1.I. The corporation may only acquire its own stocks in the presence of unrestricted retained earnings.

II. Preferred shares may be acquired even without surplus profit for as long as it will not result to the insolvency of the corporation

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

2.I. The requirement of unrestricted retained earnings to cover the shares is based on the doctrine of limited capacity

II. There can be no distribution of assets among the stockholders without first paying corporate creditors. Hence, any disposition or corporate funds to the prejudice of the creditor is rescissible.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

3.I. After incorporation, the by-laws must be signed and approved by all the incorporators and filled with the SEC together with the articles of incorporators.

II. Before incorporation, the affirmative vote of the stockholders representing at least a majority of the outstanding capital stock or of at least a majority of the members shall be necessary.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

4.I. The general rule is that, every member of a non-stock corporation and every legal owner of shares in a stock corporation has the right to be present and to vote in all corporate meetings

II. Voting may be expressed personally, or through proxies who vote in their representative capacities or when so authorized in the by-laws through remote communication or in absentia.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

5.I. An action of the board of directors during the meeting, which was illegal for lack of notice, may not be ratified.

II. Notice of meeting may be waived, expressly or impliedly, by any stockholder or member

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

6.I. the acts of corporate officers within the scope of their authority are binding on the corporation.

II. Any two or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and vice-president at the same time.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

7.I. As an exception to quorum, the articles of incorporation or by-laws may provide for a greater majority.

II. Any director or trustee of a corporation may be removed from office.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

8.I. Immediately after the election, the directors of a corporation must formally organize and elect, among others, a treasure, who must be a resident of the Philippines.

II. The officer shall manage the corporation and perform such duties as may be provided in the bylaws and/or as resolved by the board of directors.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

9.I. Every corporation has the power and capacity to have perpetual existence unless the certificate of incorporation provides otherwise

II. Every corporation has the power and capacity to enter into partnership, joint venture, merger, consolidation, or any other commercial agreement with natural and juridical persons.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

10.I. The purpose of pre-emptive right is to enable the shareholder to retain his proportionate control in the corporation

II. A suit to enforce pre-emptive rights in a corporation is a derivative suit

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

11.I. A corporation is created by operation of law. It acquires a judicial personality either by special law or general law.

II. The general law under which a private corporation may be formed or organized is the Corporation Code of the Philippines.

a.Only 1 is true

b.Only II is true

c.Both are true

d.Bothe are false

Answer:

Justification:

12.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.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

13.I. Any person, partnership, association or corporation, singly or jointly with others but not more than 15 in number, may organize a corporation for any lawful purpose or purposes.

II. Natural persons who are licensed to engaged to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allowed to organize as a corporation.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

14.I. If a corporation does not formally organize and commerce its business within 5 years from the date of its incorporation, its certificate of incorporation shall be deemed revoked.

II. If a corporation has commenced its business but subsequently becomes inoperative for a period of at least 5 years, the SEC may, after due notice and hearing, place the corporation under delinquent status

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification:

15.I. An unincorporated association, which represent itself to be a corporation, will be estopped from denying its corporate capacity in a suit against it by a third person who relied in good faith on such representation.

II. A third party who, knowing an association and received benefits from it may be barred from denying its corporate existence in a suit brought against the alleged corporation.

a.Only I is true

b.Only II is true

c.Both are true

d.Both are false

Answer:

Justification: