single Corporation
b. The separate existence of the constituent corporations shall cease
c. The surviving are the consolidated Corporation shall possess all the rights,
privileges, immunities, and powers and shall be subject to all the duties
and liabilities of a corporation
d. All of the above

TITLE X: APPRAISAL RIGHT

1. It means that a stockholder, who dissented and voted against the proposed
corporate action, may choose to get out of the corporation by demanding
payment of the fair market value of his shares.
B. APPRAISAL RIGHT
2. Any stockholder of a corporation shall have the right to dissent and
demand payment of the fair value of his shares in the following instances
except:
B. IN CASE OF INCREASE OF DECREASE OF CAPITAL STOCK
3. The following are the instances of appraisal right, except:
B. IN CASE OF INVESTING OF CORPORATE FUNDS IN ANOTHER
CORPORATION OR BUSINESS
4. I. In a close corporation, any stockholder of a close corporation may, for
any reason, compel the said corporation to purchase his shares at their fair
value, which shall not be less than their par or issued value, when the
corporation has sufficient assets in its books to cover its debits and
liabilities exclusive of capital stock.

II. The appraisal right may be exercised by any stockholder who shall have
voted against the proposed corporate action, by making a written demand
on corporation within 30 days after the date on which the vote was taken
for payment of the fair value of his shares.
C. BOTH ARE TRUE
5. I. If within a period of 60 days from the date the corporate action was
approved by the stockholders, the withdrawing stockholder and the
corporation cannot agree on the fair value of the shares, it shall be
determined and appraised by 5 disinterested persons.
 II. That no payment shall be made to any dissenting stockholder unless the
corporation has unrestricted retained earnings in its books to cover such
payment.
B. ONLY II IS TRUE
6. I. The dissenting stockholder shall be entitled to receive payment of the fair
value of his shares as agreed upon between him and the corporation or as
determined by the appraisers chosen by them.
II. Payment may be made regardless if the corporation has unrestricted
retained earnings in its books to cover the same.
A. ONLY I IS TRUE
7. The following are instances where dissenting stockholder who demands
payment of his shares is no longer allowed to withdraw from his decision,
except:
B. THE PROPOSED CORPORATE ACTION IS APPROVED BY THE SEC
WHERE ITS APPROVAL IS NECESSARY
8. I. The corporation shall bear the costs of appraisal, as a rule.
II. Clearly, the right of appraisal may be exercised when there is a minor
change in the charter or articles of incorporation substantially prejudicing
the rights of the stockholders.
A. ONLY I IS TRUE
9. The effects of transfer to dissenting shares are the following:
C. BOTH ARE TRUE
10. I. From the time of demand of payment of the fair value of a stockholders
shares until either the abandonment of the corporate action involved or the
purchase of the said shares by the corporation, all rights accruing to such
shares, including voting and dividend rights, shall be suspended.
II. If the dissenting stockholder is not paid the value of his shares within 10
days after the award, his voting and dividend rights shall immediately be
restored.
A. ONLY I IS TRUE

TITLE XI: NONSTOCK CORPORATION

1. It is one where no part of its income is distributable as dividends to its
members, trustees or officers.
A. NONSTOCK CORPORATION
2. I. Any profit which is a non-stock corporation may obtain as an incident to
its operations shall, whenever necessary or proper, be used for the
furtherance of the purposes for which the corporation was organized.
II. A non-stock corporation can be converted into a stock corporation by
mere amendment of its articles of incorporation.
 A. ONLY I IS TRUE
3. The following are the characteristics of a non-stock corporation, except:
C. AS A GENERAL RULE, IT IS NOT EMPOWERED TO ENGAGE IN
BUSINESS. MOREOVER, IT IS PROHIBITED TO MAKE INCOME OR
PROFITS AS AN INCIDENT TO ITS OPERATION.
4. The following are the characteristics of a non-stock corporation, except:
C. BY-LAWS MAY PROVIDE THAT THE MEMBERS MAY HOLD THEIR
MEETINGS AT ANY PLACE EVEN OUTSIDE THE PLACE WHERE THE
PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, EVEN IF THAT
SUCH PLACE IS OUTSIDE THE PHILIPPINES.
5. I. In stock corporations, shareholders may generally transfer their shares.
II. Membership in and all rights arising from a non-stock corporation are
transferable.
A. ONLY I IS TRUE
6. I. The Plan of Distribution of Asset may be adopted by a majority vote of
the board of trustees and approval of majority of the members having
voting rights present or represented by proxy at the meeting during which
said plan is adopted.
II. Members meeting may be held at any place outside the principal office of
the corporation provided it shall be within the Philippines.
B. ONLY II IS TRUE
7. I. No person shall be elected as trustee unless he is a member of the
corporation.
II. Unless otherwise provided in the articles of incorporation or the by-laws,
officers of a non-stock corporation may be directly elected by the
members.
A. ONLY I IS TRUE
8. I. Membership shall be terminated in the manner and for the causes
provided in the articles of incorporation or the by-laws.
II. Termination of membership shall have the effect of extinguishing all
rights of a member in the corporation or in its property, unless otherwise
provided in the articles of incorporation or the by-laws.
C. BOTH ARE TRUE
9. I. The determination of whether or not “dead members” are entitled to
exercise their voting rights depends on those articles of incorporation or
by-laws.
II. In stock corporations, on the death of a shareholder, the executor or
administrator duly appointed by the court is vested with the legal title to
the stock and entitled to vote it.
C. BOTH ARE TRUE
10. I. Membership in and all rights arising from a non-stock corporation are
personal and non-transferable.
II. Unless otherwise provided in the articles of incorporation or the by-laws,
a member may not vote by proxy.
C. BOTH ARE TRUE

11. I. The number of trustees shall be fixed in the articles of incorporation or

by-laws which may or may not be more than 15.
II. Except with respect to independent trustees of non-stock corporations
vested with public interest, only a member of the corporation shall be
elected as trustee.
B. BOTH ARE TRUE

TITLE XII: CLOSE CORPORATIONS

1. The following are corporations that cannot incorporate as a close
corporation except:
D. INDUSTRAL COMPANIES

2. The following are characteristics of a close corporation except:

A. WHERE ARE THE ARTICLES OF INCORPORATION PROVIDE THAT THE
BUSINESS OF THE CORPORATION SHALL BE MANAGED BY THE
STOCKHOLDERS THEMSELVES RATHER THAN BY THE BOARD OF
DIRECTORS, THEN THE STOCKHOLDERS SHALL BE DEEMED TO BE
THE DIRECTORS WITH ALL THE LIABILITIES IMPOSED BY THE
CORPORATION CODE ON DIRECTORS. THE STOCKHOLDERS SHALL
NOT BE PERSONALLY LIABLE FOR CORPORATE TORTS.

3. The following are characteristics of a close corporation except:

B. PRE EMPTIVE-RIGHT DOES NOT EXTEND TO ALLSTOCK ISSUANCES.

4. The articles of incorporation of a close corporation may provide, except

for:
C. A LESSER QUORUM OR VOTING REQUIREMENTS IN MEETINGS OF
STOCKHOLDERS OR DIRECTORS.

5. Any person to whom stock or a close corporation has been issued or

transferred has, or is conclusively presumed to have notice.
D. ALL OF THE ABOVE
6. An action by the directors of a close corporation without a meeting shall
not be deemed valid if:
A. BEFORE OR AFTER SUCH ASCTION IS TAKEN, WRITTEN CONSENT
THERETO IS SIGNED BY A MOJORITY THE DIRECTORS.

7. I. The pre-emptive right of stockholders in close corporations shall extend

to all stock to be issued, excluding reissuance of treasury shares.
II. A close corporation may, at its option, refuse to register the transfer of
stock in the name of the transferee if the person is not qualified to be a
stockholder and has notice thereof:
B. ONLY II IS TRUE

8. An impartial person who is neither a stockholder nor a creditor of the

corporation or of any subsidiary or affiliate of the corporation, and whose
further qualifications, if any may be determined by the SEC.
D. PROVISIONAL DIRECTOR
9. Any stockholder of a close corporation may, by written petition to the SEC,
compel the dissolution of such corporation whenever:
I. Any of acts of the directors or officers is illegal, or fraudulent, or
dishonest, or oppressive or unfairly prejudicial to the corporation or
any stockholder.
II. Corporate assets are being misapplied or wasted.
C. BOTH ARE TRUE

10. I. A provisional director is not a receiver of the corporation and does not
have the title and powers of a custodian or receiver.
II. A provisional director shall have all the rights and power of a duly
elected director of the corporation, including the right to notice of and to
vote at meetings of directors, until such time as he shall be removed by
order of the Commission or by all the stockholders.
C. BOTH ARE TRUE

11. A close corporation is one whose articles of incorporation provides the

following except:
D. ALL OF THE ABOVE

TITLE XIII - SPECIAL CORPORATIONS

1. I. Trustees of educational institutions organized as non-stock corporations
shall not be less than 5 nor more than 15.
 II. The number of trustees shall be in multiple of 5.
C. BOTH ARE TRUE

2. I. The board of trustees shall as soon as organized, so classify themselves

that the team of office of 1/5 of their number shall expire every year.
II. Religious corporations may be incorporated by one or more persons.
Such corporations may be classified into corporation’s sole and religious
societies.
C. BOTH ARE TRUE

3. A corporation formed by the chief archbishop, bishop, priest, minister,

rabbi or other presiding elder of a religious denomination, sect, or church,
for the purpose of administering or managing, as trustee, the affairs,
properties and temporalities of such religious denomination, sect or
church.
A. CORPORATE SOLE

4. A corporation formed for the same purpose as corporation sole. It consists

of two or more persons.
B. CORPORATION AGGREGATE

5. I. For the purpose of administering and managing, as trustee, the affairs,

property and temporalities of any religious denomination, sect or church, a
corporation sole may be formed by the chief archbishop, bishop, priest,
minister, rabbi or other presiding elder of any religious denomination, sect
or church.
II. In order to become a corporation sole, the chief archbishop, bishop,
priest minister, rabbi or presiding elder of any religious denomination, sect
or church must file the Commission articles of incorporation.
C. BOTH ARE TRUE

6. I. Any corporation sole may purchase and hold real estate and personal
property for its church, charitable benevolent or educational purposes, and
may receive bequests or gifts for such purposes.
II. Such corporation sole may sell or mortgage real property held by it by
obtaining an order for that purpose from the Regional Trial Court.
C. BOTH ARE TRUE

7. A corporation sole must have an article of incorporation setting forth the

following:
D. ALL OF THE ABOVE
8. I. A majority of the trustees shall constitute a quorum for the transaction of
business.
II. Trustees elected thereafter in educational corporation to fill vacancies
caused by expiration of term shall hold office for 3 years.
D. BOTH ARE FALSE

9. I. Any corporation sole may purchase and hold real estate and personal
property for its church, charitable, benevolent or educational purposes,
and may receive bequests or gifts for such purposes.
II. In cases where the rules, regulations and discipline of the religious
denomination, sect or church, religious society or order concerned
represent by such corporation sole regulate the method of acquiring,
holding selling and mortgaging real estate and personal property such
rules, regulations and discipline shall control, and the intervention of the
court shall not be necessary.
C. BOTH ARE TRUE

10. I. A corporation sole may be dissolved and its affairs settled voluntarily by
submitting to the Commission a verified declaration of dissolution.
II. Upon approval of such declaration of dissolution by the SEC, the
corporation shall cease to carry on its operations except for the purpose of
winding up its affairs.
C. BOTH ARE TRUE

11. I. A one person corporation is a corporation with a single stockholder.

II. Only a natural person, trust, or an estate may form a one person
corporation.
C. BOTH ARE TRUE

12. I. Banks and quasi banks, preneed, trust, insurance, public and publicly
listed companies and non-chartered government owned and controlled
corporations may not incorporate as one Person Corporation.
II. A natural person who is licensed to exercise a profession may organize
as one Person Corporation for the purpose of exercising such profession.
A. ONLY I IS TRUE

13. I. A One Person Corporation shall not be required to have a minimum

authorized capital stock.
II. The One Person Corporation is required to submit and file corporate by-
laws.
 C. BOTH ARE TRUE

14. I. A One Person Corporation shall indicate the letters “OPC” either below or
at the end of its corporate name.
II. The single stockholder shall be the sole director and president of the
One Person Corporation.
C. BOTH ARE TRUE
15. I. The One Person Corporation shall appoint a treasurer, corporate
secretary, and other officers as it may deem necessary.
II. The single stockholder may be appointed as the corporate secretary.
A. ONLY I IS TRUE

16. In addition to the functions designated by the One Person Corporation, the
corporate secretary shall:
D. ALL OF THE ABOVE
17. I. The single stockholder shall designate a nominee and an alternate
nominee who shall in the event of the single stockholder’s death or
incapacity, take the place of the single stockholder as a director and shall
manage the corporations affairs.
II. The articles of incorporation shall state the names, residence addresses
and contact details of the nominee and alternate nominee, as well as the
extent and limitations of their authority in managing the affairs of the One
Person Corporation.
D. BOTH ARE FALSE

18. I. When the incapacity of the single stockholder is temporary, the nominee
shall sit as director and manage the affairs of the One Person Corporation
until the stockholder, by self-determination, regains the capacity to assume
such duties.
II. In case of death or permanent incapacity of the single stockholder, the
nominee shall sit as director and manage the affairs or the One Person
Corporation until the legal heir of the single stockholder have been lawfully
determined, and the heirs have designated one of them or have agreed that
the estate shall be single stockholder of the One Person Corporation.
III. The alternate nominee shall sit as director and manage the One Person
Corporation in case of the nominee’s inability, incapacity, death, or refusal
to discharge the function as director and manager of the corporation and
only for the same term and under the same conditions applicable to the
nominee.
C. ONLY III IS TRUE
19. I. The single stockholder may, at any time change its nominee and alternate
nominee by submitting to the SEC the names 0of the new nominees and
their corresponding written consent.
II. A One Person Corporation shall maintain a minute’s book which shall
contain all actions, decisions, and resolutions taken by the One Person
Corporation.
C. BOTH ARE TRUE

20. I. When action is needed on any matter, it shall be sufficient to prepare a

written resolution, signed and dated by the single stockholder, and
recorded in the minute’s book of the One Person Corporation.
II. The date of recording in the minute’s book shall be deemed to be the
date of the meeting for all purposes.
C. BOTH ARE TRUE

21. The One Person Corporation shall submit the following within such period
as the SEC may prescribe:
D. ALL OF THE ABOVE

22. I. A sole shareholder claiming limited liability has been burden of

affirmatively showing that the corporation was adequately financed.
II. Where the single stockholder cannot prove that the property of the One
Person Corporation is independent of the stockholders personal property;
the stockholder shall be jointly and severally liable for the debts and other
liabilities of the One Person Corporation.
C. BOTH ARE TRUE

23. I. The principles of piercing the corporate veil applies which equal force to
One Person Corporation as with other corporations.
II.The Commission may place the corporation under delinquent status
should the corporation fail to submit the reportorial requirements 3 times,
consecutively or intermittently, within a period of 5 years.
C. BOTH ARE TRUE

24. I. When a single stockholder acquires all the stocks of an ordinary stock
corporation, the latter may apply for conversion into a One Person
Corporation.
II.A One Person Corporation may be converted into an ordinary stock
corporation after due notice to the SEC of such fact and of the
 circumstances leading to the conversion, and after compliance with all
other requirements for stock corporations.
C. BOTH ARE TRUE

25. I. The One Person Corporation converted from an ordinary stock

corporation shall succeed the latter and be legally responsible for all the
latter’s outstanding liabilities as of the date of conversion.
II. The ordinary Stock Corporation converted from a One Person
Corporation shall succeed the latter and be legally responsible for all the
latter’s outstanding liabilities as of the date of conversion.
C. BOTH ARE TRUE

TITLE XIV. DISSOLUTION

MULTIPLE CHOICES:

1. The following are voluntary modes of dissolution of a corporation, except:

a. By the vote of the board of directors or trustees and the resolution
adopted by the stockholders or members where no creditors are
affected.
b. By legislative enactment.
c. By amending the articles of incorporation to shorten the corporate term.
d. In case of a corporation sole, by submitting to the SEC a verified
declaration of the dissolution for approval.
2. The following are involuntary modes of dissolution of a corporation,
except:
a. By expiration of corporate term provided for the articles of incorporation.
b. By legislative enactment.
c. By failure to formally organize and commence its business within years
from the date of incorporation.
d. By the judgement of the SEC after hearing of petition for
voluntary dissolution where creditors are affected.
3. I. A corporation formed or organized under the Corporation Code may be
dissolved voluntarily or involuntarily.
II. If dissolution of a corporation does not prejudice the rights of any
creditor having a claim against it, the dissolution may be affected by
majority vote of the board of directors, trustees, and by a resolution
adopted by an affirmative vote of the stockholders owing at least majority
of the outstanding capital stock or majority of the members.
a. Only I is true
 b. Only II is true
c. Both are true
d. Both are false
4. I. Where the dissolution of a corporation may prejudice the rights of any
creditor, the petition for dissolution shall be filled with the SEC.
II. The petition shall be signed by majority of its board of directors or
trustees and its dissolution was resolved upon by the affirmative vote of
the stockholders representing at least majority of the outstanding capital
stock or by at least majority of the members.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
5. I. In the case of dissolution where creditors are affected, the SEC may
appoint a receiver to take charge of the liquidation of the corporation.
II. An involuntary dissolution may be affected by amending the articles of
incorporation to shorten the corporate term.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. I. No application or dissolution of banks, banking and quasi-banking
institutions, preneed, insurance, trust company, nonstock savings and
loan associations, pawnshops and other financial intermediaries shall be
approved by the SEC unless accompanied by a favorable recommendation
of the appropriate government agency.
II. In the case of expiration of corporate term, dissolution shall
automatically take effect on the day following the last day of the
corporate term stated in the articles of incorporation, without the need for
the issuance by the SEC of a certificate of dissolution.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
7. I. A withdrawal of the request for dissolution shall be made in writing,
duly verified by any incorporator, director, trustee, shareholder, or
member and signed by the same number of incorporators, directors,
trustees, shareholders, or members necessary to request for dissolution.
 II. Upon receipt of a withdrawal request for dissolution, the SEC shall
withhold action on the request for dissolution.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. The following may ground for involuntary dissolution of the corporation:
a. Non-use corporate charter.
b. B. Continuous in operation of a corporation.
c. Upon receipt of a lawful court order dissolving the corporation.
d. All of the above.
9. I. Every corporation whose charter expired pursuant to its articles of
incorporation, is annulled by forfeiture, or whose corporate existence is
terminated in any other manner, shall nevertheless remain as body
corporate for 5 years after the effective date of dissolution.
II. Upon winding up of corporate affairs, any asset distributable to any
creditor or stockholder or member who is unknown or cannot be found
shall be escheated in the favor of the national government.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

TITLE XV. FOREIGN CORPORATIONS

MULTIPLE CHOICES:

1. Is one 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. Government owned-and controlled corporation
d. D. None of the above.
2. The following are the requisites for a foreign corporation under the
Corporation Code:
I. It must be formed or organized or existing under any laws other than those of
the Philippines.
II. The laws of the country where the corporation was organized allow Filipino
citizens and corporations to do business in its own country or state.
 a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. I. A foreign corporation must first obtain a license from the SEC and a
certificate from the SEC before it can transact business in the Philippines.
II. Where a foreign corporation does business in the Philippines without
the proper license, it cannot maintain any action or proceeding before
Philippine courts.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
4. I. The purpose of the law in requiring that a foreign corporation doing
busines in the Philippines be licenses to do so is to subject such
corporation to the jurisdiction of the courts.
II. It is not the absence of the prescribed but “doing business” in the
Philippines without such license which debars the foreign corporation
from access to our courts.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
5. I. If a foreign corporation does business in the Philippines without a
license, it cannot sue before the Philippine courts.
II. If a foreign corporation is not doing business in the Philippines, it still
needs a license to sue before Philippine courts on an isolated transaction
or on a cause of action entirely independent of any business transaction.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. I. If a foreign corporation does business in the Philippines without a
license, a Philippine citizen or entity which has contracted with said
corporation may be estopped from challenging the foreign corporation’s
corporate personality in a suit brought before the Philippine courts.
II. If a foreign corporation does business in the Philippines with the
required license, it can sue before Philippine courts only on isolated
transaction.
 a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
7. I. A foreign corporation’s b-laws, through originating from a foreign
jurisdiction, are valid and effective in the Philippines.
II. The appointment of a resident agent of a corporate corporation is
revocable at any time at the instance of the corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. A resident agent of a foreign corporation can either be:
I. An individual residing in the Philippines regardless of solvency.
II. A domestic corporation lawfully transacting business in the Philippines.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. The purposes of appointing a resident agent are the following:
I. Notice affecting the corporation pending the establishment of its local office.
II. Summons and other legal processes in all proceedings for or against the
corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
10. I. Actual transaction of business within the Philippine territory is an
essential requisite for the Philippines to acquire jurisdiction over a foreign
corporation and thus require the foreign corporation to secure a Philippine
business license.
II. If a foreign corporation does not transact such kind of business in the
Philippines, even if it exports its products to the Philippines, the
Philippines has no jurisdiction to require such foreign corporation to
secure a Philippine business license.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
11. I. A foreign corporation without a license is not ipso facto
incapacitated from bringing an action in the Philippine courts. A license is
necessary only if a foreign corporation is “transacting” or “doing business”
in the country.
II. A party is estopped from challenging the personality of a corporation
after having acknowledged the same by entering into a contract with it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
12. I. A foreign corporation licensed to transact business in the Philippines
may not be allowed to withdraw from the Philippines.
II. The license of a foreign corporation to transact business in the
Philippines may be revoked or suspended by the SEC.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
13. I. A foreign corporation authorized to transact business in the
Philippines need not obtain an amended license in the event it changes
II. A foreign corporation applying for a license to transact business in the
Philippines shall submit to the SEC a copy of its articles of incorporation
and by-laws, certified in accordance with law, and their translation to an
official language of the Philippines, if necessary.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

TITLE XVI. INVESTIGATIONS, OFFENSES AND PENALTIES

1. I. The SEC may investigate an alleged violation of the Revised Corporation
Code, or of a rule, regulation, or order of the SEC.
II. The SEC may administer oaths and affirmations, issue subpoena and
subpoena duces tecum, take testimony in any inquiry or investigation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
2. I. Whenever the SEC has reasonable basis to believe that a person has
violated, or is about to violate the Revised Corporation Code, a rule,
regulation, or order of the SEC, it may direct such person to desist from
committing the act constituting the violation.
II. The Commission may issue a cease-and-desist order ex parte to enjoin
an act or practice which is fraudulent or can be reasonably expected to
cause significant, imminent, and irreparable danger or injury to public
safety or welfare.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. I. Any person who, without justifiable cause, fails or refuses to comply
with any lawful order, decision, or subpoena issued by the SEC shall, after
due notice and hearing, be held in contempt and fined in an amount not
exceeding P30,000.
II. When the refusal amounts to clear and open defiance of the
Commission’s order, decision or, subpoena, the SEC may impose a daily
fine of P1,000.000 until the order, decision, or subpoena is complied with.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
4. I. The unauthorized use of a corporate name shall be punished with a fine
ranging from P10,000.00 to P200,000.00
II. When, despite the knowledge of the existence of a ground for
disqualification, a director, trustee or officer willfully holds office, or
willfully conceals such disqualification, such director, trustee, or officer
shall be punished with a fine ranging from P10,000.00 to P200,000.00 at
the discretion of the court, but shall not be permanently disqualified from
being a director, trustee o r officer of any corporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
5. I. The unjustified failure or refusal by the corporation, or by those
responsible for keeping and maintaining corporate records, to comply on
the inspection and reproduction of records shall be punished with a fine
ranging from P10,000.00 to P200,000.00 at the discretion of the court,
 taking into consideration the seriousness of the violation and its
implications.
II. Any person willfully certifies a report required under the Revised
Corporation Code, knowing that the same contains incomplete,
inaccurate, false or misleading information or statements, shall be
punished with a fine ranging from P20,000.000 to P200,000.00.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. I. An independent auditor who, in collusion with the corporation’s
directors or representatives, certifies the corporation’s financial
statements despite the incompleteness or inaccuracy, its failure to give a
fair and accurate presentation of the corporation’s condition, or despite
containing false or misleading statements, shall be punished with a fine
ranging from P80,000.00 to P500,000.00.
II. Those responsible for the formation of a corporation through fraud, or
who assisted directly or indirectly therein, shall be punished with a fine
ranging from P200,000.00 to P2,000,000.00
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
7. I. A corporation that conducts its business through fraud shall be
punished with a fine ranging from P200,000.00 to P2,000,000.00.
II. A corporation used for fraud, or for committing or concealing graft and
corrupt practices as defined under pertinent statuses, shall be liable for a
fine ranging from P100,000.00 to P5,000,000.00
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. I. A director, trustee, or officer who knowingly fails to sanction, report, or
file the appropriate action with proper agencies, allows or tolerates the
graft and corrupt practices or fraudulent acts committed by a
corporation’s directors, trustees, officers, or employees shall be punished
with a fine ranging from P500,000.00 to P1,000,000.00.
II. If the offender is a corporation, the penalty may, at the discretion of
the court, be imposed upon such corporation and/or upon its directors,
 trustees, stockholders, members, officers, or employees responsible for
the violation or indispensable to its commission.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. It refers to any person who provides truthful information relating to the
SEC or possible commission of any offense or violation under the Revised
Corporation Code.
a. Whistleblower
b. Intermediary
c. Mediator
d. Conciliator

CHAPTER XVII: MISCELLANEOUS PROVISIONS

1. It means the total shares of stock issued under binding subscription
contracts to subscribers or stockholders, whether or not fully or
partially paid, except treasury shares.
a. Authorized capital stock
b. Issued capital stock
c. Paid in capital stock
d. Outstanding capital stock
2. I. Non-stock or special corporations may, through their articles of
incorporation or their by-laws, designate their governing boards by any
name other than as board of trustees.
II. The SEC may place the corporation under delinquent status in case
of failure to submit the reportorial requirements 3 times, consecutively
or intermittently, within a period of 5 years.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. Every corporation, domestic or foreign, doing business in the Philippines
shall submit to the SEC.:
a. Annual financial statements audited by an independent certified public
accountant: Provided, that if the total assets or total liabilities of the
corporation are less than P600,000.00, the financial statements shall be
certified under oath by the corporation’s treasurer or chief financial officer.
b. A general information sheets
 c. All of the above.
d. None of the above.
4. I. The SEC shall exercise visitorial powers over all corporations, which
powers shall include the examination and inspection of records,
regulation and supervision of activities, enforcement of compliance, and
imposition of sanctions.
II. Should the corporation, without justifiable cause, refuse or obstruct
the SEC’s exercise of its visitorial powers, the SEC may revoke its
certificate of incorporation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

5. The SEC have the power and authority to:

a. Exercise supervision and jurisdiction over all corporations and persons acting
on their behalf.
b. Impose sanctions for the violation of the Revised Corporation Code, its
implementing rules and orders of the SEC.
c. Promote corporate governance and the protection of minority investors,
though, among others, the issuance of rules and regulations consistent with
international best practices.
d. All of the above.
6. The SEC shall have the power and authority to:
a. Issue opinions to clarify the application of laws, rules and regulations
b. Issue cease and desist orders ex parte to prevent imminent fraud or injury to
the public.
c. Hold corporations in direct and indirect contempt.
d. All of the above.
7. I. An arbitration agreement may be provided in the articles of
incorporation or bylaws of a corporation.
II. Regulators such as the Bangko Sentral ng Pilipinas and the
Insurance Commission shall exercise primary authority over special
corporations such as banks, nonbank financial institutions, and
insurance companies under their supervision and regulation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. The SEC shall have the power and authority to:
a. Issue writs of execution and attachment to enforce payment of fees,
administrative fines, and other dues collectible under the Revised Corporation
Code.
b. Prescribe the number of Independent directors and the minimum criteria in
determining the independence of a director.
c. Impose or recommend new modes by which a stockholder, member, director,
or trustee may attend meetings or cast their votes, as technology may allow,
taking into account the company’s scale, number of shareholders or members,
structure, and other factors consistent with the basic right of corporate
suffrage.
d. All of the above.