1. Which of the following is NOT a requisite for the validity of bylaws? a. It must not be contrary to the Corporation Code, any law, and Articles of Incorporation. b. It must not be contrary to morals and public policy. c. It must be discriminatory, oppressive and arbitrary. d. It must not impair obligations and contracts. 2. May the bylaws of a corporation prejudice or affect third persons who dealt with the corporation? a. They cannot affect third persons who dealt with the corporation unless they have knowledge of the same because bylaws operate merely as internal rules among stockholders. b. As a general rule, they can affect because they are filed before the Securities and Exchange Commission (SEC). c. They can never affect or prejudice third persons. d. They will always prejudice or affect third persons. 3. According to SEC ruling, what is the nature of subscription contract? a. Divisible contract b. Indivisible contract c. Either A or B d. Neither A nor B 4. What is the formality required by the Corporation Code for the validity and enforceability of subscription contract? a. It must be notarized. b. It must be in writing because it is covered by statute of fraud. c. It must be registered with the SEC. d. It may be in any form because it is perfected by mere consent. 5. In the absence of longer period stipulated in the contract of subscription, pre-incorporation subscription shall be irrevocable for what period from the date of subscription? a. Three (3) months b. Six (6) months c. One (1) year d. Five (5) years 6. Which of the following statements shows where appraisal right may be exercised? I. Corporation decides to sell or dispose of all or substantially all assets of corporation II. Change in the rights of stockholders, authorize preferences superior to those stockholders, or restrict the right of any stockholders a. Statement I b. Statement II c. Both statements d. None of the statements 7. When may the pre-incorporation subscription contract be allowed to be revoked? I. When all of the other subscribers consent to the revocation a. Statement I b. Statement II II. Upon the expiration of the three (3) month period c. Both statements d. None of the statements 8. It entitles the holder to the right to purchase from the issuer a pre-determined number of shares that are already issued. a. Subscription warrant b. Covered warrant c. Detachable warrant d. Nondetachable warrant 9. It refers to a warrant that may not be sold, transferred or assigned to any person by the warrant holder separate from, and independent of the beneficiary securities. a. Subscription warrant b. Covered warrant c. Detachable warrant d. Nondetachable warrant 10. It refers to a warrant that may be sold, transferred or assigned to any person by the warrant holder separate from, and independent of, the corresponding beneficiary securities. a. Subscription warrant b. Covered warrant c. Detachable warrant d. Nondetachable warrant 11. It entitles the holder to the right to subscribe to a pre-determined number of shares out of the unissued capital stock of the issuer. a. Subscription warrant b. Covered warrant c. Detachable warrant d. Nondetachable warrant 12. This is a suit brought by the stockholder in behalf of himself and all other stockholders similarly situated when a wrong is committed against a group of stockholders. a. Derivative suit b. Individual suit c. Representative suit d. Stockholder's suit 13. This is a suit brought by one (1) or more stockholders/members in the name and on behalf of the corporation to redress wrongs committed against it. a. Derivative suit b. Individual suit c. Representative suit d. Stockholder's suit 14. This is a suit brought by the shareholder in his own name against the corporation when a wrong is directly inflicted against him personally. a. Derivative suit b. Individual suit c. Representative suit d. Stockholder's suit 15. It refers to the resolution or formal declaration of the board that the unpaid subscriptions are due and payable. a. Order b. Judgment c. Decision d. Call 16. How many days shall lapse from the due date fixed in the subscription contract or from the date fixed in the call made by the Board of Directors for the shares to be delinquent if still unpaid? a. 15 days b. 20 days c. 30 days d. 60 days 17. In the absence of any bidder, what shall happen to the delinquent shares and the related costs? a. It shall be acquired by the corporation and debited to expense. b. It shall be acquired by the corporation and debited to intangible asset. c. It shall be acquired by the corporation and debited to treasury shares. d. It shall be acquired by the corporation and debited to share premium. 18. Which of the following is NOT included in the proprietary rights of a shareholder? a. To receive dividends when declared b. To possess and co-own corporate assets c. To participate in distribution of corporate assets upon dissolution d. To transfer of stock in the corporate book 19. What is the effectivity and validity period of voting trust agreement at any one time with the exception of voting trust specifically required as a condition in a loan agreement whose period depends upon the term of the loan? a. A period not exceeding one (1) year b. A period not exceeding three (3) years c. A period not exceeding five (5) years d. A period not exceeding 10 years 20. It is a privilege granted to a party to subscribe to a certain portion of the unissued capital stock of a corporation within a specified period and under the terms and conditions of the grant and exercisable by the grantee at any time within the period granted. a. Stock options b. Subscription contract c. Warrant d. Underlying shares 21. It is a type of security which entitles the holder the right to subscribe to the unissued capital stock of a corporation or to purchase issued shares in the future. a. Stock options b. Subscription contract c. Warrant d. Underlying shares 22. It represents the equity ownership of a corporation divided up into units so that multiple people can own a percentage of a business. a. Certificate of stock b. Equity in a corporation c. Net assets d. Shares of stock 23. It refers to the paper representation or tangible evidence of the stock itself and of the various interests therein and expresses the contract between the corporation and the stockholder. a. Certificate of stock b. Equity in a corporation c. Net assets d. Shares of stock 24. In which of the following causes of action is individual suit the proper remedy instead of derivative suit? a. If there is wastage or improper diversion of corporate funds by reason if hiring officers whose main purpose is to shield the chairman from criminal prosecution b. Where the director of the corporation permitted the fraudulent transaction to go unpunished c. To enforce preemptive rights in a corporation d. None of the above 25. When may a corporation charge an interest on unpaid subscription not yet declared delinquent? a. From the date of subscription regardless of provision in the by-laws and subscription contract b. It cannot charge any interest. c. From the date of subscription when required by subscription contract or by-laws at the rate fixed in the by- laws or legal rate d. Only from the moment there is judicial or extrajudicial demand