PHILIPPINE CORPORATION CODE

POWER OF CORPORATION

2. May the bylaws of a corporation prejudice or affect third persons who dealt with the corporation?

a. They cannot affect third persons who dealt with the corporation unless they have knowledge of the same because bylaws operate merely as internal rules among stockholders.

b. As a general rule, they can affect because they are filed before the Securities and Exchange Commission (SEC).

c. They can never affect or prejudice third persons.

d. They will always prejudice or affect third persons.

3. According to SEC ruling, what is the nature of subscription contract?

a. Divisible contract

b. Indivisible contract

c. Either A or B

d. Neither A nor B

4. What is the formality required by the Corporation Code for the validity and enforceability of subscription contract?

a. It must be notarized.

b. It must be in writing because it is covered by statute of fraud.

c. It must be registered with the SEC.

d. It may be in any form because it is perfected by mere consent.

5. In the absence of longer period stipulated in the contract of subscription, pre-incorporation subscription shall be irrevocable for what period from the date of subscription?

a. Three (3) months

b. Six (6) months

c. One (1) year

d. Five (5) years

15. It refers to the resolution or formal declaration of the board that the unpaid subscriptions are due and payable.

a. Order

b. Judgment

c. Decision

d. Call

16. How many days shall lapse from the due date fixed in the subscription contract or from the date fixed in the call made by the Board of Directors for the shares to be delinquent if still unpaid?

a. 15 days

b. 20 days

c. 30 days

d. 60 days

17. In the absence of any bidder, what shall happen to the delinquent shares and the related costs?

a. It shall be acquired by the corporation and debited to expense.

b. It shall be acquired by the corporation and debited to intangible asset.

c. It shall be acquired by the corporation and debited to treasury shares.

d. It shall be acquired by the corporation and debited to share premium.

18. Which of the following is NOT included in the proprietary rights of a shareholder?

a. To receive dividends when declared

b. To possess and co-own corporate assets

c. To participate in distribution of corporate assets upon dissolution

d. To transfer of stock in the corporate book

19. What is the effectivity and validity period of voting trust agreement at any one time with the exception of voting trust specifically required as a condition in a loan agreement whose period depends upon the term of the loan?

a. A period not exceeding one (1) year

b. A period not exceeding three (3) years

c. A period not exceeding five (5) years

d. A period not exceeding 10 years

24. In which of the following causes of action is individual suit the proper remedy instead of derivative suit?

a. If there is wastage or improper diversion of corporate funds by reason if hiring officers whose main purpose is to shield the chairman from criminal prosecution

b. Where the director of the corporation permitted the fraudulent transaction to go unpunished

c. To enforce preemptive rights in a corporation

d. None of the above

25. When may a corporation charge an interest on unpaid subscription not yet declared delinquent?

a. From the date of subscription regardless of provision in the by-laws and subscription contract

b. It cannot charge any interest.

c. From the date of subscription when required by subscription contract or by-laws at the rate fixed in the by- laws or legal rate

d. Only from the moment there is judicial or extrajudicial demand