LCCM – REFRESHER COURSE

Regulatory Framework for Business Transactions

Final Exam

1. Which of the following is not correct?

a. A check must be presented for payment within a reasonable time after its issue or the drawer will
be discharged from liability thereon
b. Where a check is certified by the bank on which it is drawn, the certification is equivalent to
acceptance
c. Where the holder of a check procures it to be certified or accepted, the drawer and all indorsers
are discharged from liability thereon
d. A check of itself does not operate as an assignment of any part of the funds to the credit of the
drawer with the bank, and the bank is not liable to the holder unless and until it accepts or
certifies the check
2. In payment of his debt in favor of X, Y gave X a Manager's Check in the amount of PHP 100,000 dated
May 30, 2022. Which phrase best completes the statement - A Manager's Check
a. Is a check issued by a manager of a bank for his own account
b. Is a check issued by a manager of a bank in the name of the bank against the bank itself for the
account of the bank
c. Is like any ordinary check that needs to be presented for payment also
d. Is better than a cashier's check in terms of use and effect
3. The drawee bank may not refuse to pay checks drawn against it even
a. If there is a " stop payment " issued by the drawer
b. If the drawer is insolvent
c. If the drawer's deposit is insufficient
d. When the bank receives notice of the drawer's death
4. The following are the essential elements of the criminal violation of BP 22 for the issuance of
worthless checks, except
a. There must be making, drawing, and issuance of any check to apply for an account or for value
b. The must be knowledge of the maker, drawer, or issuer that at the time of issue he does not have
sufficient funds in or credit with the drawee bank for the payment of the check in full upon its
presentment
c. There must be subsequent dishonor of the check by the drawee bank for insufficiency of funds or
creditor dishonor for the same reason had not the drawer, without any valid cause, ordered the
bank to stop payment
d. There must be intent of the drawer, maker, or issuer of the check to defraud the creditor
5. What is the prima facie evidence of knowledge of insufficiency of funds or credit by the maker, issuer,
or drawer of checks?
a. The making, drawing, and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank when presented within 90 days from the
date of the check
b. The making, drawing, and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within 120 days from
the date of the check
c. The making, drawing, and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank when presented within 6 months from
the date of the check
d. The making, drawing, and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within 1 year from the
date of the check

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6. What is the defense or evidence to be presented by the issuer or drawer of a check in order to destroy
the prima facie presumption of the law as regards to the knowledge of the issuance of worthless
checks?
a. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for
payment in full by the drawee of such check within 5 banking days after receiving notice that
such check has not been paid by the drawee
b. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for
payment in full by the drawee of such check within 10 banking days after receiving notice that
such check has not been paid by the drawee
c. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for
payment in full by the drawee of such check within 15 banking days after receiving notice that
such check has not been paid by the drawee
d. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for
payment in full by the drawee of such check within 20 banking days after receiving notice that
such check has not been paid by the drawee
7. Under BP 22, it shall be the duty of the drawee-bank of any check, when refusing to pay the same to the
holder thereof upon presentment, to cause to be written, printed, or stamped in plain language thereon,
or attached thereto, the reason for drawee's dishonor or refusal to pay the same: Provided, that where
there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly
stated in the notice of dishonor or refusal. Notwithstanding receipt often order to stop payment, the
drawee-bank shall state in the notice that there were no sufficient funds in or credit with such bank for
the payment in full of such check, if such be the fact. In all prosecutions under this act, the introduction
and evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written
thereon or attached thereto, with the reason therefore as aforesaid, shall be prima facie evidence of the
following, except
a. the making or issuance of said check
b. The due presentment to the drawee for payment of the check and the dishonor thereof
c. The check was properly dishonored for the reason written, stamped, or attached by the drawee on
such dishonored check
d. The maker or issuer has intention to defraud the creditor
8. Upon winding up of the corporate affairs, any asset distributable to any creditor or stockholder or
member who is unknown and cannot be found shall be escheated and forfeited in favor of the
Old Corporation Code Revised Corporation Code
a. Barangay where such property is located Province where such property is located
b. Province where such property is located City where such property is located
c. City or municipality where such property is National government
located
d. National government City or municipality where such property is
located

9. They are contracts that give the buyer the right, but not the obligation, to buy or sell an underlying
security at a predetermined price, called the exercise or strike price, on or before a predetermined date,
called the expiry date, which can only be extended by SEC upon stockholders’ approval
a. Option contract
b. Subscription contract
c. Contract of sale
d. Bond indenture

10. Which government agency is entrusted with the administration of the Securities Regulation Code?
a. Board of Accountancy
b. Securities and Exchange Commission
c. Bangko Sentral ng Pilipinas
d. Insurance Commission

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11. Which of the following securities is exempted from registration before the Securities and Exchange
Commission?
a. Insurance policy
b. Bond indenture
c. Share warrants and share options
d. Fractional undivided interest in oil or mineral rights
12. It means a publicly announced intention by a person acting alone or in concert with other persons to
acquire outstanding equity securities of a public company, or outstanding equity securities of an
associate or related company of such public company which controls the said public company
a. Tender offer
b. Insider trading
c. Fraudulent practices
d. Issuer tender offer
13. It refers to the act of an insider or selling or buying a security of the issuer, while in possession of
material information with respect to the issuer or the security that is not generally available to the
public
a. Tender offer
b. Manipulation of price
c. Fraudulent practice
d. Insider trading
14. Which of the following acts is not considered unlawful manipulation of security prices under
Securities Regulation Code?
a. To make false or misleading statement with respect to any material fact, which he knew or had
reasonable grounds to believe was so false or misleading, for the purpose of inducing the
purchase or sale of any security listed or traded in an exchange
b. To effect, either alone or others, any series of transactions for the purchase and/or sale of any
security traded in an exchange for the purpose of pegging, fixing, or stabilizing the price of such
security
c. To use or employ, in connection with the purchase or sale of any security any manipulative or
deceptive device or contrivance
d. To sell securities in order to obtain gain on changes in the fair value of the stocks
15. He refers to a corporate officer who must monitor compliance by the corporation with the Revised Code
of Corporate Governance and the rules and regulations of regulatory agencies and, if any violations are
found, report the matter to the Board of Directors and recommend the imposition of appropriate
disciplinary action on the responsible parties and the adoption of measures to prevent a repetition of the
violation
a. independent director
b. Compliance officer
c. Controller
d. Treasurer

16. What is the quantitative threshold to be considered a small entity under SRC Rule 68?
a. Those with total assets between PHP 100M to PHP 350M are total liabilities of between PHP
100M to PHP 250M
b. Those with total assets of more than PHP 350M or total liabilities of more than PHP 250M
c. Those with total assets between PHP 3M to PHP 100M or total liabilities of between PHP 3M to
PHP 100M
d. Those with total assets below PHP 3M and total liabilities below PHP 3M

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17. What is the quantitative threshold to be considered a micro entity under SRC Rule 68?
a. Those with total assets between PHP 100M to PHP 350M are total liabilities of between PHP
100M to PHP 250M
b. Those with total assets of more than PHP 350M or total liabilities of more than PHP 250M
c. Those with total assets between PHP 3M to PHP 100M or total liabilities of between PHP 3M to
PHP 100M
d. Those with total assets below PHP 3M and total liabilities below PHP 3M
18. 20 professional doctors are intending to establish an entity for the rendition of medical services. What
is the maximum foreign investment in such an entity?
a. 0%
b. 60%
c. 40%
d. 30%
19. This test of nationality of corporation is a three-level relationship test by which the percentage of
Filipino equity is computed in a corporation engaged in fully or partly nationalized areas of activity
provided in the Constitution and other nationalization laws, in cases where corporate shareholders are
present in the situation, by attributing the nationality of the second or even subsequent tier of
ownership to determine the nationality of the corporate shareholder
a. Place of incorporation test
b. Control test
c. Dominancy test
d. Grandfather rule test

20. Albay Corporation is 60% owned by Filipinos and 40% owned by Americans. Uranus Corporation is
owned 55% by Albay corporation, 10% by other Filipino citizens and the remaining interest by
Australians. Does Uranus Corporation, a public utility, comply with the minimum Filipino ownership?
a. It cannot be determined
b. Yes under the grandfather rule test
c. No under grandfather rule test
d. No under incorporation test
21. Venus corporation is 50% owned by Filipinos and 50% owned by Germans. Legaspi Corporation is
owned 60% by Venus Corporation, 25% by other Filipino citizens and the remaining interest by Italians.
Does Legaspi Corporation, a public utility, comply with the minimum Filipino ownership?
a. It cannot be determined
b. Yes under the grandfather rule test
c. No under grandfather rule test
d. No under incorporation test
22. On January 1, 2019, Jasper invented the technology of the cacao lamp and was using it already for three
years. On January 1, 2022, Justin invented the same technology as cacao lamp. Justin made an
application for registration with the intellectual property office. Who has better rights over the patent of
the technology?
a. Justin
b. Jasper
c. Justin, for 20 years and thereafter Jasper
d. Jasper, for 20 years and thereafter Justin
23. It means the unauthorized, replication or use of a patented invention or process
a. Patent laundering
b. Patent infringement
c. Patent misappropriation
d. Patent destruction

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24. This defense may be set up by a respondent in an action for patent infringement when the respondent
is any prior user, who, in good faith was using the invention or has undertaken serious preparations to
use the invention in his enterprise or business, before the filing date or priority date of the application
on which a patent is granted
a. Doctrine of fair use
b. Doctrine of prior use
c. Doctrine of good faith
d. Doctrine of bad faith
25. It refers to the defense in a suit in a copyright infringement which pertains to a privilege to use the
copyrighted material in a reasonable manner without the consent of the copyright owner or as copying
the theme or ideas rather than their expression. It is an exception to the copyright owner’s monopoly
of the use of the work to avoid stifling the very creativity which that law is designed to foster
a. Doctrine of Fair use
b. Doctrine of Unfair use
c. Doctrine of Inappropriate use
d. Doctrine of Authorized use
26. What government services are covered by the Ease of Doing Business and Efficient Government
Service Delivery Act of 2018?
a. Government services covering business transactions
b. Government services covering nonbusiness transactions
c. Both A and B
d. Neither A nor B
27. They refer to applications or requests submitted by applicants or requesting parties of a government
office or agency which only require ministerial actions on the part of the public officer or employee or
that which present only inconsequential issues for the resolution by an officer or employee of said
government office
a. Simple transactions
b. Common transactions
c. Ordinary transactions
d. Normal transactions
28. It refers to the government agency, attached to the Office of the President, entrusted with the
implementation of the Ease of Doing Business and Efficient Government Service Delivery Act of
2018
a. Anti-Fixer Authority
b. Anti-Bureaucracy Authority
c. Anti-Red Tape Authority
d. Anti-Influencer Authority
29. This is a policy that prohibits government officers or employees to have any contact with an
application except (1) during the preliminary assessment of the request and evaluation of sufficiency
of submitted requirements and (2) necessary with any requesting party concerning an application or
request
a. Zero-Contact Policy
b. Online Policy
c. Invisible Policy
d. Intangible Policy

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30. It shall serve as a central system to receive applications and capture application data involving
business-related transactions, including primary and secondary licenses, and business clearances,
permits, certifications, or authorizations issued by the local government units: (LGUs) Provided, that
such system may also provide links to the online registration or application systems established by
National Government Agencies (NGAs)
a. Central Business Portal
b. Center Binding Program
c. Cost-Benefit fit Plan
d. Control Brand Premium
31. Any person who has sufficient funds in or credit with the drawee bank when he makes or draws and
issues at check shall not fail to keep sufficient funds or to maintain a credit to cover the full amount of
the check, if presented within a period of -- from the date appearing therein
a. 30 days
b. 60 days
c. 90 days
d. 120 days
32. Which of the following statements is correct?
a. All obligations or loans of the depositor with the closed bank as of bank closure shall be deducted
from the depositor’s total deposit with the said bank for purpose of computing the insured deposit
b. In case a depositor maintains a simple account and joint accounts with a closed bank, his insured
deposit is PHP 500,000 for simple account and PHP 500,000 for a joint account
c. PDIC shall pay deposit insurance on all valid deposits of PHP 500,000 per depositor of a closed
bank
d. In the case of a joint account involving a juridical person and a natural person, the maximum
deposit of PHP 500,000 to such joint account shall be divided equally between the juridical
person and the natural person
33-35. Georgia works as a legal researcher in a Gen. Prof. Pshp receives a daily rate of PHP 800.00 as
compensation. How much will she receive as compensation if the particular day where she reported
for work is
33. A special holiday
a. PHP 1,000
b. PHP 1,040
c. PHP 1200
d. PHP 1600
34. A special holiday which is also her rest day
a. PHP 1000
b. PHP 1040
c. PHP 1200
d. PHP 1600
35. A regular holiday which is also her rest day
a. PHP 1600
b. PHP 2080
c. PHP 2000
d. PHP 2040

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36-37. Using the facts in no. 33 but Georgia was required to render two additional hours of overtime
work, how much will she receive as compensation if the particular day where she performed the overtime
work is
36. An ordinary day
a. PHP 1000
b. PHP 1040
c. PHP 1050
d. PHP 1060
37. On her rest day
a. PHP 1060
b. PHP 1378
c. PHP 1352
d. PHP 1690
38. A married male employee may be able to avail of a paternity leave of
a. 7 days
b. 10 days
c. 12 days
d. 14 days
39. The current partner of an unmarried woman who gave birth, may be able to avail of a maternity leave
of
a. 0 days
b. 7 days
c. 10 days
d. 12 days
40. S sold his car to B on installment and a chattel mortgage was constituted on the car. B defaulted in
two installment payments. S foreclosed the chattel mortgage and sold the car at a public auction. If
there is deficiency, can S recover the deficiency?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, unless there is stipulation
41. B borrowed 100,000 from S secured by a chattel mortgage on B's car. The debt is payable installment.
When B defaulted in two installment payments, S foreclosed the chattel mortgage and sold the car at a
public auction. If there is excess, who is entitled to the excess?
a. S, even without stipulation
b. B, only if there is stipulation
c. S, unless there is stipulation
d. B, even without stipulation
42. Inadvertently, the SEC approved the Articles of Incorporation and issued a Certificate of
Incorporation to Wholesome Corporation. Thereafter it was discovered that the incorporators have not
completed the required period of residency in the Philippines. As a result, which of the following is
not correct?
a. The corporation should be considered as a de facto corporation
b. The right to exercise corporate powers can be inquired into collaterally in any private suit to
which the corporation may be a party
c. The corporation has no legal personality and the incorporators may be held personally liable for
damages
d. The Solicitor General has the right to question or contest the validity of its corporate existence
through a quo-warranto proceedings

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43. In case a managing partner collects a demandable debt from his debtor who also owns the partnership
a demandable debt, which of the following is not correct if payment is not enough to cover the two
debts?
a. The sum shall be applied to the partnership credit
b. It shall be applied to the two credits in proportion to their amounts
c. The debtor has the right to have the payment applied to his debt to the partner if it should be
honest to him
d. The partner cannot apply the payment to his own credit
44. May not require stockholders’ approval
a. Declaration of cash dividend
b. Management contract
c. Increase of bonded indebtedness
d. Removal of a director
45. The following are the effects of unlawful partnership, except
a. The contract is void ab initio and the partnership never existed in the eyes of the law
b. The profits shall be confiscated in favor of the government
c. The instruments, or tools and proceeds of the crime shall be forfeited in favor of the government
d. The contributions of the partners shall be confiscated in favor of the government
46. A person cannot be admitted into the partnership without the consent of
a. All the partners
b. Majority of the partners
c. Two third of the partners
d. Partners representing the controlling interest
47. On April 1, 2022, A and B entered into a contract of partnership for the purpose of buying and selling
textbooks, with the former as capitalist partner and the latter as industrial partner. It was agreed that A
shall contribute 100,000 to the common fund on May 2, 2022. Upon the arrival of the designated date,
A failed to deliver the contribution he promised. As a result
a. B should make a demand upon A for the delivery of his contribution to render A in default
b. The contract of partnership becomes void because A failed to give his contribution to the
common fund
c. B can compel A to deliver his contribution with interest and damages without the necessity of
demand
d. The contract of partnership was never perfected because there was no delivery of contributions by
the partners
48. The following are ways of enforcing payment of unpaid subscription. Which is the exception?
a. Sale at public auction of delinquent stock
b. Denying delinquent stock cash dividend
c. Filing a court action to recover unpaid subscription
d. Denying delinquent stock the right to vote and be voted upon
49. A contract where the creditor acquires the right to receive the fruits of an immovable of his debtor,
with the obligation to apply them to the payment of interest if owing, and thereafter to the principle of
his credit is
a. Antichresis
b. Pledge
c. Real estate mortgage
d. Commodatum

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50. May a stock certificate be issued before full payment?
Statement 1 – No, in case of stock with par value
Statement 2 - Yes, in case of stock without par value
a. True, true
b. True, false
c. False, true
d. False, false

The End

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