Corporation: Quiz 4

Stock corporations are prohibited from retaining surplus profits in excess of fifty percent of their paid in capital stock.

Stock corporations are not prohibited from retaining surplus profits in excess of the limit provided by when justified by definite corporate expansion projects or programs approved by the board of directors.

Corporation maybe prohibited by a loan agreement with any financial institution or creditor from declaring dividends without its/his consent.

No corporation shall conclude a management contract with another corporation unless such contract shall have been approved by the majority of the board of directors and stockholders or members owning at least the majority of the outstanding capital.

Where stockholders representing the same interest of both the managing and the managed corporations own or control more than one-half (1/2) of the total outstanding capital stock, the management contract must be approved by 2/3 vote of the stockholders or members of the managed corporation.

No management contract shall be entered into for a period longer than ten years for any one term.

Corporate acts which not conferred by law nor necessary or incidental to the exercise of the powers are considered Ultra-Vires Acts.

Every corporation has the power and capacity to enter into merger or consolidation with other corporations.

Corporations are allowed to make reasonable donations for public welfare or for hospital, charitable, cultural, scientific or similar purposes.

Corporation, domestic or foreign, can give donations in aid of any political party or candidate or for purposes of partisan political activity.