CORPORATION LAW Multiple Choice 1. The following are the attributes of a private corporation. What is the exception?

A) It is an artificial being B) It is created by law C) It has the right of succession D) Its power attributes, or properties are expressly authorized by law or incident to its existence E) None of the above 2. A corporation has a personality of its own because it is legal or a juridical person. Which among the following is not a consequence of its separate personality? A) It may acquire and possess property of all kinds are well as incur debts and other contractual obligations. B) It has a nationality or citizenship of its own apart from that of the stockholders C) Its obligations are obligations of the majority shareholder: D) It enjoys constitutional protection. 3. Piercing the veil of corporate entity is considered an exception to the rule of corporate fiction, i.e, that a corporation possesses a personality of its own separate and distinct from the personalities of the corporators of the corporation. Which of the following is the consequence of piercing the veil of corporate entity? A) The corporation will be considered a mere association of persons without a personality of its own B) The persons composing the corporation will be considered the same as the corporation; C) The liabilities of the corporation may be considered the liabilities of the stockholders or vice-versa; D) All the above 4. Which of the following is not a similarity between a corporation and a partnership? A) Both have juridical personalities distinct from those of the individuals composing them; B) Both can act only through their agents C) Both have continuity of existence D) Both may own property in their own names 5. They are corporations formed or organized for the government of a portion of state or those created by the state as its own device for the accomplishment of its own public purposes. A) Private corporations B) Public Corporation C) Quasi-public corporation D) Corporation by prescription 6. The following are typical examples of public corporations. Which is the exception? A) Province of Romblon B) City of Manila C) Municipality of Malolos D) Social Security System 7. They are corporations consisting of one member only. It is usually organized for the purpose of administering and managing as trustee, the affairs, property and temporalities of any religious denomination, sect or church. It may be formed by the chief archbishop, bishop, priest, minister, rabbi or other presiding elder of such religious denomination, sect or church. A) Ecclesiastical corporations B) Lay corporations C) Corporation sole D) Religious societies 8. They are corporations that are organized for spiritual purposes or for the furtherance of religion as opposed to lay corporations that are created for secular or temporal purpose. A) Ecclesiastical corporations B) Eleemosynary corporations C) Civil corporations D) Corporation aggregate 9) It is a corporation whose articles of incorporation provide that (1) all the corporations issued stock of all classes, ex clusive of treasury shares, shall be held of record by not more than twenty (20) persons; (2) all the issued stock of all classes shall be subject to one or more restrictions on transfer; and (3) the shares shall not be listed in any stock exchange or be offered to the public. A) Open corporation

B) Restrictive corporation C) Corporation by estoppel D) Close corporation 10. If certain persons assume to act as a corporation knowing it to be without authority to do so, they are liable as general partners for all debts, liabilities and damages incurred or arising as a result of such assumptions as a corporation. This situation gives rise to a A) De facto corporations B) Corporation by prescription C) Corporation by estoppel D) Corporation by misrepresentation 11. No. I Five persons without organizing a corporation pretended to be members of a non-existent corporation, which they called Ocean Quest Corporation. Through this misrepresentation they obtained a loan of P5 million from Mr. X. When the debt was not pai d, Mr. X sued Ocean Quest. The purported members thereof may invoke the defense that Ocean Quest cannot be sued because it is in truth and in fact not a corporation. No. II Spice Boys Corporation is in truth and in fact not a corporation but a mere association composed of five members. Mr. X, knowing it to be a unincorporated entity entered into a contract with it. When sued for the breach of the contract, Mr. X may interpose the defense that Spice Boys Corporation has no legal capacity to sue A) Both are true B) Both nos. are false C) Only no. 1 is true D) Only no. 1 is false 12. It is a corporation formed or organized or existing under any laws other than those of the Philippines. A) Domestic corporation B) Foreign corporation C) De jure corporation D) De facto corporation 13. No. 1 A foreign corporation is not automatically allowed to engage in business in the Philippines. It must first obtain a license in the Philippines if it wants to engage in business locally. If it engages in business in the Philippines without obtaining a license, it may be sued but it cannot sue. No. 2 A foreign corporation that it not engaged in business in the Philippines need not obtain a license because a license is required only for business purposes. Such foreign corporation may however, sue in the Philippines where the suit arise out of an isolated transaction or in order to protect its reputation, corporate name or goodwill. A) Both nos. are correct B) Both nos. are wrong C) Only no. I is correct D) Only no. II is correct. 14. No I Every corporator is an incorporator and vice versa No. II Corporators in a stock corporation are either stockholders or members A) Both statements are true B) Both statements are false C) Only first statement is true D) Only the second statement is false 15. They are persons who bring about or cause to bring about the formation and organization of a corporation by bringing together the incorporators or the persons interested in the enterprise, procuring subscriptions or capital for the corporation and setting in motion the machinery that leads to the incorporation of the applicant corporation. A) Underwriters B) Promoters C) Subscribers D) Incorporators 16. It is the amount fixed in the articles on incorporation. To be subscribed and paid in by the shareholders of a corporation, either in money or property, labor or services, at the organization of the corporation or afterwards and upon which it is to conduct its operations. It limits the maximum amount or number of shares that may be issued by the corporation without formal amendment of the articles of incorporation. A) Legal capital B) Subscribed capital C) Outstanding capital stock D) Authorized capital stock 17. Incorporators should have the following qualifications. Which is the exception? A) They must be of legal ages and must be natural persons

B) They must not less than five (5) but not more than fifteen (15) majority of whom are citizens of the Philippines C) They must number not less than five (5) but not more than fifteen (15), majority of whom must be residents of the Philippines D) Each of the incorporators of the stock corporation must be a subscriber to at least one (1) share of the capital stock of the corporation 18. Which among the following situations will justify a denial of an application for incorporation? Authorized Capital Stock Subscription A) P500,000 P125,000 B) 200,000 60,000 C) 50,000 12,500 D) 100,000 25,000 Paid Up P31,5000 12,000 5,000 6,250

19. Which among the following are the limitations to the corporate power to amend its articles of incorporation? A) The amendment must be for a legitimate purpose B) The amendment must be approved by the required vote of the board and the stockholders or members C) Both the original and amended articles must be filed with the Securities and Exchange Commission D) All of the above 20. When does the corporate existence commence? A) From the date the Securities and Exchange Commission issues a certificate of incorporation under its official seal B) From the date the corporation is notified by the Securities and Exchange Commission of the issuance of the certificate of incorporation C) From the date the certificate of incorporation is actually received by the corporation D) From the date of the publication of the issuance of the certificate of incorporation in a newspaper of general circulation