36.First Statement: ZZZ Corporation undergone corporate restructuring and plans to reduce its shares by reacquiring its issued and outstanding shares.

Second Statement: Wolfe Corporation recently approve stock dividends to its shareholder and in the process created fractional shares. The corporation plans to reacquire its fractional shares resulting from the stock dividends. a. The corporation is incorrect in both instance

b.Only ZZZ Corporation has a legal right to exercise reacquisition powers of shares

c.Only Wolfe Corporation has a legal basis to exercise reacquisition powers of shares

d.Both ZZZ and Wolfe has the legal basis to exercise reacquisition powers of shares

____ 37. I. If a corporation does business in the Philippines without a license, it cannot sue before the Philippine courts.

II. If a corporation is not doing business in the Philippines, it still needs a license to sue before Philippine courts on an isolated transaction or on a cause of action entirely independent of any business transaction.

a.Only I is true c. Both are true

b.Only II is true d. Both are false

____ 38. When is pre-emptive right available?

I.To new issues of shares arising from any increase of capital stock

II.When the board decides to open them for subscription, to existing unsubscribed portion of the authorized capital stock not previously offered to existing stockholders

III. To disposition or reissuance of treasury shares

a.I only c. I and II only

b.II only d. I, II and III

____ 39. What is the status of ultra vires contracts entered by a corporation which are not illegal per se but in violation of the formality for ratification required by the corporation code? a. voidable

b.rescissible

c.unenforceable

d.null and void but declaration of nullity may be barred by estoppel

____ 40. The following are the purposes of by-laws, except

a.It supplements the articles of incorporation

b.it is a condition precedent before the acquisition of juridical personality of a corporation

c.it defines the rights and duties of corporate officers and directors and of stockholders toward the corporation and among themselves

d.it regulates the business transactions of the corporation in a particular way