TITLE 1: GENERAL PROVISION

Question 1

Corporations which have capital stock divided into shares and are authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held.

Answer 1

Stock corporation

Question 2

A corporation incorporated under the laws of the Philippines.

Answer 2

Domestic corporation

Question 3

A corporation consisting of only one member for the purpose of administering and managing, as trustee, the affairs, property, and temporalities of any religious denomination, sect, or church.

Answer 3

Corporation sole

Question 4

A corporation organized for religious purposes.

Answer 4

Ecclesiastical corporation

Question 5

I. Well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just an alter ego of a person or another corporation.
II. It is a basic principle in Corporation Law that a corporation has a personality which is the same as the officers or members who compose it.

Answer 5

Only I is true

Question 6

It refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least 51% of its capital stock.

Answer 6

Government-owned or controlled corporation (GOCC)

Question 7

Two requisites must concur before one may be classified as a stock corporation, namely:
I. That it has capital stock divided into shares;
II. That it is authorized to distribute dividends and allotments of surplus and profits to its members.

Answer 7

Both are true

Question 8

The due incorporation of any corporation claiming in good faith to be a corporation, and its right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such corporation may be a party.

Answer 8

De facto corporation

Question 9

All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities, and damages incurred or arising as a result thereof.

Answer 9

Corporation by estoppel

Question 10

I: Any application of the doctrine of piercing the corporate veil should be done with caution; II: A corporation exercises its powers through its board of directors and/or its duly authorized officers and agents.

Answer 10

Both are true

Question 11

It is one where no part of its income is distributable as dividends to its members, trustees, or officers.

Answer 11

Non-stock corporation

Question 12

A corporation organized for charitable purposes.

Answer 12

Eleemosynary corporation

Question 13

It is an artificial being created by operation of law, having the right of succession and powers expressly authorized by law or incidental to its existence.

Answer 13

Corporation

Question 14

I: A corporation is a juridical entity vested with a legal personality separate from those acting for and in its behalf; II: Not every stockholder or officer can bind the corporation considering its separate legal entity status from those who compose it.

Answer 14

Both are true

Question 15

The continuation of a corporation’s legal status despite changes in ownership or management is called…

Answer 15

Succession

Question 16

I: Property acquired by a corporation is property of stockholders/members; II: A corporation exercises said powers through its board/directors/officers/agents…

Answer 16

Only II is true

Question 17

A corporation is formed, organized, or existing under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or State.

Answer 17

Foreign corporation

Question 18

A corporation consisting of more than one member.

Answer 18

Corporation aggregate

Question 19

I: The provisions governing stock corporations, when pertinent, shall be applicable to non-stock corporations; II: A non-stock corporation must have shareholders.

Answer 19

Only I is true

Question 20

I: Non-stock corporations can distribute 10% of their income to their members; II: Non-stock corporations are organized for charitable, religious, educational, professional, cultural, recreational,fraternal, literary, scientific, social, civil service, or similar purposes.

Answer 20

Only II is true

Question 21

A private corporation which has accepted from the State the grant of franchise or contract involving the performance of public duties but which is organized for profit.

Answer 21

Quasi-public corporation

Question 22

A corporation created in strict or substantial conformity with the mandatory statutory requirements for incorporation and the right of which to exist as a corporation cannot be successfully attacked or questioned by any party even in a direct proceeding for that purpose by the State.

Answer 22

De jure corporation

Question 23

One which has exercised corporate powers for an indefinite period without interference on the part of the government.

Answer 23

Corporation by prescription

Question 24

The following are limitations on no par value shares, except:

Answer 24

It cannot be issued as preferred shares

Question 25

I: The exclusive right to vote and be voted for in the election of directors must be for a limited period not to exceed 5 years subject to the approval of the SEC. II: Preferences granted to preferred stockholders give them a lien upon the property of the corporation nor make them creditors of the corporation.

Answer 25

Only I is true

Question 26

Shares without a right to vote.

Answer 26

Non-voting share

Question 27

I: It acquires a judicial personality either by special law or a general law; II: The general law under which a private corporation may be formed or organized is the Revised Corporation Code.

Answer 27

Both are true

Question 28

The stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof.

Answer 28

Incorporators

Question 29

It refers to a person who brings about or causes to bring about the formation and organization of a corporation.

Answer 29

Promoter

Question 30

Each share shall be equal in all respects to every other share except as otherwise provided in the articles of incorporation and stated in the certificate of stock.

Answer 30

Doctrine of equality of shares

Question 31

I: There shall always be a class or series of shares which have complete voting rights; II: The right to vote is inherent in and incidental to the ownership of corporate stocks.

Answer 31

Both are true

Question 32

These are shares usually preferred, which by their terms are redeemable at a fixed date, or at the option of either issuing corporation, or the stockholder, or both at a certain redemption price.

Answer 32

Redeemable share

Question 33

Subscriptions to the capital stock of a corporation constitute a fund to which creditors have a right to look for the satisfaction of their claims.

Answer 33

Trust fund doctrine

Question 34

These are shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing corporation by purchase, redemption, donation, or through some other lawful means.

Answer 34

Treasury stock

Question 35

Stocks issued for a consideration less than the par or issued price thereof or in any other form other than cash valued in excess of its fair value.

Answer 35

Watered stock

Question 36

I: In non-stock corporations, voting rights do not attach to membership; II: Members vote as persons, in accordance with the law and by-laws of the corporation.

Answer 36

Only II is true

Question 37

I: One of the rights of a stockholder is the right to participate in control and management through voting; II: The right to vote is inherent but not considered a property right.

Answer 37

Both are true

Question 38

They may be purchased or taken up by the corporation upon expiration of a fixed period regardless of unrestricted retained earnings...

Answer 38

Redeemable stock

Question 39

These are shares with a value fixed in articles of incorporation and certificate of stock...

Answer 39

Par value stock

Question 40

It is the governing body in a stock corporation.

Answer 40

Board of directors

Question 41

It is the governing body in a non-stock corporation.

Answer 41

Board of trustees

Question 42

A class of stock entitling the holder to vote on corporate matters, to receive dividends after other claims and dividends have been paid (especially to preferred shareholders), and to share in assets upon liquidation.

Answer 42

Common stock

Question 43

It is one which entitles the holder thereof to certain preferences over the holders of common stock.

Answer 43

Preferred stock

Question 44

I: The law provides that shares classified and issued as preferred or redeemable shares may be deprived of voting right. II: Each member shall be entitled to one vote unless so limited. broadened, or denied in the articles of incorporation or bylaws.

Answer 44

Both are true

Question 45

It is one which has no preference and entitle the shareholder to a pro rata division of the profits, if any.

Answer 45

Common stock

Question 46

I: It is settled that unissued stocks may not be voted or considered in determining whether a quorum is present in a stockholders' meeting. II: Only stock actually issued and outstanding may be voted.

Answer 46

Both are true

Question 47

These are shares classified in the articles of incorporation which may be given certain rights and privileges (e.g. dividend payments) not enjoyed by the owners of other stocks.

Answer 47

Founders' share

Question 48

I: Redeemable shares, once redeemed are retired unless reissuance is expressly allowed in the articles of incorporation. II: The Corporation Code allows redemption of shares only if there are unrestricted retained earnings on the books of the corporation.

Answer 48

Both are true

Question 49

Artifical being created by operation of law, having the right of succession and the powers, attriabutes, and properties expressly authorized by law or incidental to its existence.

Answer 49

Corporation

Question 50

Refers to any agency organized as a stock - or non stock corporation, vested with functions relating to public needs whether governmental or propriety in nature, and owned by the government of at least fifty-one (51) percent of its capital stock.

Answer 50

Government-owned or controlled corporation.

Question 51

The continuation of a corporation’s legal status despite changes in ownership or management.

Answer 51

Succession (Artificial Succession)

Question 52

Corporation which have capital stock divided into shares and are authorized to distribute to the holders of such shares dividends.

Answer 52

Stock corporation

Question 53

Corporation where no part of its income is distributable as dividends to its members, trustees, or officers.

Answer 53

Non-stock corporation

Question 54

A corporation organized for the government of a portion of the state for the general good and welfare.

Answer 54

Public corporation

Question 55

A corporation formed for some private purpose, benefit or end

Answer 55

Private corporation

Question 56

Private corporation but serve public duties

Answer 56

Quasi-public corporation

Question 57

A corporation created in strict or complied with the mandatory statutory requirementsin SEC

Answer 57

De Jure Corporation

Question 58

Corporation claiming in good faith but not complied with the requirements of SEC.

Answer 58

De Facto Corporation

Question 59

All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners

Answer 59

Corporation by estoppel

Question 60

One which has exercised corporate powers for an indefinite period without interference on the part of the government.

Answer 60

Corporation by prescription

Question 61

A corporation incorporated under the laws of the Philippines.

Answer 61

Domestic Corporation

Question 62

A corporation is formed, organized or existing under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state.

Answer 62

Foreign corporation

Question 63

A corporation which is open to any person who may wish to become a stockholder or member thereto.

Answer 63

Open Corporation

Question 64

A close corporation is one whose articles of incorporation provide that: Limited to 20 or fewer stockholders, with restrictions on stock transfers.

Answer 64

Close Corporation

Question 65

Owns another corporation’s stocks for control.

Answer 65

Parent or Holding Corporation

Question 66

More than 50% of its voting stock is owned by another corporation.

Answer 66

Subsidiary Corporation

Question 67

This applies to private corporations. Anyone who wants to form a private corporation must follow the requirements set in the Corporation Code. The corporation only comes into existence after completing these legal requirements.

Answer 67

General Law (Corporation Code)

Question 68

This applies to government-owned or controlled corporations (GOCCs). Instead of following the Corporation Code, these corporations are created directly by a special law passed by Congress. Their rules and operations are mainly based on that law. The Corporation Code applies only if relevant.

Answer 68

Special Law (Charter)

Question 69

Shares held by a third party until certain conditions are met.

Answer 69

Escrow Shares

Question 70

Less than one full share (often due to stock splits).

Answer 70

Fractional Shares

Question 71

Special shares given to the original incorporators or founders of a corporation.

Answer 71

Founders' Shares

Question 72

These are shares that a corporation can buy back from shareholders at a fixed date or under specific conditions stated in the articles of incorporation and certificate of stock.

Answer 72

Redeemable Shares

Question 73

This legal principle states that the capital stock of a corporation serves as a trust fund for its creditors.

Answer 73

Trust Fund Doctrine

Question 74

previously issued and fully paid shares that a corporation has reacquired through: Purchase (e.g., a stock buyback program) Redemption (e.g., redeemable shares) Donation (e.g., shareholders donate shares back to the company) Other lawful means

Answer 74

Treasury Shares