Lesson 6

Question 1

is a type of business
organization that is legally separate from its
owners.

Answer 1

corporation

Question 2

It is created through a legal process
that it can own property, enter into contracts, sue,
and be sued

Answer 2

corporation

Question 3

a corporation is independent
from its owners

Answer 3

Legal Entity

Question 4

Owners are only responsible for the business’ debts up to
the amount of shareholdings.

Answer 4

Limited Liability

Question 5

continues to exist even there are change of
owners.

Answer 5

Unlimited life/Perpetual Existence

Question 6

a legal person in
itself which can buy, own, sell property, sue
and be sued

Answer 6

Separate legal entity

Question 7

Ownership
can be easily transferred by buying or selling
shares of stocks.

Answer 7

Transferability of Shares:

Question 8

Managed by a
Board of Directors and executives

Answer 8

Governance Structure

Question 9

Owned by shareholders
who invest money in exchange for shares.

Answer 9

Stock Corporation

Question 10

Formed for social,
Educational, or charitable purpose (non-profit
Organizations) example: Red Cross

Answer 10

Non-Stock Corporation

Question 11

stated that a Corporation
is an artificial being created by the operation of
the law.
< Its life is limited stated in the articles of the
Corporation but not exceed 50 years subject for
Extension not longer than 50 years.

Answer 11

BP # 68, Section 2

Question 12

Issued by the
SEC; its date of issuance is the beginning of
the corporation’s juridical personality

Answer 12

Certificate of Incorporation

Question 13

Refers to the corporators mentioned in the articles of incorporation who originally formed and composed the corporation.

Answer 13

Incorporated

Question 14

Five to
fifteen individuals legal age and majority are
residents of the Philippines may form a private
corporation for any lawful purpose or purposes.

Answer 14

Section 10 of the Corporation Code

Question 15

is the governing
bodies of the stock corporation.

Answer 15

The Board of Directors

Question 16

is the governing bodies
of the non-stock corporation.

Answer 16

The Board of Trustees

Question 17

An entity where capital
is in the form of capital stock divided into
shares;
: Dividend refers as corporate earnings
] distributed to shareholders.

Answer 17

Stock Corporation

Question 18

Solely for charitable,
religious, educational, cultural or similar
purpose (no sharing of income among members)

Answer 18

Non-Stock Corporation

Question 19

Formed for the
government .

Answer 19

Public Corporation

Question 20

Formed for private
purpose/benefit.

Answer 20

Private Corporation

Question 21

Owns controlling
interest in another corporation by more than 50%.

Answer 21

Parent Corporation

Question 22

Investee corporation
in which the parent corp. has controlling interest.

Answer 22

Subsidiary Corporation

Question 23

Limited to selected or
family members.

Answer 23

Closed Corporation

Question 24

Open to any persons
intending to become a stockholder or member
of the corporation.

Answer 24

Open Corporation

Question 25

Refers to the right of stockholders to all issues of shares, in proportion to his shareholdings -0

Answer 25

Pre-emptive Right:

Question 26

Refers to the net worth of shareholder’s stake in a company.

Answer 26

Book Value of Shareholdings

Question 27

.) It has Voting Right b.) It grants Proxy Voting c.) Right to share proportionally in dividends, and in all assets after liabilities in a liquidation d.) It has preemptive rights.

Answer 27

Common Stocks / Capital Stocks :

Question 28

class of stock with preferences over common shares, including distribution of dividends and corporate assets incase of dissolution.

Answer 28

Preferred Stock

Question 29

: It has a stated liquidating value per share. : The cash dividend is described in terms of peso amount per share.

Answer 29

Stated Value

Question 30

Allow owners to receive dividend payout from the company even if the company is not profitable.

Answer 30

Dividends (preferred stock)

Question 31

With fixed-rate dividend, unpaid dividend during the years will be carried over to the next year

Answer 31

Cumulative

Question 32

Lose the right for undeclared dividends in a given year.

Answer 32

Non-Cumulative

Question 33

Shares for Filipino Stockholders

Answer 33

Class A Stock

Question 34

Shares for foreign investors.

Answer 34

Class B Stock

Question 35

Refers to share of Capital Stock has fixed value (original issue price)

Answer 35

Par Value Share

Question 36

Value received by stockholders from investment . All Assets and earnings are owned by the company which can be transferred to stockholders upon declaration for dividends distribution by the BOD.

Answer 36

Dividends

Question 37

Upon cash payment to Stockholders – Corporate Accounts’ RETAINED EARNINGS decrease

Answer 37

Cash Dividends

Question 38

Form of non-cash Asset of the corporation (invested stock in other Company)

Answer 38

Property Dividends

Question 39

Form of Stock of the `issuing company’s outstanding capital stocks.

Answer 39

Stock Dividend

Question 40

Forms of promissory notes indicating the kind of benefits the stockholders shall be received in the future.

Answer 40

Scrip Dividend

Question 41

Declared Bond instead of Cash

Answer 41

Bond Dividend

Question 42

Or Return of Capital to Investors; Declared upon dissolution of the company.

Answer 42

Liquidating Dividend