Any vacancy in the Board of Directors can be filled up by a vote of at least the majority of the remaining directors if still constituting a quorum, except when such vacancy is created by -

a. by the death of a director.

b. by the resignation of the director.

c. by the director no longer being a registered stockholder to at least one share in the books of the corporation.

d. by the expiration of term of the director.

What corporate power does the board not determine but only exercise?

a. Express power

b. Implied power

c. Power to invest into another corporation

d. Power to enter into joint venture

The pre-emptive rights of stockholders in a corporation are not statutory rights, but are ____________ and exist even when no specific grant or recognition of such right is provided for in statutory law.

a. inherent rights

b. common law rights

c. provided by the Corporation Code

d. implied rights

A share held by a third person to be released only upon the performance of a condition or the happening of a certain event contained in the agreement.

a. Common share

b. Preferred share

c. Escrow share

d. Treasury share

One of the attributes of a corporation is that it is an artificial being with a separate personality. As a result of this attribute, the corporation:

a. is not liable for torts committed by its officer or agent.

b. is liable for torts committed by its officer or agent.

c. is liable for torts by its stockholders.

d. is liable for torts committed by its stockholders and officers or agents.

The "Grandfather Rule" in Corporation law means that:

a. corporate stockholdings would be traced from the nationality of the stockholders of investor corporations in determining, in turn, the nationality of the investee corporation.

b. corporate stockholdings would be traced from the nationality of the stockholders of investee corporations in determining, in turn, the nationality of the investor corporation.

c. corporate stockholdings would be traced from the residency of the stockholders of investor corporations in determining, in turn, the residency of the investee corporation.

d. corporate stockholdings would be traced from the domicile of the stockholders of investor corporations in determining, in turn the domicile of the investee corporation.

The principle that "By-laws cannot contravene, much less override, the articles of incorporation, " is based on the rationale that ---

a. a corporation being creature of the law, cannot, in the exercise of its inherent power, contravene its own character.

b. the corporation being a creature of the law, it cannot by its acts and internal rules defy its creators or the orders of its creator.

c. a corporation being a creature of the law, it is mandated, in the exercise of its inherent powers, it must carry on the business pursuant to the interests, and not to unduly restrict or disadvantage those who are intended to be the beneficiaries thereof.

d. a corporation's articles of incorporation constitute the law as to said corporation.

Who in the items below is a "corporate officer" who in accordance with corporate law jurisprudence is NOT within the business judgement power of the Board of Directors to terminate, with or without cause, from his officer position?

a. The President and CEO, appointed by majority vote of the Board.

b. The Chairman of the Board, appointed by majority of the vote of the Board.

c. The Executive Vice-President whose position was created by a resolution unanimously adopted by the Board.

d. The Corporate Secretary, appointed by unanimous vote of the Board.

When a certificate of stock is issued for shares whose subscription is not fully paid, then ---

a. the certificates are deemed null and void for being in violation of express prohibition of the Corporation Code.

b. the directors and officers who allowed such issuance of the certificate shall be liable to the corporation for the balance of the subscription that remains unpaid.

c. the shares are conclusively deemed fully paid as to every due holder in good faith of the certificate of stock.

d. the registered stockholder shall no longer be liable for the unpaid portion of the subscription.

The corporation may deny the exercise of the stockholder of his right to inspect over business secrets or confidential matters based on the principle that ---

a. what every person can do himself, he has a right to designate another person to do it for him.

b. the exercise of the power to inspect can be exercised only in consonance with or germane to the proprietary rights of the stockholder pertaining to his shares of stock in the corporation.

c. the right to inspect being a common law right is absolute.

d. the right to inspect should be for a legitimate purpose that is protective of the interests of the corporation.

In a contract between two corporation having interlocking directors, the ratificatory vote of the stockholders owning/representing at least two-thirds (2/3) of the outstanding capital stock is generally not required in order to make the contract valid, binding and enforceable on both corporations, EXCEPT-

a. when there is fraud against one corporation, then the ratificatory vote of stockholders in the defrauded corporation is required.

b. when the interest of the interlocking directors in one corporation is merely nominal, in which case such ratificatory stockholders' vote is required.

c. When the contract is not fair or reasonable, then the ratificatory vote of stockholders in the disadvantaged corporation is required.

d. When the contract is fraudulent as against third party, then the ratificatory vote of stockholders in the disadvantage corporation is required.

X Corp. has already issued the 1,000 originally authorized shares of the corporation so that its Board of Directors and stockholders wish to increase X's authorized capital stock. After complying with the requirements of the law on increase of capital stock, X issued an additional 1,000 shares of the same value. S presently holds 200 shares out of the original 1,000 shares. Which of the following statements is true?

a. If ever there is a pre-emptive right, the same must exercised within a reasonable time as fixed by the Board of Directors if the Articles and the by-laws are silent.

b. S must be offered equivalent 200 shares under his pre-emptive right if stated in the Articles of Incorporation

c. The increase in shares must be offered first to the stockholders of record under the "Doctrine of First Refusal." If they refuse it will be offered to the general public.

d. The new subscription in the increase in authorized capital stock must first be offered to stockholders on record in proportion to their present equity holdings, and the portion pertaining to those who refuse may now be offered by the Board of Directors to any interested party.

X subscribed to a total of 1,000 shares of stock. His first subscription was for 600 shares which was fully paid and he was issued a stock certificate for 600 shares. For his second subscription of 400 shares, he only paid 40%. Is X entitle to vote for the 1,000 shares?

a. Yes, since the unpaid shares have not been declared delinquent

b. No, since X has not paid for the entire subscription

c. No, but X is entitled to vote for 760 shares, corresponding to the total amount he paid

d. Yes, X is entitled to vote for his entire subscription for he will be considered a debtor of the corporation for the unpaid shares.

S subscribed to 100 shares of stock of C Corporation with a par value of P100 each, paying P 3,000 on his subscription. Subsequently S asked the President of C Corporation to release him from his subscription. The President of C Corporation consented provided that S forfeits to the corporation what he had already paid. However, C Corporation went into insolvency and an assignee was appointed and seeks to collect from S, the balance of his unpaid subscription. Can the assignee still collect from S?

a. Yes, consent of all stockholders and creditors of C Corporation is necessary in order for the release to be valid.

b. No, the President of C Corporation already released S from his obligation.

c. No, the President is clothed with apparent authority to release S from his unpaid subscription.

d. Yes, consent of the majority of the Board of Directors is necessary, not only that of the President, in order for the release to be valid.