1. When a director takes for himself a business opportunity that pertains to the corporation of which he is a director, he shall, when found guilty of violating his duty of loyalty, be bound to ---

a. reimburse all the profits made, or charge all the losses incurred, to the corporation, arising from the transaction

b. assume the obligations of a trustee for the corporation and must account for the profits which otherwise would have accrued to the corporation.

c. reimburse to the corporation all the profits made, minus the amounts he disbursed from his personal account in pursuing the transaction

d. resign from the Board and thereby will be allowed to keep the profits made from the transaction upon unanimous vote of all the other members of the Board.

2. In a delinquency sale covering 300 shares of Mr. Bulaga, with an unpaid subscribed value of P300,000, accrued interest of P50,000, and advertisement costs of P10,000; and with the following bids received: Mr. A - 300 shares for P400,000; Mr. B -300 shares for P500,000; Mr. C.-200 shares for P1,000,000; Mr. D-199 shares for P360,000; Mr. E-100 shares for P180,000. Who is the highest bidder?

a. Mr. A

b. Mr. B

c. Mr. C

d. Mr. D

e. Mr. E

3. What would be the proper disposition of all the 300 shares which were declared delinquent in the above problem? a. All the shares should now be registered as fully paid in the name of Mr. A. b. All the shares should now be registered as fully paid in the name of Mr. B. c. 200 shares should be registered as fully paid in the name of Mr. C, and the remaining 100 shares should be credited as fully paid in the name of Mr. Bulaga. d. 199 shares should be registered as fully paid shares in the name of Mr. D, and the remaining shares should be registered as fully paid shares of Mr. Bulaga. e. 100 shares should be registered as fully paid shares in the name of Mr. E, and the rest should be registered in the name of the corporation as treasury shares.

4. A corporation was formed by fifteen (15) incorporators and its certificate of incorporation was duly issued. A year after its attainment of juridical personality, the stockholders, who are themselves the members of the board adopted a resolution, providing for the following: (i) That all of the corporation's issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20); (ii) That all of the issued stock of the corporation shall be subject to certain specified restrictions; and (iii) That the corporation shall not list in any stock exchange or make any public offering of any of its stocks of any class. a. The corporation is a close corporations because the resolution contains the elements of a close corporation; b. The corporation is de facto close corporation because although it has a certificate of incorporation, the provisions in the resolution c. The corporation is an open corporation. The corporation is a corporation by estoppel because although it operates as a corporation, it did not comply with certain legal requirements for the establishment of a close corporation.

5. The following are remedies available to a corporation to enforce payment of stocks except:

a. to distribute its assets

b. to dispose and convey its property

c. to prosecute and defend suits by or against it

d. to execute contracts to accomplish the purpose for which it was accomplished.

6. When majority of the capital stock of a corporation are owned by another corporation and that a majority of the directors of said corporation are directors of officers of the owning corporation. a. would authorize the application of the doctrine of piercing of the veil of corporate fiction as to make the acting officers and directors who are common to both companies personally liable for the debts and obligations of the controlled company. b. would authorize the application of the doctrine of piercing of the veil of corporate fiction as to make the employees of the owned corporation the employees of the owning corporation. c. would authorize the application of the doctrine of piercing of the veil of corporate fiction as to make the owning corporation liable for the debts and obligations of the owned corporation. d. would authorize, in case of fraud or conflicting inter-corporate relationships, the application of the doctrine of piercing the veil of the corporate fiction.

7. In Philippine Corporation Law, the " Trust Fund Doctrine" means that- a. the assets of the corporation to the extent of the stockholder's equity are considered to constitute a trust for the benefit of the creditors of the corporation, which cannot be distributed or returned to the stockholders during the corporate life. b. the assets of the corporation to the extent of its capital stock are considered to constitute a trust for the benefit of the creditors of the corporation, which cannot be distributed or returned to the stockholders during the corporate life. c. the Board of Directors of every corporation shall hold all the assets in trust for the benefit of the creditors of the corporation. c. the Board of Directors of every corporation shall hold all the assets in trust for the benefit of the stockholders of the corporation.

8. In Corporation Law, the legal basis by which the terms of the articles of incorporation of a corporation are legally binding on members of the public who contract or deal with the corporation is that a. the articles constitute a contractual commitment binding on the relationship between the corporation and the member of the public who deals with the corporation. b. the articles of incorporation goes into a corporation's legal capacity to contract, and thereby determines the existence of the essential element of "consent" of the contract that a member of the dealing public enters into with the corporation. c. the articles of incorporation is a public document and thereby binding on the public. c. a person who deals with corporation is bound to exercise due diligence of what transpires within the corporate process.

9. ABC Cement Corporation was organized primarily for cement manufacturing. Anticipating substantial profits, its President proposed for limestone used in the manufacture of cement. What corporate approvals or votes are needed for the proposed investments? a. approval by the board of directors b. majority of the board and approval by the stockholders representing 2/3 of the outstanding capital stock c. majority of the board and ratified by majority of the stokcholders d.2/3 vote of the Board of Directors

10. For the past three years of its commercial operation, corporation X, an oil company, has been earning tremendously in excess of 100% of the corporation's paid-in capital. All of the stockholders have been claiming that they share in the profits of the corporation by way of dividends but the Board of Directors failed to lift its finger. Is the corporation guilty of violating the law? a. Yes. The corporation is prohibited from retaining surplus profits in excess of 100% of their paid-in capital. b. No. When justified by definite corporate expansion projects. c. No. When corporation has a pending loan agreement. d. Yes. When there is need for special reserve.

11. X Corporation has already issued the 1000 original authorized shares of the corporation. The Board of Directors and stockholders wish to increase its authorized capital stock. After complying with the requirements of the law on increase of capital stock, X Corporation issued an additional 1000 shares of the same value. "A" a stockholder holds 200 our of the 1000 original shares. Stockholder "A" is aware of his pre-emptive right. When can "A" be denied this right? a. when the increase is for a valid corporate purpose. b. in case of derivative suit c. when such increase is embodied in the by-laws d. in case of the right appraisal

12. If a corporation is organized in good faith with only colorable compliance with the Corporation Code and its components assumed corporate powers, the corporation is a : a. De facto corporation b. De Jure corporation c. Corporation by Estoppel d. Corporation by Prescription

13. If all the requirements are present, which of he following entities may be considered an artificial being. a. Cooperative b. Partnership c. Corporation d. All of the above

14. If a corporation is organized in good faith in substantial compliance with the Corporation Code and the corporation's components assumed corporate powers, the corporation is a: a. De facto corporation b. De Jure corporation c. Corporation by Estoppel d. Corporation by Prescription

15. ABC Cement Corporation was organized primarily for cement manufacturing. Anticipating substantial profits, its President purposed that the corporation engaged in quarry operation for limestone used in the manufacture of cement. What corporate approvals or votes are needed for the proposed investments? a. approved by the board directors b. majority of the board and approval by the stockholders representing 2/3 of the outstanding capital stock. c. majority of the board and ratified by majority of the stockholders d. 2/3 vote of the Board of Directors

16. Intra-corporate disputes are within the jurisdiction of the : a. Securities and Exchange Commission b. Regional Trial Court c. Court of Appeals d. Metropolitan Trial Court

17. A corporation cannot: a. Enter into a joint venture agreement b. Invoke the right against unreasonable searches and seizure c. Be elected as a director d. Be a stockholder