Multiple Choice: Choose the BEST ANSWER

1. A corporation where vacancies in the Board of Directors, are filled only by

the remaining members of the Board, is:

a. Open corporation;
b. Corporation sole;
c. Eleemosynary corporation;
d. Close corporation

2. The following, except one, are qualifications of corporate directors:

a. Must continuously own at least one share during their term as directors.
b. Must own at least one share of stock.
c. Ownership of shares must be recorded in the books of the corporation.
d. Majority are citizens of the Philippines.

3. In a corporation, two or more positions may be held concurrently by the

same person, except that no one person shall act as:

a. President and Chairman of the Board

b. Secretary and Treasurer
c. Treasurer and Director
d. President and Secretary

4. Which of the following is a disadvantage of forming a corporation?

a. The shareholders are not liable for the debts of the business.
b. The subservience of minority stockholders to the wishes of the majority
subject only to equitable restraints.
c. Because of the power of succession, the existence of the entity is not affected
by the personal vicissitudes of the individual shareholders.
d. The free and ready transferability of ownership.

5. How many number of votes of the Board of Directors are required to change
the name of the corporation?

a. 2/3 vote of all the members of the Board

b. 2/3 vote of all present
c. Majority vote of all present constituting a quorum
d. Majority vote of the Board

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6. A private corporation commences to have corporate existence and juridical
personality from the date:

a. The officers of the corporation are elected by the stockholders.

b. The incorporators sign the Articles of Incorporation.
c. The Articles of Incorporation and By-laws are presented to the SEC.
d. The SEC issues it certificate of incorporation under its seal.

7. The interest or right of the owner in the corporation's profits or in the net
assets of the corporation on dissolution is:

a. Dividend
b. Share of Stock
c. Certificate of Stock
d. Capital

8. Requirement to effect the amendment of the by-laws of a corporation

a. Majority vote of the Board of Directors

b. Vote of 2/3 of the outstanding capital stock
c. Majority vote of the Board of Directors and majority vote of the outstanding
capital stock
d. Majority vote of the outstanding capital stock

9. The right of a corporation to exist as a juridical person during its term as

stated in its Articles of Incorporation despite the death of any of its
stockholders is:

a. Right of Existence
b. Right of Redemption
c. Right of Succession
d. Pre-emptive Right

10. The following person cannot be an incorporator of a corporation:

a. A resident alien
b. A married woman without the consent of the husband even if the payment of
her shares is her paraphernal property
c. A subscriber on the shares of the corporation who pays less than 25% of his
subscription
d. A corporation organized under the laws of the Philippines

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11. Which of the following documents may be submitted before or after
incorporation?

a. Verification certificate as to the name of the corporation

b. By-laws
c. Certificate of bank deposit as to the paid-up capital
d. Articles of Incorporation

12. A stock corporation, in general, is taxed in the same manner as

a. General professional partnership

b. Non-general professional partnership
c. Sole proprietorship
d. Cooperative

13. Which shares may be issued with or without par value?

a. Common shares
b. Preferred shares
c. Both common and preferred shares
d. Neither common nor preferred shares

14. Who may vote the shares without the need of any written proxy?

a. The pledgee of shares of stock

b. The mortgagee of shares of stock
c. The executor of an estate which owns the shares of stock
d. The stockholder who transferred his shares in a voting trust agreement.

15. In which of the following corporate acts is the appraisal right not available?

a. Merger or consolidation
b. Extension or shortening of corporate existence
c. Sale, lease, exchange, mortgage, pledge or other disposition of all or
substantially all of its corporate stock
d. Investment of funds for the accomplishment of the primary purpose of the
corporation

16. Director may be given compensation through any of the following ways,
except by:

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a. The vote of the stockholders representing at least a majority of the
outstanding capital stock
b. A provision in the by-laws
c. The vote of the Board of Directors if the compensation is a reasonable diem
d. The vote of the Board of Directors if the compensation is other than per
diems

17. Under this theory, the nationality of a corporation is that of the country
under whose laws it was formed

a. Control test
b. Incorporation test
c. Domiciliary test
d. Grandfather rule

18. The subscriber of unpaid shares which are not delinquent shall be entitled
to the following rights, except the right to:

a. Vote
b. Inspect corporate books
c. A stock certificate
d. Dividends

19. Immediately after their election, the directors must formally organize by
election the following officers, except:

a. President
b. Vice-President
c. Treasurer
d. Corporate Secretary

20. Which of the following is not a characteristic of a corporation?

a. Perpetual life
b. Transferability of ownership interests
c. Unlimited liability on the part of the stockholders
d. Ability to attract large amount of capital

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Essay: Read each question carefully. Answer each numbered
question and always support your answers with the pertinent
laws, rules, and/or jurisprudence. A mere "yes" or "no" answer
without any corresponding explanation or discussion may not be
given full credit.

1. Cander Maria issued a check for P 1,000,0000 which she used to pay
Santa Angelo for killing his political enemy, Maria Green. Can be the
check be considered a negotiable instrument? Explain

2. A, B, C and D were partners in the real estate firm of “Avengers.” A

certain parcel of land was registered, not in the name of the fi rm, but in
the name of A, B, C and D. If A, B, C, and D will sell the land to X, will X
become the owner? Explain

3. Henry and Lyons are engaged in real estate business and are co owners
of a parcel of land. Henry, with the consent of Lyons, mortgaged the
property to raise the funds sufficient to buy and develop the San Juan
Estate. Lyons expressed his desire not to be part of the development
project, but Henry, nevertheless, pursued the business alone. When
the business prospered, Lyons demanded for a share in the business. Is
there a partnership created between Henry and Lyons? Explain.

4. Ang Ganda signed a letter addressed and delivered to Mas Pretty. The
terms of the letter are:

a. An offer to sell a 500 sq.m. lot for P 500,000

b. An option time up to October 31, 2020 for Mas Pretty to raise the
P800,000
c. Upon payment of the P800,000, Ang Ganda will execute and sign a Deed
of Sale
d. On October 31, 2020, Ang Ganda sent a letter to Mas Pretty asking for a
new price of P750,000 for the 500 sq. m. lot.

Can Mas Pretty compel Ang Ganda to accept the P 800,000 and make
him sign and execute a Deed of Sale because there was a perfected sale?
Explain.

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5. Sugar borrowed from Pepper P100,000, as a security, he mortgaged his
land to C. The parties stipulated that Sugar cannot sell the mortgaged
property during the period of mortgage. Is the stipulation valid? Why.

6. November 24, 2020

I promise to pay P or his agent, P10,000.00 on December 1, 2020

Sgd. M

Is the instrument negotiable? Explain