Corporation MCQ (1-10)

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
ANSWER:D
 
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.
ANSWER:D
 
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
ANSWER:D
 
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.
ANSWER:B
 
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
ANSWER:D
 
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.
ANSWER:D
 
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
ANSWER:B
 
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 
ANSWER:C
 
9. The right of a corporation to exist as a juridical person during its term as stated in its Articles of Incorporation
despite the deathof any of its stockholders is:
a. Right of Existence 
b. Right of Redemption
c. Right of Succession
d. Pre-emptive Right
ANSWER:C
 
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
ANSWER:D

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
ANSWER:B
 
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
ANSWER:B
 
 
 
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
ANSWER:A
 
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.
ANSWER:C
 
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
ANSWER:D
 
16. Director may be given compensation through any of the following ways, except by:
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
ANSWER:A
 
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
ANSWER:B
 
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
ANSWER:C
 
 
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
ANSWER:B
 
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
ANSWER:C

TEST BANKCORPORATION
CORPORATION
1.  The nationality of a corporation is determined by the law of its domicile or place of principal business. The
test is known as:
A. The control theory
B. The full absorption theory
C. The incorporation theory
D. The management theory

2. This is unincorporated business organization created by an instrument by which property is to be held and man
aged by trustees for the benefit and profit of such person as may be or become the holders of transferable
certificates evidencing the beneficial interests in the estate
A. Business Trust
B. Close Corporation
C. Condominium Corporation
D. Joint Stock Company

3. When preferred shares are issued by a corporation with a fixed annual interest on the face thereof, the effect
is:
A. The contract of subscription is between the corporation and the stockholder subsists
B. The stockholder is a plain investor who may rise or fall with the financial success or failure of the corporation
C. The stockholder is a creditor of the corporation
D. The shares of stock are negotiable instruments under the Negotiable Instruments Law

4. This class of shares are those issued for no consideration or inadequate consideration:
A. Bonus shares
B. Deferred shares or founders shares
C. Over issued shares
D. Watered shares
 
5. The power to deny pre-emptive right as a corporate power is classified as an:
A. Express power
B. Incidental power
C. Implied power
D. Discretionary power

6. The power to invest corporate funds in another corporation or business or for any other purpose as a corporat
e power is classified as an:
A. Express power
B. Incidental power
C.Implied power
D.Discretionary power

7. The power of conducting commercial contracts (to increase the business) and sponsoring athletic contest for e
mployees to keep them in good health or maintaining a hospital for the employees is an example of:
A. Express power
B. Incidental power
C. Implied power
D. Discretionary power

8. To establish pension, retirement, and other plans for the benefits of its directors, trustees, officers and employ
ees is an example of:
A. Express power
B. Incidental power
C. Implied power
D. Discretionary power

9. A religious order is considered as a:

A. Corporation by prescription
B. Public corporation
C. Corporation sole
D. None of them.

10. Place of residence of a corporation shall be its:

A. Place of incorporation
B.Place of residence of majority of stockholders
C. Place where the principal office is established
D. None of them

11. This shall constitute a quorum for transaction of corporate business:

A. Majority of the members
B. Majority of the stockholders
C. Majority of the directors
D. All of them

12. Juridical personality of a corporation begins:

A. From the date of issuance of certificate of incorporation
B. By agreement of the parties
C. Acknowledgement before a Notary Public
D.None of them

13.  Right which the existing stockholders of corporation cannot be deprived without the consent is their right to s
ubscribe or to purchase new stock issued by the corporation; or unissued original stock, in proportion to their
holdings before it can be offered to others:
A. Right of redemption
B. Pre-emptive right
C. Right to purchase
D.None of them
 
14.  A private corporation organized under the corporation law commences to have corporate existence and juridic
al personality and is deemed incorporated from:
A. The date when the articles of incorporation is signed by the incorporators
B. B. When the articles of incorporation and by laws are presented and received by the Securities and Exchange
Commission and the filing fee is paid
C. From the date the SEC issues a certificate of incorporation under its official seal
D. When the Articles of Incorporation is notarized by a Notary Public

15. The following are the qualifications of incorporators . Choose the exemption:
A. Majority of whom must be Filipinos
B. Majority of whom are residents of the Philippines
C. All are of legal age
D. Natural persons, not less than five but not more than 15.

16.  These are the shares of stock which have been issued and fully paid for, but subsequently reacquired

by the issuing corporation:
A. Redeemable shares
B. Treasury shares
C. Founder’s share 
D. None of the three

17. In the amendment of the Articles of Incorporation of a stock corporation, the following is necessary:
A. Amendment by the majority vote of the Board of Directors plus a vote or written assent of the stockholders
representing at lest 2/3 of the outstanding capital stock.
B. Amendment by a vote of 2/3 of the stockholders
C. Amendment by the majority vote of the Board of Directors
D. None of the three

18. Corporation governed by special laws, aside from the requirements specified under the corporation laws, in
order that their articles of incorporation may be approved or accepted, must present before the Security and
Exchange Commission:
A. A favorable recommendation from the Ministry of Finance
B. A copy of previous income tax return and a statement of assets, liabilities and net worth
C. A favorable recommendation of the appropriate government agency to the effect that such articles or
amendment is in accordance with law.
D. An undertaking to change the name of the corporation if found that there is already registered with the SEC a
name or aname similar to the name of this corporation

19. The following are some of the requisites of a de facto corporation. Choose the exception:
A. Valid law under which it is incorporated
B. Attempt to incorporate
C. Assumption of corporation power
D. None of the above

20. The following are the qualifications of director in a corporation. Choose the exemption:
A. Majority of the directors must be Filipino citizens
B. He must own at least one share of the stock in his name
C. Majority of the corporate directors must be residents of the Philippines
D. He must not have convicted by final judgment of an offense carrying an imprisonment exceeding 6 years or an
offense constituting a violation of the Corporation Code

21.  The secretary of a stock corporation shall be:
A. A director of the corporation
B. An incorporator of the corporation
C. A resident and citizen of the Philippines
D. Of legal age and citizen of the Philippines 

22.  Directors or trustees who willfully and knowingly vote or assent to patently unlawful act of the corporation or 
who are guilty of gross negligence or had faith in directing the affairs of the corporation or acquire any personal or
pecuniary interest in conflict with their duty shall be liable:

A. As trustee for the corporation

B. Criminally for violation of the corporation code
C. Jointly and severally for the damages suffered by the corporation
D. None of the above

23.  The following are methods of dissolving a corporation:
A. Expiration of the term
B. Failure to organize and commence business within two (2) years from date of issuance of certificate of
incorporation
C. Shortening of the corporate term
D. All of the above

24.  Three of the following enumeration are not authorized to issue no par value shares of stock. Which is the exce
ption?
A. Insurance companies
B. Industrial companies
C. Public utilities
D. Trust companies

25.  Any stockholder of a corporation shall have the right to dissent and demand payment of the fair value of

his share/s in three of the following corporate acts. Which is the exception?
A. In case of any amendment to the articles of incorporation which has the effect of changing or restricting the
rights of any stockholder or class of shares.
B. In case of merger or consolidation
C. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the
corporate assets and property of the corporation.
D. In case of incurring, creating or increasing bonded indebtedness

26. The authorized capital stock of a proposed corporation is P100,000 divided into 1,000 shares with a par value
of P100.00 each.The minimum amount of subscription that must be paid is:
A. P8,750 or 87.5 shares
B. P6,250 or 62.5 shares
C. P5,000 or 50 shares
D. P7,500 or 75 shares

27. In the matter of management of the business affairs of a corporation, this is supreme:
A. Majority of the stockholders
B. 2/3 of the stockholders
C. Board of Directors
D. President of the corporation

28. This is the equitable right of stockholders to subscribe to newly issued shares of the corporation in proportion
to their present shares in order to maintain their equity in the corporation.
A. Right of redemption
B. Concept of corporation entity
C. Right to sue and be sued
D. Pre-emptive right
 
29. This is a written acknowledgement of an interest of a stockholder in the corporation.
A. Proxy
B. Share of stock
C. Certificate of Stock
D. Capital Stock

30.  These are the persons who sign the Articles of Incorporation, who may or may not be subscribers of shares

A. Incorporators
B. Trustees
C. Directors
D. Promoters

31.  Choose the minimum requirement of the Corporation Law to corporate formation:Authorized Capital Subscrib
ed Capital Paid-In Capital
A. P100,000 P20,000 P5,000
B. 100,000 20,000 4,000
C. 100,000 25,000 5,000
D. 100,000 25,000 6,250

32. They provide and regulate the internal matters of the corporation, such as calling the Board of Directors and
Stockholders meetings.
A. Board of Directors
B. Majority of Stockholders
C. By-laws
D. Articles of Incorporation

33. This is an authority to vote in a corporation stockholders meeting.

A. Proxy
B. By-laws
C. Certificate of stock 
D. Share of stock

34. A gratuitous reissue of Treasury shares will result in:

A. Capital surplus
B. Additional profit
C. Watered stock
 D. Stock dividend

35. Three (3) of the following are similarities between a partnership and a corporation. Which is not?
A. The individuals composing both have title voice in the conduct of the business
B.
 
Both have juridical personality separate and distinct from that of the individuals composing them

 
C.
 
Like a partnership, a corporation can act only through agentsD.
 
Both are organizations composed of an aggregate if
individuals36. One of the following is the limitation on proxies. Which is?
A. Proxy acquires legal title to the shares of the stock
B.
 
A proxy votes even in the presence of the stockholderC.
 
The proxy is voted only for the meeting for which it was intendedD.
 
A proxy is revocable at any time37. The number of the Board of Trustees in a non-stock corporation:
A. Shall not be less than five but not more than eleven
B.
 
May be more than fifteen upon its organizationC.
 
May be less than five upon its organizationD.
 
Shall not be less than five but not more than fifteen38. One of the following is a ground for the suspension or
revocation of the certificate of incorporation by the Securities andExchange Commission.
A. If the corporation has commenced its business transactions and afterwards ceased operation continuously for
aperiod of at least five (5) years
B.
 
If the corporation fails to commence and start to operate and the failure is due to causes beyond the control of
theCorporation
C.
 
If the corporation does not formally commence its business transaction and subsequently become continuously
inoperativefor a period of two (2) years39. Right of the corporation to continue as a juridical entity for the
term stated in the articles of incorporation despite the death ofany stockholder.A.
 
Juridical personality
C. Right of succession
B. Pre-emptive right D. Right of existence40. Original signatories in the articles of incorporation are called:A. Corpo
rators C. StockholdersB. Promoters
D. Incorporators
41.
 
They regulate different internal matters of the corporation such as calling and defining the conduct of the meeting
ofstockholders and directors.A.
 
Board of directors B. Articles of incorporation
C. By-laws
 D. Proxy
42.
 
The document conferring authority to vote stock in a corporate meeting:A.
 
Power of attorney
 C. Capital stockB.
 
Shares of stock D. Proxy
43.
 
The minimum requirement of Corporation Law to corporate
formation.Authorized Subscribed Capital Paid in CapitalA.
 
P500,000 P100,000 P25,000
B. 500,000 125,000 31,250
C.
 
500,000 100,000 20,000D.
 
500,000 125,000 25,00044. Three (3) of the following are attributes of a corporation. Which is the exception?A.
 
An artificial beingB.
 
Has the right of successionC.
 
Has powers, attributes and properties expressly authorized by law or incident to its existence
D. Created by agreement of the incorporators
45. Three of the following are qualifications of the Board of Directors. Which is the exception?A. He must own at
least one (1) share of the capital stock
B. At least majority of them are citizens of the Philippines
C.
 
The shares owned must be recorded in the books of the corporation.D.
 
He must continuously own at least one )1) share of the stock of the
corporation46. The voting requirement to increase or decrease capital stock

 
A. Majority vote of the board of directors and consented by the stockholders representing two-thirds (2/3) of
theoutstanding capital stock
B.
 
Two-thirds (2/3) vote of the board of directors with the consent of majority of outstanding capital stockC.
 
Majority vote of the board of directors and with consent if majority of the outstanding capital stockD.
 
Majority vote of the board of directors and three-fourths (3/4) vote of the outstanding capital stock47. A dividend
payable partly in cash and partly in stocks, as to class of dividend, is
a :A. Optional dividend C. Liquidation dividendB. Property dividend
D. Composite dividend
48.
 
Bonds which are not secured by any specific mortgage lien of pledge or corporate property but by the general
corporation are:A.
 
Guaranteed bonds C. Income bondsB.
 
Debenture bonds
D. Redeemable bonds
49.
 
These are the rules and guidelines adopted by the stockholders of a corporation for the internal government.A.
 
Rules and regulations C. Minutes of the meetingsB.
 
Articles of Incorporation
D. By-law
 
50.
 
Which of these conditions comply with the minimum requirement of the law to corporate formation?
Authorized Capital Subscribed Capital Paid In CapitalA.
 
P100,000 P25,000 P12,500B.
 
64,000 16,000 4,000C.
 
200,000 50,000 10,000
D. 200,000 40,000 10,000
51.
 
A distribution by a corporation of shares held by it in another corporation is:A.
 
Stock dividendB.
 
Sales of capital assetC.
 
Property dividend of actual distribution of corporate assetsD.
 
Sale of treasury stock
52.
 
Corporations organized by private persons performing public function and for profit to private parties are:A.
 
Public corporationsB.
 
Government controlled corporation
C. Quasi-public corporation
D. Private corporation53. This is a document of a corporation acknowledging the interest of a stockholder in the
corporation’s assets.
 A.
Certificate of stock
C. Share of stock 
 
B. Capital stock D.
Stockholder’s equity
 54. In a corporation, any two (2) or more positions may be hels concurrently by the same person, except that no
one (1) personshall act as:A.
 
Chairman of the Board and PresidentB.
 
Secretary and Treasurer
C. President and Secretary
D. Treasurer and Director55. A corporation may invest its
funds in any other corporation of business or any purpose other than the primary purpose forwhich it was
organized, only if:
A. There is majority vote of the Board of Directors and ratified by the stockholders representing 2/3 of the
outstandingcapital stock
B.
 
It is reasonably necessary to accomplish its secondary purpose, the approval of the stockholders not necessaryC.
 
There is a majority vote of the Board of DirectorsD.
 
There is majority vote of the outstanding capital stock56. The following are advantages of no-
par value share of stock. Which is the exception?A.
 
 No-par value share allow flexibility in priceB.
 
The stockholders of no-par value shares are relieved of personal liability for unpaid stock subscriptionC.
 
It allows the issue of stock in exchange of property
D. No-par value shares afford a possible remedy or relief from the evil of overcapitalization and stock watering
57. The right to vote at meetings, the right to receive dividends and the right to
receive copies of financial statements is known as:A. Right of existence C. Pre-emptive right

 
 
B.
Directors right
D.
Stockholder’s right
 
58. The Garcia Realty Development Corporation has a capital stock of P1,000,000 divided into
10,000 shares with a par valueof p100 each. 5,000 shares are ordinary share and 5,000 shares are 10% preference
share. In 2008 there was no declared dividends but in 2009 dividends in the amount of P200,000 were declared.
The holders of the preference share are entitled to receive:A.
 
P50,000 if cumulative, non-participatingB.
 
P125,000 in non-cumulative, participating
C. P125,000 if cumulative, participating
D. P100,000 if non-cumulative, non-participating 59.
 
Persons who compose the corporation whether as stockholder in a stock corporation or member in a non-stock
corporation, arecalled:A.
 
Incorporators C. PromotersB.
 
Subscribers
D. Corporators
 60.
 
In three of the following, these persons qualify to be incorporators. Which is the exception?
A. Must have paid at least 25% of their subscription
B.
 
 Natural persons not less than five, not more than 15C.
 
Majority are residents of the PhilippinesD.
 
 Need not be citizens of the Philippines 61. Dividends are declared and paid out of theA.
 
Paid-up capitalB.
 
Capital stockC.
 
 Net income of the current year
D. Unrestricted retained earnings
62. The following defect will preclude the creation of even a de facto corporation:A.
 
The name of the corporation closely resembles that of a pre-existing corporation that it will tend to deceive the
publicB.
 
The incorporators or a certain number of them are not residents of the Philippines
C. Lack of certificate of incorporation from the Securities and Exchange Commission
D. Answer not given63.
 
The distinction between a proxy and a voting trust is that in a voting trust:
A. The trust has a legal title to the shares of the transferring stockholder
 B.
 
Unless coupled with interest, is revocable at any timeC.
 
Is not limited to any particular meetingD.
 
Answer not given64.
 
The distinction between subscription of shares from purchase of shares is that in subscription of shares:A.
 
It is an independent agreement between the individual and the corporation to buy shares of stock from it at a
stipulated priceB.
 
It takes place before or after incorporation and is generally paid in installment or upon call.
 C.
 
In case of insolvency of the corporation, the subscription price cannot be enforced on the theory that the
corporation canno longer perform its obligation to deliver the certificate of stockD.
 
Answer not given65.
 
A corporation created in strict or substantial conformity with the statutory requirements for incorporation and
whose right toexist as a corporation cannot be successfully attacked even in a direct proceeding for that purpose
by the State is known as:A.
 
De jure corporation C. De facto corporationB.
 
Corporation by estoppels D. Answer not given66.
 
One of the characteristics of treasury shares is that:A.
 
They have the status of outstanding sharesB.
 
They may not be reissued or sold again
C. They participate neither in dividends nor in the meetings of the corporation as voting stocks
D. Answer not given67. Which of the following will not qualify as incorporator of a corporation?A.
 
A minor who is emancipated by voluntary concession or marriageB.
 
A married woman without the consent of her husband where the property involved in the act of incorporation is
paraphernal
C. A corporation
D. Answer not given
 
68.
 
The articles of incorporation is required to state the names, nationalities and residences of persons who act as
directors ortrustees are duly elected and qualified. This requirement is intended to provide a basis by which the
Securities and ExchangeCommission could determine whether the Articles of Incorporation has complied with the
requirement that:
A. At least a majority of the directors or trustees are residents of the Philippines
 B.
 
All the directors or trustees are residents of the PhilippinesC.
 
2/3 of the directors or trustees are residents of the PhilippinesD.
 
Answer not given69.
 
The power to revoke corporate franchise for causes specified by law is vested only in the:A. President of the
Republic of the Philippines
B. Securities and Exchange Commission
C.
 
Court of component jurisdictionD.
 
Answer not given70. Corporate dissolution may take place by voluntary inaction
which will in the cessation of its corporate powers and thecorporation shall be deemed dissolved. Such dissolution
may result from:
A. Inaction by the corporation through its failure to formally organize and commence with the transaction of
itsbusinesses or the construction of its works within two years from the date of its incorporation
B.
 
Failure of the corporation to submit the annual reports required by the Securities and Exchange Commission for a
periodof five yearsC.
 
Merger or consolidation with respect to absorbed corporationD.
 
Answer not given71. Watered stocks are shares of stock issued by a corporation for a consideration in any form
other than cash valued in excess ofits fair value. In this regard:A. The issue by itself is void
B. The agreement that it shall be paid less than its par or issued value is illegal and void and can not be enforced
C.
 
The subscriber and purchaser shall not be liable for the full par value of the sharesD.
 
Answer not given72. The voting proportion
required to enable a corporation to invest its funds in any other corporation on business of for any purpose other
than its primary purpose:A.
 
2/3 vote of the board of directors and ratified by majority of the outstanding capital stockB.
 
Majority vote of the board of directors and ratified by majority of the stockholdersC. Majority of the board of
directors and ratifies by 2/3 of the outstanding stockholders
D. Majority of the board of directors and ratified by 2/3 of the outstanding capital stock
73. An officer of a corporation may hold two or more positions in the corporation but not as:A. Chairman of the
Board and President
B. President and Treasurer
C.
 
Secretary and Treasurer
D.
 
Vice President and Secretary74. The right of a corporation to exist as juridical person during its term as stated in its
Articles of Incorporation despite the deathof any of its stockholders is:A. Right of existence
C. Right of succession
B. Right of redemption D. Pre-emptive right75.
 
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
C. Certificate of stockB.
 
Share of stock D. Capital76.
 
Requirement to effect the amendment of by-laws of a corporation.A.
 
Majority vote of the board of DirectorsB.
 
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
77.
 
The nationality of the corporation is determined by the place of the controlling stockholders. This test is:A.
 
Control test
B. Incorporation test C. Domicile test D. Capitalalization test
78.
 
The following person can not be incorporator of a corporation.A.
 
A resident alienB.
 
A married woman without the consent of the husband even if the payment of her shares is her paraphernal
propertyC.
 
A subscriber on the share of the corporation who pays less than 25% of his subscription
 
D. A corporation organized under the laws of the Philippines
79.
 
One of the following is not required and does not form part of the three-fold duty of directors of a corporation.
Which one?A.
 
Duty of diligence C. Duty of obedience B. Duty of loyalty
D. Duty of efficiency
 80.
 
These do not form part of the outstanding capital stock:A.
 
Bonus shares C.
Founder’s shares
 B.
 
Treasury shares
D. Redeemable shares81.
 
O
ne of the following does not require stockholder’s approval:
 A.
 
Merger or consolidationB.
 
Change of corporate nameC.
 
Investment of corporate funds for a purpose outside of the main purpose of the corporation.
D. Declaration of cash dividend
82.
 
Under this test, a corporation is a national of the country pursuant to whose laws it is incorporated:A.
 
 Nationality test C. Control testB.
 
B. Capitalization test
D. Incorporation test
 83.
 
Which of the following statements is not correct?A.
 
In the delinquency sale at public auction, the highest bidder is one who offers to pay the full amount of the
balanceof the subscription plus interest and expenses of the sale for the highest number of shares.
 B.
 
The sale of delinquent stock at public auction can be stopped if the Board of Directors stops the sale for valid
reason.C.
 
Payment of unpaid subscription may not be enforced by applying cash dividends to delinquent stockholders.D.
 
The Board of Directors shall order, by resolution, the sale of delinquent stock specifying the amount due plus
accruedinterest, the place, time and date of the sale84.
 
A stockholder who does not approve the action taken by the Board of Directors in proposing to amend the Articles
ofIncorporation is allowed to withdraw from the corporation in one of the following instances: A. Merger or
consolidationB. Investment of corporate funds in another corporation
C. Creating, incurring, increasing or decreasing any bonded indebtedness
D. Shortening or prolonging corporate existence85. I. Membership in a non-
stock corporation and all rights arising therefrom cannot be transferred even if provided inthe articles of
incorporation or by laws because membership and the rights arising therefrom are personal and non-
transferable.II. Treasury stocks sold for less than p
ar or issued value are considered “watered stock” and as such are prohibited
 by law.Which is correct?A. True; False
B. Both statements are false
C.
 
False; TrueD.
 
Both statements are true.