Corporation Titles 7&8

Any contract for the acquisition of unissued stock in an existing corporation or a corporation still to be formed.

• Subscription Contract

• Purchase Contract

• Contract to Sell

• Absolute Contract of Sale

Which of the following is/are true?

I. The books and records of a corporation are admissible in evidence in favor or against the corporation and its members to prove the corporate acts.

II. The right to inspect the books of the corporation is personal to each stockholder.

• Statement I

• Statement II

• Both Statements

• None of them

Which of the following is not a disadvantage of obtaining funds by borrowing?

I. Unfavorable financial leverage results when the cost of borrowing funds exceeds the revenue they generate.

II. It may reduce a company's ability to withstand a major loss.

• Statement I

• Statement II

• Both Statements

• None of them

Which of the following does not violate the Trust Fund Doctrine?

I. When the corporation releases or condones payment of the unpaid subscription.

II. When there is payment of dividends with unrestricted retained earnings.

III. When properties are transferred in fraud of creditors.

IV. When the capital stock is decreased relieving the stockholders to pay their subscriptions.

• Statement I

• Statement II

• Statement III

• Statement IV

Which of the following is/are true?

I. Under the Trust Fund Doctrine, the subscribed capital stock of the corporation is a trust fund for the payment of debts of the corporation which the creditors have the right to look up to satisfy their credits.

II. Creditors may sue stockholders directly for unpaid subscriptions.

• Statement I

• Statement II

• Both Statements

• None of them

It is a privilege granted to a party to subscribe to a certain portion of the unissued capital stock of a corporation within a specified period and under the terms and conditions of the grant, exercisable by the grantee at any time within the period granted.

• Stock option

• Subscription warrant

• Warrant certificate

• Beneficiary Securities

Which of the following is/are true?

I. There is a binding contract of subscription as soon as the offer to take shares is made by a person to a corporation.

II. Acceptance of the offer is not needed for the perfection of the contract.

• None of them

• Statement I

• Statement II

• Both Statements

Which of the following is/are true?

I. One can become the owner of shares through succession

II. Shares can be donated.

• Statement I

• Statement II

• Both Statements

• None of them

Which of the following is/are true?

I. Original subscribers become shareholders from the time of the issuance of the Certificate of Incorporation by the SEC.

II. Original subscribers whose name appear in the Articles of Incorporation but does not appear in the Stock and Transfer Book are not entitled to all the rights as such.

• Statement I

• Statement II

• Both Statements

• None of them.

Which of the following is/are false?

I. Persons whose ownership are registered in the stock and transfer book are considered stockholders of record.

II. A person can be recognized as a stockholder by mere presentation of dividend coupons.

• Statement II

• Statement I

• Both Statements

• None of them