TITLE 1 : GENERAL PROVISION, DEFINITIONS AND CLASSIFICATION

1. The factors for the application of the doctrine of piercing the corporate veil are the following,
except: Identity of the stockholders

2. I. Any application of the doctrine of piercing the corporate veil should be done with caution.
TRUE
II. A corporation its powers through its board of directors and/or its duly authorized officers
and agents. TRUE

3. The continuation of a corporation’s legal status despite changes in ownership or

management. Succession

4. I. Property acquired by a corporation is the property of stockholders or members. FALSE

II. A corporation exercises said powers through its board of directors and/or its duly authorized
officers and agents. TRUE

5. Corporations which have capital stock dividend into shares and are authorized to distribute to
the holders of such shares dividends or allotments of the surplus profits on the basis of the
shares held. Stock Corporation

6. Is one where no part of its income is distributable as dividends to its members, trustees, or
officers. Non-stock corporation

7. One which has exercised corporate powers for an indefinite period without interference on the
part of the government. Corporation by prescription

8. A corporation incorporated under the laws of the Philippines. Domestic Corporation

9. A corporation is formed, organized or existing under any laws other than those of the
Philippines and whose laws allow Filipino citizens and corporations to do business in its own
country or State. Foreign corporation

10. A corporation consisting of more than one member. Corporation aggregate

11. A corporation consisting of only one member for the purpose of administering and
managing, as trustee, the affairs, property and temporalities of any religious denomination, sect
or church. Corporation sole

12. A corporation organized for religious purposes. Ecclesiastical corporation

13. A corporation organized for charitable purposes. Eleemosynary corporation

14. It is an artificial being created by operation of law, having the right of succession and the
powers, attributes and properties expressly authorized by law or incidental to its existence.
Corporation

15. I. A corporation is a juridical entity vested with a legal personality separate and distinct
from those acting for and in its behalf and, in general, from the people comprising it. TRUE
II. Not every stockholder or officer can bind the corporation considering the existence of a
corporate entity separate from those who compose it. TRUE

16. I. Well-settled is the principle that the corporate mask may be removed or the corporate veil
pierced when the corporation is just an alter ego of a person or of another corporation. TRUE
II. It is a basic principle in Corporation Law that a corporation has a personality which is the
same as the officers or members who compose it. FALSE

17. The following are the characteristics of a corporation, except: Created by meeting of the
minds

18. 18. It refers to any agency organized as a stock or non-stock corporation, vested with
functions relating to public needs whether governmental or proprietary in nature, and owned by
the Government directly or through its instrumentalities either wholly, or, where applicable as in
the case of stock corporations, to the extent of at least 51 per cent of its capital stock.
Government-owned or controlled corporation

19. Two requisites must concur before one may be classified as a stock corporation, namely

I. That it has capital stock divided into shares

II. That it is authorized to distribute dividends and allotments of to its members

Both are True

20. II. The provisions governing stock corporation, when pertinent, shall be applicable to
non-stock corporations.
II. A non-stock corporation must have shareholders.

Both are False

21, I. Non-stock corporations can distribute 10% of their income to their members.
II. Non-stock corporations are organized for charitable, religious, educational, professional,
cultural, recreational, fraternal, literary,

Both are False

‘
22. A private corporation which have accepted from the State the grant of franchise or contract
involving the performance of public duties but which are organized for profit.

Quasi-public corporation

23. A corporation created in strict or substantial conformity with the mandatory statutory
requirements for incorporation and the right of which to exist as a corporation cannot be
successfully attacked or questioned by any party even in a direct proceeding for that purpose by
the State.

De jure corporation

24. The due incorporation of any corporation claiming in good faith to be a corporation, and its
right to exercise corporate powers, shall not be inquired into collaterally in any private suit to
which such corporation may be a party. a. Government-owned or controlled corporation may be
a party.

De facto corporation

25. All persons who assume to act as a corporation knowing it to be without authority to do so
shall be liable as general partners for all debts, liabilities and damages incurred or arising as a
result thereof.

Corporation by estoppel

PART II

1. I. In non-stock corporations, the voting rights does not attach to membership.

II. Members vote as persons, in accordance with the law and the by- laws of the corporation.

Only II is true

2. I. One of the rights of a stockholder is the right to participate in the control and management
of the corporation that is exercised through his vote.
II. The right to vote is a right inherent in and incidental to the ownership of corporate stock,
but as such is not a property right.

Both are true

3. A class of stock entitling the holder to vote on corporate matters, to receive dividends after
other claims and dividends have been paid (especially to preferred shareholders), and to share
in assets upon liquidation.

Preferred Stock
4. Is one which entitles the holder thereof to certain preferences over the holders of common
stock.

Common Stock

5. They may be purchased or taken up by the corporation upon the expiration of a fixed period,
regardless of the existence of unrestricted retained earnings in the books of the corporation, and
upon such other terms and conditions as may be stated in the articles of incorporation, which
terms and conditions must also be stated in the certificate of stock representing said shares.

Redeemable Stock

6. Shares with a value fixed in the articles of incorporation and the certificate of stock. Par value
stock

Par Value stock

7. The following are the limitations on no par value shares except:

It can be issued for a consideration of at least 3.00

8. I. The exclusive right to vote and be voted for in the election of directors must be for a limited
period not to exceed 5 years subject to the approval of the SEC.
II. Preferences granted to preferred stockholders gives them a lien upon the property of the
corporation nor make them creditors of the

Only I is true

9. I. The law provides that shares classified and issued as preferred or redeemable shares may
be deprived of voting right.
II. Each member shall be entitled to one vote unless so limited, broadened, or denied in the
articles of incorporation or bylaws.

Only I is true

10. . Is one which has no preference and entitle the shareholder to a pro rata

Common Stock

11, Shares without a right to vote.

Non-voting Shares
12. I. It acquires a judicial personality either by special law or a general law.
II. The general law under which a private corporation may be formed or organized is the
revised corporation code

Both are true

13. he stockholders or members mentioned in the articles of incorporation as originally forming

and composing the corporation and who are signatories thereof

Incorporators

14. Is the governing body in a stock corporation.

Board of directors

15. Is the governing body in a non-stock corporation.’

Board of Trustees

16. Is a person who brings about or cause to bring about the format organization of a
corporation

Promoter

17. Each share shall be equal in all respects to every other share way otherwise provided in the
articles of incorporation and stated certificate of stock.

Doctrine of equality of shares

18. I. There shall always be a class or series of shares which have complete voting rights.
II. . The right to vote is inherent in and incidental to the ownersh corporate stocks.

Both are true

19. I. . It is settled that unissued stocks may not be voted or considered in determining whether
a quorum is present in a stockholders' meeting
II. . Only stock actually issued and outstanding may be voted

Both are true

[Link] classified in the articles of incorporation which may be g certain rights and privileges
(eg dividend payments) not enjoyed by the owners of other stock,

Founder’s Share
21. Are shares usually preferred, which by their terms are redeemable at fixed date, or at the
option of either issuing corporation, or s stockholder, or both at a certain redemption price.

Redeemable Share

22. Subscriptions to the capital stock of a corporation constitute a fund to which the creditors
have a right to look for the satisfaction of their claims

Trust fund doctrine.

23. Are shares of stock which have been issued and fully paid for, but subsequently reacquired
by the issuing corporation by purchase, redemption, donation or through some other lawful
means.

Treasury Stock

24. Stocks issued for a consideration less than the par or issued price thereof or in any other
form other than cash valued in excess of its fair value.

Watered Stock

25.1. Redeemable shares, once redeemed are retired unless reissuance is expressly allowed in
the articles of incorporation.
11. The Corporation Code allows redemption of shares only if there are unrestricted retained
earnings on the books of the corporation.

Both are true.

TITLE2 : INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS

1. I. Only a natural person, trust, or an estate may form a One Person Corporation.
II Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies, and
non-chartered government-owned and controlled corporations may not incorporate as One
Person Corporations.

Both are true

2. This is the maximum amount fixed in the articles of incorporation that may be subscribed and
paid by the stockholders of the corporation.

Authorized capital stock

3. The following are limitations in the amendment of the articles of incorporation, except

The amendment requires the vote or written assent of stockholders' representing

majority of the outstanding capital stock or majority members if it be a non-stock
corporation.

4. I. corporation shall have perpetual existence unless its articles of Incorporation provides
otherwise.
II. The general rule as to corporations is that each corporation must have a name by which it
is to sue and be sued and do all legal acts.

Both are true

5. I. It is the certificate of incorporation that gives juridical personality to a corporation and

places it under the jurisdiction of the Securities and Exchange Commission.
II. A corporation commences its corporate existence and juridical personality and is deemed
incorporated from the date the DTI issues certificate of incorporation under its official seal.

Only I is true

6. The following are the requirements before one can qualify facto corporation, except
An attempt in good faith to incorporate.

7. The following are the three-fold nature of the articles of incorporate except:
A contract between the corporations inter se.

8. The purpose of the principal of the corporation are the following except:
To determine the venue of court cases involving the stockholders

9. I. The number of directors shall not be more than 15.

II. The number of trustees may be more than 15.

Both are true

10. I. The articles of incorporation of a nonstock corporation may be amended by the vote or
written assent of majority of the trustees and least 2/3 of the members.

II. The amendment of the articles of incorporation shall take effect upon their approval by the
SEC or from the date of filing with the SEC if not acted upon within 9 months from the date of
filing for a cause not attributable to the corporation

Only I is true
11. The following are grounds for such disapproval, except

The articles of incorporation or any amendment thereto is not substantially in

accordance with the form prescribed by the Philippine Cooperative Code.

12. No corporate name shall be allowed by the SEC if it is not distinguishable from that already
reserved or registered for the use of another corporation. A name is not distinguishable even if it
contains one or more of the following:
I. . The word "corporation", "company", "incorporated", "limited", "limited liability", or an
abbreviation of one of such words;

II. Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different

tenses, spacing, or number of the same word or phrase.

Both are true

13. I. If a corporation does not formally organize and commence its business within 5 years from
the date of its incorporation, its certificate of incorporation shall be deemed revoked.

II. If a corporation has commenced its business but subsequently becomes inoperative for a
period of at least 5 consecutive years, the SEC may, after due notice and hearing, place the
corporation under delinquent status

Both are true

14. I. A delinquent corporation shall have a period of 2 years to resume operations and comply
with all requirements that the SEC shall prescribe.

II. . Upon compliance by the corporation, the SEC shall issue an order lifting the delinquent
status. Failure to comply with the requirements and resume operations within the period given
by the SEC shall cause the revocation of the corporation's certificate of incorporation.

Both are true

15. I. Any person, partnership, association or corporation, dingy or with others but not more than
15 in number, may corporation for any lawful purpose of purposes

II. Natural persons who are licensed to practice partnerships or associations organized for the
purpose of practicing a profession, shall not be allowed to organize as a corporation

Both are true

16. I. Incorporators who are natural persons must be of legal age.

II. Each incorporator of a stock corporation must own or subscriber to at least 1 share of the
capital stock

Both are true

17. . A written contract to purchase newly issued shares of stock

Subscription contract

18. Is that portion of the authorized capital stock which has been bot subscribed and paid

Paid-up Capital

19. L. The contents of the articles of incorporation are binding, not only on the corporation, but
also on its shareholders.

II. The general rule as to corporations is that each corporation mat do all legal acts, have a
name by which it is to sue and be sued amd do all legal acts.

Only II is true

20. I. . A corporation can change its name by amending its by-laws.

II. A corporation with a single stockholder is considered a One Verses Corporation.

Only II is true

21. The following are the reasons that a principal office of the corporation must be stated in its
articles of incorporation, except:

for purposes of board of directors' meeting.

22. I. A corporation is in a metaphysical sense a resident of the place where its principal office is
located as stated in the articles of incorporation.

II. The place where the principal office of the corporation is to be located is one of the required
contents of the by-laws.

Only I is true

23.
I. The filing of articles of incorporation and the issuance of the certificate of incorporation are
essential for the existence of a de facto corporation.
 II. An organization not registered with the SEC cannot be considered a corporation in any
concept, not even as a corporation de facto.

Both are true

24. . It applies when persons assume to form a corporation and exercise corporate functions
and enter into business relations with third persons.

Corporation by estoppel

25. I. . Stock corporations shall not be required to have a minimum capital stock.

II. All corporations shall file with the Commission articles of incorporation in any of the official
languages

Both are true

26. I. An unincorporated association, which represented itself to be a corporation, will be

estopped from denying its corporate capacity in a suit against it by a third person who relied in
good faith on suck representation.

II. A third party who, knowing an association to be unincorporated nonetheless treated it as a

corporation and received benefits from it may be barred from denying its corporate existence in
a suit brought against the alleged corporation.

Both are true

27. I. Corporation by estoppel is founded on principles of equity and is designed to prevent

injustice and unfairness.

II. Consolidation becomes effective not upon mere agreement of the members but only upon
issuance of the certificate of consolidation by the SEC

Both are true

28. The amendment of the articles of incorporation, requires merely that:

I. The amendment is not contrary to any provision or requirement under the Corporation Code.
II.. It is for a legitimate purpose.

Both are true.

TITLE 3 : BOARD OF DIRECTORS/ TRUSTEES AND OFFICERS

TITLE HI-BOARD OF DIRECTORS/TRUSTEES AND OFFICERS

MULTIPLE CHOICE

1 The following are the qualifications of a board of director/tr except

Majority of the board of directors or trustees must be citizens the Philippines

2. I. The board of the following corporations vested with public interest shall have Independent
directors constituting at least 10% of board,

II. Independent directors must be elected by the other directors present

Only II is true

3. It is a person who, apart from shareholdings and fees received from the corporation, is
independent of management and free from any business or other relationship which could, or
could reasonably be perceived to materially interfere with the exercise of independent judgment
in carrying out the responsibilities as a director.

Independent director.

c. Authorized director

4. I. The acts of corporate officers within the scope of their authority are binding on the
corporation.

II. Any 2 or more positions may be held concurrently by the same person, except that no one
shall act as president and secretary or as president and vice-president at the same time.

Only 1 is true

5. I. The power to remove directors or trustees belongs to the officers exclusively.

II. Removal of directors or trustees may be with or without cause."

Only II is true
6. The requisites for removal of directors are the following, except:

The director or trustee can only be removed by a vote of the stockholders representing at
least majority of the outstanding capital stock or majority of the members entitled to vote
in case of non-stock corporations,

7. Immediately after their election, the directors of a corporation must formally organize and
elect

All of the above.

8. I. If the corporation is vested with public interest, the board shall also elect a compliance
officer.

II. The officers shall manage the corporation and perform such duties as may be provided in the
bylaws and/or as resolved by the board of directors.

Both are true

9. A person shall be disqualified from being a director, trustee or officer of any corporation if,
within 5 years prior to the election or appointment as such, the person was:

All of the above.

10. A person shall be disqualified from being a director, trustees or officer any corporation if,
within 5 years prior to the election or appointment a. Of an offense punishable by imprisonment
for a period exceedings as such, the person was convicted by final judgment

All of the above..

11 I. The SEC shall, motu proprio or upon verified complaint, and after du notice and hearing
order the removal of a director or trustee elect despite the disqualification, or whose
disqualification arose w discovered subsequent to an election.

II. The removal of a disqualified director shall be without prejudice t other sanctions that the
SEC may impose on the board of directors trustees who, with knowledge of the disqualification,
failed to remove such director or trustee.

Both are true

12. I. Any vacancy occurring in the board of directors or trustees other tha by removal or by
expiration of term may be filled by the vote of at leas a majority of the remaining directors or
trustees, if still constituting quorum.

II. Any directorship or trusteeship to be filled by reason of an increase in the number of directors
or trustees shall be filled only by an election at a regular or at a special meeting of stockholders
or members duly called for the purpose, or in the same meeting authorizing the increase of
directors or trustees if so stated in the notice of the meeting

Both are true

13. I. Every director must own at least 100 share of the capital stock of the corporation of which
he is a director, which share shall stand in his name on the books of the corporation.

II. Trustees of non-stock corporations must be members thereof.

Only II is true

14. I. The governing body of a corporation is its board of directors

II. The board of directors of a corporation is a creation of law.

Both are true

15. II. It is well settled in this jurisdiction that where compone directors are guilty of a breach of
trust, a stockholder may instead himself and other stockholders and for the benefit of the
corporation.

II. The board of directors for trustees, in case of non-stock corporations) has the sole authority
to determine policies, enter into contracts, and conduct the ordinary business of the corporation
with the scope of its charter.

Both are true

16 A corporation's board of directors is understood to be that body which except:

None of the above.

17. I. The property of the corporation is not the property of its stockholders Br or members;
however, it may be sold by the stockholders or members
[Link] power and responsibility to decide whether a corporation can enter into a binding contract
is lodged with the board of directors.

Only II is true
18. I The directors of a corporation shall not receive any compensation for being members of
the board of directors, except for reasonable per diems.

II. In no case shall the total yearly compensation of directors, as such directors, exceed 10% of
the net income after income tax of the corporation during the preceding year.

Only 1 is true

19. I. The general rule is that obligations incurred by the corporation, acting through its
directors, officers and employees, are its sole liabilities, and vice versa.

II. A contract of the corporation with one or more of its director or trustees or officers is void.

Only 1 is true

20. A contract of the corporation with one or more of its dirsson trustees or officers.

. Doctrine of self-dealing board of directors

21. The requisites for a contract of the corporation with one or more of directors or trustees or
officers to be valid are the following except

That in case of an officer, the contract has been previously authorized by the
stockholders

22. A director, by virtue of his office, acquires for himself a business opportunity which should
belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must
account to the latter for all such profits by refunding the same.

Doctrine of corporate opportunity

23. It is a body created by the by-laws and composed of not less than three members of the
board which, subject to the statutory limitations, has all the authority of the board of directors to
the extent provided in the by laws

Executive committee

24. The following are the limitations of an executive committee, except:

Amendment or repeal of any resolution of the board.

25. I. The executive committee may act, by 2/3 vote of all its members.

II. . The act of a director violating the doctrine of corporate opportunity can be ratified by a vote
of the stockholders owning or representing at least majority of the outstanding capital stock

Both are false

26. I. A stockholder or member who participates through remote communication or in absentia,

shall be deemed present for purposes of quorum.

II. The directors or trustees elected shall perform their duties as prescribed by law, rules of good
corporate governance, and bylaws of the corporation.

Both are true

27. When the vacancy prevents the remaining directors from constituting a quorum and
emergency action is required to prevent grave, substantial, and irreparable loss or damage to
the corporation, the vacancy may be temporarily filled from among the officers of the corporation
by unanimous vote of the remaining directors or trustees.

Emergency board of director

28. I. Stockholders or members periodically elect the board of directors or trustees, who are
charged with the management of the corporation.

II. Stockholders or members also elects officers to carry out management functions on a
day-to-day basis.

Only I is true

29. I. Acts of management pertain to the stockholders or members.

II. Acts of ownership pertain to the board.

Only I is true

30. I. Once the directors or trustees are elected, the stockholders members relinquish corporate
powers to the board in accord with law.
II Contracts intra vires entered into by the board of diredana binding upon the corporation
Both are true
TITLE 4 : POWERS OF CORPORATIONS

1. It is the preferential right of all stockholders of a stock corporation to subscribe to all issues or
disposition of shares of any class, in proportion to their respective shareholdings

Pre-emptive right

2 I. The purpose of pre-emptive right is to enable the shareholder to retain his proportionate
control in the corporation.
II. A suit to enforce preemptive rights in a corporation is a derivative suit.

Only I is true

3. The requirements for the sale or other disposition of assets are the following, except:

SEC approval is required.

4. The following are instances when a corporation may acquire its own shares, except:

To acquire founders' shares.

5. I. The corporation may only acquire its own stocks in the presence of unrestricted retained
earnings.
II. Preferred shares may be acquired even without surplus profit for as long as it will not result
in the insolvency of the Corporations.

Only I is true

6. I. The requirement of unrestricted retained earnings to cover the share based on the doctrine
of limited Capacity

II. There can be no distribution of assets among the stockholders shares is based on the
doctrine of limited capacity. without first paying corporate creditors. Hence, any disposition e
cover the corporate funds to the prejudice of creditors is rescissible.

Both are false

7. The following are the requisites for the exercise of a corporate p to invest corporate funds in
another corporation, except:
Any dissenting stockholder shall have pre-emptive right
8. The retained earnings which have not been reserved or set aside by the board of directors for
some corporate purpose.

Unrestricted retained earnings

9. I. No management contract shall be entered into for a period longer than 5 years for any 1
term.

II. No corporation shall possess or exercise corporate powers other than those conferred by the
Revised Corporation Code or by its articles of incorporation and except as necessary or
incidental to the exercise of the powers conferred.

Both are true

10. Where a stockholder or stockholders representing the same interest of both the managing
and the managed corporations own or control more than 1/3 of the total outstanding capital
stock entitled to vote of the managing corporation.

Interlocking stockholders

11. Where a majority of the members of the board of directors of the managing corporation also
constitute a majority of the members of the board of directors of the managed corporation. c.
Interlocking board of directors

Interlocking board of directors

Or None of the Above

12. I. A corporation has no power except those expressly conferred on it by the Corporation
Code and those that are implied or incidental to its existence.

II. In turn, a corporation exercises said powers through its board of directors and/or its duly
authorized officers and agents.

Both are true

13. It is an action brought by a stockholder on behalf of the corporation to enforce corporate

rights against the corporation's directors, officers or other insiders.

Derivative suit

14. The following are the requisites of the corporate power to extend or shorten corporate term:
 I. Approval by a 2/3 vote of the board of directors or trustees.
II. Ratification by the stockholders representing at least 2/3 of the outstanding capital stock or
by at least 2/3 of the members in case of non-stock corporations.

Only II is true

15. It means that a stockholder who dissented and voted against the proposed corporate action,
may choose to get out of the corporation by demanding payment of the fair market value of his
shares.

Appraisal right

16 Subscriptions to the capital stock of a corporation constitute a fund which the creditors have
a right to look for the satisfaction of t claims the

Trust fund doctrine

17. The distribution of corporate capital happens in only in three instances, except: a.
Amendment of the articles of incorporation to reduce the b. Purchase of redeemable shares by
the corporation, regardless of authorized capital stock.

Amendment of the by-laws to reduce the authorized capital stock

18. The following are the requirements of increase or decrease authorized capital stock, except:

Approval thereof by the DTI

19. I. The right of appraisal may be exercised when there is a fundamental change in the charter
or articles of incorporation substantially prejudicing the rights of the stockholders.

II. A corporation can purchase its own shares, provided payment is made out of surplus profits
and the acquisition is for a legitimate corporate purpose.

Both are true

20. Corporate profits set aside, declared, and ordered to be paid by the directors for distribution
among stockholders at a fixed time.

Dividends

21. I. payment of dividends to a stockholder is not a matter of right but a matter of consensus.
II. The declaration of dividends is dependent upon the availability of surplus profit or restricted
retained earnings

Both are true

22. The limitations on dividends are the following except:

d. Declaration of dividends is discretionary upon the board of directors.

23. It is an agreement whereby a corporation delegates the management of its affairs to another
corporation for a certain period of time.

Management contract

24. It refers to an act outside or beyond corporate powers, including those that may ostensibly
be within such powers but are, by general or special laws, prohibited or declared illegal.

Intra vires act

25. I. Every corporation has the power and capacity to have perpetual existence unless the
certificate of incorporation provides otherwise.
II. Every corporation has the power and capacity to enter into a partnership, joint venture,
merger, consolidation, or any other commercial agreement with natural and juridical
persons.

Both are true

TITLE 5 : BYLAWS

1. I. It is the generally accepted rule that third persons are bound by by- laws
II. By-laws may be necessary for the "government of the corporation but these are subordinate
to the articles of incorporation.

Only 11 is true

2. I,. Bylaws may be adopted and filed prior to incorporation."

II. In all cases, bylaws shall be effective only upon the issuance by the SKC of a certification that
the bylaws are in accordance with the Revised Corporation Code.

Only II is true
3. It is a condition precedent in the acquisition of corporate existence.

Articles of incorporation

4. I. The owners of majority of the outstanding capital stock or majority of the members in a
non-stock corporation may delegate to the board of directors or trustees the power to amend or
repeal any by-laws or adopt new by-laws.

II. The amended or new by-laws shall only be effective upon the issuance by the SEC of a
certification that the same are not inconsistent with the Revised Corporation Code.

Only 1 is true

5. I. Any power delegated to the board of directors or trustees to amend or repeal any by-laws
or adopt new by-laws shall be considered as revoked whenever stockholders owning or
representing 2/3 of the outstanding capital stock or 2/3 of the members in non-stock
corporations, shall so vote at a regular or special meeting.
II . Whenever the bylaws are amended or new bylaws are adopted, the corporation shall file with
the SEC such amended or new bylaws.

Both are true

6. It constitutes the charter or fundamental law of the corporation

Articles of incorporation

7. A private corporation may provide the following in its bylaws:

All of the above.

8. The rules and regulations or private laws enacted by the corporation regulate, govern and
control its own actions, affairs and concerns and its stockholders or members and directors and
officers with relation thereto and among themselves in their relation to it.

By-laws

9. I. The purpose of a by-law is to regulate the conduct and define the duties of the members
towards the corporation and among themselves.
II. By-laws are the relatively permanent and continuing rules of action adopted by the
corporation for its own government and that of the individuals composing it and having the
direction, management and control of its affairs, in whole or in part, in the management and
control of its affairs and activities.

Both are true

10. I. The bylaws shall be signed by the stockholders or members voting for them and shall be
kept in the principal office of the corporation.

II. A copy of the bylaws, duly certified by a majority of the directors trustees and countersigned
by the secretary of the corporation, shall be filed with the SEC and attached to the original
articles of incorporation

Both are true

TITLE 6 : MEETINGS

1. I. As a rule, a quorum shall consist of the stockholders representing a in the case of nonstock
corporations. TRUE
II. Unless the articles of incorporation or the bylaws provides for a greater majority, a majority
of the directors or trustees as stated in the articles of incorporation shall constitute a quorum to
transact the corporation and otherwise, said the voting trust Issued in the name pursuant to said
corporate business. TRUE

2. Is the book which records the names and addresses of all stockholders arranged
alphabetically, the installments paid and unpaid on all stock for which subscription has been
made, and the date of payment th
ereof. STOCK AND TRANSFER BOOK

3. I. Every decision of at least a majority of the directors or trustees present at a meeting at

which there is a quorum shall be valid as a corporate act. TRUE
II. The election of officers which requires the vote of a majority of all the members of the
board. TRUE

4. The requirements for board meeting are the following, except: Meeting of the directors or
trustees duly assembled as a Board.

5. I. Meetings of directors or trustees of corporations may be held anywhere in or outside of the

Philippines, unless the bylaws provide otherwise. TRUE
II. Notice of regular or special meetings stating the date, time and place of the meeting must
be sent to every director or trustee at least 1 day prior to the scheduled meeting, unless a longer
time is provided in the bylaws. FALSE
6. I. In case of pledged or mortgaged shares in stock corporations, the pledgee or mortgagee
shall have the right to attend and vote at meetings. TRUE
II. In case of shares of stock owned jointly by two or more persons, in order to vote the same,
the consent of all the co-owners shall be necessary. TRUE

7. I. Treasury shares shall have no voting right as long as such shares remain in the Treasury.
TRUE
II. Directors or trustees cannot attend or vote by proxy at board meetings but there is no
prohibition for them to act as proxies in stockholders' meetings. FALSE

8. I. Directors or trustees who cannot physically attend or vote at board meetings can
participate and vote through remote communication such as videoconferencing,
teleconferencing, or other alternative modes of communication that allow them reasonable
opportunities to participate. TRUE
II. Directors or trustees can attend or vote by proxy at board meetings. TRUE

9. I. The chairman or, in his absence, the president shall preside at all meetings of the directors
or trustees as well as of the stockholders or members, unless the bylaws provide otherwise.
TRUE
II. In case a stockholder grants security interest in his or her shares in stock corporations, the
stockholder-grantor shall have the right to attend and vote at meetings of stockholders. TRUE

10. I. Executors, administrators, receivers, and other legal representatives duly appointed by
the court may attend and vote in behalf of the stockholders or members without need of any
written proxy. TRUE
II. When the shares are owned in an "and/or capacity by the holders thereof, any one of the
joint owners can vote said shares or appoint a proxy therefor. TRUE

11. I. Stockholders and members may vote in person or by proxy in all meetings of stockholders
or members. TRUE
II. When so authorized in the bylaws or by a majority of the board of directors, the
stockholders or members of corporations may also vote through remote communication or in
absentia. TRUE
III. A stockholder or member who participates through remote communication or in absentia
shall be deemed present for purposes of quorum. TRUE

12. I. The general rule is that every member of a nonstock corporation, and every legal owner
of shares in a stock corporation, has a right to be present and to vote in all corporate meetings.
TRUE
II. Voting may be expressed personally, or through proxies who vote in their representative
capacities. TRUE
13. I. Directors must act as a body in a meeting called pursuant to the law or the corporation's
by-laws, otherwise, any action taken therein may be questioned by any objecting director or
shareholder. TRUE
II. The general rule is that a corporation, through its board of directors, should act in the
manner and within the formalities, if any, prescribed by its charter or by the general law. TRUE

14. I. An action of the board of directors during a meeting, which was illegal for lack of notice,
may not be ratified. FALSE
II. Notice of meeting may not be waived, expressly or impliedly, by stockholder or member.
FALSE

15. The requirements for a valid meeting are the following, except: It must be held always at
the principal place of the business.

16. I. Stockholder's or member's meetings shall be held in the municipality where the principal
office of the corporation is located. TRUE
II. Regular meetings of stockholders or members shall be held annually on a date fixed in
the bylaws, or if not so fixed, on any date after April 15 of every year as determined by the
board of directors or trustees. TRUE

17. I. In regular meetings of stockholders or members, a written notice of regular meetings shall
be sent to all stockholders or members of record at least 10 days prior to the meeting. FALSE
II. Written notice of regular meetings may be sent to all stockholders or members of record
through electronic mail or such other manner as the SEC shall allow under its guidelines. TRUE

18. I. Any city or municipality in Metro Manila, Metro Cebu, Metro Davao, and other
Metropolitan areas shall, for purposes of stockholders' or members' meetings, be considered a
city or municipality. TRUE
II. Notice of meetings shall be sent through the means of communication provided in the
bylaws, which notice shall state the time, place and purpose of the meetings. TRUE

19. The requirements for a valid proxy are the following except: It shall be signed by the
corporate secretary

20. The purposes of proxies are the following, except: It assures the presence of all

21. Revocation of proxy may be made through the following, except: NONE OF THE ABOVE

22. A trust created by an agreement between a group of the stockholders of a corporation and
the trustee or by a group of identical agreements between individual stockholders and a
common trustee, whereby it is provided that for a term of years, or for a period contingent upon
a certain event, or until the agreement is terminated, control over the stock owned by such
stockholders, either for certain purposes or for all purposes, is to be lodged in the trustee, either
with or without a reservation to the owners, or persons designated by them, of the power to
direct how such control shall be used. VOTING TRUST AGREEMENT

23. The following are the requirements imposed on a voting trust agreement, except: A
certified copy of such agreement shall be filed with the corporation and with the SEC;
non- compliance, however, said the agreement is effective and enforceable.

24. The three tests of voting trust agreement are the following: ALL OF THE ABOVE

25. I. A stockholder or member may propose the holding of a special meeting and items to be
included in the agenda. TRUE
II. Whenever for any cause, there is no person authorized or the authorized unjustly refuses
to call a meeting, the SEC, upon petition of stockholder or member on a showing of good cause
therefor, may issue an order, directing the petitioning stockholder or member to call meeting of
the corporation by giving proper notice. TRUE

26. I. Unless the bylaws provide for a longer period, the stock and transfer book or
membership book shall be closed at least 20 days for regular meetings and 7 days for special
meetings before the scheduled date of the meeting. TRUE
II. The right to vote of stockholders or members may be exercised in person, through a
proxy, or when so authorized in the bylaws, through remote communication or in absentia.
TRUE

TITLE 7 : STOCKS AND STOCKHOLDERS

1. I. As long as the shares are not considered delinquent, stockholders are entitled to all rights
granted to it whether or not subscribed stocks are fully paid. TRUE
II. Shares of stock shall not be issued in exchange for promissory capital notes or future
service. TRUE

2. I. Stocks shall not be issued for a consideration less than the par or issued price thereof.
TRUE
II. Where the consideration is other than actual cash, or consists of intangible property such
as patents of copyrights, the valuation thereof shall initially be determined by the incorporators
or the board of directors, subject to approval of the SEC. TRUE

3. Unit of interest in a corporation. SHARES OF STOCKS

4. Evidence of the holder's ownership of the stock and of his right as a shareholder.
CERTIFICATE OF STOCK

5. I. The stock and transfer book is the basis for ascertaining the persons entitled to the rights
and subject to the liabilities of a stockholder. TRUE
 II. On the death of a shareholder, the executor or administrator duly appointed by the Court is
vested with the legal title to the stock but not entitled to vote it. FALSE

6. For a valid transfer of stocks, there must be strict compliance with the mode of transfer
prescribed by law. The following are the requirements, except: To be valid against third
parties, the transfer must be recorded in the SEC.

7. Solidary liabilities may be incurred and the veil of corporate fiction may be pierced when
directors and trustees or, in appropriate case, the officers of a corporation does the following,
except: Habitual absence in the director’s meeting

8. I. As a rule, the doctrine of corporate opportunity is violated where the stocks are issued by
the corporation for a consideration which is lesS than its par value. FALSE
II. Subscribers for stock shall pay to the corporation interest on all unpaid subscriptions from
the date of subscription, if so required by, and at the rate of interest fixed in the by-laws. TRUE

9. Bidder who shall offer to pay the full amount of the balance on the subscription together with
accrued interest, costs of advertisement and expenses of sale, for the smallest number of
shares or fraction of a share. HIGHEST BIDDER

10. I. A subscription of shares in a corporation still to be formed shall be irrevocable for a period
of at least six (6) months from the date of subscription. TRUE
II. No pre-incorporation subscription may be revoked after the articles of incorporation is
submitted to the Commission. TRUE

11. Consideration for the issuance of stock may be: a. Actual cash paid to the corporation.
Labor performed for or services to be rendered to the corporation;

12. I. In stock corporations, shareholders may generally transfer their shares. FALSE
II. Membership in and all rights arising from a nonstock corporation are personal and
non-transferable. FALSE

13. Is an action brought by minority shareholders in the name of the corporation to redress
wrongs committed against it, for which the directors refuse to sue. DERIVATIVE SUIT

14. The following are the requisites of a derivative suit: ALL OF THE ABOVE

15. Where a stockholder or member is denied the right of inspection, his suit would be individual
because the wrong is done to him personally and not to the other stockholders or the
corporation. INDIVIDUAL SUIT

16. Where the wrong is done to a group of stockholders, as where preferred stockholders' rights
are violated, a class suit will be proper for the protection of all stockholders belonging to the
same group. REPRESENTATIVE SUIT
17. Any contract for the acquisition of unissued stock in an existing corporation or a corporation
still to be formed shall be deemed a subscription notwithstanding the fact that the parties refer to
it as a purchase or some other contract. SUBSCRIPTION CONTRACT

18. I. The rule is that the endorsement of the certificate of stock by the owner or his
attorney-in-fact or any other person legally authorized to make the transfer shall be sufficient to
effect the transfer of shares only if the same is coupled with delivery. TRUE
II. The delivery of the stock certificate duly endorsed by the owner is the operative act of
transfer of shares from the lawful owner to the new transferee. TRUE

19. I. The certificate of stock itself once issued is a continuing affirmation or representation that
the stock described therein is valid and genuine. TRUE
II. Stock issued without authority and in violation of law is voidable and confers no rights on
the person to whom it is issued and subjects him to no liabilities. FALSE

20. I. A certificate of stock is one, entire and divisible contract. FALSE

II. The stockholder shall not be entitled to a certificate until he has remitted the full payment
of his subscription together with any interest or expenses, if any is due. TRUE

21. I. The general rule is that obligations incurred by the corporation, acting through its
directors, officers and employees, are their joint liabilities. FALSE
II. It is basic that a corporation is a juridical entity with legal personality separate and distinct
from those acting for and in its behalf and, in general, from the people comprising it. TRUE

22. The following except one, are the exceptional circumstances warranting the disregard of the
doctrine of separate personality: When a director, trustee or officer is made, by specific
provision of by-laws, personally liable for his corporate action.

TITLE 8 : CORPORATE BOOKS AND RECORDS

1. The books and records required to be kept by the corporation are the following except:
DAILY TIME RECORD

2. The following are the limitations on the right of inspection by a stockholder, except: The right
can be exercise only by the common stockholders

3. I. The corporate secretary has the duty to record and prepare the minutes of the meeting.
TRUE
II. Without the certification of the corporate secretary, it is incumbent upon the other directors
or stockholders as the case may be to submit proof that the minutes of the meeting are accurate
and reflective of what transpired during the meeting. TRUE
4. I. A corporation shall furnish a stockholder or member, within 10 days from receipt of their
written request, its most recent financial statement in the form and substance of the financial
reporting required by the Commission. TRUE
II. At the regular meeting of stockholders or members, the board of directors or trustees shall
present to such stockholders or members a financial report of the operations of the corporation
for the preceding year, which shall include financial statements. TRUE

5. I. The proper custodian of the books, minutes and official records of a corporation is usually
the corporate treasurer. FALSE
II. The signature of the corporate president gives the minutes of the meeting probative value
and credibility. FALSE

6. I. The stockholder’s right of inspection of the corporation’s books and records is based upon
their ownership of the assets and property of the corporation. TRUE
II. The right of inspection granted to stockholders is absolute. FALSE

7. I. Corporate records, regardless of the form in which they are stored shall be open to
inspection by any director, trustee, stockholders or member of the corporation in person or by a
representative at reasonable hours on business days. TRUE
II. The inspecting or reproducing party shall remain bound by confidentiality rules under
prevailing laws. TRUE

8. I. A requesting party who is not a stockholder or member of the company or is a competitor,

director, officer, controlling stockholder or otherwise represents the interests of a competitor
shall have no right to inspect or demand reproduction of corporate records. TRUE
II. If the corporation denies or does not act on a demand for inspection and/or reproduction, the
aggrieved party may report such denial or inaction to the SEC. TRUE

9. Stock corporations must also keep a stock and transfer book, which shall contain: ALL OF
THE ABOVE

TITLE 9 : MERGER AND CONSOLIDATION

1. It is the union of two or more existing entities to form a new entity called the consolidated
corporation. CONSOLIDATION

2. I. Merger or consolidation becomes effective upon the mere agreement of the constituent
corporations. FALSE
II. Ordinarily, in the merger of two or more existing corporations one of the corporations
survives and continues the combined business while the rest are dissolved and all their rights,
properties and liabilities are acquired by the surviving corporation. TRUE
3. I. Upon approval by majority vote of each of the board of directors or trustees of the
constituent corporations of the plan of merger or consolidation, the same shall be submitted for
approval by the stockholders or members of each of such corporations at superate corporate
meetings duly called for the purpose. TRUE
II. The affirmative vote of stockholders representing at least ⅔ of the outstanding capital stock
of each corporation in the case of each corporation or at least ⅔ of the members in the case of
non-stock corporations shall be necessary for the approval of such a plan. TRUE

4. I. In the merger of two existing corporations, one of the corporations survives and continues
the business, while the other is dissolved and all its rights, properties and liabilities are acquired
by the surviving corporation. TRUE
II. By operation of law, upon the effectiveness of the merger, the absorbed corporation ceases
to exist but its rights and properties as well as liabilities, shall be taken and deemed transferred
to and vested in the surviving corporation. TRUE

5. I. Any amendment to the plan of merger or consolidation may be made. TRUE

II. The amendment to the plan of merger or consolidation must be approved by majority vote
of the respective boards of directors or trustees of all the constituent corporations and ratified by
the affirmative vote of stockholder representing at least ⅔ of the outstanding capital stock or of
⅔ of the members of each of the constituent corporations. TRUE

6. The merger or consolidation shall have the following effects: ALL OF THE ABOVE

7. As a rule, a corporation that purchases the assets of another will not be liable for the debts of
the selling corporation, except when any of the following circumstances is present. Which is the
exception? Where the transaction is validly entered into

8. I. Two or more corporations may merge into a single corporation which shall be one of the
constituent corporations. TRUE
II. Two or more corporations may consolidate into a new single corporation which shall be the
consolidated corporation. TRUE

9. It is a union whereby one or more existing corporations are absorbed by another corporation
that survives and continues the combined business. MERGER

10. I. For a valid merger or consolidation, the approval by the SEC of the articles of merger or
consolidation is required. TRUE
II. If, upon investigation, the SEC has reason to believe that the proposed merger or
consolidation is contrary to the provisions of the Corporation Code or existing laws, it shall set a
hearing to give the corporations concerned the opportunity to be heard. TRUE

11. I. The merger shall only be effective upon the issuance of a certificate of merger by the SEC.
TRUE
 II. Consolidation becomes effective not upon mere agreement of the members but only upon
issuance of the certificate of consolidation by the SEC. TRUE

12. I. When the SEC is satisfied that the consolidation of the corporation is not inconsistent with
the provisions of the Corporation Code and existing laws, it issues a certificate of consolidation
which makes the reorganization official. TRUE
II. Since there is a dissolution of the absorbed corporations, there is winding up of their
affairs or liquidation of their assets. FLASE

TITLE 10 : APPRAISAL RIGHT

1. I. The dissenting stockholder shall be entitled to receive payment of the fair value of his
shares as agreed upon between him and the corporation or as determined by the appraisers
chosen by them. TRUE
II. Payment may be made regardless if the corporation has unrestricted retained earnings in
its book to cover the same. FALSE

2. The following are instances where a dissenting stockholder who demands payment of his
shares is no longer allowed to withdraw from his decision, except: The proposed corporate
action is approved by the SEC where its approval is necessary.

3. I. The corporation shall bear the costs of appraisal, as rule. TRUE

II. Clearly, the right of appraisal may be exercised when there is a minor change in the charter
or articles of incorporation substantially prejudicing the rights of the stockholders, FLASE

4. Any stockholder of a corporation shall have the right to dissent and demand payment of the
fair value of his shares in the following instances, except: In case of increases or decreases
of capital stock.

5. The following are the instances of appraisal right, except: In case of investing of corporate
funds in another corporation or business

6. I. In a close corporation, any stockholder of a close corporation may, for any reason, compel
the said corporation to purchase his shares at their fair value, which shall not be less than their
par or issued value, when the corporation has sufficient assets in its books to cover its debts
and liabilities exclusive of capital stock. TRUE
II. The appraisal right may be exercised by any stockholder who shall have voted against the
proposed corporate action, by making a written demand on the corporation within 30 days after
the date on which the vote was taken for payment of the fair value of his shares. FALSE

7. I. If within a period of 60 days from the date the corporate action was approved by the
stockholders, the withdrawing stockholder and the corporation cannot agree on the fair value of
the shares, it shall be determined and appraised by 5 disinterested persons. FALSE
 II. That no payment shall be made to any dissenting stockholder unless the corporation has
unrestricted retained earnings in its books to cover such payment. TRUE

8. The effects of transfer of dissenting shares are the following:

I. The rights of the transferor as a dissenting stockholder shall cease and the transferee
shall have all the rights of a regular stockholder. TRUE
II. All dividend distributions which would have accrued on such shares shall be paid to the
transferee. TRUE

9. I. From the time of demand for payment of the fair value of a stockholder’s shares until either
the abandonment of the corporate action involved or the purchases of the said shares by the
corporation, all rights accruing to such shares, including voting and dividend rights, shall be
suspended. TRUE
II. If the dissenting stockholder is not paid the value of his shares within 10 days after the
award, his voting and dividend rights shall immediately be restored. FALSE

10. It means that a stockholder who dissented and voted against the proposed corporate action,
may choose to get out of the corporation by demanding payment of the fair market value of his
shares. Appraisal Right

TITLE 11 : NON- STOCK CORPORATIONS

1. I. In stock corporations, shareholders may generally transfer their shares. TRUE

II. Membership in and all rights arising from a nonstock corporation are transferable. FALSE

2. I. The Plan of Distribution of Assets may be adopted by a majority vote of the board of
trustees and approval of majority of the members having voting rights present or represented by
proxy at the meeting during which said plan is adopted. FALSE
II. Member’s meetings may be held at any place outside the principal office of the corporation
provided it shall be within the Philippines. TRUE

3. I. No person shall be elected as trustee unless he is a member of the corporation. TRUE

II. Unless otherwise provided in the articles of incorporation or the by-laws, officers of a
non-stock corporation may be directly elected by the members. TRUE

4. I. Membership shall be terminated in the manner and for the causes provided in the articles of
incorporation or the by-laws. TRUE
II. Termination of membership shall have the effect of extinguishing all rights of a member in
the corporation or in its property, unless otherwise provided in the articles of incorporation or the
by-laws. TRUE

5. It is one where no part of its income is distributable as dividends to its members, trustees, or
officers. Non-stock Corporation
6. I. Any profit which a non-stock corporation may obtain as an incident to its operations shall,
whenever necessary or proper, be used for the furtherance of the purpose or purposes for which
the corporation was organized. TRUE
II. A non-stock corporation can be converted into a stock corporation by mere amendment of
its articles of incorporation. FALSE

7. The following are the characteristics of a non-stock corporation, except: As a general rule, it
is not empowered to engage in business. Moverover, it is prohibited to make income or
profits as an incident to its operation.

8. The following are the characteristics of a non-stock corporation, except: By-laws may
provide that the members may hold their meetings at any place even outside the place
where the principal office of the corporation is located, even if that such place is outside
the Philippines.

9. I. The determination of whether or not “dead members” are entitled to exercise their voting
rights, depends on those articles of incorporation or by-laws. TRUE
II. In stock corporations, on the death of a shareholder, the executor or administrator duly
appointed by the Court is vested with the legal title to the stock and entitled to vote it. TRUE

10. I. Membership in and all rights arising from a nonstock corporation are personal and
non-transferable. TRUE
II. Unless otherwise provided in the articles of incorporation or the by-laws, a member may
not vote by proxy. FALSE

11. I. The number of trustees shall be fixed in the articles of incorporation or bylaws which may
or may not be more than 15. TRUE
II. Except with respect to independent trustees of nonstock corporations vested with public
interest, only a member of the corporation shall be elected as trustees. TRUE

TITLE 12 : CLOSE CORPORATIONS

1. An action by the directors of a close corporation without a meeting shall not be deemed valid
if: Before or after such action is taken, written consent thereto is signed by a majority the
directors.

2. I. The pre-emptive right of stockholders in close corporations shall extend to all stock to be
issued, excluding reissuance of treasury shares. FALSE
II. A close corporation may, at its option, refuse to register the transfer of stock in the name of
the transferee if the person is not qualified to be a stockholder and has notice thereof. TRUE

3. An impartial person who is neither a stockholder nor a creditor of the corporation or of any
subsidiary or affiliate of the corporation, and whose further qualifications, if any, may be
determined by the SEC. Provisional director
4. Any stockholder of a close corporation may, by written petition to the SEC, compel the
dissolution of such corporation whenever:
I. Any of acts of the directors or officers is illegal, or fraudulent, or dishonest, or oppressive
or unfairly prejudicial to the corporation or any stockholder, TRUE
II. Corporate assets are being misapplied or wasted. TRUE

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

6. A close corporation is one whose articles of incorporation provides the following except: All
of the above

7. The following are corporations that cannot incorporate as a close corporation, except:
Industrial companies

8. The following are characteristics of a close corporation, except: Where the articles of
incorporation provide that the business of the corporation shall be managed by the
stockholders themselves rather than by the board of directors, then the stockholders
shall be deemed to be the directors with all the liabilities imposed by the Corporation
Code on directors. The stockholders shall not be personally liable for corporate torts.

9. The following are characteristics of a close corporation, except: Pre-emptive right does not
extend to all stock issuances.

10. The articles of incorporation of a close corporation may provide, except for: A lesser
quorum or voting requirements in meetings of stockholders or directors.

11. Any person to whom stock or a close corporation has been issued or transferred has, or is
conclusively presumed to have notice. All of the above

TITLE 13 : SPECIAL CORPORATIONS

TITLE 14 : DISSOLUTION

1.
I. Where the dissolution of a corporation may prejudice the rights of any creditor, the
petition for dissolution shall be filed with the SEC.
II. The petition shall be signed by a majority of its board of directors or trustees and that its
dissolution was resolved upon by the affirmative vote of the stockholders representing at
 least majority of the outstanding capital stock or by at least majority of the members.
Only I is true

2.
I. In the case of dissolution where creditors are affected, the SEC may appoint a
receiver to take charge of the liquidation of the corporation.
II. An involuntary dissolution may be effected by amending the articles of incorporation
to shorten the corporate term. Only I is true

3.
I. No application for dissolution of banks, banking and quasi-banking institutions, preneed,
insurance and trust companies, nonstock savings and loan associations, pawnshops, and
other financial intermediaries shall be approved by the SEC unless accompanied by a
favorable recommendation the case of the appropriate government agency.
II. In the case of expiration of corporate term, dissolution shall automatically take effect on
the day following the last day of the corporate term stated in the articles of incorporation,
without the need for the issuance by the SEC of a certificate of dissolution. Both are True

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

D. By the judgment of the SEC after hearing of petition for voluntary dissolution
where creditors are affected.
or
B. By legislative enactment.
Kung wala yung D sa pagpipilian matik B sagot, kung nandun yung D, yun ang sagot
kasi may typo sa question, yung nasa no. 4 yun guis tas yung isa yung tama talaga is
yung sa 8.

5.
I. A corporation formed or organized under the Corporation Code may be dissolved voluntarily
or involuntarily.
II. If dissolution of a corporation does not prejudice the rights of any creditor having a claim
against it, the dissolution may be effected by, majority vote of the board of directors or
trustees, and by a resolution adopted by the affirmative vote of the stockholders owning at
least majority of the outstanding capital stock or majority of the members. Both are true

6.
I. A withdrawal of the request for dissolution shall be made in writing duly verified by any
incorporator, director, trustee, shareholder, or member and signed by the same number of
incorporators, directors, trustees, shareholders, or members necessary to request for
dissolution.
II. Upon receipt of a withdrawal of request for dissolution, the SEC shall withhold action on
the request for dissolution. Both are true
7. The following may be grounds for involuntary dissolution of the corporation: All of the above

9.
I. Every corporation whose charter expires pursuant to its articles of incorporation, is
annulled by forfeiture, or whose corporate existence is terminated in any other
manner, shall nevertheless remain as a body corporate for 5 years after the effective
date of dissolution.
II. Upon the winding up of corporate affairs, any asset distributable to any creditor or
stockholder or member who is unknown or cannot be found shall be escheated in
favor of the national government. Only II is true

TITLE 15 : FOREIGN CORPORATIONS

1.
I. If a foreign corporation does business in the Philippines without a license, a
Philippine citizen or entity which has contracted with said corporation may be
estopped from challenging the foreign corporation's corporate personality in a suit
brought before Philippine courts.
II. If a foreign corporation does business in the Philippines with the required license, it
can sue before Philippine courts only on isolated transaction. Only I is true

2.
I. A foreign corporation’s by-laws, though originating from a foreign jurisdiction, are
valid and effective in the Philippines.
II. The appointment of a resident agent of a foreign corporation is revocable at any time
at the instance of the corporation. Both are true

3. A resident agent of a foreign corporation can either be:

I. An individual residing in the Philippines regardless of solvency.
II. A domestic corporation lawfully transacting business in the Philippines. Both are
true

4. The purposes of appointing a resident agent are the following:

I. Notice affecting the corporation pending the establishment of its local office.
II. Summons and other legal processes in all proceedings for or against the
corporation. Both are true

5.
I. Actual transaction of business within the Philippine territory is an essential requisite
for the Philippines to acquire jurisdiction over a foreigncorporation and thus require
the foreign corporation to secure a Philippine business license.
 II. If a foreign corporation does not transact such kind of business in the Philippines,
even if it exports its products to the Philippines, the Philippines has no jurisdiction to
require such foreign corporation to secure a Philippine business license. Both are
true

6. Is one formed, organized or existing under any laws other than those of the Philippines
and whose laws allow Filipino citizens and corporations to do business in its own country or
state. Foreign corporation

7.
The following are the requisites for a foreign corporation under the Corporation Code:
I. It must be formed, organized, or existing under any laws other than those of the
Philippines.
II. The laws of the country where the corporation was organized allow Filipino citizens
and corporations to do business in its own country or state. Both are true

8.
I. A foreign corporation must first obtain a license from the SEC and a certificate from
the SEC before it can transact business in the Philippines.
II. Where a foreign corporation does business in the Philippines without the proper
license, it cannot maintain any action or proceeding before Philippine courts. Both
are true

9.
I. The purpose of the law in requiring that a foreign corporation doing business in the
Philippines be licensed to do so is to subject such corporation to the jurisdiction of
the courts.
II. It is not the absence of the prescribed license but "doing business" in the Philippines
without such license which debars the foreign corporation from access to our courts.
Both are true

10.
I. If a foreign corporation does business in the Philippines without a license, it cannot
sue before the Philippine courts.
II. If a foreign corporation is not doing business in the Philippines, it
stillneedsalicensetosuebeforePhilippine courts on an isolated transaction or on a
cause of action entirely independent of any business transaction. Only I is true

11.
I. A foreign corporation without a license is not ipso facto incapacitated from bringing
an action in Philippine courts. A license is necessary only if a foreign corporation is
"transacting" or "doing business" in the country.
 II. A party is estopped from challenging the personality of a corporation after having
acknowledged the same by entering into a contract with it. Both are true

12.
I. A foreign corporation licensed to transact business in the Philippines may not be
allowed to withdraw from the Philippines.
II. The license of a foreign corporation to transact business in the Philippines may be
revoked or suspended by the SEC. Only II is true

13.
I. A foreign corporation authorized to transact business in the Philippines need not
obtain an amended license in the event it changes its corporate name, or desires to
pursue in the Philippines other or additional purposes.
II. A foreign corporation applying for a license to transact business in the Philippines
shall submit to the SEC a copy of its articles of incorporation and by-laws, certified in
accordance with law, and their translation to an official language of the Philippines, if
necessary. Only II is true

TITLE 16 : INVESTIGATIONS, OFFENSES, AND PENALTIES

1.
I. An independent auditor who, in collusion with the corporation's directors or
representatives ,certifies the corporation's financial statements despite its
incompleteness or inaccuracy, its failure to give a fair and accurate presentation of
the corporation's condition, or despite containing false or misleading statements,
shall be punished with a fine ranging from P80,000.00 to P500,000.00.
II. Those responsible for the formation of a corporation through fraud, or who assisted
directly or indirectly therein, shall be punished with a fine ranging from P200,000.00
to P2,000,000.00. Both are true

2.
I. A corporation that conducts its business through fraud shall be punished with a fine
ranging from P200,000.00 to P2,000,000.00.
II. A corporation used for fraud, or for committing or concealing graft and corrupt
practices as defined under pertinent statutes, shall be liable for a fine ranging from
P100,000.00 to P5,000,000.00. Both are true

3.
I. A director, trustee, or officer who knowingly fails to sanction, report, or file the
appropriate action with proper agencies, allows or tolerates the graft and corrupt
practices or fraudulent acts committed by a corporation's directors, trustees, officers,
 or employees shall be punished with a fine ranging from P500,000.00 to
P1,000,000.00.
II. If the offender is a corporation, the penalty may, at the discretion of the court, be
imposed upon such corporation and/or upon its directors, trustees, stockholders,
members, officers, or employees responsible for the violation or indispensable to its
commission. Both are true

4.
I. The unauthorized use of a corporate name shall be punished with a fine ranging
from P10,000.00 to P200,000.00.
II. When, despite the knowledge of the existence of a ground for disqualification, a
director, trustee or officer willfully holds office, or willfully conceals such
disqualification, such director, trustee or officer shall be punished with a fine ranging
from P10,000.00 to P200,000.00 at the discretion of the court, but shall not be
permanently disqualified from being a director, trustee or officer of any corporation.
Only I is true

5.
I. The unjustified failure or refusal by the corporation, or by those responsible for
keeping and maintaining corporate records, to comply on the inspection and
reproduction of records shall be punished with a fine ranging from P10,000.00 to
P200,000.00, at the discretion of the court, taking into consideration the seriousness
of the violation and its implications.
II. Any person who willfully certifies a report required under the Revised Corporation
Code, knowing that the same contains incomplete, inaccurate, false, or misleading
information or statements, shall be punished with a fine ranging from P20,000.00 to
P200,000.00. Both are true

6. It refers to any person who provides truthful information relating to the SEC or possible
commission of any offense or violation under the Revised Corporation Code.
Whistleblower

7.
I. The SEC may investigate an alleged violation of the Revised Corporation Code, or of
a rule, regulation, or order of the SEC.
II. The SEC may administer oaths and affirmations, issue subpoena and subpoena
duces tecum, take testimony in any inquiry or investigation. Both are true

8.
I. Whenever the SEC has reasonable basis to believe that a person has violated, or is
about to violate the Revised Corporation Code, a rule, regulation, or order of the
 SEC, it may direct such person to desist from committing the act constituting the
violation.
II. The Commission may issue a cease and desist order ex parte to enjoin an act or
practice which is fraudulent or can be reasonably expected to cause significant,
imminent, and irreparable danger or injury to public safety or welfare. Both are true

9.
I. Any person who, without justifiable cause, fails or refuses to comply with any lawful
order, decision, or subpoena issued by the SEC shall, after due notice and hearing,
be held in contempt and fined in an amount not exceeding P30,000.00.
II. When the refusal amounts to clear and open defiance of the Commission's order,
decision, or subpoena, the SEC may impose a daily fine of P1,000.00 until the order,
decision, or subpoena is complied with. Both are true

TITLE 17 : MISCELLANEOUS PROVISIONS

1 & 2.
The SEC shall have the power and authority to: All of the above lagi pag ito tanong

3.
I. An arbitration agreement may be provided in the articles of incorporation or bylaws
of a corporation.
II. Regulators such as the Bangko Sentral ng Pilipinas and the Insurance Commission
shall exercise primary authority over special corporations such as banks, nonbank
financial institutions, and insurance companies under their supervision and
regulation. Both are true

4. Every corporation, domestic or foreign, doing business in the Philippines shall submit to
the SEC: All of the above

5.
I. The SEC shall exercise visitorial powers over all corporations, which powers shall
include the examination and inspection of records, regulation and supervision of
activities, enforcement of compliance, and imposition of sanctions.
II. Should the corporation, without justifiable cause, refuse or obstruct the SEC's
exercise of its visitorial powers, the SEC may revoke its certificate of incorporation.

7. It means the total shares of stock issued under binding subscription contracts to
subscribers or stockholders, whether or not fully or partially paid, except treasury shares.
Outstanding capital stock
8.
I. Non-stock or special corporations may, through their articles of incorporation or their
by-laws, designate their governing boards by any name other than as board of
trustees.
II. The SEC may place the corporation under delinquent status in case of failure to
submit the reportorial requirements 3 times, consecutively or intermittently, within a
period of 5 years. Both are true