The debt of a stockholder is not a debt of the corporation of which he is a stockholder, and conversely, the debt of the corporation is not a debt of any of its stockholders is based on the -

a. Separate and distinct personality principle

b. trust fund doctrine

c. doctrine of piercing the veil of corporate fiction

d. limited liability principle

Shares of stock that has been issued by the corporation for consideration less than their par value would strictly and technically be called

a. "Discounted stock"

b. "Premium stocks"

c. "Watered stocks"

d. "Void stocks"

Shares of stock that have been issued by the corporation for consideration reflected as equal to the par or issued value of the shares, when in fact the amount actually received was less, would technically be called -

a. "Discounted stock"

b. "Premium stocks"

c. "Watered stocks"

d. "Void stocks"

Which of the following is in conformity with both law and jurisprudence?

a. The separate personality of a corporation may be disregarded when an incorporation dominates and controls the outstanding capital stock.

b. Shareholders cannot maintain a suit in their own names to recover corporate property.

c. A corporation does not fall within the constitutional protection against unreasonable searches and seizures,

d. A corporation has a right against self-incrimination.

An Article of Incorporation is a contract between the following, except;

a. Securities and Exchange Commission and Corporation

b. State and Corporation

c. Corporation and Share Holders

d. State and Share Holders

Which of the following acts does NOT require an amendment to the Articles of Incorporation of a corporation?

a. Change of corporate name.

b. Change of principal place of business.

c. Change in outstanding capital stock.

d. Change in corporate term.

Which of the following statements is true in applying the corporation by estoppel doctrine?

a. Corporate insiders (would-be stockholders, directors, officers ) cannot invoke the corporation by estoppel doctrine with respect to dealings they have with the ostensible corporation.

b. Notwithstanding that a corporation is eventually incorporated, the acts performed by the incorporators while the application for incorporation is pending will be governed by the corporation by estoppel doctrine.

c. All persons who are associated with the ostensible corporation shall be liable as general partners under the corporation by estoppel doctrine.

d. Only persons who actively represent themselves and act as a corporation knowing it to be without authority to do so shall be liable as general partners under the corporation by estoppel doctrine.

SEC Opinion No. 04-43, dated 26 October 2004, held that a temporary or permanent cessation of operations of a corporation which does not involve the shortening of corporate term or a formal dissolution of the corporation, may be pursued by the Board of Directors only with ratification by stockholders owning or representing at least two-thirds (2/3) of the outstanding capital stock, although not particularly governed by the Corporation Code, is in recognition, and implementation, of the ---

a. Theory of Concession.

b. Theory of Delegated Power

c. Theory of Business Enterprise

d. Doctrine of Strong Juridical Personality

Whereas, a decrease of the authorized capital stock will not be approved by the SEC if the effect is to prejudice the rights of the creditors, and yet no such qualification is provided for under the Corporation Code when it comes to the increase in authorized capital stock, because -

a. It is an application of the coverage of the trust fund that always makes an increase of authorized capital stock favorable or non-prejudicial to the creditors of the corporation.

b. It is presumed that creditors of the corporation will always be happy with the increased of its authorized capital stock.

c. No appraisal right is triggered by an increase in the authorized capital stock of the corporation.

d. Creditors of the corporation, not being within the intra-corporate relationship, have no standing on matters that pertain to the capital structure of the corporation.

The principle that "By-Law provisions cannot contravene the law," is based on the rationale that

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

b. the corporation being a creature of the law, it cannot, in the exercise of its inherent powers like adopting a set of by-laws, contravene the law, public policy or public order.

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

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

Pedro, as President of ACD Corporation, was allowed the use of a Ford Expedition registered in the name of the corporation Upon his retirement, he continued to use the Ford Expedition and refused to return it. Which one of the following would be a correct reason for not returning the vehicle?

a. The corporation owes him some money.

b. He bought the vehicle form the corporation.

c. He owns all the outstanding shares of the corporation.

d. The vehicle was acquired with funds lent by him to the corporation

ABC Corporation, a private corporation engaged in the business of importing used cars from Japan was issued a certificate of incorporation by virtue of R.A. 27890. Because of a failed business transaction, ABC Corporation sued Mr. X for a damage arising from the latter's alleged breach of its contractual obligations.

a. Mr. X cannot allege "lack of legal capacity to sue" of ABC Corporation in its motion to dismiss because it has a legal personality conferred by law.

b. Mr. X cannot allege "lack of legal capacity" in its motion to dismiss because it is not allowed to attack the existence of the corporation collaterally.

c. ABC Corporation is a de jure corporation and its existence can be attacked only through a quo warranto proceeding.

d. Attacking the existence of ABC Corporation may be done through a motion to dismiss because its creation is void.

X subscribed to 1,000 shares of stock in ABC. He paid 50% of the subscription but such subscription was later on declared delinquent. The total liability of X, including the balance, accrued interest, costs and other expenses amounted to P50,000. Which bidder is considered the highest bidder in the delinquency sale?

a. A bid of P45,000 for 500 shares

b. A bid of P43,000 for 504 shares

c. A bid of P50,000 for 900 shares

d. A bid of P40,000 for 300 shares

Iglesia ng Dios Kay Cristo Jesus, Haligi at Suhay ng Katotohanan is a non-stock religious corporation registered in 1936. A group headed by Eliseo Soriano disassociated themselves from such society and succeeded in registering in March, 1988, a new religious corporation named Iglesia Ng Dios kay Kristo Hesus, Haligi at Saligan ng Katotohanan. When the first corporation filed a protest with the SEC against the use of a similar name by the second corporation, the Soriano group caused the registration in April, 1980 of a new corporation named Ang Mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus, H.S.K. , Sa Bansangs Pilipinas, Inc. Can the corporation keep its registered name against the protest of the first corporation?

a. No, since the SEC has the authority to deregister at all times corporate names to spawn confusion.

b. Yes, since the second corporation was already registered with the SEC. A vested right was created.

c. Yes, since a corporate personality was created distinct from the first corporation having different incorporators.

d. No, since it registered another corporation under a different name to avoid confusion.

. Francisco, a government employee, borrowed money from GSIS, secured by a mortgage on her house. Upon failure to pay the installments due, GSIS threatened to foreclose the security. Francisco answered that she could not keep up with the installments and she submitted a proposal whereby she could liquidate the debt. Said proposal was rejected by GSIS Board. However, the Corporate Secretary erroneously sent her a wire that the proposal was accepted. Subsequently when she received summons for foreclosure, she brough action for damages. Is the corporate secretary's act binding upon GSIS?

a. Yes, since the Corporate Secretary is clothed with apparent authority

b. No, since there was no Board Resolution authorizing the Corporate Secretary to perform such act.

c. No, since the Board rejected the proposal.

d. Yes, since the Corporate Secretary is a member of the Board.

"BZ" is a recreational club which was organized to operate golf course for its members with an original authorized capital stock of P100M. The articles of incorporation nor the by laws did not provide for the distribution of dividends although there is a provision that after dissolution, the assets shall be given to a charitable corporation. Which of the following statement is true based on existing jurisprudence?

a. This is a stock corporation since its articles of incorporation and by-laws are silent, it is presumed that it can declare dividends.

b. This is a non-stock corporation because the articles of incorporation did not provide for the distribution of dividends.

c. The stockholders or members must amend the articles of incorporation and state clearly whether the corporation is a stock corporation or a non-stock corporation.

d. This is a non-stock corporation because the assets after dissolution are to be given to a charitable institution.

iN 2010, P Corporation passed a board resolution removing X from his position as general manager of said corporation. The by-laws of P Corporation provides that the officers are the president, general-manager, treasurer and secretary. Upon complaint filed with the SEC, it held that the general manager could be removed by mere resolution of the Board of Directors. On motion for reconsideration, X alleged that he could only be removed by the affirmative vote of the stockholders representing 2/3 of the outstanding capital stock. Is X's contention tenable?

a. No, the voting requirement is only majority of the Board of Directors.

b. No, the vote required is majority of the board and 2/3 of the outstanding capital stock consenting.

c. Yes, the voting requirements is only 2/3 of the outstanding capital stock.

d. No, the required vote is majority of the Board of Directors consented by majority of the outstanding capital stock

An attribute of a corporation wherein it has the continuity of corporate life during its term of existence stated in the articles of incorporation, independent from that of its stockholders or members.

a. Right to succession

b. Right to corporate term

c. Right to extend corporate existence

d. Right of continuous use of corporate charter

In a corporate setting, the "shares of stock" represent ---

a. Ownership of the corporation over its assets.

b. Ownership of interest of the stockholders over the assets of the corporation.

c. Co-ownership rights of all the stockholders over the assets of the corporation.

d. Ownership interest of the stockholder over the corporate enterprise.

The "Management Contract" entered into between two corporations which requires the separate Board resolutions approving it to be ratified separately by stockholders of each of the corporations is that which involves the management

a. by the managing corporation of the primary purpose business of the managed corporation.

b. by the managing corporation of the non-primary purpose business of the managed corporation.

c. by the managing corporation of all or substantially all of the business of the managed corporation.

d. by the managing corporation of the investments and securities of the managed corporation.