26. I. The exclusive right to vote and be voted for in the election of directors must be for a limited period not to exceed 5 years subject to the approval of the SEC.

II. Preferences grated to preferred stockholders gives them a lien upon the property of the corporation nor make them creditors of the corporation.

A. Only II is true B. Only Ii is true.

C. Both are true

D. Both are false

27. Is that portion of the authorized capital stock which has been both subscribed and paid. A. Authorized capital stock

B. Paid-up capital

C. Unissued capital

D. Outstanding capital

28. The following are limitations in the amendment of the articles of incorporation, except:

A.The amendment must be for legitimate purposes and must not be contrary to the Corporation Code and special laws.

B.The amendment must be approved by a majority of the board of directors or board of trustees.

C.The amendment requires the vote or written assent of stockholders' representing majority of the outstanding capital stock or majority members if it be a non-stock corporation.

D.The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation.

29. The following are the reasons that a principal office of the corporation must be stated in its articles of incorporation, except:

A. To fix the residence of the corporation in a definite place.

B. To determine the venue of court cases involving corporation.

C. For purposes of board of directors' meeting.

D. To determine the place where the books and records of the corporation are ordinarily kept.

30. I. It is the certificate of incorporation that gives juridical personality to a corporation and places it under the jurisdiction of the Securities and Exchange Commission.

II. A corporation commences its corporate existence and juridical personality and is deemed incorporated from the date the DTI issues certificate of incorporation under its official seal. A. Only I is true.

B. Only II is true.

C. Both are true.

D. Both are false.

31. I. A delinquent corporation shall have a period of 2 years to resume operations and comply with all requirements that the SEC shall prescribe.

II. Upon compliance by the corporation, the SEC shall issue an order lifting the delinquent status. Failure to comply with the requirements and resume operations within the period given by the SEC shall cause the revocation of the corporation's certificate of incorporation.

A. Only I is true

B. Only II is true

C. Both are true

D. Both are false

32. It is a person who, apart from shareholding and fees received from the corporation, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to materially interfere with the exercise of independent judgement in carrying out the responsibilities as a director.

A. Dependent director

B. Independent director

C. Authorized director

D. Outstanding director

33. A person shall be disqualified from being a director, trustee or officer of any corporation if, within 5 years prior to the election or appointment as such, the person was:

A. Convicted by final judgement of an offense punishable by imprisonment for a period exceeding 6 years.

B. Found administratively liable for any offense involving fraudulent acts.

C. Found by a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct.

D. All of the above.

34. Immediately after their election, the directors of the corporation must formally organize and elect: A. A president, who must be a director.

B. A treasurer, who must be a resident.

C. A secretary, who must be a citizen and resident of the Philippines.

D. All of the above.

35. It means that the stockholder who dissented and voted against the proposed corporate action, may choose to get out of the corporation by demanding payment of the fair market value of his shares. A. Pre-emptive right

B. Appraisal right

C. Stockholders right

D. Right to liquidation

36. The following are the requirements of increase or decrease authorized capital stock, except:

A. No decrease of the capital stock shall be approved if its effect shall prejudice the rights of corporate creditors.

B. Approval by a majority vote of the board of directors.

C. ratification by the stockholders holding at least 2/3 of the outstanding capital stock.

D. Approval thereof by the DTI.

37. The following are the requisites for the exercise of a corporate power to invest corporate funds in another corporation, except:

A.Approval of the majority of the board of directors or trustees.

B. Ratification by the stockholders representing at least 2/3 of the outstanding capital stock, or by at least 2/3 of the members in the case of non-stock corporations, at a stockholder's or member's meeting duly called for the purpose.

C. Written notice of the proposed investments and the time and place of the meeting shall be addressed to each stockholder or member by mail or served personally. D. Any dissenting stockholder shall have pre-emptive right.

38. 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 of corporate funds to the prejudice or creditors is rescissible. A. Only I is true

B. Only II is true

C. Both are true

D. Both are false

39. I. No management contract shall be entered into for a period longer than 5 years for any 1 term.

II. No corporation shall possess or exercise corporate powers other than those conferred by the Revised Corporation Code or by its articles of incorporation and except as necessary or incidental to the exercise of the powers conferred.

A. Only I is true

B. Only II is true

C. Both are true

D. Both are false

40. The rules and regulations or private laws enacted by the corporation to regulate, govern and control its own actions, affairs and concerns and its stockholders or members and directors and officers with relation thereto and among themselves in their relation to it.

A. By-laws

B. Articles of incorporation

C. Resolution

D. Rules, regulation and discipline

41. It is a condition precedent in the acquisition of corporate existence.

A. By-laws

B. Articles of incorporation

C. Shares of stock

D. Rules, regulation and discipline

42. A private corporation may provide the following in its bylaws:

A. The modes by which a stockholder, member, director, or trustee may attend meetings and cast their votes.

B. The form for proxies of stockholders and members and the manner of voting them.

C. The manner of election or appointment and the term of office of all officers other than directors or trustees.

D. All of the above.

43. Is the book which records the names and addresses of all stockholders arranged alphabetically, the installments paid and unpaid on all stock for which subscription has been made, and the date of payment thereof.

A. Stock and transfer book

B. Check book

C. Journals

D. Ledgers

44. The following are the requirements imposed on a voting trust agreement, except:

A.The agreement must be in writing and notarized and specify the terms and conditions thereof.

B. A certified copy of such agreement shall be filed with the corporation and with the Securities and Exchange Commission; non-compliance, however, said agreement is effective and enforceable.

C. The certificate or certificates of stock covered by the voting trust agreement shall be cancelled and new ones shall be issued in the name of the trustee or trustees stating that they are issued pursuant to said agreement.

D.It shall be noted that the transfer in the name of the trustee or trustees is made pursuant to said voting trust agreement.

45. I. In case of pledged or mortgaged shares in stock corporations, the pledgee or mortgagee shall have the right to attend and vote at meetings of stockholders.

II. In case of shares of stock owned jointly by two or more persons, in order to vote the same, the consent of all the co-owners shall be necessary.

A. Only I is true

B. Only II is true

C. Both are true

D. Both are false

46. Evidence of the holder's ownership of the stock and his right as a shareholder. A. Treasury stock

B. Shares of stock

C. Certificate of stock

D. Par value stock

47. For a valid transfer of stocks, there must be strict compliance with the mode of transfer prescribed bylaw. The following are the requirements, except:

A. There must be delivery of the stock certificate.

B. The certificate must be endorsed by the owner or his attorney-in-fact or other persons legally authorized to make the transfer.

C. To be valid against third parties, the transfer must be recorded in the books of the corporation.

D. To be valid against third parties, the transfer must be recorded in the SEC.

48. The following, except one, are the exceptional circumstances warranting the disregard of the doctrine of separate personality:

A.When directors and trustees or, in appropriate case, the officers of a corporation vote for or assent to patently unlawful acts of the corporation.

B.When a director or officer has consented to the issuance of watered down stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto.

C.When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation.

D.When a director, trustee or officer is made, by specific provision of by-laws, personally liable for his corporate action.

49. I. Stocks shall not be issued for a consideration less than the par or issued price thereof.

II. Where the consideration is other than actual cash, or consists of intangible property such as patents of copyrights, the valuation thereof shall initially be determined by the incorporators or the board of directors, subject to approval of the SEC.

A. Only I is true

B. Only II is true

C. Both are true

D. Both are false

50. I. As a rule, the doctrine of corporate opportunity is violated where the stocks are issued by the corporation for a consideration which is less than its par value.

II. Subscribers for stock shall pay to the corporation interest on all unpaid subscriptions from the date of subscription, if so required by, and at the rate of interest fixed in the by-laws. A. Only I is true

B. Only II is true

C. Both are true

D. Both are false