CHAPTER 2

Question 1

is a legal entity created by an individual or group of shareholders who have
ownership of the corporation( through shares of stocks issued by the corporation) to engage in
business activities.
• Are legal entities and are sometimes defined as “legal persons”.

Answer 1

Corporation

Question 2

Corporations are allowed to perform
functions that humans make such as

Answer 2

-Buying and selling properties
-Owning copyrights
-Patents
-Trademarks
-And engaging in any business activities
-It has indefinite life span that can survive from generation to generation

Question 3

-a company or organization that has legal rights and responsibilities. i.e. the right to make contracts and the responsibility to pay debts.
- is a responsible being in the eyes of the law and can be used for damages if the performance
of the agreement is not met.

Answer 3

Legal Entity

Question 4

legal right to produce or sell something that have invented for a specific period of time

Answer 4

Patents

Question 5

once registered, that same symbol or series of words cannot be used by any other organization.

Answer 5

Trademarks

Question 6

Philippine corporations

Answer 6

• There is no minimum number of incorporators( directors)
• But shall not have more than 20 incorporators
• Each of the incorporators must have one share of stocks.
• Granted a perpetual corporate term( previously 50- year term)
• No Required subscribe/ paid-up capital and residency of incorporators
to keep with global standards.
• One Person Corporation ( OPC)

Question 7

allows a single person to form a
corporation without board of directors or shareholders

Answer 7

One person corporation

Question 8

is the system of rules ,practices and
processes by which a firm is directed and controlled.

Answer 8

Corporate governance

Question 9

essentially involves balancing the interests of a
company’s many stakeholders, such as shareholders, senior
management executives, customers, suppliers, financiers, the
government, and the community.

Answer 9

Corporate governance

Question 10

structures were put into place to protect the
various stakeholders of corporations and prevent corporate scandals
and or failures from happening.

Answer 10

Corporate governance

Question 11

help guide a company’s decisions and play a big
part in deciding if the business will be successful. It provide a clear direction for
the company and help in setting priorities and goals, as well as making informed
decisions.

Answer 11

Business aims and objectives

Question 12

provide a clear direction for the company and help in setting priorities and goals,
as well as making informed decisions.

Answer 12

Business aims and objectives

Question 13

are the broad, general goals that summarize what a company
wants to achieve

Answer 13

Business aims

Question 14

are specific, measurable targets that help a company
achieve its aims

Answer 14

Business objectives

Question 15

defines the organization’s business, its objectives and how it will reach these objectives

Answer 15

Mission statement

Question 16

outlines the company’s long-term goals and aspirations for the future in terms of its long-term growth and impact on the world

Answer 16

Vision statement

Question 17

Business Objectives (Long Version)

Answer 17

•Objectives give the business a clearly defined target.
• These are Plans that can then be made to achieve
targets.
• This can motivate the employees.
•It also enables the business to measure the progress
toward its stated aims.

Question 18

Business Objectives

Answer 18

Survival
Profit Maximization
Profit Satisfying
Sales Growth

Question 19

a short-term object short-trembly for a small business just
starting out, or when a new firm enters the market or at a time of crisis.

Answer 19

Survival

Question 20

try to make the most profit possible – most like to be
the aim of the owners and shareholders.

Answer 20

Profit Maximization

Question 21

try to make enough profit to keep the owners
comfortable – probably the aim of smaller businesses whose owners do
not want to work longer hours.

Answer 21

Profit Satisficing

Question 22

where the business tries to make as many sales as possible.
This may be because the managers believe that the survival of the business
depends on being large. Large businesses can also benefit from economies
of scale.

Answer 22

Sales Growth

Question 23

organizations like the Co-op or the Body Shop
have objectives that are based on their beliefs on how one should treat the environment
and people who are less fortunate.

Answer 23

Ethical and Socially Responsible Objectives

Question 24

are run to not only generate a profit but provide a service to
the public. This service will need to meet the needs of the less well-off in society or help
improve the ability of the economy to function: e.g. cheap and accessible transport
service.

Answer 24

Public Sector Corporations

Question 25

that monitor or control private sector activities have objectives that are to ensure that the business they are monitoring complies with the laws laid down.

Answer 25

Public sector organizations

Question 26

their aims and objectives are led by the beliefs they stand for

Answer 26

Charities and voluntary organizations

Question 27

their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.

Answer 27

Health care and Education Establishments

Question 28

Alternative aims and objectives

Answer 28

Ethical and socially responsible objectives Public sector corporations Public sector organization Health care and education establishments Charities and voluntary organizations

Question 29

Importance of business aims and objectives. Setting business aims and objectives is important for a couple of reasons:

Answer 29

Clarity if Direction Measure of Company's Success Increases Motivation improves Decision Making

Question 30

helping to prioritize efforts and allocate resources effectively.

Answer 30

Clarity of Direction

Question 31

allowing to track progress and make better decisions

Answer 31

Measure Company's Success

Question 32

of the employees, by helping them understand long-term goals

Answer 32

Increase Motivation

Question 33

process at all levels of the organization.

Answer 33

Improves Decision Making

Question 34

Key Players In Corporate Governance

Answer 34

CEO Chairman of the Board Board of Directors Shareholders Stakeholders

Question 35

is the person responsible for leading and managing the entire organization in achieving its organizational goals. It is the duty of the ____ to collaborate with the board for the overall direction of the company.

Answer 35

CEO

Question 36

of directors should not only provide leadership of the board but also play an important role in the governance practices of the company.

Answer 36

Chairman Of The Board

Question 37

This is the best entity in steering the company’s strategic direction and evaluating its performance. As a _____, questions must be asked during board meetings to make sure decisions made by the company will be for the best interest of the company in the long term

Answer 37

Board of Directors

Question 38

Considered owners of the company through their ownership/ holdings of stock shares, this group actively seeks to maximize stock price increase over a period of time.

Answer 38

Shareholders

Question 39

Any group of people who are affected by how a corporation operates (i.e., employees, suppliers, government and society among others).

Answer 39

Stakeholders

Question 40

-Are individuals who have no connection with the company and are free from any relationship which may be considered a conflict of interest

Answer 40

Independent Director

Question 41

Hold a particular executive position inside the organization, such as CEO or other senior executive position such as the vice president.

Answer 41

Executive Director

Question 42

Directors that act as a group known as a _______. Corporations also have officers who are appointed by and receive their powers from the board.

Answer 42

board of directors

Question 43

Duties of Directors

Answer 43

• Act in the best interest of those they serve • Owe a duty of care to their corporation. Stays informed about corporate developments and makes informed decisions • Be loyal to the corporation. • Manage the corporation’s business and affairs and has the authority to exercise all of the corporation’s powers • Responsible for making major business and policy decisions, and the officers are responsible for carrying out the board’s policies and for making the day-to-day decisions

Question 44

Corporate Officers and Their Duties

Answer 44

President Vice President Secretary Treasurer

Question 45

usually makes decisions on corporate policy and operations.

Answer 45

President

Question 46

assumes the president’s function in his or her absence. Also often be responsible for running part of the corporation’s business or operations.

Answer 46

Vice President

Question 47

makes and keeps the corporate books and records. This includes keeping the records of directors’ and shareholders’ meetings and the corporation’s stock record book. The _______ also has the authority to send out notices to corporate meetings and keep a register of the names and addresses of the stakeholders. The _______ also keeps the corporate seal

Answer 47

Secretary

Question 48

keeps the corporation’s money and is responsible for taxes, financial reports, etc.

Answer 48

Treasurer

Question 49

are formed because board work can be done effectively. By focusing and discussing particular issues separately from general board meetings, the time management of directors is optimized.

Answer 49

Committee

Question 50

as a result of corporate meltdowns, this committee has become a nonnegotiable aspect of good governance. The main objective of this committee is to oversee accounting and financial reporting processes and results. They make sure that internal and external audits are carried out with integrity.

Answer 50

Audit Committee

Question 51

Different Committee

Answer 51

Audit Committee Remuneration Committee Nomination Committee

Question 52

this committee is responsible for identifying compensation and benefit plans for directors and senior executives through performance appraisals. Excessive compensation packages during economic downturns or financial crises warrant a closer investigation of the rationale behind said compensation.

Answer 52

Remuneration Committee

Question 53

to assure an effective working board, the directors on board must be independent thinkers, including executive directors. The ____________ should nominate the right mix of board members to ensure objectivity, independence, and expertise.

Answer 53

Nomination Committee

Question 54

allows you to check your corporation’s compliance with your rule book and the law.

Answer 54

Healthy Corporation Checklist

Question 55

The checklist contains a list of questions to ask about your corporation. — Each question has a tick box to record your corporation’s compliance, helping you to identify the areas that need attention

Answer 55

Healthy Corporation Checklist

Question 56

Are individuals who are not part of the management but related to a certain aspect of the company, such as being a supplier, family representative, friend, adviser or shareholder

Answer 56

Non executive director

Question 57

Effective Business Criteria

Answer 57

Smart Measurable Achievable Reaslitic Timebound

Question 58

goal is well-defined, with a clear outcome in mind. It should answer the questions of what you want to achieve, who is involved, and where it will happen.

Answer 58

Specific

Question 59

goal has clear criteria for success and a timeline for achieving it. This allows you to track your progress along the way

Answer 59

Measurable

Question 60

goal is one that is possible to achieve given the resources and constraints you have.

Answer 60

Achievable

Question 61

goal is one that is achievable and aligned with your overall vision and long-term objectives.

Answer 61

Realistic

Question 62

goal has a clear timeline for completion, with a start and end date. This helps to provide motivation and a sense of urgency to achieve the goal.

Answer 62

Time bound

Question 63

Importance of corporate governance

Answer 63

-it lays down the framework for creating long term trust between companies and the external providers of capital -improves strategic thinking at the top by inducting independent directors who bring in experience -enables better monitoring of risks -limits liability of top management by modulating decision making process -ensures integrity of reporting of financial figures -helps provide a degree of confidence

Question 64

Managed by directors and officers

Answer 64

Corporation