Code of Investments and Setting Business in the Philippines

Question 1

When was the Corporation Code of the Philippines enacted?
a. May 1, 1975
b. May 1, 1980
c. May 1, 1985
d. May 1, 1990

Answer 1

B. May 1, 1980

Question 2

What is the primary purpose of the Corporation Code of the Philippines?
a. To regulate labor practices
b. To govern corporate governance and operations
c. To oversee taxation policies
d. To manage foreign trade

Answer 2

B. To govern corporate governance

Question 3

What legislative body enacted the Corporation Code of the Philippines?
a. Congress of the Philippines
b. Senate of the Philippines
c. Batasang Pambansa
d. House of Representatives

Answer 3

C. Batasang Pambansa

Question 4

Which type of corporation has capital stock divided into shares?
a. Non-stock corporation
b. Stock corporation
c. Sole proprietorship
d. Cooperative

Answer 4

B. Stock Corporation

Question 5

What is required for the formation of a stock corporation?
a. At least three incorporators
b. At least seven incorporators
c. At least ten incorporators
d. At least five incorporators

Answer 5

D. At least five incorporators

Question 6

Directors of a regular corporation are elected for a term of:
a. Not exceeding three (3) years
b. One (1) year
c. Five (5) years
d. As stated in the bylaws

Answer 6

b. One (1) year

Question 7

Trustees of a non-stock corporation are elected for a term:
a. Of one (1) year
b. d. Not exceeding three (3) years
c. Of five (5) years
As determined by the members

Answer 7

B. Not exceeding three years

Question 8

For corporations vested with public interest, the minimum percentage of independent directors on
the board is:
a. Ten percent (10%)
b. Fifteen percent (15%)
c. Twenty percent (20%)
d. Twenty-five percent (25%)

Answer 8

C. Twenty Percent (20%)

Question 9

Which of the following is NOT explicitly mentioned as a corporation vested with public interest
requiring independent directors?
a. Banks and quasi-banks
b. Insurance companies
c. Corporations covered by the Securities Regulation Code
d. Small and medium enterprises

Answer 9

d. small and medium enterprises

Question 10

For quorum in a meeting of stockholders or members, there must be present:
a. b. c. A majority of the directors or trustees
Any number of stockholders or members
Owners of a majority of the outstanding capital stock (or majority of members if no
capital stock)
d. At least one-third of the outstanding capital stock or members

Answer 10

C. Owners of a majority of the outstanding capital stock (or majority of members if no capital stock)

Question 11

What is the primary law that governs the Board of Investments (BOI) in the Philippines?
a. Republic Act No. 7160
b. Executive Order No. 226
c. Republic Act No. 10963
d. Presidential Decree No. 957

Answer 11

b. Executive Order No. 226

Question 12

The BOI is an attached agency of which Philippine government department
a. Department of Finance
b. Department of Energy
c. Department of Trade and Industry
d. Department of Labor and Employment

Answer 12

C. Department of Trade and Industry

Question 13

What is the main document that lists investment activities eligible for BOI incentives?
a. National Development Plan
b. Tax Incentives Plan
c. Investment Roadmap
d. Investment Priorities Plan (IPP)

Answer 13

D. Investment Priorities Plan (IPP)

Question 14

Which of the following is a fiscal incentive granted by BOI?
a. Simplified customs procedures
b. Exemption from income tax (Income Tax Holiday)
c. Visa assistance
d. Employment of foreign nationals

Answer 14

B. Exemption from income tax (Income Tax Holiday)

Question 15

How long is the typical income tax holiday for BOI-registered enterprises?
a. 1-2 years
b. 2-3 years
c. 4-7 years
d. 10 years

Answer 15

C. 4-7 years

Question 16

Which of the following is a key consideration when choosing a business structure

Answer 16

C. Liability and Taxation

Question 17

In a limited partnership, which partner has unlimited liability?
a. Limited partners
b. General partners
c. All partners equally
d. None of the partners

Answer 17

B. General partners

Question 18

Which business structure is known for its perpetual existence?
a. Sole proprietorship
b. Partnership
c. Corporation
d. One Person Corporation (OPC)

Answer 18

C. Corporation

Question 19

What is a primary disadvantage of a C corporation compared to an S corporation?
a. Limited liability
b. Ease of setup
c. Double taxation
d. Perpetual existence

Answer 19

C. Double Taxation

Question 20

Which aspect of a partnership should be clearly defined in a partnership agreement?
a. The type of office furniture
b. The color of the company logo
c. Profit-sharing arrangement
d. The daily lunch menu

Answer 20

C. Profit-sharing arrangement

Question 21

Identify the law that serves as the primary legal framework for corporations in the Philippines

Answer 21

The Corporation Code of the Philippines (Batas Pambansa Blg. 68)

Question 22

When was the Batas Pambassan Blg 68 enacted

Answer 22

May 1, 1980

Question 23

What legislative body enacted Batas Pambansa Blg. 68?

Answer 23

Batasang Pambansa

Question 24

What government agency oversees corporate registration in the Philippines?

Answer 24

Securities and Exchange Commission (SEC)

Question 25

Define "corporation" as per the Corporation Code

Answer 25

An artificial being created by operation of law, having rights, attributes, and powers authorized by law or incident to its existences

Question 26

It refers to equity investment by a non-Philippine nationals in the foreign exchange or other assets registered with the Central Bank

Answer 26

Foreign Investment

Question 27

This list contains sectors and activities reserved for Philippine Nationals by the Constitution or specific Law

Answer 27

List A (of the Foreign Investment Negative List)

Question 28

These enterprices export at least 60% of their output and may be 100& foreign-owned

Answer 28

Export Exnterprises

Question 29

What Philippine law provies investment incentives for activities under the Strategic Investment Priority Plan (SIPP)

Answer 29

The Corporate recovery and Tax Incentives for Enterprises (CREATE) Act.

Question 30

Which government agency in the Philippines has been responsible for implementing the investment priorities plan since 1987

Answer 30

The board of investment (BOI)

Question 31

Offer a clear road plan for sustainable growth, emphasizing important sectors like healthcare, education, and transportation

Answer 31

Investment Priority Plan (IPP)

Question 32

What memorandum order approved the 2022 SIPP

Answer 32

Memorandum Order No. 61

Question 33

What type of incentives does the CREATE Act provide for SIPP-Aligned investments

Answer 33

Income tax holidays (ITH) and enhanced deductions (EH)

Question 34

It is essetial to economic growth

Answer 34

Investment priority plan

Question 35

Which Philippine agency evaluates applications for tax incentives under SIPP

Answer 35

Board of Investment

Question 36

A business structure where the owner has complete control but also complete responsibility

Answer 36

Sole Proprietorship

Question 37

A document outlining the rights, responsibilites, and profit distribution among partners.

Answer 37

Partnership Agreement

Question 38

The individuals who own a corporation

Answer 38

Shareholders

Question 39

The governing body elected by shareholders to oversee a corporation

Answer 39

Board of Directors

Question 40

The process of taxing profits at the corporate level and again when distributed to shareholders

Answer 40

Double Taxation