Question 1

2 / 2 pts
To determine the nationality of a corporation, this test is used wherein
the nationality of a corporation is that of the country where its
principal business is conducted.

Grandfather rule

Incorporation test

Business domiciliary test

Question 2
2 / 2 pts
Corporations formed under a special law shall adhere to the provisions
of the Revised Corporation Code and the special law under which it is
formed shall apply in suppletory character.

True

False

Question 3
2 / 2 pts
A newly-formed corporation is primarily liable for pre-incorporation
contracts and obligations entered into and/or incurred by the promoter
in behalf of and for the benefit of the corporation.

True
False

IncorrectQuestion 4
0 / 2 pts
The holder of a NON-VOTING share CANNOT cast his vote in the which
of the following instances:

removal of a director

merger or consolidation

amendment of the by-laws

decrease of authorized capital stock

Question 5
2 / 2 pts
If the varying rights and privileges granted to different classes of
shares are not stipulated in the articles of incorporation, then there is
no variance to speak of and all these classes of shares shall have the
same rights and privileges as that of the others.

True

False

Question 6
2 / 2 pts
The holder of treasury shares is NOT entitled to receive dividends.

True

False

Question 7
2 / 2 pts
As a general rule, after the effectivity of the Revised Corporation Code,
those issued with their certificates prior to such effectivity shall
amend their articles in order to avail of the benefit of perpetual
existence.

True

False

Question 8
2 / 2 pts
What is the effect of substantial and strict compliance with the
requirements set forth by the laws concerning the formation of a
corporation?

formation of a corporation by estoppel

formation of a de facto corporation

formation of a de jure corporation

Question 9
2 / 2 pts
What is the required number of votes to amend any matter in the
articles of a STOCK incorporation?

majority vote of the board of directors AND the vote or written assent
of the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock

majority vote of the board of directors AND the vote or written assent
of the stockholders representing at least majority of the outstanding
capital stock

two-thirds (2/3) vote of the board of directors AND the vote or written
assent of the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock

Question 10
2 / 2 pts
Despite the defects in its incorporation, one of the requisites of a de
facto corporation is that it must have been issued a certificate of
incorporation by the Commission.

True

False

Question 11
2 / 2 pts
The validity of the existence of a de jure corporation may only be
inquired into through the institution of a quo warranto proceeding by
the Solicitor General in behalf of the state.

True

False

IncorrectQuestion 12
0 / 2 pts
What is the liability of persons who are found to be responsible for
acting as a corporation despite the knowledge that they are without
authority to dispense of corporate powers?

liable in their individual capacities for all the debts, liabilities, and
damages incurred or arising therefrom

liable as general partners for all debts, liabilities and damages

incurred or arising as a result thereof

liable in the same way that a de jure corporation is liable for all the
debts, liabilities, and damages

Question 13
2 / 2 pts
Happy Go Lucky Corp was incorporated today. As to its right to exist
and continue its business, what is the effect if it shall fail to
commence its business until November 30, 2025?
its certificate of incorporation is deemed revoked

the corporation may be placed under a delinquent status

no effect as the new law allows for a five-year period from

incorporation

Question 14
2 / 2 pts
Corporations vested with public interest shall have independent
directors constituting at least eighty percent (80%) of such board.

True

False

Question 15
2 / 2 pts
Which of the following statements is TRUE pertaining to voting in
absentia (voting through remote communication)?

A board resolution is not an effective and proper mechanism to set

forth the guidelines for voting in absentia.

Voting in absentia is applicable only to stock corporations.

Corporations vested with public interest shall nevertheless be allowed

such mode even if there is no such provision in the by-laws.
Question 16
2 / 2 pts
The election of directors and trustees must be done by ballot if so
requested by at least one voting stockholder or member.

True

False

Question 17
2 / 2 pts
The removal of a director or trustee from the board is allowed even if
the removal is without cause.

True

False

Question 18
2 / 2 pts
If a vacancy in the board of directors exists due to the expiration of
term of a director, who has the power to fill such vacancy?

the stockholders

the remaining directors

the corporate officers

IncorrectQuestion 19
0 / 2 pts
Which of the following statements is NOT TRUE pertaining to
compensation of directors or trustees?

The board may resolve the matter and issue a resolution provided that
the grant of compensation is reasonable.

The compensation may consist of reasonable per diems, except when

provided for in the by-laws.

In no case shall the total yearly compensation of directors exceed 10%

percent of the net income before income tax of the corporation during
the preceding year.

Question 20
2 / 2 pts
In case of contracts between corporations with interlocking directors,
the condition that the presence of such interlocking director(s) is not
necessary to constitute quorum and for the approval of the contract
only applies when:

the interest of the interlocking director in both corporations is at least

nominal

there is fraud in the execution of the contract, or that the contract is

not reasonable under the circumstances
the interest of the interlocking director in one corporation is
substantial, while it is merely nominal in the other

Question 21
2 / 2 pts
The following are corporations vested with public interest, except:

a specially regulated financial intermediary

banks / quasi-banking corporation

privately listed company

corporation whose securities are listed for trading in an exchange

Question 22
2 / 2 pts
In case of non-holding of regular election, the report must be made ____
days from the scheduled election.

15

30

3
45

Question 23
2 / 2 pts
The following are causes of vacancy in the Board of Director/ Trustees,
except:

Decrease in the number of trustees/directors

Death

Disqualification

Abandonment

Question 24
2 / 2 pts
In no case shall the total yearly compensation of directors exceed 20%
percent of the net income before income tax of the corporation during
the preceding year.

True

False

Question 25
2 / 2 pts
It prohibits directors from usurping for, or diverting to, themselves
business deals or opportunities that in equity or fairness belong to the
corporation.

Doctrine of Corporate Equity

Opportunistic Doctrine

Doctrine of Corporate Opportunity

Doctrine of Corporate Rehabilitation