RFBT-3305 ATTY.

VILLEGAS
REVISED CORPORATION CODE (RA 11232) ATTY. AGUILAR

1. A private corporation commences to have a. tangible

corporate existence and juridical personality from b. may not be issued even if the subscription is
the date: not fully paid
a. the officers of the corporation are elected by c. written evidence of ownership of the shares
the stockholders d. intangible
b. the incorporators sign the Articles of
incorporation 8. The appraisal right can be exercised by a
c. the Articles of incorporation and the by-laws stockholder under the conditions provided by law,
are presented to the SEC which one of the following is the ground in case of
d. the SEC issues a certificate of incorporation close corporation?
under its official seal a. merger or consolidation
e. all of the above b. sale, lease, exchange, transfer, mortgage,
pledge or other disposition of all or substantially
2. One of the following is not required and does not all of the corporate property
form part of the three-fold duties of a director of a c. amendment of articles of incorporation
corporation. Which one is it? d. investment of corporate funds in another
a. Duty of diligence purpose
b. Duty of loyalty e. for any reason
c. Duty of obedience
d. Duty of efficiency 9. The by-laws of the non-stock corporation may
provide that the meetings of the members of the
3. It is one brought by one or more of the non-stock corporation may be held:
stockholders or members in the name and on behalf of a. within the principal place of business only
the corporation to redress wrongs committed against b. within the Philippines only
it or to protect or vindicate corporate rights, whenever c. at any place even outside the place where the
the officials of the corporation refuse to sue, or are the principal office of the corporation is located
ones to be sued or hold control of the corporation. provided within the Philippines
a. mandamus d. at any place even outside the place where the
b. quo warranto principal office of the corporation is located
c. appraisal right and even outside the Philippines
d. derivative suit e. anywhere
e. individual suit
10. In case of a delinquent stockholder, the following
4. A corporation cannot exist if: rights are not given to him, except:
a. there are incorporators who are juridical a. right to receive dividends in accordance with
persons the provisions of the law
b. there are no articles of incorporation b. right to vote
c. no incorporating directors or trustees c. right to be voted for
d. there is no name provided for in the articles of d. right of representation at any stockholders’
incorporation meeting
e. all of the above
f. None of the above (b,c,d) 11. A corporation commences its existence from the
issuance of the certificate of incorporation, which one is
5. Unless otherwise provided by the Corporation the exception?
Code or special law, the number of directors must a. close corporation
be: b. widely-held corporation
a. not less than five (5) nor more than fifteen c. religious corporation
(15) d. non-stock corporation
b. not more than fifteen (15) e. educational corporation
c. not less than fifteen (15) not more than
twenty-five (25) 12. Stocks which are previously issued and fully paid
d. more than five (5) nor more than fifteen (15) for and reacquired by the corporation either by purchase,
e. more than five (5) but not less than fifteen donation, forfeiture or some other lawful means.
(15) a. scrip shares
b. treasury shares
6. Which of the following does not belong in the c. scrip shares
enumeration? d. redeemable shares
a. serious misrepresentation as to what the e. delinquent shares
corporation can do or is doing
b. the articles of incorporation is not 13. A religious corporation acquires juridical
substantially in the form prescribed by law personality from –
c. the purpose is patently unconstitutional, a. execution of the articles of incorporation and
illegal or immoral by-laws
d. the treasurer’s certification is false. b. filing of the articles of incorporation and other
documents
7. Which of the following is not a characteristic of c. issuance of the certificate of incorporation from
certificate of stock? SEC
 d. approval of the Securities and Exchange
Commission 21. I - Stock corporations are formed by not less
e. None of the above than five but not more than 15 incorporators who are
natural persons
14. Which of the following is not an Involuntary II - Corporation sole is composed of only one
dissolution of the corporation? natural person
a. by the vote of the board of directors and III - Corporation may exist for not more than 50
stockholders, where no creditors are affected years from the date of incorporation unless sooner
b. non-use of corporate charter dissolved or unless said period is extended.
c. receipt of a lawful order of the court dissolving IV – Corporation is automatically dissolved if it
the corporation fails to do any business within 2 years from date of
d. continuous inoperation of a corporation incorporation
15. Voting requirement for the amendment of the a. I, II, III and IV are true
by-laws. b. I and II are true, III and IV are false
a. 2/3 of the outstanding capital stock c. I, II and III are true, IV is false
b. majority of the board of directors d. I, II, III and IV are false
c. majority of the board consented to by 2/3 of e. Answer not given (F, T, F, F)
the outstanding capital stock
d. majority of the board of directors consented to 22. Sebastian, one of the stockholders of Longan
by majority of the outstanding capital stock Corp was convinced by Fernando, one of the directors of
said corporation to sell to him (Fernando) his stockholding
16. One of the characteristics of treasury shares is for a certain price. Since the offer was good, Sebastian
that: consented to the sale. Unknown to Sebastian, at the time
a. they have the status of outstanding shares of the sale, Fernando was the chief negotiator of Longan
b. they may not be reissued or sold again Corp. in selling its substantial property to the government
c. they can vote in the election of directors at a price which greatly enhanced the value of the stock.
d. they participate neither in dividends not in the Under what doctrine is Fernando as director of the
meetings of the corporation as voting stocksa corporation liable?
e. they can be reacquired by the corporation a. Doctrine of Corporate Opportunity
regardless of the existence of unrestricted retained b. Special Fact Doctrine
earnings c. Business Judgment Rule
d. Trust Fund Doctrine
17. It means the total shares of stock issued to e. Doctrine of Alter Ego
subscribers or stockholders, whether or not fully or f. Doctrine of Special Theory
partially paid (as long as there is a binding subscription
agreement), except treasury shares. 23. Hokkaido, Hakone, Ajinamoto, Nissin and Oishi
a. authorized capital stock are five Japanese citizens who organized a corporation in
b. paid-up capital stock the Philippines and registered in the same in the office of
c. shares in escrow the Securities and Exchange Commission
d. voting stock a. It is a foreign corporation
e. outstanding capital stock b. It is a domestic corporation
c. It is a nationalized corporation
18. The following are the advantages of par value d. It is partly nationalized
shares, which is one is not? e. Answer not given
a. easily sold
b. easily issued as fully paid and non-assessable 24. The corporate existence may be disregarded
c. greater protection to creditors where the entity is formed or used for illegal purposes.
d. unlikelihood of distribution of dividends that are a. Doctrine of Limited Capacity
only ostensible profits b. Doctrine of Piercing the Veil of Corporate Fiction
e. unlikelihood of sale of subsequently issued c. Doctrine of Corporate Fiction
shares at a lower price d. Alter Ego Doctrine

19. The following are some of the corporate acts that 25. A corporation can be formed for the practice of
need the vote of stockholders holding 2/3 of the law, medicine or other professions.
authorized capital stock. Which should not be included? a. True, the rights are granted explicitly under the
a. Adoption, amendment or repeal of by-laws. law
b. Amendment of articles to increase or decrease b. True, since the same right is allowed in
capital stock. partnerships
c. Incurring, creation or increase of bonded c. False, because the principle of delectus
indebtedness. personarum applies in corporation.
d. Approval of merger or consolidation. d. False, because consent of all the corporators is
necessary.
20. Statement No. I – Dividends shall be deemed e. None of the following
non-cumulative in the absence of an agreement.
Statement No. 2 – Shares without par value Choices from Question Nos. 26-31
may be issued for a consideration less than the value of a. All are true f. I is false; II and III are
P5.00 per share true
a. No.1 is true; No.2 is false b. All are false g. I/II are false; III is true
c. I is true; II/III are false h. I/III are false; II is true
b. No.1 is false; No.2 is true
d. I/II are true, III is false i. None of the above
c. Both are true e. I/III are true; II is false
d. Both are false
e. None of the above
 26. Statement No. 1 - The remedy against a c. stock dividend
corporation de jure is a quo warranto proceeding against d. scrip dividend
the said corporation to oust it from the exercise of e. liquidating dividend
corporate powers usurped by it and to have it dissolved.
Statement No. 2 - The issuance of the certificate of 33. Which of the following does not belong to the
incorporation gives the corporation the legal personality limitation of the Executive Committee?
and the authority to do business. a. filling of the vacancies in the board
Statement No. 3 - The vote of the majority of the b. the amendment or repeal of by-laws or the
outstanding capital stock is sufficient for the removal of adoption of new by-laws
the directors. B c. determination of the presence of the quorum
d. distribution of cash dividends
27. Statement No. 1 - Proxy voting is allowed in the e. amendment or repeal of any board resolution
election of the board of directors.
Statement No. 2 - Under the law, the secretary 34. Which of the following does not require the 2/3
of the corporation must be a director of the corporation. vote of the stockholders?
Statement No. 3 - Under the law, the secretary a. entering into management contracts
of the corporation must be a resident and citizen of the b. power to shorten or extend corporate term
Philippines. E c. sale or disposition of corporate assets
d. investment of corporate funds in another
28. Statement No. 1 - If the vacancy results by corporation
reason of increase in the number of directors or trustees
and the remaining directors or trustees still constitute a 35. Which of the following does not belong in the
quorum, the remaining directors or trustees can be filled enumeration?
by them. a. elimination of fractional shares
Statement No. 2 - The acts done by a disloyal b. redemption of redeemable shares
director may be ratified by the vote of the stockholders c. satisfaction of indebtedness to the corporation
owning or representing at least 2/3 of the outstanding d. payment of shares of dissenting or withdrawing
capital stock. stockholders
Statement No. 3 - In case of the abandonment of e. satisfaction of corporation’s indebtedness
the contract for the sale or disposition of all or
substantially all of the corporate assets, approval of the 36. Stikki Cement corporation (STIKKI) was
stockholders is not necessary. F organized primarily for cement manufacturing.
Anticipating substantial profits, its president proposed
29. Statement No. 1 - After the incorporation of the that STIKKI invest in (a) a power plant project, (b)
corporation, it is given one year after official notice of the concrete road project, and (c) quarry operations for
issuance of certification from SEC to make by-laws. limestone used in the manufacture of cement. What vote
Statement No. 2 - A stockholder’s indebtedness is needed if the aforementioned are reasonably necessary
to a corporation under a subscription agreement cannot to manufacture of the cement?
be compensated or set-off with the amount of his shares a. majority of the board and 2/3 vote of the
in the same corporation there being no relation of creditor outstanding capital stock
and debtor with regard to such shares. b. majority of the board of directors
Statement No. 3 - The stockholders have the c. majority of the stockholders and majority of the
power to declare dividends in case of stock dividends. H board of directors
d. majority of the stockholders
30. Statement No. 1 - Two-thirds (2/3) vote on the e. 2/3 vote of the outstanding capital
part of the board of directors is required to declare cash stock
dividends.
Statement No. 2 - The declaration of cash 37. These do not form part of the outstanding
dividends creates a debt from the corporation in favor of capital stock:
its stockholders. a. bonus shares
Statement No. 3 - A corporation can be an b. treasury shares
incorporator. F c. redeemable shares
d. founder’s shares
31. Statement No. 1 - If the shares of stock have no e. preferred shares
par value, the corporation has no authorized capital stock,
but it has capital stock, the amount of which is not 38. The distinction between subscription of shares
specified in the articles of incorporation as it cannot be from purchase of shares is that in subscription of shares:
determined until all the shares have been issued. a. it is an independent agreement between the
Statement No. 2 - No par values shares may not individual and the corporation to buy shares of stock from
be issued without being fully paid. it at a stipulated price.
Statement No. 3 - Stockholders are liable with b. it takes place before or after incorporation and
their separate property for the payment of the debts of is generally paid in installment or upon a call.
the corporation. D c. in case on insolvency of the corporation, the
subscription price cannot be enforced on the theory that
32. A writing or certificate issued to a stockholder the corporation can no longer perform its obligation to
entitling him to the payment of money or the like at some deliver the certificate of stock.
future time inasmuch as the corporation at the time of d. answer not given
such dividends are declared has profits in cash, or has no
sufficient cash, or has cash but wishes to reserve it from 39. One of the characteristics of treasury shares is
some corporate purposes. that:
a. optional dividend a. they have the status of outstanding shares
b. bond dividend b. they may not be reissued or sold again
 c. they participate neither in dividends nor in the c. Because of the power of succession, the
meetings of the corporation as voting stocks existence of the entity is not affected by the personal
d. answer not given vicissitudes of the individual shareholders.
d. the free and ready transferability of ownership
40. Watered stocks are shares of stock issued by the
corporation for a consideration less than its par or issued 48. The corporation shall be deemed dissolved and its
value or for a consideration in any form other than cash, corporate powers cease, if from the of its incorporation, it
valued in excess of its fair value. In this regard: does not formally organize and commence the transaction
a. the issue itself is void of its business
b. the agreement that it shall be paid for less than a. 4 years
its par value is illegal and void and cannot be enforced. b. 3 years
c. the subscriber or purchaser shall not be liable c. 2 years
for the full par value of the shares d. 5 years
d. answer not given
49. A representative action where a stockholder
41. An officer of a corporation may hold two or more brings an action in the name and in behalf of the
positions in the corporation but not as: corporation and any relief obtained belongs to the
a. Chairman of the Board and President corporation and not to the stockholders individually or
b. President and Treasurer collectively.
c. Secretary and Treasurer a. Individual suit
d. Vice-President and Secretary b. Derivative suit
c. Representative suit
42. The right of the corporation to exist as a juridical d. Corporate suit
person during its term as stated in its Articles of
Incorporation despite the death of any of its stockholders 50. Cash dividend as distinguished from stock
is: dividend
a. right of existence a. needs stockholders approval
b. right of redemption b. declared by the board of directors
c. right of succession c. not a taxable income
d. pre-emptive right d. results to withdrawal of assets from the
corporation
43. The nationalilty of a corporation is determined by
the place of the controlling stockholders, This test is: 51. A non-voting stock may vote in the
a. Control test following acts, except in the case of:
b. Domicile test a. approval of the compensation of directors
c. Incorporation test b. merger or consolidation
d. Management test c. increase or decrease of capital stock
d. sale, lease, exchange of all or substantially all
44. Contracts between a corporation and third of corporate property
persons must be made by or under the authority of its:
a. Board of Directors 52. Under this theory, the nationality of the
b. Stockholders corporation is that of the country under whose laws it was
c. President and chief Operating Officer formed
d. General Manager a. Control test
b. Incorporation test
45. Purely ultra vires acts of the officers of c. Corporation by estoppel
corporation to invest corporate funds in another business d. corporation by prescription
or corporation, i.e acts not contrary to law, morals, public
policy may be ratified by: 53. This is a characteristic of a stock corporation as
a. the stockholders holding two-thirds (2/3) of the distinguished from a non-stock corporation
voting power a. the powers are vested in the Board
b. majority vote of all the members of the Board b. the members can vote by mail
c. The stockholders holding one-half (1/2) of the c. it is formed by at least 5 but not more than 15
voting power persons
d. majority vote of the Board of Directors present d. it is organized for profit

46. The following are the requisites, except one for a 54. Amount equal to the aggregate par value or
valid declaration of stock dividend: issued value of the outstanding capital stock
a. existence of original and unissued shares a. Legal Capital
b. dividend declarations is made by the Board of b. Unissued capital stock
Directors and approved by 2/3 of the outstanding capital c. Outstanding capital stock
stocks d. authorized capital stock
c. it is issued to increase the authorized capital
d. existence of the unrestricted retained earnings 55. Shares without par value may not be issued for a
consideration
47. Which of the following is a disadvantage of a. less than P1 per share
forming a corporation: b. less than P5 per share
a. the shareholders are not liable for the debts of c. Outstanding capital stock
the business d. less than P100 per share
b. the subservience of minority stockholders to
the wishes of the majority subject only to equitable 56. If the remaining directors constitute a quorum,
restraints they can fill up the vacancy
 a. in case of removal of the director 64. The doctrine of corporate opportunity rests on the
b. in case of expiration of the term of director unfairness of an officer or director of a corporation taking
c. if there is an increase in the number of advantage of an opportunity for his own personal benefit
directors adverse to the corporation.
d. in case of resignation of a director The by-laws must be filed with the SEC for the
corporation to acquire juridical personality.
a. Both statements are true
57. Stock dividends differ from cash dividend in that a. Both are false.
stock dividends b. First is true, second is false
a. do not increase capital stock c. First is false, second is true.
b. involves the disbursements of corporate funds
c. require the approval of both the board of 65. The executive committee cannot act on this matter
directors and the stockholders except:
d. once received by the stockholders, are beyond a. Filling of vacancy in the board of directors
the reach of corporate directors a. Cash dividend declaration
b. Board resolution on depository bank of the
58. Rules of action adopted by the corporation for its corporation
internal government and for the government of its officers c. Stock dividend declaration
and of its stockholders or members
a. contract
66. At the annual meeting of ABC Corporation for the
b. Articles of Incorporation
election of five directors, A, B, C, D, E, F and G were
c. Ultra vires act
nominated. A, B, C, D and E received the highest
d. By-Laws
number of votes and proclaimed elected. F received ten
votes less than E. Subsequently, E sold his shares to F.
59. A stockholders’ option to subscribe to allotment of
Who between E and F has the right to attend as director
shares in proportion to his holding of outstanding shares.
in the board meeting? The transfer of shares having been
a. Voting right b. Pre-emptive right
registered with the corporation.
c. Ultra vires act d. Appraisal right
a. E is the director because his term is one year until
his successor is elected and qualified
60. For purposes of interlocking directors, the
a. F is the director for he has acquired all the shares
stockholdings shall be considered substantial if:
of E.
a. exceeding 10% of the authorized capital stock
b. Either of them shall be the director
b. exceeding 10% of the outstanding capital stock
c. Neither of them shall be the director
c. exceeding 20% of the authorized capital stock
d. exceeding 20% of the outstanding capital stock
67. S1 The merger or consolidations of corporations
61. Shares deposited by the seller or his agent with a become effective upon approval by the constituent
bank or third party to be delivered to the buyer or corporations of the plan of merger or consolidation as the
subscriber only upon the fulfillment of the stipulated case may be.
suspensive condition. S2 After the merger the absorbed corporation must
a. Promotion shares b. Founder’s shares undertake dissolution and winding-up procedures.
c. Redeemable shares d. Escrow stock a. Both statements are false
a. Both are true.
62. 73. X Corporation posted a P1M profit in its b. First is false, second is true.
realty business and its real estate has appreciated in c. First is true, second is false.
value to the tune of P4M. The board then declared
dividends to its stockholders computed on the basis of 68. The corporation has nine-member board. Two of the
representing profits and appreciation in value of its real members have sold their shares while two others are
estate. Is the dividend declaration valid? abroad. To have a quorum, the number required is:
a. Not valid because there was no approval of 2/3 of a. Seven
the outstanding capital stock. a. Five
a. Valid because it was based on profit and b. Three
increment in the value of the corporate assets. c. Four
b. Not valid because the dividends must only come
from unrestricted retained earnings
c. Valid if no creditors shall be prejudiced and 69. A director of a corporation may be removed from the
approved by the required votes of the directors and office by a vote of the stockholders holding representing:
stockholders. a. Majority of the outstanding capital stock
a. 2/3 of the stockholder
63. S1 - After dissolution but within the three-year period b. 2/3 of the OCS
of liquidation a corporation’s term may still be extended c. Majority of the stockholders
by amendment of its articles of incorporation.
S2 - The dissolution of a corporation shall take place
because it has been in continuous non-operation for 2 70. The effectivity of the Founders’ Shares.
years. a. 3 years
a. Both statements are false b. 4 years
a. Both are true. c. 5 years
b. First is false, second is true. d. 10 years
c. First is true, second is false
71. Vote in Corporations vested with public interest in
case of Self-dealing director.
a. majority of the BOD and 2/3 of OCS
b. majority of the BOD and majority of OCS
c. majority of the BOD and 2/3 of Independent
directors
d 2/3 of the BOD and majority of the independent
directors
e. Answer not given

72. Period to notify in case of election of Regular Meeting

of Stockholders.
a. At least 20 days
b. At least 21 days
c. 1 week
d. 2 weeks
e. 10 days

73. Percentage requirement to consider stockholdings

substantial
a. exceeds 10%
b. exceeds 100%
c. exceeds 20%
d. exceeds 25%
e. exceeds 30%

74. Period for Pre-Incorporation Subscription Contract

a. at least 1 month
b. at least 3 months
c. at least 6 months
d. at least 1 year

75. Period for notation of Certificate of Stock in case of

exercise of Appraisal Right
a. 20 days
b. 3 days
c. 15 days
d. 10 days
e. 30 days

76. Annual Financial Statements need not need an

independent CPA if the total assets or liabilities is –
a. below 50,0000
b. below 100,000
c. below 500,000
d. below 600,000
e. below 1 Million

77. The following are penalties imposable by SEC, except:

a. Escheat
b. Contempt
c. Dissolution
d permanent cease and desist
e. Suspension of COI

Forget all the reasons it won’t

work and believe the one reason
that it will.”

- Carpe Diem –
God is with you. Have faith!