__ 1.

A contract where two or more persons bind themselves to contribute money, property or industry to a common
fund with the intention of dividing the profits among themselves.
A. Voluntary association
B. Corporation
C. Partnership
D. Sole proprietorship

__ 2. It refers to the doctrine to the effect that the separate personality of a corporation will be disregarded if it
used to defeat public convenience, justify a wrong, protect fraud, or defend crime.
A. Doctrine of limited capacity
B. Doctrine of corporate opportunity
C. Trust fund doctrine
D. Doctrine of piercing the veil of corporate entity

__4. The minimum capital in money or property except, when immovable property or real rights thereto are
contributed that will require the contract of partnership to be in public instrument and be registered with the
securities and Exchange Commission (SEC).
A. P5,000
B. P10,000
C. P3,000
D. P30,000

__ 5. If the partnership has the minimum capital mentioned in No. 4, but the contract is not in a public instrument or
the same is not recorded with the SEC, the partnership:
A. Is void
B. Is voidable
C. Does not acquire juridical personality
D. Still acquires juridical personality

__ 8. Partnership formed for the exercise of a profession which is duly registered is an example of:
A. Universal partnership of profits
B. Universal partnership of all present property
C. Particular partnership
D. Partnership by estoppel

__ 15. Which of the following stipulation is valid?

A. A stipulation excluding a capitalist partner from profits
B. A stipulation excluding a capitalist partner from losses
C. A stipulation excluding an capitalist partner from losses
D. A stipulation excluding an capitalist partner from profits

__ 27. The change in the relation of the partners caused by any ceasing to be associated in the carrying on the business
is known as:
A. Termination of the partnership
B. Winding up of partnership affairs
C. Liquidation of the partnership business
D. Dissolution of the partnership

__ 33. In a limited partnership where there are 4 partners:

A. All the partners must be limited partners
B. The numbers of limited partners must be equal to the number general partner, that is, 2:2
C. The number of limited partner must be greater than number of general partners, that is, 3:1
D. It is enough that there is one limited partner; the rest may all be general partners

__ 34. A limited partner may contribute:

A. Money and/ or property
B. Money and/ or service
C. Property and/or service
D. Service only
__ 37. A person admitted to all the rights of a limited partner who has died or has assigned his interest in the
partnership is known as:
A. An ostensible partner
B. A liquidating partner
C. A substituted limiter partner
D. A general limited partner

__ 40. Which of the following will not cause the automatic dissolution of a limited partnership.
A. Death of a general partner
B. Death of a limited partner
C. Insolvency of a general partner
D. Insanity of a general partner

__ 2. It refers to the doctrine to the effect that the separate personality of a corporation will be disregarded if it is used
to defeat public convenience, justify a wrong, project fraud, or defend crime.
A. Doctrine of limited capacity
B. Doctrine of corporate opportunity
C. Trust fund doctrine
D. Doctrine of piercing the veil of corporate entity

__ 3. The doctrine of piercing veil of corporate entity shall apply in the following cases, except:
A. When the separate personality of the corporation is used as a vehicle for the evasion of an existing obligation
B. When the corporate entity is used to justify wrong, protect fraud, or defend a crime
C. Where the corporation is merely a farce since it mere business conduit of a person
D. Where mere majority of the outstanding capital stock is owned by single individual

__ 4. Piercing the corporate veil based on the alter ego theory requires the concurrence of the following elements,
except:
A. Control of the corporation by the stockholder or parent corporation.
B. Fraud or fundamental unfairness imposed upon the other party by the corporation.
C. Harm or damage caused to the other party by the fraudulent or unfair act of the corporation.
D. The corporate name bears the name of the stockholder or parent corporation.

__ 5. These statements are presented to you for evaluation:

Statement I - Frequent transactions between a parent company and its subsidiary are by themselves a sufficient
Reason for a disregarding the fiction of separate corporate peronality

Statement II - For as long as the separate personality of a corporation is not used for illegal or fraudulent purpose,
the other party to the transaction has no right to pierce the corporate veil.

In your evaluation of the foregoing statements:

A. Both statements are true.
B. Both statements are false.
C. Only Statement I is true.
D. Only Statemet II is true.

__ 6. These statements are presented to you:

Statement I - Mere ownership by a single stockholder of all or nearly all of the following stock of a corporation is
by itself sufficient reason for disregarding the fiction of separte corporate personalty.

Statement II - The fact that the name of a corporation includes the name of one of the stockholders is a valid
ground to pierce the corporate veil.

In your evaluation of the foregoing statements:

A. Both statements are true.
B. Both statements are false.
 C. Only Statement I is true.
D. Only Statemet II is true.

__ 9. Mr. Gregorio Atencio, the sole proprietor of GREAT Grocery Store, the only supermarket on his town, offered
to sell the business to Mr. Arturo Bautista for P20,000,000.00. Mr. Bautista accepted the offer on the condition
that Mr. Atencio would not put up any supermarket in the town within a period of five (5) years after the
consummation of the sale. Two years after the sale, Mr. Atencio, wqanting to put up the same business, created.
Regent Supermaret Corporation with 90% of the capital stock being registered in his name, and the remaining
10% in the name of his relatives who merely signed the article of incorporation as incorporators and without
knowledge that they were being made stockholders of regent. The store of regent is located in the same town.
Mr, Bautista, on learning that the new supermarket was put up by Mr. Atencio, now sues the latter and regent be
restrained from pursuing the business and demands the payment of damage. Mr. Atencio contends that he has
not committed any violation because regent has a personality separate from his own. Decide.

A. Mr. Atencio violated his contract. Based on the facts, he and regent will be considered as one under the
Doctrine of piercing the veil of coreporate entity.
B. Mr. Atencio is correct. He has a personality and separate and distinct from that of regent and should not be
held liable for breach of contract.
C. The provision in the contract that Mr. Atencio must not put up the sam business within five (5) years in the
town is void for being in restraint of trade.
D. Mr. Bautista has a course of action against Mr. Atencio but not against Regent.

__10. A corporation commences to exist:

A. Upon the execution of the articles of incorporation by the incorporators.
B. Upon the filing of the articles in incorporation with the Securities And Exchange Commission.
C. Upon the issuance of the certificate of incorporation.
D. On the dat when incorporators acknowledged the due execution of the articles of incorporation before a
notary public

__11. These statements are presented to you for evaluation:

Statement I - A corporation continues to exist for the period for which it was formed regardless fo the changes in
the ownership of its shares or in its membership.

Statement II - The existence of a corporation is not affected by the death, insolvency, or incapacityof the individual
stockholders or members.

Which of the foregoing statements refer to the right of succession of a corporation?

A. Both statements I and II.
B. Neither statement I nor II.
C. Statement I only.
D. Statement II only.

__ 12. A partnership and a corporation are similar except with the respect to:
A. Having a separate personality
B. Composed of a group of persons
C. Being artificial person
D. Having the right of succession

__ 16. One of the following is not a characteristic of a stock corporation. Which is it?
A. It is formed by not more than 15 persons
B. The stockholders are liable only to the extent of their investment
C. The stockholders directly own the properties of the corporation
D. It acts through the board of directors

__17.A stock corporation differs from a nonstock corporation in that in a nonstock corporation:
A. There is a stock provided into shares.
B. There is an authority to distribute dividends or allotments from surplus profits.
C. Its income shall be used only for the furtherance of the purpose for which it was incorporfated.
 D. It is formed for profit.

__18. It refers to a corporation which operates within the country under whose laws it was incorporated.
A. Foreign corporation
B. Offshore corporation
C. Domestic corporation
D. Public corporation

__19. Under this test, The nationality of a corporation follows that of the country under whose laws it was
formed.
A. Incorporation Test
B. Control Testt
C. Business Domiciliary Test
D. Grandfther Test

__20. This is the test applied in determining the nationality of a corporation during wartime where the assets of a
corporation may be confiscated by the State under whose laws it was incorporated for purposes of national
securitty
A. Public corporation
B. Quasi-public corporation
C. Government-owned corporation
D. Government-controlled corporation

__21. A corporation that is organized for the government of a portion of the state, like a promise, city,
municipality or barangay.
A. Public corporation
B. Quasi- pubic corporation
C. Government- owned corporation
D. Government- controlled corporation

__22. A corporation that has been created in strict compliance with all the legal requirements and whose right to
exist as a corporation cannot be successfully attacked in a direct proceeding for that purpose by the state.
A. De facto corporation
B. De jure corporation
C. Corporation by prescription
D. Corporation by estoppel

__23. A corporation that is defectively created but there is an actual exercise of corporate rights and franchise
resulting from an attempt in good faith to incorporate on the part of its members.
A. De jure corporation
B. Corporation by prescription
C. Corporation by estoppel
D. De facto corporation

__24. Its due existence can be attacked directly in a quo warranto proceeding by the state
A. De facto corporation
B. De jure corporation
C. Both de jure and de factor corporation
D. Neither de facto nor de jure corporation

__25. Its due existence can be inquired into collaterally either by the state or private persons.
A. De facto corporation
B. De jure corporation
C. Both de facto and de jure corporation
D. Neither de facto nor de jure corporation

__26. Assuming that a certificate of incorporation was issued by the Securities and Exchange Commission, Which of
the following is not a de facto corporation?
A. A corporation that indicated an erroneous amount of paid in capital in the teasurer’s affidavit.
B. A corporation where an individual incorporator is incapable of giving consent.
 C. A corporation where the ackowledgment of the incorporators is defective.
D. A corporation whose articles of incorporation provide for the exercise of a common professionby the
Incorporators

__28. One which is not in reality a corporation but is considered as one with respect to those who are preclude by their
admission or conduct from denying its existence.
A. Corporation by estoppel
B. Corporation by prescription
C. De jure corporation
D. De facto corporation

__29. Those composing it are liable a general partners

A. Corporation by estoppel
B. Corporation by prescription
C. De jure corporation
D. De facto corporation

__32. Refer to No. 30. The corporation formed under the circumstanced is a:
A. Corporation by estoppel
B. Corporation by prescription
C. De jure corporation
D. De facto corporation

__33. A corporation that has exercised corporate powers for such a length of time without interference from the state
and which, by fiction law, is given the status of a corporation.
A. Corporation bt estoppel
B. De facto corporation
C. Corporation by prescription
D. De jure corporation

__34. In case a corporation is formed for the exercise of a profession, it shall be considered as a:
A. De facto corporation
B. De jure corporation
C. Either (a) or (b) depending on whether or not a certificate of incorporation was issued.
D. Non-exixtent corporation even if a certificate of incorporation was issued.

__35. Those mentioned in the articles of incorporation as originally forming and composing the corporation and are
signatories of such document are known as:
A. Corporators
B. Stockholders
C. Incorporation
D. Members

__36. These statements are presented to you:

Statement I - An incorporator of a corporation must be a subscriber to its capital stock in the case of a stock
corporation, or a member thereof in the case of nonstock corporation, at the time of incorporation

Statement II - An incorporator remains as such even if he is no loger a stockholder or a member of corporation.

In your evaluation of the foregoing statements:

A. Both statements are true
B. Both statements are false
C. Only 1 statements is true
D. Only statements II is true

__37. Which of the following statements is correct:

A. A promoter is personally liable for contracts he entered into in behalf of a corporation still to be formed if the
incorporation does not materialize.
 B. A newly-formed corporation is automatically liable for preincorporation contracts entered into in its behalf by
the promoter who has facilitated the creation ot the corporation.
C. A corporation becomes liable for pre-incorporation contracts entered into it its behalf by a premoter once it
ratifies the contract
D. A promoter is released from pre-incorporation contracts he entered into once the corporation ratifies the
contract and the other party to the contract absolves him from liability

__38. The total amount of shares which a corporation is allowed to issue if the shares have par value.
A. Subscribe capital stock
B. Unissued capital stock
C. Authorized capital stock
D. Issued capital stock

__41. Its refers to the total shares of stock issued to subscribers or stockholders, whether fully or partially paid (as
long as there is a binding subscription agreement), except treasury shares.
A. Outstanding capital stock
B. Issued capital stock
C. Subscribed capital stock
D. Authorized capital stock

__43. Refer to the facts in the preceding number. Assume that for 2022, A,B,C,D,E,F,G and H ran for the position of
director in the annual election of directors. If you were a stockholder with 400 shares, how many votes may you
possibly castin the election
A. 400 votes
B. 2800 votes
C. 3,200 votes
D. 8 votes

__ 44. A share of stock differs from a stock certificate in that the share of stock:
A. Is a tangible property
B. May not be issue unless the subscription has been fully paid
C. Is the written evidence of a stockholder’s rights and interest in a corporation
D. Is one of the units into which the capital stock is divided

__45. The ordinary stock of a corporation that entitles the holder to a pro rata division of the dividends,
without preference or advantage over the stockholder.
A. Common stock
B. Preferred stock
C. Par value stock
D. No-par value stock

__46. A stock whose nominal value is stated in the stock certificate.

A. Par value stock
B. Issued stock
C. No-par value stock
D. Redeemble stock

__ 48. I. A stock corporation may classify all its shares as nonvoting

II. A stock corporation may not issue both par value and non-par value at the same time.
A. Both statements are true
B. both statement are false
C. Only I is true
D. Only II is true

__52. Which shares may be reacquired by a corporation even if it has no unrestricted retained earnings in its
books?
A. Founders’ shares
B. Redeemable shares
 C. Convertible shares
D. Par value shares

__53. Shares that are issued without consideration or with no adequate consideration are known as:
A. Watered stock.
B. Redeemable stock.
C. Founders’ stock.
D. No-par stock.

__55. Which of the following documents is not required to be submitted at the time of incorporation?
A. Articles of incorporation
B. Tresurer’s affidavit
C. Verification slip authorizing use for corporate name
D. Bylaws

__57. It refers to the right to exist as a corporation and it is vested in the individuals who compose the corporation
and not in the corporation itself.
A. Primary franchise
B. Secondary franchise
C. License
D. Certificate of authority

__58. The charter of a corporation organized under the general law includes the following, except the:
A. Revised corporation code
B. Othe laws applicable to corporations
C. Articles of incorporation
D. Bylaws

__73. The basic governing document of a private corporation which in effect serves as the applications of the
incorporators with the government through the securities and exchange commission to become a corporation
is the
A. Articles of incorporation
B. Bylaws
C. Certificate of incorporation
D. Verification certificate

__75. Which of the following provisions of the article of incorporation cannot be amended?
A. Name of the corporation
B. Corporate term
C. Purpose or purposes of the corporation
D. Number and name of incorporators

__ 81. Directors of an ordinary stock corporation must possess the following qualifications, except:
A. They must be the owner of at least one (1) share of stock.
B. The shares of stock they own must stand in their name in the books of corporation while they are
directors.
C. Majority of the directors must be citizens of the Philippines.
D. They must not be more than 15 in number.

__ 85. At least twenty percent (20%) of the members of the board of directors of corporations vested with public
interest must be:
A. Incorporating directors
B. Independent directors
C. Emergency directors
D. Provisional directors

__ 87. As a rule, the quorum in the meeting of the board of directors or trustees is at least:
A. A majority of the total number of directors or trustees fixed in the articles of incorporation.
B. Two-thirds (2/3) of the total number fixed in the articles of incorporation.
C. Three-fourths (3/4) of the total number fixed in the articles of incorporation.
 D. Any number as long as it is fixed in the bylaws.

__ 88. The bylaws may provide that the quorum in the meetings of directors or trustees may be:
I. Less than the majority of the total number of directors fixed in the articles of incorporation.
II. More than the majority of the total number of directors fixed in the articles of incorporation.

The statement is true with respect to:

A. Both I and II.
B. I only.
C. II only
D. Neither I nor II.

__ 90. Who may attend and vote in person,by remote communication or by proxy in meetings?
A. Stockholders or members in the regular or special meetings of the stockholders or members.
B. Directors or trustees in the regular or special meetings of the board of directors or trustees.
C. Both (a) and (b).
D. Neither (a) nor (b).

__ 94. Who of the following corporate officers must also be a director?

A. President
B. Treasurer
C. Corporate secretary
D. None of the foregoing officers is required to be a director for as long as each owns at least one share of
stock in his own name.

__95. The president of a corporation may at the same time be the:

A. Treasurer
B. Corporate secretary
C. Both the treasurer and corporate secretary.
D. Chairman of the board of directors.

__96. A,B,C,D,E,F and G are directors of Speedex Corporation whose articles of incorporation provide for seven (7)
directors. During the month of October 2021, the board of directors of the corporation which is engaged in the
sale of motor vehicles, held a meeting to approve a contract for the purchase of 20 motorcycles. Present during
the meeting were A,B,C,D and G, with A,B,C and G voting for the approval of the contract. Assuming that the
contract is fair and reasonable under the circumstances, the contract between Speedex Corporation and G is:
A. Valid .
B. Rescissible.
C. Voidable.
D. Unenforceable.

__97. Refer to the facts in the preceding number. If an executive committee is allowed by the bylaws of Speedex
Corporation to be formed , which of the following acts may be performed by the executive committee?
A. Election of Y to fill a vacancy in the board of directors.
B. Declaration of stock dividends.
C. Amendment of the bylaws.
D. Approval of a contract for the purchase of 10 units of motorcycle.

__99. What vote is required in order that the act of the executive committee will be considered valid?
A. Majority of its members.
B. All of its members.
C. Two-thirds of its members.
D. Majority of its members present during the executive committee meeting.

__100. Which of the following causes of vacancy in the board of directors may be filled by the remaining directors if
they still constitute a quorum?
A. Increase in the number of directors.
B. Expiration of the term of directors.
C. Death of director.
D. Removal of director.