DE LA SALLE LIPA
College of Business, Economics, Accountancy and Management Accountancy Department Business Law - Review COERA!E" A# Corp Corpor orat atio ion n Code Code $ature and classes of corporation Re%uirements for organi&ation 'owers of a corporation E(press )mplied )ncidental Board of Directors*Corporate O+cers ualications Election and removal 'owers and duciary duties Classes of stoc.s Concepts /u0scriptions 'owers, duties, rig1ts and o0ligations of stoc.1olders Ma2ority and minority control Corporate reorgani&ation Mergers Consolidations Ot1er 0usiness com0inations Modes of dissolution and li%uidation 3oreign corporations License to do 0usiness 'urpose of t1e license Re%uirements for application*issuance of license Conse%uence of doing 0usiness wit1out licenses Denition and rig1ts of foreign corporations Denition of doing 0usiness and its relation to foreign investments Resident agent 4purpose*%ualications5 /uits against foreign corporations /uspension*revocation of license 6it1drawal from 0usiness 7inds and availa0ility of corporate 0oo.s
a da nds e l e c tt hebe s ta ns we rf o rt hef o l l o wi ngque s t i o ns . Di r e c t i on:Re 1. The following are the attributes of a corporation, except a. It is an artificial being. b. It is created by entering into a contract, whether oral or written. c. It enjoys the right of succession. d. It has the powers, attributes, and properties expressly authorized by law or incident to its existence. 2. It is a corporation which has capital stock divided into shares and are authorized to distribute to the holders of such shares dividends or allotents or the surplus profits on the basis of the shares held. a. !on"stock corporation b. #lose corporation c. $pen corporation d. %tock corporation &. 'hich of the following stateents refers to a lay corporation( a. It is one organized for religious purposes. b. It is one established for charitable purposes. c. It is one which consists of only one eber or corporator. d. It is one organized for a purpose other than a religion. ). 'hich of the following stateents refers to a doestic corporation( a. It is one incorporated under the *hilippine laws. b. It is one fored, organized or existing under any laws other than those of the *hilippines and whose laws allow +ilipino citizens and corporations to do business in its own country. country. c. It is one existing both in fact and law. d. It is one existing in fact but not in law.
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. -$!/ *hilippines., is fully owned by Teka 0una, a apanese national. Its ain office is located at Tokyo, apan but it was incorporated under the provisions of the #orporation #ode of the *hilippines. It engages its business in the *hilippines. 'hat is the classification classification of the corporation under the #orporation #ode( a. esident corporation b. +oreign corporation c. !on"resident corporation d. oestic corporation 3. The following are characteristics of a corporation, except a. It ac4uires juridical personality fro the oent of execution of contract of incorporation. b. The power to do business and anage its affairs is vested in the board of directors or trustees. c. It re4uires at least five incorporators except a corporation sole. d. It can be dissolved with the consent of the state. 5. The following are characteristics of a corporation, except a. The owner has the right to transfer his interest without prior consent of other owners. b. The owners are liable personally and subsidiarially. c. It ay not be fored for a ter in excess of 6 years extendible to no ore than 6 years in any one instance. d. It has a right of succession. 7. It refers to a group of persons persons that assues to act as a corporation corporation knowing it to be without authority authority to do so, and enters into a transaction with a third person on the strength of such appearance. a. e jure corporation b. #orporation be prescription c. #orporation by estoppel d. $pen corporation 8. It is a corporation which controls another as a subsidiary by the power to elect anageent. It is the one that holds stocks in other copanies for purposes of control rather than for ere investent. a. -olding corporation b. %ubsidiary corporation c. /ffiliate d. /ssociate 16. It is a corporation established for business or profit. a. 9leeosynary corporation b. #ivil corporation c. 9cclesiastical corporation d. :ay corporation 11. 11. The following are the advantages of foring a corporation, except a. It has continuity of existence and liited liability on the part of shareholders. b. It is subject to greater degree of governental supervision. c. It has a legal capacity to act and contract as a distinct unit in its own nae. d. Its anageent is centralized and there is ease in transferability of shares. 12. The following are the disadvantages of foring a corporation, except a. There is high cost and foration and operations. b. %tockholders have little voice in the conduct of the business. c. It akes feasible gigantic financial undertakings due to nuerous investors. d. Its credit is weakened by the liited liability feature. 1&. They refer to the persons entioned in the /rticles of Incorporation as originally foring and coposing the corporation, having signed the /rticles and acknowledged the sae before notary public. a. Incorporators b. #orporators c. %tockholders d. irectors 1). 'hich of the following stateents refers to prooters( a. They are the corporators of a nonstock corporation. b. They are the persons who acting alone or with another take initiative in founding and organizing the business or enterprise of the issuer and receive consideration therefor. c. They are the persons who agreed to take and pay for original and unissued shares of a corporation fored or to be fored. d. They are persons who guaranteed on a fir coitent and;or declared best effort basis the distribution and sale of securities of any kind by another copany. 1. The following are the 4ualifications of incorporators, except a. They ust be natural persons not suffering fro legal capacity excess incorporated cooperatives which are allowed to be incoporators of rural bank. b. 0ajority ust be residents of the *hilippines and all ust be of legal age. c. 0ajority ust be +ilipino citizens. d. They ust not be less than but not ore than 1. e. In stock corporations, each ust own or subscribe to at lease one share, while in nonstock corporations, ebers are not owners of shares of stocks, and their ebership depends on ters provided in the articles of incorporation.
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13. It refers to the basic class of ordinary shares usually without extraordinary rights and privileges, and the owners thereof are entitled to pro"rate share in the profits of the corporation and in its asses upon dissolution and likewise in the anageent of its affairs. a. *referred shares b. #oon shares c. %pecial shares d. *rivileged shares 15. 'hich of the following stateents refers to cuulative preference shares( a. It is one which entitles the owner thereof to payent not only of current dividends but also back dividends not previously paid whether or not during the past years dividends were declared or paid. b. It is one which grants the holders of such shares only to the payent of current dividends but not back dividends when and if dividends are paid to the extent agreed upon before any other stockholders are paid the sae. c. It is one which entitles the shareholders to participate with the coon shares in excess distribution at soe predeterined or at a fixed ratio as ay be deterined. d. It is one which entitles the shareholder thereof to receive the stipulated preferred dividends and no ore. 17. 'hich of the following shares are allowed to be classified as without right to vote( I. edeeable shares II. *referred shares III. #oon shares a. I only b. I and III only c. II and III only d. I and II only 17. 'hen voting rights are denied to a specific share, the shareholder shall nevertheless be entitled to vote on the following fundaental atters, except a. 0erger or consolidation of capital stock b.
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2. 'hich of the following shares have no voting rights of whatsoever( a. *referred shares b. #oon shares c. edeeable shares d. Treasury shares 23. 'hich of the following stateents refers to the authorized capital stock( a. It refers to the aount fixed in the articles of incorporation that ay be subscribed and paid by the stockholders of the corporation. b. It refers to the portion of the capital stock issued to subscribers, whether fully paid or partially paid, except as treasury shares. c. It refers to the aount paid by the stockholders on subscriptions fro unissued shares of the corporation. d. It refers to the aount e4ual to the aggregate par value and;or issued value of the outstanding capital stock and cannot be returned to shareholders until dissolution. 25. 'hat is the axiu ter of the corporation as provided in the #orporation #ode( a. 6 years only b. 6 years extendable for another 6 years in a single instance which extension cannot be ade earlier than years prior to the expiration date. c. 6 years extendable for another 6 years in a single instance which extension cannot be ade earlier than 16 years prior to the expiration date. d. 6 years extendable for another 6 years in a single instance which extension cannot be ade earlier than 2 years prior to the expiration date. 27. /T Inc. has authorized capital stock of *76,666. 'hat is the iniu subscribed capital stock( a. *13,666 b. *26,666 c. *)6,666 d. *36,666 28. T9! Inc. has authorized capital stock of *36,666. 'hat is the iniu paid up capital( a. *1,666 b. *&,56 c. *),666 d. *,666 &6. It refers to the docuent that defines the charter of relationships between the %tate and the corporation, the stockholder and the %tate, and between the corporation and its stockholders. a. overnance of the corporation &2. 'hat is re4uired vote for aending the articles of incorporation( a. 0ajority vote of the board of directors;trustees and 2;& vote of the outstanding capital stock;ebers b. 2;& vote of the board of directors;trustees and 2;& vote of the outstanding capital stock;ebers c. 2;& vote of the board of directors;trustees and ajority vote of the outstanding capital stock;ebers d. 0ajority vote of the board of directors;trustees and ajority vote of the outstanding capital stock;ebers &&. The following are the grounds when articles of incorporation;or its aendent ay be rejected or disapproved, except a. The /$I or any aendent thereto is substantially in accordance with the for prescribed therein. b. The re4uired percentage of ownership of the capital stock to be owned by +ilipino citizens has not been coplied with. c. The treasurer=s affidavit concerning the aount of capital stock subscribed and or paid is false. d. The purpose of the corporation is patently illegal, ioral, unconstitutional or contrary to governent rules and regulations. &). The following are the grounds for the suspension or revocation of franchise or certificate of registration, except a. +raud in procuring its certificate of registration. b. %erious isrepresentation as to what the corporation can do or is doing to the prejudice of the public. c. efusal to coply with the lawful order of %9#. d. #ontinuous inoperation for a period of at least & years after the coenceent of its business. e. +ailure to file the by"laws within the re4uired period. f. +ailure to file re4uired reports in appropriate fors as andated by %9#. &. It refers to a corporation which actually exists for all practical purposes as a corporation but which has no legal right to corporate existence as against the %tate since it has not coplied with all the re4uireents necessary. a. e jure corporation b. #orporation by estoppel c. e facto corporation d. #orporation by prescription
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&3. 'hich of the following instances will result to a defacto corporation( I. The percentage of +ilipino ownership of the capital stock re4uired for the business is less than what is prescribed by law. II. The failure to subit by laws on tie. III. The /rticles of Incorporation fails to state all the atters re4uired by the #ode. I?. /bsence of /rticles of Incorporation ?. +ailure to file articles of incorporation or lack of articles of incorporation fro the %9#. a. I, II, III, I? and ? b. I? and ? c. I, II and III d. I, II, III and I? &5. 'hat is the liability of officers and directors of a de facto corporation to creditors( a. :iable only to the extent of their subscription b. :iable only to the extent of their subscription unless acted in bad faith c. !ot liable d. :iable as general partners &7. 'hat is the liability of officers and directors of corporation by estoppel also known as ostensible corporation( a. :iable only to the extent of their subscription b. :iable only to the extent of their subscription unless acted in bad faith c. !ot liable d. :iable as general partners &8. 'hat is the effect if a corporation does not forally organize and coence the transaction of its business or the construction of its works within two @2A years fro the date of its incorporation( a. The corporation shall be deeed dissolved. b. That shall be a ground for suspension or revocation of corporate charter. c. The corporation is considered de facto corporation. d. The corporation shall be criinally liable. )6. 'hat is the effect if a corporation has coenced the transaction of its business but subse4uently becoes continuously inoperative for a period for at least five @A years( a. The corporation shall be deeed dissolved. b. That shall be a ground for suspension or revocation of corporate charter. c. The corporation is considered de facto corporation. d. The corporation shall be criinally liable. )1. The following are the conditions non"copliance of which will prevent the legal existence, except a. +iling of the articles of incorporation with the %9# or issuance of the certificate of incorporation by the %9# b. +iling of the by"laws with the %9# c. The iniu nuber of incorporators re4uired by the #orporation #ode d. The legal re4uireents that 2B of the authorized capital stock ust be subscribed and 2B thereof paid )2. 'hen is the coenceent of corporate existence( a. 9xecution of articles of incorporation by the incorporators b. 9xecution of contract by the founders c. Issuance by the %9# to the incorporators of certificate of incorporation under its official seal d. #oenceent of the business operation of the corporation )&. 'hat is the governing body of a corporation( a. >eneral partners b. eneral anager d. #ouncil of elders )). The following are the 4ualifications of directors of a stock corporation, except a. -e ust own at lease one share of the capital stock. b. -e ust be incorporator of the corporation. c. -e ust be of legal age. d. 0ajority ust be residents of the *hilippines. ). 'hat is the ter of office of directors of a corporation( a. Ter of two years but he ay continue to serve until their successors are elected and 4ualified. b. Ter of three years but he ay continue to serve until their successors are elected and 4ualified. c. Ter of one year but he ay continue to serve until their successors are elected and 4ualified. d. Ter of four years but he ay continue to serve until their successors are elected and 4ualified. )3. 'hich of the following stateents concerning nuber of directors;trustees of a corporation is false( a. In a stock corporation, it ust not be less than five nor ore than fifteen. b. In ordinary non"stock corporation, the board of trustees ay be ore than 1 in nuber. c. In close corporation, there is no re4uireent for election of board of directors. d. Trustees of nonstock educational corporation shall not be less than five nor ore than fifteen. e. In a corporation sole, the nuber of directors is at least . )5. 'hat is the re4uired nuber of present board of directors during election of board of directors in a stock corporation( a. $wners of ajority of the outstanding capital stock.
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b. $wners of 2;& of the outstanding capital stock. c. $wners of 166B of the outstanding capital stock. d. $wners of 2B of the outstanding capital stock. )7. 'hat is the anner of voting re4uired by the #orporation #ode for election of board of directors in a stock corporation( a. %traight voting b. #uulative voting c. *articipative voting d. %iple voting )8. 'hat is the anner of voting for election of board of trustees in a non"stock corporation( a. %traight voting b. #uulative voting for one candidate c. #uulative voting by distribution d. 0ebers of non"stock corporations ay cast as any votes as there are trustees elected but ay cast not ore than one vote for one candidate. 6. 'hich of the following stateents concerning the election of directors;trustees is false( a. The election ust be by ballot if re4uested by any voting eber or stockholder. b. The candidates receiving the higher nuber of votes shall be declared elected and a ajority vote is not necessary as long as there is a 4uoru during the election. c. elin4uent stock ay be voted. d. /t any eeting of stockholder or ebers called for the election of directors or trustees, there ust be present either in person or by representative authorized to act by written proxy, the owners of a ajority of the outstanding capital stock or ajority of ebers entitled to vote. 1. 'hat is the 4uoru re4uired for the election of corporate officers( a. $wners of ajority of the outstanding capital stock. b. $wners of 2;& of the outstanding capital stock. c. $wners of 166B of the outstanding capital stock. d. C plus one of the nuber of directors as fixed in the articles of incorporation 2. In which of the following is proxy voting allowed( a. In election of board of directors by shareholders. b. In election of corporate officers by board of directors. c.
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b. If the vacancy results fro death, resignation, abandonent, or dis4ualification and the reaining ebers of the board still constitutes a 4uoru. c. If the vacancy is created by reason of an increase in the nuber of directors or trustees. d. If the vacancy is referred by the board of directors to the shareholders.
36. The following are the reasons for vacancy in the board of directors which ay allow the reaining ebers of the board of directors to fill the vacancy in the presence of the 4uoru, except a. eath of a director b. esignation of a director c. eoval of a director by a stockholder or expiration of ter or vacancy due to increase in nuber of directors d. /bandonent of office by a director d. is4ualification of a director 31. The /rticles of Incorporation and uilty of siple negligence or is in good faith in directing the affairs of the corporation d. #onsent to the issuance of watered stocks, or having knowledge thereof, fails to file objections with the corporate secretary. e. /gree or stipulate in a contract to hold hiself personally liable with the corporation 38. The following are the reedies of the stockholders in case of isanageent of the corporation, except a. #riinal action against the corporation b. issolution if the abuse aounts to a ground for the institution of a 4uo warranto proceeding but the %olicitor >eneral refuses to act c. eceivership d. Injunction if the act has not yet been done e. erivative suit or coplaint filed with the %9# 56. -e refers to a director, trustee, or officer who personally contracts with the corporation in which he is director, trustee or officer.
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a. #onflicting director, trustee or officer b. irector;trustee;officer in bad faith c. Interlocking director, trustee or officer d. %elf"dealing director, trustee or officer
51. 'hat is the status of a contract entered into by a self"dealing director and the corporation( a. !ull and void b. ?alid and without defect c. ?oidable at the option of the director d. ?oidable at the option of the corporation 52. -e refers to a person who is a director, trustee or officer in different corporations. a. #onflicting director, trustee or officer b. irector;trustee;officer in bad faith c. Interlocking director, trustee or officer d. %elf"dealing director, trustee or officer 5&. 'hat is the status, as a general rule, of a contract entered into by 2 or ore corporations, having interlocking directors( a. !ull and void b. ?alid and without defect provided there is no fraud and the contract is fair and reasonable c. ?oidable at the option of the director d. ?oidable at the option of the corporation 5). The following are the re4uisites in order for contracts with self"dealing directors to be valid, except a. The presence of such self"dealing director in the board eeting approving the contract was not necessary to constitute a 4uoru. b. The vote of such director;trustee in the board eeting, approving the contract was not necessary for the approval of the contract. c. The contract is fair and reasonable under the circustances. d. In the case of an officer, the contract has been previously authorized by the board of directors. e. The contractual aount shall not exceed 16B of net incoe before tax of the preceeding year. 5. If the interlocking director=s interest in one corporation is substantial @26B of outstanding capital stockA and his interest in the other corporation is erely noinal, then all the re4uisites for contracts with self"dealing directors ust be present to be valid. If either of the first two re4uires are absent, the contract can by ratified by how any vote( a. $wners of ajority of the outstanding capital stock or ajority of ebers. b. $wners of 2;& of the outstanding capital stock or 2;& of ebers. c. $wners of 166B of the outstanding capital stock or 166B of ebers. d. $wners of 2B of the outstanding capital stock or 2B of ebers. 53. 'hat is the liability of a director, who by virtue of his office, ac4uired for hiself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of the corporation( a. The director is not liable. b. The director is liable only if he acted in bad faith. c. The director is liable only if he acted in gross negligence. d. The director is liable to refund to the corporation all the profits he realized on a business opportunity which the corporation is financial able to undertake, fro its nature, is in line with corporations business and is of practical advantage to business and the corporation has an interest or a reasonable expectancy. 55. It refers to a body created by the by"laws and coposed of not less than three appointed ebers of the board which, subject to the statutory liitations, has all the authority of the board to the extend provided in the board resolution or by"laws. a. 9xecutive coittee b. 9xecutive council c. 9xecutive body d. 9xecutive group 57. The executive coittee ay act by ajority vote of its ebers and its decision is not appealable to the board of directors. -owever, it cannot act on the following atters, except a. /pproval of any action for which shareholders= approval is also r e4uired. b. +illing up of board vacancies c. 9ntering into a huge contract d. /endent, repeal of by laws or adoption of new by"laws e. /endent or repeal of any resolution of
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71. The following are the general powers and capacity of a corporationF a. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, ortgage and deal with real and personal property, securities and bonds. b. +or stock corporations, to issue and sell stocks to subscribers and treasury stock, for nonstock corporation, to adit ebers c. To enter into erger or consolidation d. To establish pension, retireent, and other plans for the benefit of its directors, trustees, officers and eployees e. To sue and be sued f. To ake reasonable donations for public welfare, hospital, charitable, cultural, scientific, civic or siilar purposes g. To give donation to any political party, candidate and partisan political activity h. To exercise other powers essential or necessary to carry out its purposes i. ight of succession j. To adopt and use of corporate seal k. To aend its articles of incorporation l. To adopt its by"laws 72. The following are the other powers of the corporationF @!$ /!%'9, 9!E09/TI$! $!:GA a. To sell, dispose, lease, encuber all or substantially all of corporate assets b. *ower to ac4uire own shares c. Invest corporate funds in another corporation or business or for any other purpose other than the priary purpose d. *ower to deny e. *ower to declare dividends out of unrestricted retained earnings f. *ower to increase or decrease capital stock g. *ower to incur, create or increase bonded indebtedness h. *ower to enter into anageent contract i. 9xtension or shortening corporate ter 7&. 'hat is the re4uired vote for the extension;shortening of corporate ter( a. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. b. /pproval by 2;& vote of the board of directors;trustees and ratification by 2;& of the stockholders representing outstanding stock or ebers. c. /pproval by 2;& of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. d. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. 7). 'hat is the re4uired vote for the increase;decreasing of authorized capital stock( a. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. b. /pproval by 2;& vote of the board of directors;trustees and ratification by 2;& of the stockholders representing outstanding stock or ebers. c. /pproval by 2;& of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. d. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. 7. 'hat is the re4uired vote for incurring, creating or increasing bond indetedness( a. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. b. /pproval by 2;& vote of the board of directors;trustees and ratification by 2;& of the stockholders representing outstanding stock or ebers. c. /pproval by 2;& of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. d. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. 73. It refers to the right of shareholders to subscribe to all issues or disposition of shares of any class in proportion to their present shareholdings. a. /ppraisal right b. *re"eptive right c. ight of first refusal d. edeeable right 75. 'hen is pre"eptive right available( I. To new issues of shares arising fro any increase of capital stock II. To unissued shares belonging to the original stock of the corporation III. To unsubscribed portion and treasury shares
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a. I only b. II only c. I and II only d. I, II and III
77. The following are the instances when pre"eptive right of shareholder is not available, except a. %hares to be issued to coply with laws re4uiring stock offering or iniu stock ownership by the public b. To shares that are being reoffered by the corporation after they were initially offered together with all the shares c. %hares issued in good faith with approval of the stockholders holding 2;& of the outstanding capital stock in exchange for the property need for corporate purposes d. %hares issued, with approval of the stockholders holding 2;& of the outstanding capital stock, in payent of previously contracted debts e. In case the pre"eptive right is not denied in the articles of incorporation f. 'aiver of the right by the stockholder g. In case of non"stock corporation h. 'here the assignors have previously exercise their pre"eptive rights to subscribe to new shares 78. 'hat is the re4uired vote for the sale, disposal, lease or encubrance of all or substantially all of corporate assets( a. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. b. /pproval by 2;& vote of the board of directors;trustees and ratification by 2;& of the stockholders representing outstanding stock or ebers. c. /pproval by 2;& of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. d. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. 86. The following are the reasons for ac4uiring own shares and placing the in treasury, except a. To eliinate fractional shares out of stock dividends b. To collect or coproise indebtedness to the corporation, arising out of unpaid subscription, in a delin4uency sale and to purchase delin4uent shares sold during said sale c. To pay dissenting or withdrawing shareholders d. To pay bonds payable e. To effect a decrease of capital stock f. In close corporations, where there is a deadlock in the anageent of the business. 81. It eans that the capital stock, property, and other assets of the corporation are regarded as e4uity in trust for payent of corporate creditors. a. 9stoppel doctrine b. octrine of e4uitable recoupent c. 'asting asset doctrine d. Trust fund doctrine 82. In which of the following instances of ac4uisition of treasury shares is the existence of unrestricted retained not re4uired( a. To effect decrease of capital stock b. To pay redeeable preference shares c. To pay dissenting or withdrawing stockholders d. To eliinate fractional shares out of stock dividends 8&. 'hat is the vote re4uired for the investent of corporate funds in another corporation or for purposes other than the priary purpose( a. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. b. /pproval by 2;& vote of the board of directors;trustees and ratification by 2;& of the stockholders representing outstanding stock or ebers. c. /pproval by 2;& of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. d. /pproval by ajority vote of the board of directors;trustees and ratification by ajority of the stockholders representing outstanding stock or ebers. 8). 'hich type of dividends is re4uired to be ratified by 2;& of the outstanding capital stock( a. #ash dividend b. *roperty dividend c. %tock dividend d. %cript dividend 8. /s a general rule, dividends can be declared only out of a. #apital b. %hare preiu c. !et Incoe d. Enrestricted retained earnings
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83. 'hich type of dividends can be applied to the unpaid subscription( a. #ash dividends only b. %tock dividends only c.
85. They refer to the profits set aside, declared, and ordered to be paid by the directors for distribution aong shareholders at a fixed tie. a. *rofit b. :oss c. etained earnings d. ividends 87. Ender trust fund doctrine, dividend cannot be declared out of capital. The following are the instances when dividends can be declared out of capital, legally, except a. ividends fro investent in wasting asset corporation b. To utilize a lease or patent c. :i4uidating dividends d. issenting stockholder 88. 'hen shall the stockholders be entitled to cash and property dividends( a. Epon date of payent b. Epon date of record c. Epon date of declaration d. Epon date of accounting 166. #ash and property dividends re4uire a. /pproval by ajority vote of the board of directors and ratification by ajority of the stockholders representing outstanding stock. b. /pproval by 2;& vote of the board of directors and ratification by 2;& of the stockholders representing outstanding stock. c. /pproval by 2;& of the board of directors and ratification by ajority of the stockholders representing outstanding stock. d. /pproval by ajority vote of the board of directors only. 161. /s a general rule, what is the axiu surplus profits to be r etained by a stock corporation( a. 6B of paid up capital b. 166B of paid up capital c. 6B of authorized capital stock d. 166B of authorized capital stock 162. The corporation ay retained surplus in excess of the liit provided by the #orporation #ode in the following instances, except a. 'hen it can be clearly shown that such retention is necessary under special circustances obtaining in the corporation such as when there is a need for special reserve for probable contingencies. b. 'hen the corporation is prohibited under any loan agreeent with any financial institution or creditor fro declaring dividends without its consent and such consent has not yet been secured. c. 'hen justified by define corporate expansion projects approved by the board of directors. d. 'hen needed to iniize corporate incoe tax payents. 16&. It refers to the dividends which are actually distributions of the assets of the corporation upon dissolution or winding up of the sae. a. #ash dividends b. %tock dividends c. #ash dividends d. :i4uidating dividends 16). It refers to the dividends which are payable in unissued or increased or additional shares of the corporation. a. #ash dividends b. %tock dividends c. #ash dividends d. :i4uidating dividends 16. The following are the instances which allow distribution of capital and considered exceptions to trust fund doctrine, except a. /endent to articles of incorporation to reduce authorized capital stock b. *urchase of redeeable preference shares b y the corporation regardless of the existence of unrestricted retained earnings c. issolution and eventual li4uidation of the corporation d. istribution of cash dividends to stockholders e. In close corporation, when there should be a deadlock and the %9# orders the pa yent of the appraised value of the stockholders= share 163. It refers to any contract whereby a corporation undertakes to anage or operate all or substantially all of the business of another corporation, whether such contracts are called service contracts, operating agreeents or otherwise. a. 0anageent contract b. 9ployent contract c. 9xecutive contract d. $perating contract 165. /s a general rule, what is the re4uired vote for validity of anageent contract(
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a. 0ajority of the 4uoru of the board of directors and ratification by the stockholders owning at least 2;& of the outstanding capital stock or ebers of both the anaging and anaged corporation. b. 2;& of the 4uoru of the board of directors and ratification by the stockholders owning at least ajority of the outstanding capital stock or ebers of both the anaging and anaged corporation. c. 2;& of the 4uoru of the board of directors and ratification by the stockholders owning at least 2;& of the outstanding capital stock or ebers of both the anaging and anaged corporation. d. 0ajority of the 4uoru of the board of directors and ratification by the stockholders owning at least ajority of the outstanding capital stock or ebers of both the anaging and anaged corporation.
167. In case there are interlocking stockholders or interlocking directors between the anaged and anaging corporation, what is the re4uired ratification both on the part of anaged corporation( a. 0ajority of the stockholders owning the outstanding capital stock b. 2;& of the stockholders owning the outstanding capital stock c. 2B of the stockholders owning the outstanding capital stock d. 5B of the stockholders owning the outstanding capital stock 168. /s a general rule, what is the axiu ter of anageent contract( a. years b. & years c, 16 years d. 1 year 116. It refers to act coitted outside the object for which a corporation is created as defined by the law of its organization and therefore beyond the powers conferred upon it by law. a. Enconstitutional act b. Ioral act c. Eltra vires act d. Illegal act 111. 'hat is the binding effect of executed contract which is considered ultra vires( a. It can bind the parties on the basis of estoppels. b. It can never bind the parties. c. It should not bind the parties because it is void ab initio. d. It is always subject to ratification and court can interfere. 112. It refers to the rules of action adopted by a corporation for its internal governent and for the regulation of conduct, and prescribe the rights and duties of its stockholders or ebers towards itself and aong theselves in reference to the anageent of its affairs. a. #ertificate of incorporation b. /rticles of incorporation c.
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a. %tockholders owning 2;& of the outstanding capital stock or 2;& of ebers. b. %tockholders owning 36B of the outstanding capital stock or 36B of ebers. c. %tockholders owning 5B of the outstanding capital stock or 5B of ebers. d. %tockholders owning ajority of the outstanding capital stock or ajority of ebers. 118. 'hich of the following powers cannot be delegated to the board of directors( a. *ower to aend by laws b. *ower to repeal by laws c. *ower to adopt new by laws d. *ower to adopt first original by laws
126. If a date is not fixed in the by"laws for the regular eeting of shareholders, what onth shall the regular eeting be held( a. /pril b. 0ay c. 0arch d. une 121. In case the by"laws is silent, 'here shall the regular and special eeting of stockholders be located( a. In the city;unicipality where the principal office is located preferably at the principal office of the corporation. b. In the city;unicipality where the principal warehouse is located preferably at the principal warehouse of the corporation. c. In the city;unicipality where the principal branch is located preferably at the principal branch office of the corporation. d. In the city;unicipality where the largest branch is located preferably at the largest branch of the corporation. 122. In case the by"laws is silent, how often shall the r egular eeting of stockholders be held( a. /nnually b. 0onthly c. %ei"annually d. Huarterly 12&. In case the by"laws is silent, how often shall the regular eeting of board of directors be held( a. /nnually b. 0onthly c. %ei"annually d. Huarterly 12). In case the by"laws is silent, who has the authority to call special eeting of board of directors( a. #hairan of the board b. *resident c. %ecretary d. Treasurer 12. In case the by"laws is silent, where shall the eeting of the board of directors be held( a. /nywhere provided within the *hilippines b. /nywhere in or out of the *hilippines c. In the principal office of the corporation d. In the principal operation of the corporation 123. In case the by"laws is silent as to who shall call a eeting, who has the authority to call special eeting of shareholders( a.
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a. *resident only b. %ecretary, stockholder or eber c. Treasurer only d. #hairan of the board only 1&2. The following shares are not entitled to vote, except a. elin4uent shares b. Treasury shares c. +ractional shares d. 9scrow shares before the fulfillent of condition e. Enpaid shares
1&&. / stockholder ay vote in the following anner, except a. irectly in person b. Through a proxy c.
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b. %ales contract c. %ubscription contract d. *rootion contract 1)&. 'hich of the following ters r efers to absolute subscription( a. It is a subscription where the corporation agrees to do soething, the fulfillent of which not being a condition precedent to the accrual of a liability of the subscriber or the ac4uisition of the rights of a stockholder. b. It is a subscription entered into after the incorporation for the ac4uisition of unissued stock. c. It is a subscription subject to a condition. d. It is a subscription where the subscriber becoes liable on the subscription and ac4uires the rights of a stockholder fro the tie it is accepted.
1)). It is a subscription entered into before incorporation( a. *ost incorporation subscription b. *re"incorporation subscription c. #onditional subscription d. %ubscription with a special ter 1). *re"incorporation subscription shall be irrevocable for how any period fro the date of subscription( a. 1 year b. 3 onths c. & onths d. years 1)3. It refers to an agreeent between a corporation and a third person by which the latter agrees for a certain copensation to purchase a stipulated aount of stocks or bonds, specified in the agreeent, if such securities are not purchased by those to who they are first offered. a. %tock options b. %ubscription contract c. Enderwriting agreeent d. %ale contract 1)5. It refers to a privilege granted to a party to subscribe to a certain portion of the unissued capital stock of a corporation within a certain period and under the ters and conditions of the grant and exercisable by the grantee at any tie within the period granted. a. %tock options b. %ubscription contract c. Enderwriting agreeent d. %ale contract 1)7. The following are valid considerations for subscription agreeent, except a. #ash actually received b. *roperty, tangible or intangible, actually received c. :abor or services rendered to the corporation d. *reviously incurred corporate indebtedness e. /ounts transferred fro unrestricted retained earnings to capital stock or share dividends f. $utstanding shares in exchange for stocks in the event of reclassification or conversion g. *roissory notes or future services 1)8. 'hich of the following stateents is false concerning issue price of shares( a. %hares of stocks shall not be issued for a consideration less than the par or issue price thereof. b. Treasury shares ay be reissued below par or original issue price so long as the price is reasonable. c. !either / nor < d. aseous stock 11. It refers to the interest or right which owner has in the anageent of the corporation and its surplus profits, and on dissolution, in all of its assets reaining after the payent of its debts. a. %hares of stocks b. #ertificate of stock c. 94uity in a corporation d. !et assets 12. It refers to the paper representation or tangible evidence of the stock itself and of the various interests therein and expresses the contract between the corporation and the stockholder. a. %hares of stocks b. #ertificate of stock c. 94uity in a corporation d. !et assets 1&. The following are the reedies of the subscribers where the corporation refuses to issue certificate of stocks, except a. / petition for andaus
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b. / suit for specific perforance of an express or iplied contract c. /n action for daages in the absence of specific perforance d. /ction for rescission of contract of subscription e. / criinal action against the corporation 1). The following are the re4uisites for the issuance of certificate of stock, except a. The certificate ust be signed by the president or vice president and countersigned by the secretary or assistant secretary. b. The certificate ust be sealed with the seal of the corporation. c. The certificate ust always be for newly issued shares. d. The par value, as to par value shares or the subscription as to no par value shares ust first be fully paid. e. The certificate ust be delivered. f. The original certificate ust be surrendered where the person re4uesting the issuance of a certificate is a transferee fro the stockholder.
1. The following are the odes of stock transfer, except a. Indorseent and delivery of stock certificate and to issue a new certificate b. Transfer ade in a separate instruent in the case of assignent c. udicial or extrajudicial settleent of estate d. *ledge of certificate of stock 13. The following are the re4uireents for the validity of transfer of stock, except a. The transfer ust be notarized. b. There ust be delivery of the certificate. c. The share ust be indorsed by the owner or his agent. d. To be valid to the corporation and third persons, the transfer ust be duly recorded in the books of the corporation. 15. The following are the effects of unregistered transfer of shares, except a. It is invalid as between the transferor and transferee. b. It is invalid as to the corporation except when notice is given to the corporation. c. It is invalid as against corporate creditors. d. It is invalid as to the attaching or executing creditors. 17. It refers to a suit brought by one or ore stockholders or ebers in the nae and on behalf of the corporation to redress wrongs coitted against it or to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue or are the ones to be sued or hold control of the corporation. a. erivative suit b. Individual suit c. epresentative suit d. %hareholders= suit 18. It is an action brought by a stockholder against the corporation for direct violation of his contractual rights. a. erivative suit b. Individual suit c. epresentative suit d. %hareholders= suit 136. It refers to an action brought by a person in his o wn behalf or on behalf of all siilarly situated. a. erivative suit b. Individual suit c. epresentative suit d. %hareholders= suit 131. The following are the instances of issuance of watered stock, except a. Issuance of shares without consideration bonus share b. issuance of shares as fully paid when the corporation has received a lesser su of oney than its par or issued value discount share c. Issuance of shares for a consideration other than actual cash such as property or services the fair valuation of which is less than its par or issued price d. Issuance of stock dividend where there are no sufficient retained earnings or surplus to justify it e. Issuance of treasury shares for less than their par or issued price 132. 'ho shall be liable for issuance of watered stock( a. $nly the consenting director or officer b. $nly the consenting director or officer and subscriber c. $nly the consenting director or officer, subscriber and subse4uent transferee d. #onsenting director;officer, subscriber, subse4uent transferor and transferee 13&. 'hen can a corporation charge an interest on unpaid subscription( a. +ro the date of subscription regardless of provision in the by"laws and subscription contract b. 'hen re4uired by a board resolution c. 'hen re4uired by the by"laws or subscription contract d. It cannot charge an y interest 13). 'hen can a corporation charge interest on delin4uent stocks( a. +ro the date of delin4uency regardless of provision in the by"laws and subscription contract b. +ro the date of delin4uency if provided in the by"laws c. +ro the date of delin4uency if provided by the subscription contract
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d. +ro the date of delin4uency if provided in the by laws and subscription contract 13. It refers to the resolution or foral declaration of the board that the unpaid subscription are due and payable. a. #all b. $rder c. udgent d. ecision 133. 'hen will unpaid subscription be considered delin4uent( a. If the subscription contract fixes the date for payent, failure to pay on such date shall render the entire balance due and payable with interest. Thirty days therefro, if still unpaid, the share shall becoe delin4uent. b. If no date is fixed in the subscription contract, the board of directors can ake the call for payent and specify the due date. !otice of call is andatory. +ailure to pay on the date fixed in the call shall render the entire balance due and payable with interest. Thirty days therefor, it still unpaid, the share shall becoe delin4uent. c. 9ither / or < d. !either / nor < 135. 'hen shall a call of board of directors not necessary to ake the unpaid subscription delin4uent( a. 'hen the date of payent is specified in the subscription agreeent. b. 'hen the corporation is insolvent. c. 9ither / or <. d, !either / nor <. 137. 'ho shall be considered the highest bidder in a delin4uency sale( a. The person participating in the delin4uency sale who offers to pay the full aount of the balance of the subscription together with the accrued interest, costs of advertiseent and expenses of sale, for the sallest nuber of shares. b. The person participating in the delin4uency sale who offers to pay the full aount of the balance of the subscription together with the accrued interest, costs of advertiseent and expenses of sale, for the highest nuber of shares. c. The person participating in the delin4uency sale who offers to pay the full aount of the balance of the subscription excluding the accrued interest, costs of advertiseent and expenses of sale, for the sallest nuber of shares. d. The person participating in the delin4uency sale who offers to pay the full aount of the balance of the subscription excluding the accrued interest, costs of advertiseent and expenses of sale, for the highest nuber of shares. 138. In the absence of any bidder, what shall happen to the delin4uent shares and the related costs( a. It shall be ac4uired by the corporation and debited to expense b. It shall be ac4uired by the corporation and debited to intangible asset c. It shall be ac4uired by the corporation and debited to treasury shares d. It shall be ac4uired by the corporation and debited to share preiu 156. Is the delin4uent shareholder entitled to any share( a. !o, in any case b. Ges to the reainder shares upon distribution to the highest bidder or corporation of the treasury shares c. Ges to all delin4uent shares d. !o in case the corporation is the purchaser of the delin4uent shares 151. The following are the effects of delin4uency of shares, except a. It accelerates the entire aount of the unpaid subscription. b. It subjects the shares to interests, expenses and costs. c. It disenfranchises the shares fro any right that inherent to a shareholder. d. It dis4ualifies the shareholders fro receiving cash dividends. 152. The following stateents concerning the effects of delin4uent are true, except a. / delin4uent stockholder seeking to be elected as director ay not be a candidate for, nor be duly elected, to board b. !o delin4uent stock shall be voted for nor be entitled to vote or representation at any stockholders eeting c. elin4uent stock has the right to receive cash dividends but shall be applied first to balance of subscription d. elin4uent stock shall be included in deterining the existence of 4uoru 15&. 'hich of the following is not the right of unpaid subscribed shares( a. ight to vote at stockholders= eeting b. ight to issuance of stock certificate c. ight to receive dividends d. ight to protect his interest in appropriate action 15). 'here he consideration for the shares subscribed is other than cash, when can the shareholders exercise the rights of regular stockholder( a. Epon approval by the board of director of the valuation b. Epon approval by the %9# of the valuation c. Epon consent of the shareholders d. Epon approval by the copany president 15. The following are the rights of a share a shareholder @!o /nswer, ust 9nuerationA /. ights to control and anageent a. To attend and vote in person;proxy at stockholders= eeting b. To elect and reove directors c. To approve certain corporate acts d. To copel the calling of eetings e. To have the corporation voluntarily dissolved f. To enter into a voting trust agreeent
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g. To adopt;aend;repeal the b y"laws or adopt new by"laws <. *roprietary rights a. To transfer of stock in the corporate book b. To receive dividends when declared c. To issuance of certificate of stock;other evidence of stock ownership d. To participate in distribution of corporate assets upon dissolution e. To pre"eption in the issue of shares #. eedial rights a. To inspect corporate books b. To recover stock unlawfully sold for delin4uency c. To deand payent in the exercise of appraisal right d. To be furnished recent financial stateents;reports of the corporation=s operations e. To bring suits
153. The following are the liabilities of stockholders, except a. To be personally liable like general partners to corporate creditors b. To be liable to the corporation for unpaid subscription c. To be liable to the corporation for interest on unpaid subscription d. To be liable for creditors of the corporation on unpaid subscription e. To be liable for watered stock f. To be liable for dividends unlawfully paid g. To be liable for failure to create corporation 155. 'hich of the following stateents concerning pre"eptive right is incorrect( a. ight of pre"eption does not extend to treasury shares in case of their reissuance b. /s a general rule, there is no preeptive right on additional issues of originally authorized shares. c. 'hen a corporation at its inception offers only a specified portion of its authorized capital stock for subscription, there would be preeptive right as to the reaining portion thus offered for subscription d. Enless restricted in the /rticles of Incorporation, the pre"eptive right of the stockholder is transferable. 157. The following are the books to be kept by stock transfer agent of the corporation, except a.
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a. It ust be approved by the board of each corporation by ajority vote. b. There ust be ratification by vote of stockholders representing 2;& of outstanding capital stock or ebers. c. There ust be approval by the %ecurities and 9xchange #oission. d. There ust be consent or approval of the creditors of the corporation. 17. 'hen one corporation buys all the shares of another corporation, what is the effect, as a general rule( a. This will result autoatically to erger. b. This will result autoatically to consolidation. c. This will operate to dissolve the ac4uired corporation. d. The entities will aintain their separate entities and one will not answer for the debts of the other. 173. / corporation shall be liable to the liabilities of another corporation in the following cases, except a. If the purchase was in fraud in creditors. b. If the purchase results to control or significant influence. c. If there is an express assuption of liabilities. d. If there is a consolidation or erger. d. If the purchaser is erely a continuation of the seller.
175. In which of the following types of ac4uisition shall the purchases be liable to the debts of the ac4uiree( a. /sset"level only which involves property only purchase b.
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d. #lose corporation 18. 'hich of the following are the re4uisites of a non"stock corporation( a. It does not have capital stock dividend into shares. b. !o part of whose incoe is, during its existence, distributable as dividends to its ebers, trustees, or officers. c.
187. 'hich of the following stateents pertains to stock corporation( a. $wners ay be deprived of the right to vote by proxy in the articles or by"laws. b. $wners cannot transfer their o wnership unless allowed by the articles or by"laws c. The nuber of ebers of the board ay exceed the nuber of 1 d. #uulative voting is available in the election of the ebers of the board 188. 'hich of the following stateents pertains to nonstock corporation( a. $fficers are elected by the
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d. The stockholder is not personally liable for corporate torts. 263. 'hat is the nature of preeptive right in a close corporation( a. It is dependent upon the provision of articles of incorporation. b. It is based on the provision in the by"laws. c. It is absolute unless liited or curtailed by the articles of incorporation. d. It depends upon the contractual agreeent. 265. It happens when the directors or stockholders of a close corporation are so dividend respecting the anageent of the business and affairs of the corporation that the votes re4uired for any corporate action cannot be obtained and as a result, business and affairs can no longer be conducted to the advantage of the stockholder generally. a. eadlock b. 94ual c. Tie d. %ae 267. 'ho has the authority to break the deadlock in a close corporation( a. *resident b. #hairan of the board c. +ounder d. %9#
268. It is a stock or nonstock corporation organized to provide facilities for teaching or instruction. a. 9ducational corporation b. #haritable corporation c. eligious corporation d. #ivil corporation 216. 'hat is the ter of board of trustees in educational corporation( a. /lways 1 year b. /lways years c. /lways & years d. 0ay be less than five years as provided in the articles of incorporation or by"laws 211. It is a special for of corporation usually associated with the clergy, consisting of one person only and his successors who is incorporated by law to give soe legal capacities and advantages. a. #orporation sole b. eligious societies;corporate aggregate c. $rdinary nonstock religious corporation d. #haritable corporation 212. / non"stock corporation governed by a board but with religious purposes. a. #orporation sole b. eligious societies;corporate aggregate c. $rdinary nonstock religious corporation d. #haritable corporation 21&. -ow can a corporation sole be converted into a corporate aggregate( a.
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c. :i4uidation d. 9liination 217. /fter the dissolution of a corporation, what is the reaining period of the corporate body( a. 2 years fro the tie it is dissolved for the purpose of li4uidation of its corporate affairs b. & years fro the tie it is dissolved for the purpose of li4uidation of its corporate affairs c. 1 years fro the tie it is dissolved for the purpose of li4uidation of its corporate affairs d. ) years fro the tie it is dissolved for the purpose of li4uidation of its corporate affairs 218. It refers to the reopening or reorganization. It conteplates a continuance of corporate life in an effort to restore the corporation to its forer successful operation. a. Incorporation b. issolution c. :i4uidation d. ehabilitation 226. It is a corporation fored, organized or existing under any law other than those of the *hilippines and whose law allows +ilipino citizens and corporation to do business in its own country or state. a. oestic corporation b. esident corporation c. +oreign corporation d. Illegal corporation 221. In deterining the nationality of a corporation in the *hilippines, whether doestic or foreign, what is the test applied by the #orporation #ode( a. Incorporation test b. esidency test c. #ontrol test d. >randfather rule test 222. -ow can a foreign corporation be allowed to transact or do business in the *hilippines( a.
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CORPORATE ACTS WHICH REQURE MAJORITY VOTE OF THE BOD ALONE (EVP) Corporate At
Sa!"e#t Po"#t$
Election of officers (Sec. 25, CC)
0ajority vote of all the ebers of the <$
Vacancies in <$ if !$T due to reoval, expiration of the ter or increase in nuber of directors (Sec. 29, CC)
0ajority vote of reaining directors if 4uoru still exists
Power to ac4uire own shares (Sec. 41, CC)
0ajority vote
•
•
•
If the directors do not constitute a 4uoru, stockholders have the right to elect *rovided that there is unrestricted retained earnings $nly for legislative purposes
CORPORATE ACTS WHICH REQUIRE MAJORITY VOTE OF THE BOD AND VOTE OF THE STOC%HOLDERS REPRESENTIN& MAJORITY OF THE OCS (FAM) Corporate At
Sa!"e#t Po"#t$
Fixing the issued *rice of !o" par value shares (Sec. 62, last par., CC)
0ajority of 4uoru of <$, if authorized by /$I or by"laws
0ajority of $#%, if <$ is not authorized by the /$I
Aendent or repeal of
0ajority vote
0ajority of $#%
Manageent #ontract (Sec. 44, CC)
0ajority vote of <$ of both anaging and anaged corporation
0ajority of $#%;ebers of both anaging and anaged corporation and in soe cases 2;& of $#%;ebers
/endent ay be ade by the
CORPORATE ACTS WHICH REQUIRE MAJORITY VOTE OF THE BOD AND VOTE OF STOC%HOLDERS REPRESENTIN& ' OF THE OCS (ADAM*LI+ES) Corporate At Aendent of Incorporation
/rticles
Sa!"e#t Po"#t$ of
0ajority vote
?ote or written assent of 2;& of $#%;ebers
!on"voting shares can vote /ppraisal right is available in certain cases 9ffective upon approval by %9#, or date of filing if not acted upon within six onths • •
•
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0ust be for a legitiate purpose %ee sections 115"112 !on"voting shares can vote •
Dissolution of #orporation (Secs. 118 and 119, CC) Adoption of plan or distribution of assets of non"stock corporation (Sec. 95 [2], CC)
•
0ajority vote
2;& of $#%;ebers
0ajority vote of trustees
2;& of ebers having voting rights
•
!on"voting shares can vote /ppraisal right is available, except when the plan is abandoned /ny aendent to the plan ay be ade provided it is approved by ajority vote of the board and 2;& of $#%;ebers 0ajority of the board is sufficient if the transaction does not cover all or substantially all of the assets of the corporation !on"voting shares can vote /ppraisal right is available !otice is re4uired If sale is aban doned, director=s action is sufficient, no need for ratification by stockholders 0eeting is re4uired !on"voting shares can vote !o appraisal right !otice re4uireent %9# prior approval *rior approval of the %9# is necessary for it is only fro and after the approval by the %9# and the issuance by the %9# of a certificate of filing that the capital stock shall stand increased or decreased Treasurer=s sworn stateent is necessary !o decrease of capital stock if it will prejudice right of creditors 0eeting is re4uired !on"voting shares can vote !o appraisal right !otice is re4uired egistration of bonds with the %9# is necessary !on"voting shares can vote /ppraisal right available !otice is re4uired Investent in the secondary purpose is covered %tockholder=s ratification is not necessary if the investent is incidental to priary purpose !on"voting shares can vote /ppraisal right is available !otice re4uireent 9ffected through an aendent of the /$I There ust be unrestricted retained earnings • •
Merger or #onsolidation (Sec. 77, CC)
0ajority of <$ of constituent corporations
2;& of $#%;ebers constituent corporations
of
•
•
%ale, Lease, 9xchange, 0ortgage, *ledge, ispose of all or substantially all of 0ajority vote corporate assets (Sec. 40, CC)
2;& of $#%;ebers
• • • •
• • • • •
Increase or decrease capital stock (Sec. 38, CC)
of
0ajority vote
2;& of $#%;ebers
•
•
•
Incur, #reate, Increase
•
0ajority vote
2;& of $#%;ebers
• • •
• •
Investent of #orporate +unds in another #orporation or
• •
0ajority vote
2;& of $#%;ebers
•
•
Extension or shortening of corporate ter (Sec. 37, CC)
•
0ajority vote
2;& of $#%;ebers
• •
Issuance of Stock ividends (Sec. 43, CC)
0ajority of the 4uoru
2;& of $#%;ebers
CORPORATE ACTS WHICH REQUIRE MAJORITY VOTE OF THE STOC%HOLDERS REPRESENTIN& MAJORITY OF THE OCS ALONE (FFAD)
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Corporate At
Sa!"e#t Po"#t$ easonable per dies ay be given
•
Fixing of copensation of directors (Sec. 30, CC)
0ajority of $#%
Adoption of
0ajority of $#%;ebers
• •
!on"voting shares can vote
•
#andidates with the highest nuber of votes get e lected #uulative votingF !o. shares x !o. of directors to be elected !on"voting shares cannot vote %tockholders;0ebers shall vote if the <$;<$T are not authorized by the /rticles of Incorporation and the by"laws to fix the price
•
9lection of Directors;trustees (Sec. 24, CC)
0ajority of $#%;ebers
•
•
Fixing the issued *rice of !o" *ar value shares (Sec. 62, last par., CC)
•
0ajority of $#%
CORPORATE ACTS WHICH REQUIRE MAJORITY VOTE OF THE STOC%HOLDERS REPRESENTIN& ' OF THE OCS ALONE (PARDS) Corporate At
Sa!"e#t Po"#t$ •
enial of pre"eptive right (Sec. 39, CC)
2;& of $#%
elegation of the power to Aend, epeal or /dopt !ew
2;& of $#%
•
• •
• •
Reoval of irectors;Trustees (Sec. 28, CC)
2;& of $#%;ebers • •
atification of act of ,isloyal director (Sec. 34, CC)
elegation can be revoked by ajority $#% !on"voting shares cannot vote !otice and stateent of purpose are necessary 0ust be ade in a eeting called by the secretary on *resident=s order or on written deand of ajority of $#% !on"voting shares cannot vote eoval without cause cannot be used to deprive inority stockholders of their right of representation
2;& of $#% •
atification of a contract of $elf"dealing directors (Sec. 32, CC)
$nly if the /$I or aendent thereto denies pre" eptive right enial extends to shares issued in good faith in exchange for property needed for corporate purposes or in payent of previously contracted debts
•
2;& of $#%;ebers •
The contract ust be fair and reasonable under the circustances +ull disclosure of adverse interest of directors;trustees involved is necessary *resence of director;trustee ust be necessary to constitute 4uoru $ the vote of director;trustee ust be necessary for the approval of the contract
DLSL CPA Board Operation - Business Law Page 25 of 25
