Answer the following

1. The factors for application of the doctrine of piercing the corporate veil are the following except:

a) Stock ownership by one or common ownership or both corporations

b) Identity of directors and officer

c) The manner of keeping corporate books and records

d) Identity of stockholders

2. The continuation of a corporation's legal status despite changes ownership or management.

a) Succession

b) Inheritance

c) Dissolution

d) Liquidation

3. The following are the reasons that a principal office of the corporation must be stated in its article 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.

4. The following are the qualifications of a board of director/trustee, except:

a) For a stock corporation, ownership of at least 1 share of capital stock of the corporation in his own name. For non-stock corporation, only members of the corporation can be elected.

b) Majority of the board of directors or trustees must be citizens of the Philippines.

c) The director or trustee must be incapacitated.

d) The director or trustee must be of legal age.

5. It is a body created by the by-laws and composed of not less than three members of the board which, subject to the statutory limitations, has all the authority of the board of directors to the extent provided in the by-laws.

a) Board committee

b) Trust committee

c) Officers' committee

d) Executive committee

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

a) By-laws

b) Articles of incorporation

c) Shares of stock

d) Certificate of incorporation

7. What is the minimum par value of a stock?

a) Five pesos per share

b) Twenty pesos per share

c) One Hundred pesos per share

d) One Thousand pesos per share

8. The following are non-stock corporations EXCEPT:

a) For social purposes

b) For scientific purposes

c) For art auction purposes

d) For professional purposes

9. In non-stock corporations, the number of the members of the Board of Trustees shall not exceed ____.

a) 5

b) 7

c) 12

d) 15

10. Involuntary dissolution of a corporation may occur in the following circumstances EXCEPT:

a) Expiration of corporate term

b) Legislative enactment

c) In case of merger or consolidation d) By order of the SEC on existing legal grounds

Problem: Archie Andrews, Veronica Lodge, Betty Cooper, Jughead Jones, and Cheryl Blossom, all of legal ages, Filipinos, all single (except for Archie and Veronica who are married to each other), and all residents of the Philippines formed a stock corporation and registered the same before the SEC as Riverdale Luxe Goods, Inc., which corporation is engaged in the business of selling luxury handbags, shoes and other accessories in the domestic market. Its principal main office is at No. 314 Mildew Avenue, Southside Place, Iloilo City, Philippines. All the aforementioned incorporators also formed the Board of Directors of the corporation where its chairperson is Mr. Jones. The president of the corporation is Ms. Lodge who had considerable knowledge of anything considered to be luxurious. The corporation has an authorized capital stock of PhP10,000,000.00 divided into 100,000 shares with a par value of PhP100.00 per share. Of the ACS, 25% of which has been subscribed and paid.

1. If the BOD were to appoint a Treasurer for the Corporation, who can they NOT appoint

a) Jughead

b) Betty

c) Archie

d) Cheryl

2. Regie was appointed as the corporate secretary. This was opposed by Veronica reasoning that Regie was a company outsider and not a member of the BOD. Is her point valid?

a) Yes. A corporate secretary must be a member of the BOD.

b) No. A corporate secretary does not have to be a member of the BOD but must be a stockholder.

c) Yes. A corporate secretary must be a company insider who must at least have one position in the company.

d) No. A corporate secretary can be anybody as long as the BOD approves it.

3. Wildlings, Inc., a foreign corporation, communicated to Riverdale Luxe Goods, Inc. through its Filipino president Jon Snow that his corporation is interested in buying shares in Riverdale. How many shares is Jon Snow allowed to buy for Wildings, Inc.?

a) 10,000 shares

b) 50,000 shares

c) 25,000 shares

d) 40,000 shares

4. If Jon Snow wants to be a member of the BOD, what is the minimum number of share that he is required to acquire?

a) 1,000 shares

b) 100 shares

c) 10 shares

d) 1 share

5. Josie & the Pussycats performed at the Company Christmas Party Event of Riverdale last December 20, 2019. Riverdale then invited Josie to invest in the corporation. Josie agreed and subscribed to 1,000 shares. She further said that her unpaid talent fee of PhP100,000.00 from the previous company event be used to pay for her subscribed shares and to be issued her corresponding stock certificate. Cheryl refused this saying that cash must be used as payment. Is Cheryl correct?

a) Yes, as consideration for the issuance of stock, only actual cash is considered.

b) Yes, as consideration for the issuance of stock, cash is considered and, if not enough, supplemented by property.

c) No, as consideration for the issuance of stock, even a promise of future service is considered.

d) No, as consideration for the issuance of stock, services actually rendered to the corporation is also considered

6. Being a separate juridical being, a corporation can acquire real properties in the course of its business. If Riverdale Luxe Goods, Inc. were to buy and sell parcels of land in a span of two (2) years for profit in order to generate income and capital for its business, is it allowed to do so?

a) Yes, because the acquisition of properties is part of the powers of the corporation.

b) Yes, because a stock corporation is allowed to engage in business activities that generate profit.

c) No, because Riverdale must only engage in the business of selling luxury goods, not lands.

d) No, because Riverdale should also engage in the business of selling other properties too, not only lands or luxury goods.

7. The BOD through Jughead declared cash dividends. A stockholder named Carlisle opposed it saying that no meeting was held for the purpose and no approval was secured from the stockholders. Is Carlisle correct?

a) Yes. A 2/3 vote of approval of the outstanding capital stock at a regular or special meeting must be procured for such dividend to be declared.

b) Yes. Majority vote of approval of the outstanding capital stock at a regular or special meeting must be procured for such dividend to be declared.

c) No. Only 50% vote of approval of the stockholders present is required for for such dividend to be declared.

d) No. Only stock dividends needs approval of the stockholders

8. If Riverdale Luxe Goods, Inc. were to increase its capital stock from PhP10,000,000.00 to PhP20,000,000.00. Can it do so?

a) Yes, provided that 70% of its initial ACS is subscribed and paid.

b) Yes, provided that 100% of its initial ACS is subscribed and paid.

c) No because only 25% of its initial ACS is subscribed and paid; 50% of the initial ACS is at least needed to be subscribed and paid.

d) No because only 25% of its initial ACS is subscribed and paid; 90% of the initial ACS is at least needed to be subscribed and paid.

9. Cardo Dalisay Corporation of Tondo, Manila owed Riverdale Luxe Goods, Inc. the amount of PhP500,000.00 which had already been due and demandable last January 15, 2020. If Riverdale were to sue Cardo for collection of sum of money, where can Riverdale file the case?

a) In Iloilo City

b) In Tondo

c) Either A or B

d) Neither A or B

10 If the corporate term of Riverdale Luxe Goods, Inc. were to be until 2030, it can extend its corporate term not earlier than?

a) 2023

b) 2025

c) 2027

d) It can extend anytime.