Corporation

Question 1

REPUBLIC ACT No. ________
This Code shall be known as the “Revised Corporation Code of the Philippines”

Answer 1

11232

Question 2

1. A _______ is an artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incidental to its existence.
2. ___________ are acts committed outside the object for which a corporation is created as defined by the law of its organization and therefore beyond the express, implied and incidental powers of the corporation. They are not necessarily illegal.

Answer 2

1. corporation
2. Ultra Vires Acts or Contracts

Question 3

Kinds of Corporations as to Control or Ownership:
1. _________ is a corporation that controls another corporation
2. _________ is a corporation controlled by another corporation
3. ________ is a corporation which is a member of a group of companies
4. __________ is a corporation being significantly influenced by an investor

Answer 3

1. Holding or parent corporation
2. Subsidiary corporation
3. Affiliate
4. Associate

Question 4

An ___________ is a person who apart from shareholdings and fees received from any business or other relationship which could, or could reasonable be received to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director.

Answer 4

independent director

Question 5

Industires or activities where the law require a certain minimum, or full, Filipino ownership requirement, such as:
1. Mass Media - ___% reserved to Filipinos
2. Advertising - ___% reserved to Filipinos
3. Public Utility - ___% reserved to Filipinos
4. Educational Institution - ___% reserved to Filipinos
5. Exploration, evaluation and development of natural resources - ___% reserved to Filipinos
6. Ownership of land - ___% of the stockholders of the Corporation must be Filipinos

Answer 5

1. 100
2. 70
3. 60
4. 60
5. 60
6. 60

Question 6

Disqualification of Directors, Trustees or Officers

A person shall be disqualified from being a director, trustee or officer of any corporation if, within ______ years prior to the election or appointment as such, the person was:

(a) Convicted by final judgment:
(1) Of an offense punishable by imprisonment for a period exceeding _____ years;
(2) For violating this Code; and
(3) For violating Republic Act No. 8799, otherwise known as “The Securities Regulation Code”;

(b) Found administratively liable for any offense involving fraudulent acts; and

(c) By a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct similar to those enumerated in paragraphs (a) and (b) above.

Answer 6

five (5)six (6)

Question 7

METHODS OF VOTING:
1. _________ - a stockholder’s vote is determined by the number of shares he owns. E.g., If a stockholder has 1k shares, gets 1k votes.

2. _________ - the stockholders’ vote is determined by the number of shares he owns and the number of directors to be elected. He may either concentrate all such votes into one candidate (Cumulative Voting for one candidate) or he may distribute them among the candidates as he may see fit (Cumulative voting by distribution)

Answer 7

1. Straight Voting
2. Cumulative Voting

Question 8

REMEDIES AGAINST ERRING OFFICERS/DIRECTORS:
1. ______________ - is an action brought by a stockholder against the corporation for direct violation contractual rights. (Stockholder vs. Corporation)
2. _____________ - refers to an action brought by a person in his own behalf or on behalf of all similarly situated. (Association Of Stockholders vs. Corporation)
3. ____________ - refers to a suit brought by one or more members in the name and on behalf of the corporation to redress committed against it or to protect or vindicate corporate rights, the officials of the corporation refuse to sue or are the ones to be sued or hold control of the corporation. The corporation is a necessary party to the suit. It is a suit filed by a person who must a shareholder to enforce a corporation’s cause of action. (Stockholder on behalf of corporation vs. board of Directors of Corporation)

Answer 8

1. Individual or Personal Action
2. Representative suit
3. Derivative suit

Question 9

Corporate Officers
The directors of a corporation must formally organize an elect:
(a) a president, who must be a _______;
(b) a treasurer, who must be a _______;
(c) a secretary, who must be a ______ and _____ of the Philippines; and
(d) such other officers as may be provided in the bylaws.

If the corporation is vested with public interest, the board shall also elect compliance officer. The same person may hold two (2) or more positions concurrently, except that no one shall act as president and secretary or as president and treasurer at the same time, unless otherwise allowed in this Code.

Answer 9

a. director
b. resident
c. citizen; resident

🔍 Why the Corporate Secretary Must Be a Citizen and Resident
The corporate secretary is the liaison between the corporation and the SEC, and is responsible for:
- Filing the General Information Sheet (GIS)
- Certifying board resolutions and minutes
- Managing stock and transfer books
- Ensuring compliance with Philippine corporate law and governance
Because these duties involve legal accountability, certification under oath, and interpretation of Philippine law, the secretary must be:
- A Filipino citizen → to ensure allegiance to Philippine legal standards
- A resident → to ensure availability for regulatory and board matters

🔍 Why the Treasurer Must Only Be a Resident
The treasurer is the custodian of corporate funds, responsible for:
- Certifying paid-up capital
- Monitoring unrestricted retained earnings
- Ensuring financial compliance for dividends, share buybacks, etc.
The law requires the treasurer to be a resident to ensure:
- Immediate availability for financial oversight
- Preventive control against unauthorized fund transfers abroad
But citizenship is not required, because the role is financial, not legal or regulatory

Question 10

A _____________ is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form this kind of corporation.

Answer 10

One Person Corporation
Corporate name must contain “OPC”

Question 11

Conversion from One Person Corporation to an Ordinary Stock Corporation

A One Person Corporation may be converted into an ordinary stock corporation after due notice to the Commission of such fact and of the circumstances leading to the conversion, and after compliance with all other requirements for stock corporations under this Code and applicable rules. Such notice shall be filed with the Commission within ____ days from the occurrence of the circumstances leading to the conversion into an ordinary stock corporation. If all requirement a have been complied with, the Commission shall issue a certificate of filing or amended articles of incorporation reflecting the conversion.

In case of death if the single stockholder, the nominee or alternate nominee shall transfer the shares to the duly designated legal heir or estate within _____ days from receipt of either an affidavit of heirship or self-adjudication executed by a sole heir, or any other legal document declaring the legal heirs of the single stockholder and notify the Commission of the transfer. Within sixty (60) days from the transfer of the shares, the legal heirs shall notify the Commission of their decision to either wind up and dissolve the One Person Corporation or convert it into an ordinary stock corporation. The ordinary stock corporation converted from One Person Corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion.

Answer 11

sixty (60)
seven (7)

Question 12

1. 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
   a. Only Statement 1 is true
   b. Only Statement 2 is true
   c. Both statements are true
   d. Both statements are not true
2. ABC Corporation borrowed Php 3,000,000.00 from DEF Bank. Mr. Benito is the controlling stockholder, owning eighty percent (80%) of the outstanding capital stock of ABC Corporation. QEF Bank seeks to collect the Php 3,000,000.00 debt of ABC Corporation, but it discovered that the corporation has no more assets. DEF Bank is now going after Mr. Benito to collect the debt. Is Mr. Benito liable to pay the Php 3,000,000.00 debt of ABC Corporation?
   a. No, Mr. Benito can only be held liable for Php 2.400.000.00, or 80% of Php 3,000.000.00
   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.
3. A corporation:
   a. Has 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
4. 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 business interest
   c. Protect fraud
   d. Justify wrong
5. 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

Answer 12

1. D
2. B
3. D
4. B
5. C

Question 13

6. The shares of stock of a close corporation is held by:
   a. Not more than 20 persons
   b. At most 20 persons
   c. Not more than 50 persons
   d. At most 50 persons
7. 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 shareholders
   d. The nationality of majority of the members of the Board of Directors
8. 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 ecclesiastical corporation created for the benefit of persons composing it
   d. An ecclesiastical corporation created for charitable purposes
9. J, K, L, M, and N wanted to form a corporation. They signed a “contract of incorporation” whereby all five of them are obligated themselves to contribute P2,000,000 each as share 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 no show that the contract of incorporation was entered into a public instrument
10. 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

Answer 13

6. A
7. A
8. B
9. C
10. A
    Under the RCC, a corporation sole is formed upon filing with the SEC—not upon issuance of a certificate.

Question 14

11. After verifying that their name is unique and allowed, the incorporation of OPQ Corporation filed its Articles of Incorporation and Treasurer’s Affidavit with the Securities and Exchange Commission. The Certificate of Incorporation did not submit its Corporate By-Laws with the SEC. Numerous board resolutions have been issued and corporate transactions 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
12. 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
    a. Only Statement 1 is true
    b. Only Statement 2 is true
    c. Both statements are true
    d. Both statements are not true
13. Statement 1: Once an incorporator ceases to be a shareholder, an amendment of the Articles of Incorporation is necessary.
    Statement 2: Not all shareholders are incorporators
    a. Only Statement 1 is true
    b. Only Statement 2 is true
    c. Both statements are true
    d. Both statements are not true
14. Which of 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
15. Statement 1: A foreign corporation cannot make donations to partisan political activity
    Statement 2: A domestic corporation can make donations to partisan political activity
    a. Only Statement 1 is true
    b. Only Statement 2 is true
    c. Both statements are true
    d. Both statements are not true

Answer 14

11. B
12. B
13. B
14. D
    Who are Not Allowed to Form OPC
    Banks, nonbank financial institutions, quasibanks, preneed, trust, insurance, public and publicly listed companies, nonchartered government-owned and controlled corporations cannot be incorporated as OPC.
    A natural person who is licensed to exercise a profession may not organize as an OPC for the purpose of exercising such profession except as otherwise provided under special laws.
15. C

Question 15

16. Which of the following is not an express power of a 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
17. These are powers that attach 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 powers
18. In the Articles of Incorporations, 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
19. 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 and subscribe to at least one (1) share
    d. A person who is not a resident of the Philippines may qualify as an incorporator
20. 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.

Answer 15

16. C
    Hiring is an implied power, not expressly listed under Section 35 of the RCC.
17. A
18. A
19. D
20. B

Question 16

21. 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 not be convicted by final judgment 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 judgment 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
22. 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 well for Mojo Corporation as it soon filed for bankruptcy. Notwithstanding Buttercup Corporation being able to render all the services required under the contact, 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 share
    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 judgment 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
23. Statement 1: The manner of voting for the members of the Board of Directors is always by ballot.
    Statement 2: 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.
    a. Only Statement 1 is true.
    b. Only Statement 2 is true.
    c. Both statements are true.
    d. Both statements are not true.
24. 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 5,000 votes in favor of one candidate
    d. Courage has 15,000 votes. He must distribute his votes to three candidates
25. Under which of the following causes of vacancy in the Board of Directors is the vote of stockholders required?
    a. Death
    b. Expiration of the term
    c. Resignation
    d. Abandonment

Answer 16

21. D EXCEEDING 6YRS
22. C
23. D
24. C
25. B
    When a director’s term expires, a new one must be elected by stockholders. Other causes (death, resignation, abandonment) may be filled by the board if still constituting a quorum

Question 17

26. Mr. X, a member of the Board of Directors of XYZ Corporation died during his term as a director on March 5, 2020. Up to When shall the remaining directors fill the vacancy caused by Mr. X’s death?
    a. March 20, 2020
    b. April 4, 2020
    c. April 19, 2020
    d. May 4, 2020
27. ABC Corporation is planning to enter into a contract with one of its Directors, Barry. There were seven members of the Board of Directors Agatha, Barry, Chandra, Demi, Emil, Farrah, and Gem. At the meeting where part of the agenda is the proposed contract with Barry, the following members of the Board of Directors were present: Agatha Barry Demi, and Emil are present. When the vote for the contract with Barry is being counted, the Corporate Secretary noted that Barry abstained from voting. Agatha, Demi, and Emil all voted in favor of the contract. What is the status of the contract?
    a. Voidable at the option of Barry.
    b. Voidable at the option of corporation.
    c. Void.
    d. Perfectly valid.
28. What is the limit as to the amount of the total yearly compensation of the directors?
    a. It should not exceed 10% of the net income before tax of the corporation during the preceding year.
    b. it should not exceed 20% of the net income before tax of the corporation during the preceding year.
    c. It should not exceed 10% of the net income after tax of the corporation during the preceding year.
    d. It should not exceed 20% of the net income after tax of the corporation during the preceding year.
29. It signifies the maximum amount of shares that a corporation may issue.
    a. Outstanding capital stock
    b. Issued capital stock
    c. Issuable capital stock
    d. Authorized capital stock
30. All of the following are valid considerations for shares, except:
    a. Promissory notes
    b. Intangible personal property
    c. Services rendered
    d. Previously incurred indebtedness

Answer 17

26. C
    The RCC gives 45 days from the date of vacancy (March 5) to fill it.
27. B
28. A
29. D
30. A

Question 18

31. The exclusive right to vote and be voted for in the election of directors granted to holders of founders’ shares shall not exceed a period of:
    a. Two (2) years
    b. Three (3) years
    c. Four (4) years
    d. Five (5) years
32. In which of the following acts may the right to vote of preference shareholders be withheld?’
    a. Removal of members of the Board of Directors
    b. Increase or decrease of capital stock
    c. Amendment of by-laws
    d. Sale of substantially all of the corporate property
33. Which of the following statements is true in relation to no-par value shares?
    I. Preference shares can be issued as no-par value shares Articles of Incorporation so provides.
    II. Whatever is paid for no-par value shares constitutes paid-in capital and is covered by the trust fund doctrine regardless of the amount.
    a. I only
    b. Il only
    c. Both land II.
    d. Neither I nor II.
34. Treasury shares are:
    a. Issued and outstanding
    b. Issued but not outstanding
    c. Not issued and not outstanding
    d. Not issued but outstanding
35. Hanna subscribed for 2,000 shares with P50 par value for P60 each, or a total of P120,000. Hanna was able to pay P60,000 and was unable to pay for the other half. Now, Hanna is demanding the issuance of half of the shares, i.e., 1,000 shares, sinceshe was able to pay half of the subscription price. Can Hanna do so?
    a. Yes. Partial payment of subscription price gives rise to a right to demand issuance of a proportional number of shares
    b. Yes. However, Hanna must first secure vote of a majority of the Board of Directors constituting quorum
    c. No. Hanna must be able to pay the entire par value of P100,000 (2,000 shares at a par value of P50 each) before the shares can be issued
    d. No. Subscription contracts are considered indivisible

Answer 18

31. D
32. A
33. B
    Preference shares cannot be issued as no-par value shares. But whatever is paid for no-par shares is fully considered paid-in capital under the trust fund doctrine.
34. B
35. D

Question 19

36. Jackie subscribed for 3,000 shares with P44 par value for P80 each, Jackie was only able to pay P160,000 of the subscription price, leaving an unpaid balance of P80,000. Subsequently, the shares became delinquent. Prior to the delinquency sale, the Board of Directors declared cash dividends and called for a stockholder’s meeting to vote on the proposed corporate restructuring of the corporation. Which of the following statements is true?
    a. Jackie is entitled to the cash dividends, and she is likewise entitled to vote on the proposed corporate restructuring
    b. Jackie is not entitled to cash dividends, and she is likewise not entitled to vote on the proposed corporate restructuring
    c. Jackie is not entitled to the cash dividends, but is entitled to vote on the proposed corporate restructuring
    d. Jackie is entitled to the cash dividends, but is not entitled to vote on the proposed corporate restructuring
37. This refers to a suit brought by one or more stockholders or members in the name and on behalf of the corporation to redress wrongs committed against it or to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue or are the ones to be sued or hold control of the corporation
    a. Individual suit
    b. Personal suit
    c. Representative suit
    d. Derivative suit
38. Without board resolution, majority of the outstanding capital may:
    a. Declare stock dividends
    b. Revoke delegated power to amend by-laws
    c. Enter into a management contract
    d. Deny pre-emptive right
39. Without board resolution, 2/3 of the outstanding capital may:
    a. Remove a member of the Board of Directors
    b. Fix compensation of directors
    c. Extend or shorten the corporate term
    d. Invest in another corporation other than the primary purpose
40. In order for a voting trust to be valid, which of the following are part of the requisites?
    I. It should be notarized.
    II. It should be filed before the Chairman of the Board of Directors.
    a. I only.
    b. II only.
    c. Both I and II.
    d. Neither I nor II.

Answer 19

36. D
37. D
38. B
    📘 Concept Clarification
    Board Resolution – What Is It? A board resolution is a formal decision made by the Board of Directors during a meeting. It authorizes specific actions (e.g., entering contracts, declaring dividends, appointing officers). It must be recorded in the minutes and often required for legal or regulatory compliance.
    Revoke delegated power to amend by-laws - This is a stockholder power that doesn’t need board initiation.
39. A
    Removal of directors requires 2/3 vote of stockholders, even without board action.
40. A
    It must be notarized and filed with the SEC, not with the Chairman of the Board.

Question 20

41. Under which of the following scenario can the preemptive right not be exercised?
    I. Re-issuance of treasury shares
    II. Issuance in compliance with minimum stock ownership by the public.
    a. I only.
    b. II only.
    c. Both I and II.
    d. Neither I nor II.
42. The by-laws take effect upon:
    a. The issuance of the Certificate of Incorporation
    b. Approval by the Securities and Exchange Commission
    c. Approval of the stockholders by 2/3 vote
    d. Ratification of a majority of the Board of Directors
43. If the by-laws were made prior to incorporation, then:
    a. It must be approved by the majority of the stockholders
    b. It must be approved by at least 2/3 of the stockholders
    c. It must be approved by at least 3/4 of the stockholders
    d. It need not be approved by the stockholders
44. In order to constitute a quorum for the meeting of the directors:
    a. At least 1/3 must be present
    b. Majority must be present
    c. At least 2/3 must be present
    d. At least 3/4 must be present
45. Notice for the regular meeting of the stockholders must be received by the stockholders:
    a. 30 days before the meeting
    b. 21 days before the meeting
    c. 15 days before the meeting
    d. 14 days before the meeting

Answer 20

41. B
42. B
43. D
44. B
45. B

Question 21

46. Statement 1: Proxy voting is allowed during the meeting of the Board of Directors
    Statement 2: Proxy voting is allowed during the meeting of the stockholders
    a. Only Statement 1 is true
    b. Only Statement 2 is true
    c. Both statements are true
    d. Both statements are not true
47. Sam Corporation wants to expand its operations and intends to set up its own delivery system. Smith Corporation is a trucking and logistics corporation. Sam Corporation purchased all of Smith Corporation’s assets and liabilities. As a result of the transaction, Smith Corporation is dissolved. Which of the following statements is true?
    a. The transaction is a consolidation. Sam Corporation and Smith Corporation are called constituent corporations
    b. The transaction is a merger. Sam Corporation and Smith Corporation are called constituent corporations.
    c. The transaction is a consolidation. Smith Corporation is called the absorbed corporation.
    d. The transaction is a merger. Smith Corporation is called the absorbed corporation
48. The plan of merger or consolidation must be approved by:
    a. The stockholders representing at least 1/2 of the e outstanding capital stock.
    b. The stockholders representing at least 2/3 of the outstanding capital stock.
    c. The stockholders representing at least 3/4 of the outstanding capital stock.
    d. The stockholders representing all of the outstanding capital stock.
49. Which of the following non-stock corporations are required to have trustees in multiples of five?
    a. Charitable non-stock corporations
    b. Religious non-stock corporations
    c. Scientific non-stock corporations
    d. Educational non-stock corporations
50. Where no creditors are affected, how much vote is required to affect a voluntary dissolution?
    a. Majority of the outstanding capital stock
    b. At least 1/3 of the outstanding capital stock
    c. At least 2/3 of the outstanding capital stock
    d. At least of the outstanding capital stock

Answer 21

46. B
47. D
    A merger combines two companies into one, while consolidation creates a new entity from two or more companies, resulting in the original companies ceasing to exist.
    | Definitions |
    Merger: A merger occurs when two or more companies combine to form a single entity. In this process, one company typically absorbs the other, and the surviving company retains its name and identity. The absorbed company ceases to exist as a separate legal entity.
    Consolidation: Consolidation involves the combination of two or more companies to create a completely new entity. In this case, all original companies cease to exist, and a new company is formed, often with a new name.
48. B
49. D
50. A

Question 22

6. Under this theory, the nationality of the corporation is that of the country under whose law it was formed
   a. Control test
   b. Incorporation test
   c. Domicile test
   d. Grandfather rule
7. A corporation created in strict compliance with all the legal requirements and whose right to exist as a corporation
   cannot be successfully attacked in a direct proceeding for that purpose by the State is?
   a. De jure corporation
   b. De facto corporation.
   c. Corporation by estoppel
   d. Corporation by prescription
8. Corporations begin to have corporate existence and juridical personality.
   a. From the moment of the execution of the Articles of Incorporation
   b. From the moment of the execution of the Constitution and by-laws
   c. From the moment of the execution of the Treasurer’s Affidavit
   d. From the date of the issuance of the certificate of incorporation by the SEC under its official seal
9. Corporations as distinguished from partnerships
   a. the liability extends up to private properties.
   b. created by agreement.
   c. interest or ownership is transferable only if the other owner’s consent.
   d. no dissolution in case of death, withdrawal or resignation of an owner.
10. The articles of incorporation differ from the by-laws in that the articles of incorporation are
    a. The rules of action adopted by a corporation for its internal government
    b. Adopted before or after incorporation
    c. A condition precedent in the acquisition by a corporation of a juridical personality
    d. Approved by the stockholders if adopted after the incorporation

Answer 22

6 B
7 A
8 D
9 D
10 C

Question 23

W12 Private Corp

1. One incorporated under the laws of the Philippines
   a. Domestic corporation
   b. Foreign corporation
2. A corporation existing in fact and in law
   a. De facto corporation
   b. De javu corporation
3. A corporation existing in fact but not in law
   a. De jure corporation
   b. De javu corporation
   c. De facto corporation
   c. De jure corporation
   c. De facto corporation
4. One which is limited to selected persons or members of a family
   a. Open corporation b. Close corporation
   d. Close corporation
   d. De open corporation
   d. De close corporation
   c. Lay corporation d. Ecclesiastical corporation
5. One which is so related to another corporation that the majority of its directors can be elected by such other corporation.
   a. Subsidiary corporation
   b. Parent or holding corporation
   c. Quasi corporation
   d. Corporation by prescription

Answer 23

1 A
2 C
3 C
4 B
5 A

Question 24

21. Issued to those who in some way interested to the company, for incorporating the company, for services rendered in
    launching the welfare of the company
    a. Preferred share of stock
    b. Common share of stock
    c. Promotion stock
    d. Share in escrow
22. When a corporation is used to defeat public convenience, justify wrong, protect fraud, or defend crime or made as a
    shield to confuse the legitimate issues or where a corporation is a mere alter ago or business conduit of a person, this
    doctrine applies
    a. Doctrine of business opportunity
    b. Trust fund doctrine
    c. De facto doctrine
    d. Doctrine of piercing the veil of corporate fiction
23. If the remaining directors constitute a quorum, they can fill up the vacancy
    a. In case of removal of a director
    b. In case of expiration of term of a director
    c. If there is an increase in the number of directors
    d. In case of resignation of a director
24. The following may be the consideration of the shares of stock of a corporation, except
    a. Actual cash paid to the corporation
    b. Previously incurred indebtedness of the corporation
    c. Amounts transferred from unrestricted retained earnings
    d. Services to be performed by a lawyer on the proposed increase in capital stock of the corporation
25. A certificate of stock is distinguished from share of stock in that a share of stock
    a. Is the written evidence of a stockholder’s interest in the assets and management of a corporation
    b. Is tangible personal property
    c. Is one of the units into which the capital stock is divided
    d. May not be issued if the subscription has not been duly paid

Answer 24

21 C
22 D
23 D
24 D
25 C

🧠 Breakdown:
A share of stock represents a unit of ownership in a corporation. It’s an intangible right that entitles the holder to certain privileges like voting, receiving dividends, and sharing in assets upon liquidation.

A certificate of stock, on the other hand, is merely the physical or electronic document that evidences ownership of that share. It’s the tangible proof, not the ownership itself.

🔍 Why the other choices are incorrect:
a. This describes the certificate, not the share itself.

b. Shares are intangible personal property, not tangible. The certificate is tangible.

d. This is a rule about issuance of certificates, not a defining trait of a share.

Question 25

16. Corporators in a stock corporation a. Members b. Stockholders c. Incorporators d. Promoters 17. Persons who have agreed to take and pay for original unissued shares of a corporation formed or to be formed a. Promoters b. Subscribers c. Incorporation d. Corporators 18. Persons who bring about or cause to bring about the formation and organization of a corporation by bringing together the persons interested in the enterprise a. Subscribers b. Promoters c. Corporations d. Incorporators 19. Amount equal to the aggregate par value or issued value of the outstanding capital stock a. Legal capital b. Unissued capital stock c. Outstanding capital stock d. Authorized capital stock 20. Shares without par value may not be issued for a consideration a. Less than P1 per share b. Less than P5 per share c. Outstanding capital stock d. Less than P100 per share

Answer 25

16 B 17 B 18 B 19 A 20 B

Question 26

11. This is a feature of a non-stock corporation as distinguished from a stock corporation a. The owners are liable only up to the extent of their investment b. The owners are not entitled to dividends unless declared by the board c. Its income shall be used only for the furtherance of the purpose for which it was organized d. Straight on cumulative voting may be used in choosing the members of the board 12. This is a characteristic of a stock corporation as distinguished from a non-stock corporation a. The powers are vested in the Board b. The owners can declare dividends c. It is formed by at least 5 but not more than 15 persons d. It is organized for profit 13. One established for charitable purposes a. Ecclesiastical corporation b. Lay corporation c. Corporation sole d. Eleemosynary corporation 14. A religious corporation which consists of one member only or his successors a. Corporation aggregate b. Lay corporation c. Corporation sole d. Eleemosynary corporation 15. One organized for a purpose other than for religion a. Ecclesiastical corporation b. Lay corporation c. Corporation sole d. Eleemosynary corporation

Answer 26

11 C 12 D 13 D 14 C 15 B

Question 27

36. The veil of corporate fiction may be pierced in the following cases, except. a. when used as a cloak to cover fraud, illegality or it results in injustice. b. to defeat public convenience, justify wrong, defend crime c. where two factories are made to appear as one and used as a device to defeat the ends of law or as a shield to confuse legitimate issues d. where two corporations have the same president . 37. Shares deposited by the seller or his agent with a bank or third party to be delivered to the buyer or subscriber only upon the fulfillment of the stipulated suspensive condition a. Promotion shares b. Founders shares c. Redeemable shares d. Escrow shares 38. Unless sooner dissolved or extended, the life of a corporation may be for a period not exceeding a. Five years b. Ten years 39. As regards treasury shares, which is not correct? c. Fifty years a. They have no voting rights as long as they remain in the treasury d. Sixty years b. They are considered as part of earned or surplus profits and therefore distributable as dividends. c. They are not entitled to dividends d. They may be distributed as property dividend if there are retained earnings arising from the business of the corporations. 40. Each of the incorporator of a stock corporation must own or be a subscriber to at least a. One share of the capital stock of the corporation b. Two shares of the capital stock of the corporation c. Three shares of the capital stock of the corporation d. Four shares of the capital stock of the corporation

Answer 27

36 D 37 D 38 C 39 B 40 A

Question 28

26. A, B, C, D, E, F and G are the duly elected directors for 2011 of Delicious Corporation whose article of incorporation provide for 7 directors. On August 1, 2011, Directors A, B, C, D and E met to fill the two vacancies in the board brought about by the valid removal of F for disloyalty to the corporation and the death of G. In the said meeting, the remaining directors voted for X to replace F and Y, a son of G, to replace his father. Both X and Y are owners of at least one share of stock of the corporation. The election of X and Y by the remaining directors a. Valid for both X and Y b. Not valid for both X and Y c. Valid with respect to X, not valid with respect to Y d. Not valid with respect to X, valid with respect to Y 27. In the meeting of the board of directors of Gold Corporation, a construction company held on March 31, 2011, directors A, B, C, D and E were present among the 9 directors. The meeting had for its agenda the following: I. The appointment of new treasurer II. The approval of the contract for the purchase of cement worth P50,000 from X Supplies Co. When the voting took place, directors A, B, C and D voted for the election of Y as the new treasurer, and directors A, B and C voted for the approval of the contract with X Supplies a. Both corporate acts are valid b. Both corporate acts are not valid c. The election of Y as a new treasurer is valid, the approval of the contract with X Supplies is not valid d. The election of Y as a new treasurer is not valid, the approval of the contract with X Supplies is valid 28. Stock dividends differ from cash dividend in that stock dividends a. Do not increase the legal capital b. Involves the disbursement of corporate funds c. Require the approval of both the board of directors and the stockholders d. Once received by the stockholders, are beyond the reach of corporate creditors

Answer 28

26 D 27 D 28 C

Question 29

If the authorized capital stock is P60,000, divided into 600 shares with par value of P100 per share 29. And P40,000 has been subscribed, the minimum paid-up should be a. P40,000 b. P15,000 c. P10,000 d. P5,000 30. If P15,000 has been subscribed, the minimum paid-up should be a. P15,000 b. P10,000 c. P5,000 d. P3,750 31. If 1,000 shares are outstanding and 5 members of the Board of Directors are to be elected, the least number of shares needed by a candidate to be elected is a. 501 shares b. 250 shares c. 200 shares d. 167 shares 32. Using the preceding number, the minimum number of votes needed by a candidate to be elected is a. 2,501 votes b. 1,250 votes c. 1,000 votes d. 835 votes 33. The board of directors of a corporation consists of nine (9) members, where two (2) were removed and two (2) have resigned, who fills up the vacancy? First answer – the remaining members of the Board Second answer – the stockholders a. both answers are true b. both answers are false c. only the first answer is true d. only the second answer is true 34. Using number 33, except that three (3) have resigned, who fills up the vacancy? First answer – the remaining members of the Board Second answer – the stockholders a. both answers are true b. both answers are false c. only the first answer is true d. only the second answer is true 35. May rightfully question an ultra-vires act of a corporation, except a. stockholders b. state c. competitors d. creditors, if fraud is charged

Answer 29

29 C 30 C 5k minimum 31 D 32 D 33 B 34 D 35 C

Question 30

41. The board of directors of a corporation consists of nine (9) members, where two (2) have died during their term of office and one (1) is abroad, the quorum would be a. Five (5) members b. Six (6) members c. Four (4) members 42. In no case shall the total yearly compensation of directors, as such directors, exceed a. 5% of the net income before income tax during the preceding year b. 10% of the net income before income tax during the preceding year c. 10% of the net income after income tax during the preceding year d. 10% of the net income before income tax during the current year d. Seven (7) members 43. A corporate officer or director cannot, take advantage for their personal benefit a business opportunity which the corporation is financially able to undertake. a. Doctrine of corporate fiction b. Trust fund doctrine c. Doctrine of corporate opportunity d. Doctrine of limited capacity 44. A corporation has only such powers as are expressly granted and those that are necessarily implied from those expressly granted or those which are incidental to its existence a. Doctrine of corporate fiction b. Trust fund doctrine c. Doctrine of corporate opportunity d. Doctrine of limited capacity 45. For purposes of interlocking directors, the stockholdings shall be considered substantial if a. Exceeding 10% of the authorized capital stock b. Exceeding 10% of the outstanding capital stock c. Exceeding 20% of the authorized capital stock d. Exceeding 20% of the outstanding capital stock

Answer 30

41 A 42 B 43 C 44 D 45 D

Question 31

46. A shareholders’ option to subscribe to allotment of shares in proportion to his holding of outstanding shares, before new shares are offered to others a. Voting right b. Pre-emptive right c. Ultra vires act d. Appraisal right 47. The assets of the corporation as represented by its capital stock are to be maintained unimpaired that there can be no distribution of such assets among the stockholders without provision being first made for the payment of corporate debts. a. Doctrine of corporate fiction b. Trust fund doctrine c. Doctrine of corporate opportunity d. Doctrine of limited capacity 48. Dividend in the form of a promissory note and may be issued to bear interest a. Optional dividend b. Composite dividend c. Preferred dividend d. Scrip dividend 49. Dividend which is partly in cash and partly in stocks a. Optional dividend b. Composite dividend c. Cumulative dividend d. Liquidating dividend 50. Dividend which gives the stockholder an option to receive cash or stock dividend a. Optional dividend b. Bond dividend c. Cumulative dividend d. Liquidating dividend

Answer 31

46 B 47 B 48 D 49 B 50 A

Question 32

51. Dividend which are actually distributions of the assets of the corporation upon dissolution or winding up a. Bond dividend b. Preferred dividend c. Cumulative dividend d. Liquidating dividend 52. Rules of action adopted by the corporation for its internal government and for the government of its officers and of its stockholders are members a. Contract b. Articles of incorporation c. Ultra vires act d. By-laws 53. The corporation shall be deemed dissolved and its corporate powers cease, if from the date of its incorporation, it does not formally organize and commence the transaction of its business or the construction of its works within a. 4 years b. 3 years c. 2 years d. 5 years 54. If the corporation has commenced the transaction of its business, the corporate franchise or certificate of incorporation may be suspended or revoked, if it subsequently becomes continuously inoperative for a period of at least a. 4 years b. 3 years c. 2 years d. 5 years 55. A representative action where a stockholder brings an action in the name and in behalf of the corporation and any relief obtained belongs to the corporation and not to the stockholders individually or collectively a. Individual suit b. Derivative suit c. Representative suit d. Corporate suit

Answer 32

51 D 52 D 53 C 54 D 55 B

Question 33

61. A non-voting stock may vote in the following corporate acts, except in case of a. Approval of the compensation of directors b. Merger or consolidation c. Increase or decrease in capital stock d. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of corporate property 62. One of the following acts maybe performed by the executive committee of a corporation. Which is it? a. Declaration of stock dividends b. Filling of vacancies in the board of directors c. Amendment or repeal of the by-laws or adoption of new by-laws d. Approval of contracts in the ordinary course of business 63. A corporation may acquire its own shares for a legitimate purpose provided it has unrestricted retained earnings. In which of the following acquisition is the requirement of unrestricted retained earnings not imposed? a. When the acquisition is made to eliminate fractional shares b. When delinquent shares are acquired in a delinquency sale c. When redeemable shares are repurchased in accordance with the terms provided in the articles of incorporation d. When shares are acquired from stockholders who exercise their appraisal right 64. A. When par value shares are issued above par, the premium or excess is to be considered as part of the legal capital. B. In the case of no par value shares, the entire consideration received forms part of legal capital and shall be available for distribution as dividends. a. both are true b. both are false c. only the first is true d. only the second is true 65. A. There is merger when two or more corporations unite giving rise to a new corporate body and dissolving the constituent corporations. B. There is consolidation when two or more corporations unite, one corporation loses its corporate existence absorbing in itself the other which disappears as a separate corporation. a. both are true b. both are false c. only the first is true d. only the second is true

Answer 33

61 A 62 D 63 C 64 B 65 B

Question 34

56. An action brought by a stockholder against the corporation for direct violation of his contractual rights a. Individual suit b. Derivative suit c. Representative suit d. Corporate suit 57. Where a stockholder may bring a suit in behalf of himself and all other stockholders who are similarly situated when a wrong is committed against them a. Individual suit b. Derivative suit c. Representative suit d. Corporate suit 58. Any profit which it may earn shall be used for the furtherance of the purpose for which the corporation was organized as such profit is not distributable to its members a. non stock corp. b. close corp. c. stock corp. d. private corp. 59. All of this corporation’s issued stock of all classes exclusive of treasury shares shall be held of record by not more than twenty (20) persons a. Close corporation b. Stock corporation 60. Cash dividend as distinguished from stock dividend a. needs stockholders approval b. declared by the board of directors c. Private educational corporation d. Non-stock corporation c. not a taxable income d. results to withdrawal of assets from the corporation.

Answer 34

56 A 57 C 58 A 59 A 60 D

Question 35

66. A. All incorporators are corporators and all corporators are incorporators. B. Banks, trust companies, insurance companies, public utilities and building and loan associations may have a par value or may have no par value as may be provided for in the articles of incorporation. a. both are true b. both are false c. only the first is true d. only the second is true 67. A. Shares with par value may not be issued for a consideration less than the value of P5 per share B. Preferred shares of stocks may be issued with or without a stated par value. a. both are true b. both are false c. only the first is true d. only the second is true 68. A. Shares issued without par value shall be deemed fully paid and non-assessable and the holder of such shares shall not be liable to the corporation or its creditors in respect thereto. B. Statement above means that the holder is no longer liable for the shares even if they are not yet fully paid. a. both are true b. both are false c. only the first is true d. only the second is true 69. A. Redeemable shares may be redeemed regardless of the existence of unrestricted retained earnings even if such redemption would cause insolvency or inability of the corporation to meet its debts as they mature. B. Treasury shares do not revert to the unissued shares of the corporation and are still issued shares but being in the treasury they have the status of outstanding shares. a. both are true b. both are false c. only the first is true d. only the second is true 70. A. In no case shall the paid-up capital be P5,000 or less. B. Where the capital stock consists only of no par value shares, the 25% subscription requirement shall be computed on the basis of the issued price of no par value shares a. both are true b. both are false c. only the first is true d. only the second is true

Answer 35

66 B 67 B 68 C 69 B 70 B

Question 36

71. A. A corporation has the power to do all acts not expressly or impliedly prohibited. B. No person convicted by final judgment of violation of the Corporation Code, regardless of the punishment imposed shall qualify as a director, trustee, or officer of any corporation. a. both are true b. both are false c. only the first is true d. only the second is true 72. A. No person convicted by final judgment of an offense punishable by imprisonment shall qualify trustee, or officer of any corporation. as a director, B. Any vacancy occurring in the board of directors or trustee may be filled by the vote of at least majority of the remaining directors of trustees, if still constituting a quorum. a. both are true b. both are false c. only the first is true d. only the second is true 73. A. Where the capital stock is divided into par value shares and no par value shares, the 25% subscription requirement shall be based on the amount of authorized capital stock in case of par value shares and for no par value shares it is based on the entire number of authorized no par value shares. B. 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 results thereof. a. both are true b. both are false c. only the first is true d. only the second is true 74. A. A majority of the directors or trustees of all corporations organized in the Phil. must be citizens of the Phil. B. The president of a corporation must be a resident citizen a. both are true b. both are false c. only the first is true d. only the second is true 75. A. The by-laws of a corporation can not provide that a director should own at least two shares of stock B. Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as a secretary and treasurer at the same time. a. both are true b. both are false c. only the first is true d. only the second is true

Answer 36

71 B 72 B 73 A 74 B 75 B

Question 37

76. A. In the election of directors, owners of majority of the outstanding capital stock must be present to vote in person as they cannot vote by proxy B. Directors or trustees can attend and vote by proxy in board meetings a. both are true b. both are false c. only the first is true d. only the second is true 77. A. The corporate secretary must be a director, and a resident and citizen of the Philippines. B. The by-laws of a corporation may create an executive committee, composed of not less than three (3) members to be appointed by the board of directors a. both are true b. both are false c. only the first is true d. only the second is true 78. A. In case of extension of corporate term, and not if shortened may any dissenting stockholder exercise his appraisal right. B. No dividend shall be issued without the approval of stockholders representing not less than 2/3 of the outstanding capital stock. a. both are true b. both are false c. only the first is true d. only the second is true 79. A. The stockholders of a stock corporation have the power to declare dividends out of the unrestricted retained earnings which shall be payable in cash, in property or in stock to all stockholders on the basis of the outstanding shares held by them. B. Cash dividend and stock dividend are declared by the board with the concurrence of the stockholders representing at least 2/3 of the outstanding capital stock. a. both are true b. both are false c. only the first is true d. only the second is true 80. A. An ultra vires act is one which is contrary to law, morals, good customs, public order or public policy. B. Regular meeting of the board of directors shall be held annually on a date fixed in the by-laws, or if not so fixed, on any date in April of every year as determined by the board of directors. a. both are true b. both are false c. only the first is true d. only the second is true

Answer 37

76 B 77 B 78 B 79 B 80 B

Question 38

81. A. Meetings of stockholders may be held anywhere in or outside of the Phil. unless the by-laws provide otherwise. B. The President shall preside at all meetings of the directors or trustees as well as of the stockholders or members, unless the by-laws provide otherwise. a. both are true b. both are false c. only the first is true d. only the second is true 82. A. No management contract shall be entered into for a period longer than five years for any term. B. The power to amend the articles of incorporation lies with the stockholders or members directly, or indirectly by delegating said power to the board of directors or trustees. a. both are true b. both are false c. only the first is true d. only the second is true 83. A. The power to amend by-laws lies with the board of directors or trustees, directly or indirectly by delegating said power to the stockholders. B. Treasury shares shall have no voting rights as long as they remain in the treasury. a. both are true b. both are false c. only the first is true d. only the second is true 84. A. All unissued shares of stock shall not be issued for a consideration less than its par value. B. No certificate of stock shall be issued to a subscriber until the full amount of his subscription together with interest and expenses, in case of delinquent shares, if any is due, has been paid. a. both are true b. both are false c. only the first is true d. only the second is true 85. A. The highest bidder is the person offering to pay the full amount of the balance on the subscription together with accrued interest, if any, cost of advertisement and expenses of sale for the highest number of shares. B. Holders of subscribed shares not fully paid shall have all the rights of stockholder. a. both are true b. both are false c. only the first is true d. only the second is true 86. A. The cost and expenses of appraisal shall be borne by the stockholders. B. The board of directors may remove a member of the board for excessive absences. a. both are true b. both are false c. only the first is true d. only the second is true

Answer 38

81 D 82 B 83 D 84 A 85 B 86 B

Question 39

W15 OPC 1. It refers to a corporation with a single stockholder. a. One person corporation (OPC) b. Corporation Aggregate c. Partnership d. Joint Venture 2. The following can be the single stockholder of a one person corporation (OPC), except a. Natural person who must be of legal age b. Trust who does not refer to a trust entity (company or corporation) but the subject being managed by a trustee c. Estate d. Partnership or corporation or cooperative or association 3. If the single stockholder of a one person corporation (OPC) is a trustee, administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties, what must be submitted by these persons to SEC? a. Proof of authority to act on behalf of the trust or estate b. Tax Identification Number of trust or estate c. PSA Birth Certificate d. PRC Identification Number 4. As a general rule, what is the term of existence of one person corporation (OPC)? a. 50 years renewable for another term b. Perpetual existence c. 50 years subject to unlimited times of renewal d. 20 years renewable for another term 5. As an exception to the general rule of perpetual existence, what is the term of one person corporation (OPC) under the name of trust or estate, what is its term of existence? a. 50 years renewable for another term b. Perpetual existence c. 50 years subject to unlimited times of renewal d. It shall be co-terminus with the existence of the trust or estate.

Answer 39

1 A 2 D 3 A 4 B 5 D

Question 40

6. How may a one person corporation (OPC) under the name of estate or trust be dissolved? a. By submission of Partition, such as Order of Partition issued by the Court in case of Judicial Settlement and Deed of Extrajudicial Settlement in case of summary settlement of the estate. b. By submission of proof of termination of the trust. c. Either A or B d. Neither A nor B 7. Where shall the suffix “OPC” be indicated by the one person corporation in its corporate name? a. Below its corporate name b. At the end of its corporate name c. Either A or B d. Neither A nor B 8. Who shall be the director of the one person corporation (OPC)? a. The single stockholder of the one person corporation b. The SEC Chairperson c. The BIR Commissioner d. The BoA Chairman 9. Who shall be the president of the one person corporation (OPC)? a. The single stockholder of the one person corporation b. The SEC Chairperson c. The BIR Commissioner d. The BOA Chairman 10. Who must be designated by the single stockholder of the one person corporation (OPC) in its Articles of Incorporation? a. Nominee b. Alternate Nominee c. Both A and B d. Neither A nor B

Answer 40

6 C 7 C 8 A 9 A 10 C

Question 41

11. What document must be attached in the application for incorporation by single stockholder of the one person corporation (OPC)? a. The written consent of both the nominee and alternate nominee to the designation. b. The PRC ID of both the nominee and alternate nominee. c. The PSA CENOMAR of both the nominee and alternate nominee. d. None of the above. 12. Who will replace the single stockholder of the one person corporation (OPC) in case of his death and/or incapacity? a. Nominee designated in the Articles of Incorporation b. Alternate Nominee designated in the Articles of Incorporation c. Either A or B d. Neither A nor B 13. The following must be set forth in the Articles of Incorporation to be filed by the single stockholder of the one person corporation (OPC) to SEC for application for incorporation, except a. Primary purpose b. Principal office address c. Term of existence d. Name and details of the single stockholder e. Name of nominee and alternate nominee f. Authorized, subscribed and paid up capital g. Such other matters consistent with law and which may be deemed necessary and convenient h. By-laws 14. Which corporation is not required to submit and file its by-laws to SEC? a. Corporation aggregate b. One Person Corporation (OPC) c. Both A and B d. Neither A nor B 15. Unless provided by special law, what is the minimum authorized capital stock of one person corporation (OPC)? a. P5,000 b. P25,000 c. P5 d. No minimum authorized capital stock

Answer 41

11 A 12 C 13 H 14 B 15 D

Question 42

16. Unless provided by special law, what is the minimum subscribed capital of the authorized capital of one person corporation (OPC)? a. At least 25% of authorized capital stock b. At least 10% of authorized capital stock c. At least 20% of authorized capital stock d. No minimum subscribed capital stock 17. Unless provided by special law, what is the minimum paid-up capital of the authorized capital of one person corporation (OPC)? a. At least 25% of actually subscribed capital stock b. At least 25% of minimum subscribed capital stock c. At least 25% of actually subscribed capital stock or P5,000, whichever is higher d. No minimum paid up capital of the authorized capital stock 18. How many days from the issuance of its Certification of Incorporation by SEC shall the OPC appoint a treasurer, corporate secretary and other officers? a. Within 15 days b. Within 10 days c. Within 5 days d. Within 3 days 19. How many days from the appointment of treasurer, corporate secretary and other officers shall the OPC notice the SEC of such appointment? a. Within 15 days b. Within 10 days c. Within 5 days d. Within 3 days 20. Which corporate position may not be assumed by the single stockholder of the one person corporation (OPC)? a. Corporate Secretary b. Corporate Treasurer c. Both A and B d. Neither A nor B

Answer 42

16 D 17 D 18 A 19 C 20 A

Question 43

21. In which corporation is the Corporate President not allowed to assume the role of a Corporate Treasurer? a. One person corporation (OPC) b. Corporation aggregate c. Both A and B d. Neither A nor B 22. What is the requirement of Revised Corporation Code if the single stockholder of the one person corporation (OPC) assumes the position of Corporate Treasurer? a. The single stockholder of the one person corporation (OPC) shall post a surety bond to be computed based on the authorized capital stock (ACS) of the one person corporation (OPC). b. The single stockholder of the one person corporation (OPC) shall post an intangible property bond to be computed based on the authorized capital stock (ACS) of the one person corporation (OPC). c. The single stockholder of the one person corporation (OPC) shall post a goodwill bond to be computed based on the authorized capital stock (ACS) of the one person corporation (OPC). d. The single stockholder of the one person corporation (OPC) shall post a mighty bond to be computed based on the authorized capital stock (ACS) of the one person corporation (OPC). 23. When may a single stockholder of the one person corporation (OPC) change its nominee and alternative nominee? a. After 3 years from Incorporation b. After 5 years from Incorporation c. After 10 years from Incorporation d. At any time 24. How may a single stockholder of the one person corporation (OPC) change its nominee and alternative nominee? a. Through submission to SEC of the names of the new nominees and their corresponding written consent. b. Through amendment of articles of incorporation. c. Both A and B must concur. d. Neither A nor B. 25. In case the single stockholder of the one person corporation (OPC) becomes incapacitated, who can take over the management of the OPC as its director and president? a. Nominee b. SEC Chairperson c. BoA Chairman d. BIR Commissioner

Answer 43

21 B 22 A 23 D 24 A 25 A

Question 44

26. In case the incapacity of the single stockholder of the one person corporation (OPC) ends, what is the effect? a. The single stockholder of the one person corporation (OPC) can resume the management of the one person corporation (OPC). b. The one person corporation (OPC) is automatically dissolved by operation of law. c. The one person corporation (OPC) becomes a de facto corporation. d. That is a ground for dissolution through court proceedings. 27. In case of death or permanent incapacity of the single stockholder of the one person corporation (OPC), who can take over the management of the OPC as its director and president? a. Nominee b. SEC Chairperson c. BoA Chairman d. BIR Commissioner 28. In case of death or permanent incapacity of the single stockholder of the one person corporation (OPC), up to what period or time may the nominee take over the management of the OPC? a. Until the legal heirs of the single stockholder have been lawfully determined and the heirs have agreed among themselves who will take the place of the deceased. b. For a period of 10 years c. In perpetuity d. For a period of 20 years 29. The following are the reports that must be submitted by OPC to SEC within the period required by SEC, except a. Annual audited financial statements or if total assets and total liabilities are less than P600,000, the financial statements shall be certified under oath by the corporation’s treasurer b. A report on all explanations or comments by the president on the qualification, reservation or adverse remarks made by the auditor in the financial statements c. A disclosure of all self-dealings and related transactions entered into between the OPC and the single stockholder d. Corporate by-laws 30. What is the period for submission of annual audited financial statements to SEC by OPC? a. Within 90 days from the end of fiscal year as indicated in its Articles of Incorporation b. Within 60 days from the end of fiscal year as indicated in its Articles of Incorporation c. Within 120 days from the end of fiscal year as indicated in its Articles of Incorporation d. Within 30 days from the end of fiscal year as indicated in its Articles of Incorporation

Answer 44

26 A 27 A 28 A 29 D 30 C

Question 45

31. The following entities are not allowed to form OPCs, except a. Banks b. Non-bank financial institutions c. Quasi-banks d. Pre-need e. Trust entity/company f. Insurance g. Public entities h. Publicly listed entities i. Non-charted government-owned and controlled corporations (GOCCs) j. A natural person who is licensed to exercise a profession (CPA or Lawyers) for the purpose of exercising such profession except as otherwise provided under special laws k. Foreign natural person, but subject to the applicable capital requirement and constitutional and statutory restrictions on foreign participation in certain investment areas or activities 32. Under Revised Corporation Code, when may an ordinary corporation be allowed to convert to a one person corporation? a. When a single stockholder acquires all the stocks of an ordinary stock corporation b. When a single stockholder becomes the majority stockholders of an ordinary stock corporation c. When a single stockholder becomes the controlling stockholders of an ordinary stock corporation d. Any of the above 33. Under Revised Corporation Code, how may an ordinary corporation convert into a one person corporation? a. By dissolving the ordinary corporation and forming a new one person corporation b. By filing an application before SEC subject to the submissions of such documents as the SEC may require c. By liquidating the ordinary corporation d. By creating a general partnership 34. Under Revised Corporation Code, when may a one person corporation convert into an ordinary corporation? a. After giving notice to SEC of facts and circumstances leading to conversion b. When the stockholders of ordinary corporation die c. When majority of the stockholders of ordinary corporation sell their shares to third persons d. It is not allowed. 35. Under Revised Corporation Code, how may a one person corporation convert to an ordinary corporation? a. By dissolving the one person corporation and forming a new ordinary corporation b. By filing an application and giving notice SEC subject to the submissions of such documents as the SEC may require c. By liquidating the ordinary corporation d. By creating a general partnership 36. Under Revised Corporation Code, which is false about a one person corporation? a. A sole shareholder claiming limited liability has the burden of affirmatively showing that the corporation was adequately financed. b. Where the single stockholder cannot prove that the property of the One Person Corporation is independent of the stockholder's personal property, the stockholder shall be jointly and severally liable for the debts and other liabilities of the One Person Corporation. c. The principles of piercing the corporate veil apply with equal force to One Person Corporations as with other corporations. d. The single stockholder is always liable only up to the extent of his capital contribution under the concept of limited liability rule.

Answer 45

31 K 32 A 33 B 34 A 35 A 36 D