Corporation Flashcards
(50 cards)
Statement 1: As a general rule, a corporation is entitled to moral damages.
Statement 2: A corporation is entitled to the constitutional right against self incrimination
Both statements are NOT true
ABC Corporation borrowed P3,000,000 from DEF Bank. Mr. Benito is the controlling stockholder, owning eighty percent (80%) of the outstanding capital stock of ABC Corporation. DEF Bank seeks to collect the P3,000,000 debt of ABC Corporation, but it discovered that the corporations has no more assets. DEF Bank is now going after Mr. Benito to collect the debt. Is Mr. Benito liable to pay the P3,000,000 debt of ABC Corporation?
A. No. Mr. Benito can only be held liable for P2,400,000, or 8% of P3,000,000
B. No. The liability of ABC Corporation is separate from the liability of Mr. Benito
C. Yes. Under the doctrine of piercing the veil of corporate fiction, Mr. Benito is liable for the debts of the corporation.
D. Yes. Under the doctrine of unlimited liability, Mr. Benito’s personal assets serve as security for the debts of the corporation
B
A corporation:
A. Has a non-renewable term of existence of fifty (50 years)
B. Has a term of existence of fifty (50) years, renewable three times
C. Has a term of existence of fifty (50) years, renewable for an indefinite number of times
D. Has a perpetual existence unless its articles of incorporation provide otherwise.
D
The doctrine of piercing the veil of corporate fiction applies when the corporate fiction is being used to do the following except:
A. Defeat public convenience
B. Pursue a business interest
C. Protect fraud
D. Justify wrong
B
Which of the following is not an advantage of forming a corporation as distinguished from other forms of business ownership?
A. Continuity of existence
B. Limited liability
C. Low cost of formation
D. Ease in transferability of ownership interest
C
The shares of stock of a close corporation are held by:
A. Not more than 20 persons
B. At most 20 persons
C. Not more than 50 persons
D. At most 50 persons
A
In order to determine whether a corporation is a domestic or a foreign corporation, the main point of query is:
A. The place of incorporation
B. The nationality of incorporators
C. The nationality of the controlling interest
D. The nationality of majority of the members of the Board of Directors
A
An eleemosynary corporation is:
A. A lay corporation created for the benefit of persons composing it
B. A lay corporation created for charitable purposes
C. An ecclesisatical corporation created for the benefit of persons composing it
D. An ecclesiastical corporation created for charitable purposes
B
J, K, L, M, N wanted to form a corporation. They signed a “contract of incorporation’ whereby all five of them obligated themselves to contribute P2,000,000 each as share of capital of the proposed corporation. All of the persons have contributed P2,000,000 each within a month from the signing of the “contract of incorporation”. Is there a corporation?
A. Yes, from the time of the signing of the contract of incorporation
B. Yes, from the time that J, K, L, M, and N have all contributed P2,000,000
C. No, since there is no Certificate of Incorporation
D. No, since the facts did not show that the contract of incorporation was entered into in a public instrument
C
The corporate existence of a corporation sole commences from:
A. Filing of the verified articles.
B. Issuance of Certificate of Incorporation
C. Initial contribution
D. First transaction
A
After verifying that their name is unique and allowed, the incorporators of OPQ Corporation filed its Articles of Incorporation and Treasurer’s Affidavit with the Securities and Exchange Commission. The Certificate of Incorporation was issued. However, nine months had passed and OPQ Corporation did not submit its Corporate By-Laws with the SEC. Numerous board resolutions have been issued and corporate transactions have been entered into. What is the status of the corporation?
A. An inexistent corporation
B. A de facto corporation
C. A de jure corporation
D. A corporation by estoppel
B
Statement 1: The existence of a de facto corporation can be attacked collaterally
Statement 2: The existence of a corporation by estoppel can be attacked directly
Only statement 2 is true
Statement 1: Once an incorporator ceases to be a shareholder, an amendment f the Articles of Incorporation is necessary.
Statement 2: Not all shareholders are incorporators
Only statement 2 is true
Which among the following institutions are allowed to incorporate as a one-person corporation?
A. Quasi-banks
B. Publicly-listed companies
C. Natural persons exercising their profession
D. Export enterprises
D
S1: A foreign corporation cannot make donations to partisan political activity.
S2: A domestic corporation can make donations to partisan political activity
Both statements are true
Which of the following is not an express power of corporation under the Corporation Code?
A. To sue in its corporate name
B. To convey and sell real and personal property
C. To hire personnel
D. To amend its articles of incorporation
C
These are powers that attaches to a corporation at the moment of its creation without regard to its expressed powers or particular primary purpose and may be said to necessarily arise from its being a juridical person engaged in business.
A. Inherent powers
B. Express powers
C. Implied powers
D. Collateral power
A
In the Articles of Incorporation, Blackpink Corporation’s primary purpose is the manufacture, distribution, and sale of hammers. Blackpink Corporation wants to enter into the business of rendering carpentry services. The Board of Directors of Blackpink Corporation met, and they decided to venture into the carpentry services industry. What is the status of contracts entered into by Blackpink Corporation involving carpentry services?
A. The contracts are voidable since it is an ultra vires act.
B. The contracts are unenforceable since they were entered into without authority.
C. The contracts are valid since they were authorized by the Board of Directors
D. The contracts are void for being outside the primary purpose of the corporation
A
(Ultra vires is a latin word meaning “beyond the powers”. Describes actions taken by corporations that exceed the scope of power given to them by laws or corporate charters.)
All of the following are true statements regarding the qualifications of an incorporator, except:
A. An incorporator may be any juridical person
B. A person eighteen (18) years of age may be an incorporator
C. An incorporator must own or subscribe to at least one (1) share
D. A person who is not a resident of the Philippines may not qualify as an incorporator
D
Corporations vested with public interest shall have independent directors constituting:
A. At least 10% of such Board
B. At least 20% of such Board
C. At least 30% of such Board
D. at least 40% of such Board
B
All of the following are true statements regarding the qualifications of a director, except:
A. A director must own at least one share in their own names
B. Majority of the Board of Directors must be residents of the Philippines
C. A director must be not be convincted by final judgement of a violation of the Securities Regulations Code within five (5) years prior to election or appointment
D. A director must not be convicted by final judgement of a violation of an offense punishable by imprisonment for a period exceeding three (3) years within five (5) years prior to election or appointment
D
Bubbles is a member of the Board of Directors of Buttercup Corporation. Through a Board Resolution of the members of the Board present during the board meeting, Bubbles was authorized to enter into a contract with Mojo Corporation involving the provision of services by Buttercup Corporation in exchange for the payment of P20,000,000 by Mojo Corporation. However, events did not turn out well for Mojo Corporation as it soon filed for bankruptcy. Notwithstanding Buttercup Corporation being able to render all the services required under the contract, Mojo Corporation was only able to pay P3,000,000 of the contract price. One of the shareholders, Buttercup, is particularly worried as to how it will affect the financial position of Buttercup Corporation. She went to court and sought to annul the contract entered into by Bubbles. Is the contract entered into by Bubbles annullable?
A. Yes. Considering that Buttercup is a shareholder and would be directly affected by the decision of the Board, Buttercup can seek for the annulment of the contract.
B. Yes. The contract constitutes an ultra vires act for being entered into in bad faith
C. No. As a general rule, matters of management are subject to the discretion and judgement of the Board of Directors
D. No. Buttercup must first obtain the vote of at least 2/3 of the outstanding capital stock before the contract may be annulled
C
S1: The manner of voting for the members of the Board of directors is always by ballot.
S2: In order to be seated as a member of the Board of Directors, a director must obtain at least one-third (1/3) of the total number of votes cast.
Both statements are NOT true
Courage owns 5,000 shares of stock of Muriel Corporation. Three members of the Board of Directors will be elected. Which of the following is true under cumulative voting?
A. Courage has 5,000 votes. He may pool all 5,000 votes in favor of one candidate.
B. Courage has 5,000 votes. He must distribute his votes to three candidates.
C. Courage has 15,000 votes. He may pool all 5,000 votes in favor of one candidate.
D. Courage has 15,000 votes. He must distribute his votes to three candidates
C
