1. Corporation

 What is the life of a private corporation?

• A. It has perpetual existence unless its articles of incorporation provide for a specific term

• B. It has maximum life of 20 years

• 1. C. It has maximum life of 30 years

• D. It has maximum life of 50 years

Answer explanation

Section 11. Corporate Term. - A corporation shall have perpetual existence unless its articles of incorporation provide otherwise.

Under the Revised Corporation Code, what is the requirement for the issuance of preferred shares?

• A. Preferred shares of stock must be issued with par value

• B. Preferred shares of stock may either be par value shares or no-par value shares

• C. Preferred shares of stock must be no-par value shares

• D. Preferred shares of stock may be issued only with discounted value

Answer explanation

Section 6. Classification of Shares

Preferred shares of stock issued by a corporation may be given preference in the distribution of dividends and in the distribution of corporate assets in case of liquidation, or such other preferences: Provided, That preferred shares of stock may be issued only with a stated par value. The board of directors, where authorized in the articles of incorporation, may fix the terms and conditions of preferred shares of stock or any series thereof: Provided, further, That such terms and conditions shall be effective upon filing of a certificate thereof with the Securities and Exchange Commission, hereinafter referred to as the "Commission".

Statement 1: A corporation sole is a religious corporation which consists of one member only or his successors

Statement 2: A lay corporation is a corporation organized for a purpose other than for religious

• A. Both statements are true

• B. Only Statement 1 is true

• C. Only Statement 2 is true

• D. Both statements are false

Answer explanation

Sec. 3. Classes of corporations. 

Corporation sole – consists of one member or corporator and his successors.

Lay – organized for a purpose other than religious

When no-par value common shares of stocks are issued, what is the minimum issue price?

• A. P1.00

• B. P2.00

• C. P5.00

• D. P10.00

Answer explanation

Section 6. Classification of Shares.

That no-par value shares must be issued for a consideration of at least Five pesos (₱5.00) per share: Provided, further, That the entire consideration received by the corporation for its no-par value shares shall be treated as capital and shall not be available for distribution as dividends

Which of the following is allowed concurrent positions to a single person?

• A. President and Secretary

• 1. B. Secretary and Treasurer 

• C. President and Treasurer

• D. None of the above

Answer explanation

SEC. 24. Corporate Officers. – Immediately after their election, the directors of a corporation must formally organize and elect: (a) a president, who must be a director; (b) a treasurer, who must be a resident; (c) a secretary, who must be a citizen and resident of the Philippines; and (d) such other officers as may be provided in the bylaws. If the corporation is vested with public interest, the board shall also elect a compliance officer. The same person may hold two (2) or more positions concurrently, except that no one shall act as president and secretary or as president and treasurer at the same time, unless otherwise allowed in this Code.

When may the courts exceptionally interfere with the contracts entered into by the board of directors?

• A. When the contracts are so unconscionable and oppressive as to amount to a wanton destruction of rights of the minority

• B. When the contracts are considered ultra vires

• C. Neither A nor B

• D. Either A or B

Answer explanation

SEC. 44. Ultra Vires Acts of Corporations. – No corporation shall possess or exercise corporate powers other than those conferred by this Code or by its articles of incorporation and except as necessary or incidental to the exercise of the powers conferred.

What is the qualification of a corporate treasurer?

• 1. A. Must be resident-citizen of the Philippines 

• 1. B. Must be a stockholder and must be a Filipino Citizen 

• 1. C. Not the corporate president and must be a resident of the Philippines 

• 1. D. Must be a stockholder and a Director

Answer explanation

SEC. 24. Corporate Officers. – Immediately after their election, the directors of a corporation must formally organize and elect: (a) a president, who must be a director; (b) a treasurer, who must be a resident; (c) a secretary, who must be a citizen and resident of the Philippines; and (d) such other officers as may be provided in the bylaws. If the corporation is vested with public interest, the board shall also elect a compliance officer. The same person may hold two (2) or more positions concurrently, except that no one shall act as president and secretary or as president and treasurer at the same time, unless otherwise allowed in this Code. 

Under Revised Corporation Code, when shall the election to fill-up vacancy in the board of directors/trustees be held if the reason is for causes other than the expiration of term (removal, increase in sits, resignation, abandonment of office, or death)?

• 1. A. It shall be held no later than 15 days from the time the vacancy arose

• 1. B. It shall be held no later than 20 days from the time the vacancy arose

• 1. C. It shall be held no later than 45 days from the time the vacancy arose

• 1. D. It shall be held no later than 30 days from the time the vacancy arose

Answer explanation

Section 28. Vacancies in the Office of Director or Trustee; Emergency Board.

When the vacancy is due to term expiration, the election shall be held no later that the day of such expiration at a meeting called for that purpose. When the vacancy arises as a result of removal by the stockholders or members, the election may be held on the same day of the meeting authorizing the removal and this fact must be so stated in the agenda and notice of said meeting. In all other cases, the election must be held no later than forty-five (45) days from the time the vacancy arose. A director or trustee elected to fill vacancy shall be referred to as replacement director or trustee elected to fill a vacancy shall be referred to as replacement director or trustee and shall serve only for the unexpired term of the predecessor in office.

It refers to a body created by the by-laws and composed of not less than three appointed members of the board which, subject to the statutory limitations, has all the authority of the board to the extent provided in the board resolution or by-laws. This body may act, by majority of all its members, on such specific matters within the competence of the board as may be delegated to it in by-laws

• 1. A. Executive council

• 1. B. Executive group

• 1. C. Executive body

• 1. D. Executive committee

Answer explanation

Sec. 35. Executive committee. - The by-laws of a corporation may create an executive committee, composed of not less than three members of the board, to be appointed by the board. Said committee may act, by majority vote of all its members, on such specific matters within the competence of the board, as may be delegated to it in the by-laws or on a majority vote of the board

In which document shall the denial of the pre-emptive right of a stockholder be stated for denial to be valid and binding?

• 1. A. By-Laws 

• 1. B. Articles of incorporation 

• 1. C. Neither A nor B

• 1. D. Either A or B

Answer explanation

Section 38. Power to Deny Preemptive Right. - All stockholders of a stock corporation shall enjoy preemptive right to subscribe to all issues or disposition of shares of any class, in proportion to their respective shareholdings, unless such right is denied by the articles of incorporation or an amendment thereto: Provided, That such preemptive right shall not extend to shares issued in compliance with laws requiring stock offerings or minimum stock ownership by the public; or to shares issued in good faith with the approval of the stockholders representing two-thirds (2/3) of the outstanding capital stock in exchange for property needed for corporate purposes or in payment of previously contracted debt.