1.X corporation was operating at a loss for the year 2017. By the end of that year, the stockholders were wondering why they have not yet received their dividends for 2017, so they filed a case to compel the Board to declare dividends. Will their case prosper?

a.Yes, because dividends must be declared out of the capital of the corporation at the end of the year to serve as year-end bonus

b.No, because there are no unrestricted retained earnings

c.No, because corporations are prohibited from retaining surplus profits in excess of 100% of their paid in capital

2. X corporation was operating at a loss for the year 2017. By the end of that year, the stockholders were wondering why they have not yet received their dividends for 2017, so they filed a case to compel the Board to declare dividends. Will their case prosper?

a.Yes, because dividends must be declared out of the capital of the corporation at the end of the year to serve as year-end bonus

b.No, because there are no unrestricted retained earnings

c.No, because corporations are prohibited from retaining surplus profits in excess of 100% of their paid in capital

3.A group of stockholders of X Corp. filed a case against the members of the board for mismanagement of the affairs of the corporation. While the case was pending, the corporation was dissolved. One day after the dissolution, the board decided to extend the corporate life by an amendment of the AOI. Is this correct?

a.Yes, because the law allows a corporation to extend its term by amendment of the AOI

b.No, because amendment to extend corporate life must be approved by 2/3 of the stockholders

c.Yes, because the corporation still exists, as there are still three years within which the corporation can act, known as the winding up period

d.No, because once dissolved, there is no more life to extend