ACT1110 - Integrated Review

Which of the following is not a power of a corporation?

• Express

• Implied

• Incidental

• Artificial

Ann, Bianca, Deng, Steph, and Zen are directors of Twinkle Corporation, a stock corporation with 10,000 voting shares. Among the five directors, only Zen represents minority shareholders. On a stockholders’ meeting, 5,001 shares voted to remove Ann without just cause. Is Ann’s removal valid under Section 27 of the Revised Corporation Code?

• No, the removal is not valid. A director can only be removed with just cause.

• Yes, the removal is valid. Ann may be removed without just cause, provided majority of the stockholders approve

• No, the removal is not valid. The voting threshold to remove a director was not met.

• Yes, the removal is valid. Directors may be removed by vote of a simple majority of the stockholders.

Mitzi, Pavie, Chee, Steph, and Joe are directors of Falcon Corporation, a stock corporation. Chee was validly removed by the stockholders. The four remaining directors voted 3-1 to appoint JP, the corporate treasurer, to fill the vacancy in the board. Is the appointment of JP valid under Section 28 of the Revised Corporation Code?

• Yes, when the vacancy is due to the stockholders' approval but the replacement is a corporate officer, the remaining board may fill such vacancy

• Yes, the vacancy in the board was filled by the majority vote of the remaining directors

• No, when the vacancy in the board is due to removal of stockholders, it is the stockholders, not the directors, who shall fill the vacancy

• No, the vacancy in the board must be filled by the unanimous vote of the remaining directors

Soaring Falcon Corporation is about to elect new directors. The nominees are: (1) Chee, who was convicted of an offense punishable by 6 years imprisonment; (2) JP, who currently serves as an officer in another corporation; and (3) Red, a former director previously disqualified for violating the Securities Regulation Code, but petitioned an appeal for acquittal which was rejected. Based on the Revised Corporation Code, who is disqualified from serving as a director?

• Only Chee is disqualified because she was punished for 6 years imprisonment

• Chee and Red are disqualified, but JP is qualified

• Only JP is disqualified because he serves in another corporation

• Only Red is disqualified because of her conviction for violating the Securities Regulation Code

Under the Articles of Incorporation of Bocobo Corporation, the number of directors is fixed at 9. At a duly called board meeting, only 5 directors—Klo, Gi, Ian, Mark, and Niki—were present. During the meeting, a resolution authorizing the sale of an asset was proposed. Klo, Gi, and Ian voted in favor, Mark abstained, and Niki voted against the resolution. The corporate secretary later certified that the resolution was validly passed by the board. Was the resolution validly approved in accordance with Section 52 of the Revised Corporation Code?

• Yes, because only one voted against the resolution

• Yes, because a quorum was present and a majority of those present voted in favor of the resolution

• No, because abstentions and negative votes must be subtracted from the total number of directors

• No, because at least 5 affirmative votes (majority of the total board of 9) are needed for any board action involving major corporate assets

At Adamdaughter University, the board of trustees has five members: Frank, Bong, Babi, Rose, and Ruben. During a board meeting to elect the president, only three directors were present: Frank, Babi, and Rose. Bong and Babi voted to elect Manny as president, while Frank voted to elect John as president. By a vote of 2-1, Manny became university president of Adamdaughter University. Is the election of Manny as president valid under the Revised Corporation Code?

 

• Yes, because a majority of the trustees present voted for him

• No, because all directors must be present for the election to be valid

• No, because a majority of all directors, not just those present, must vote for the president

• Yes, because only the directors present can vote, and the majority agreed

According to Section 24 of the Revised Corporation Code, which of the following corporate officers may reside in a foreign country?

• President

• Secretary

• Treasurer

• None of the above

Yi-jin, Hee-do, and Seung-wan are directors of TwentyOne Corp., a stock corporation with 1,000 outstanding voting shares. At a regular stockholders' meeting, some stockholders moved to remove Seung-wan, a director representing minority stockholders, without citing any specific cause. The vote garnered approval from stockholders holding 700 shares. Was the removal of Seung-wan as director valid under the Revised Corporation Code?

• Yes, because the board can remove a director at any time by majority vote

• No, because Seung-wan can only be removed with cause as he represents minority stockholders

• Yes, because at least two-thirds of the outstanding capital stock voted for removal

• No, because the directors, not the stockholders, should decide whether or not to remove Seung-wan

To mitigate risks, internal control is designed and implemented by those charged with governance, management, and other personnel. What level of assurance does internal control provide about the achievement of an entity’s objectives?

• Absolute assurance

• Reasonable assurance

• Moderate assurance

• Low assurance

This factor of control environment provides a framework for planning, directing, and controlling the entity’s operations. Appropriate methods of assigning responsibility must be implemented to avoid incompatible functions.

• Integrity and ethical values

• Commitment to competence

• Human resource policies

• Organizational structure