Rfbt 102 (FInals)

1. They regulate the various internal matters such as calling and conduct of meeting of
stockholders and director. A
a) By laws
b) Articles of incorporation
c) Voting trust agreement
d) All of the above
e) None of the above

2. The number of the board of trustees in a non-stock corporation. A

3. The nationality of the corporation is determined by where it was incorporated. The test is
known as: C
a) The control theory
b) The full absorption theory
c) The incorporation theory
d) The management theory
e) All of the above
f) None of the above

4. Any vacancy occurring in the board of directors or trustees other than by removal or by
expiration of term, may be filled by the vote of at least a majority of the remaining directors or
trustees if still constituting a quorum. True

5. Private corporation acquires legal personality from the date the certification is issued by the
SEC. True

6. If corporation issues stock in excess of the amount authorized by its charter or Articles of
Incorporation, the over-issued stock is valid. False

7. The articles of incorporation of a close corporation may provide that the business of the
corporation shall be managed by the stockholders of the corporation rather than by a board of
directors. True

8. Corporations are empowered to enter into a partnership with natural and juridical persons.
True

9. Domestic corporations can make reasonable donations, including those donations in aid of any
political party or candidate or for purposes of partisan political activity. True

10. A close corporation, within the meaning of this code, is one whose articles of incorporation
provides that: D
a) All the corporation’s issued stock of all classes, exclusive of treasury shares, shall be
held of record by not more than a specified number of persons, not exceeding 20.
b) All the issued stock of all classes shall be subject to one or more specified restrictions
on transfer permitted by law.
c) The corporation shall not list in any stock exchange or make any public offering of its
stocks of any class.
d) All of the above
e) None of the above

11. It refers to a certified issued by the CPA for cooperatives that complied with the mandatory
requirements. D
a) Certificate of incorporation
b) Certificate of cooperation
 c) Certificate of registration
d) Certificate of good standing
e) All of the above
f) None of the above

12. In delinquency sale. Should there be no bidder, the corporation may bid for the same, and the
title to all the shares of stock covered by the subscription shall be vested in the corporation as
treasury shares and may be disposed of by said corporation in accordance with the provision of
this code. True

13. Stock corporation shall be required to have a minimum capital stock. False

14. The following are expressed powers of a corporation except;

15. It is a person who, apart from shareholdings and fees received from the corporation is
unprejudiced of management and free form any business or other relationship which could, or
could reasonably be perceived to materiality interfere with the exercise of neutral judgment in
carrying out the responsibilities as a director. B
a) Dependent director
b) Independent director
c) Authorized director
d) Outstanding director
e) All of the above
f) None of the above

16. In a primary cooperative a quorum shall consist of at least twenty-five per centum of all the
members entitled to vote. True

17. All persons who assume to act as a corporation knowing it to be without authority to do so
shall be liable as general partners for all debts, liabilities, and damages incurred or arising as a
result of thereof. True

18. The following are the limitations on no-par value except: A

19. A cooperative may have these members, to wit. C

20. A stockholder or member who participates through remote communication or in absentia

21. Stock issued for a consideration less than the par or issued price thereof or in any other form
other than cash in excess of its fair value. C
 a) Preferred stock
b) Founder’s share
c) Watered shares
d) Optional share
e) All of the above
f) None of the above
22. A voluntary dissolution may be effected by amending the articles of incorporation to shorten
the corporate term pursuant to the provision of this Code. True
23. This is a written acknowledgement by the corporation of an interest of a stockholder in the
corporate property and franchise. C
a) Proxy
b) Share of stock
c) Certificate of stock
d) Capital stock
e) All of the above
f) None of the above
24. A foreign corporation lawfully doing business in the Philippines shall be bound by laws,
rules, and regardless applicable to domestic corporation of the same class, except those which
provide for the creation, formation, organization, or dissolution of corporations or those which
fix the relations liabilities, responsibilities, or duties of stockholders, members or officers of
corporation to each other or to the corporation. True

25. As a condition to the issuance of the license for a foreign corporation to transact business in
the Philippines such corporation shall file with the Commission a written power of attorney
designating a person who must be a resident of the Philippines, on whom summons and other
legal processes may be. True

26. Directors or trustees who willfully knowingly vote for or assent to patently unlawful act of
the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the
corporation or acquire any personal or pecuniary interest in conflict with their duty shall be
liable. C
a) As a trustee for the corporation.
b) Criminally for violation of the corporation code.
c) Jointly and severally for the damages suffered by the corporation
d) None of the above

27. Only if no payment is made on the unpaid subscription within 30 days from the date
specified in the contract or on the call, all stocks covered by the subscription shall thereupon
become delinquent. True

28. One who has agreed to take stock from the corporation on the original issue such stock is
called: D
 a) Incorporator
b) Member
c) Promoter
d) Subscriber
e) All of the above
f) None of the above

29. They may be purchased or taken up by the corporation upon the expiration of a fixed period,
regardless of the existence of unrestricted retained earnings in the books of the corporation, and
upon such other terms and conditions as must also be stated in the certificate of stock
representing said shares. C
a) Common stock
b) No par value stock
c) Redeemable shares
d) Treasury shares
e) All of the above
f) None of the above

30. Directors or trustees may receive compensation in their capacity as officers, even if not
provided for in the by-laws. True

31. Stock corporation can retaining surplus profits in excess of 100% of their paid-in capital
stock in the following cases, except: D
a) When justified by define corporate expansion projects or programs approved by the
board of directors
b) When the corporations is prohibited under any loan agreement with financial institutions
c) When it can be clearly shown that such retention is necessary under special
circumstances obtaining in the
d) None of the above

32. What is the voting proportion required to enable a corporation to invest its funds in any other
corporation or business or for any purpose other than its primary purpose? D
a) Majority of the board of directors and ratified by majority of the outstanding capital
stock.
b) Majority of the board of directors and ratified by majority of the members.
c) Majority of the board of directors and ratified by 2/3 of stockholders.
d) Majority of the board of directors and ratified by 2/3 of the outstanding capital stock.
e) None of the above

33. In a OPC, a sole shareholder claiming limited liability has the burden of affirmatively
showing that the corporation was adequately financed, otherwise the veil of corporate
identity maybe pierced by the counts. True
34. Corporations which have capital stock dividend into shares and are authorized to distribute to
the holders of such shares dividends or allotments of the surplus profits on the basis of the
shares held. B
a) Non-stock corporation
b) Stock corporation
c) Corporation aggregate
d) Corporation by prescription

35. Subscriptions to the capital stock of a corporation constitute a fund to which the creditors
have a right to look for the satisfaction of their claims. A
a) Trust fund doctrine
b) Doctrine of indivisibility
c) Doctrine of corporate opportunity
d) Incorporation doctrine
e) All of the above
f) None of the above

36. A member shall be liable for the debts of the cooperative to the extent of his contribution to
the share capital of the cooperative. True

37. Only a natural person, trust, or an estate may form a One Person Corporation. True

38. Private corporations which have accepted from the state of grant of a franchise or contract
involving the performance of a public duties is called: A
a) Quasi-public corporation
b) Quasi-corporation
c) Ecclesiastical corporation
d) Ellemosynary corporation
e) None of the above

39. The authorized capital stock of corporation is 100,000 divided into 1,000 shares with par
value of 100 each. The minimum amount of subscription that must be paid is. F
a) 8,750 or 87.5 shares
b) 5,000 or 50 shares
c) 6,250 or 62.5 shares
d) 7,500 or 75 shares
e) all of the above
f) None of the above

40. The net surplus of every cooperative shall be distributed as follows, except: E
a) Reserve fund which shall be at least ten per centum.
b) Education and training fund shall not be more than ten per centum.
c) Patronage refund
d) Dividend
e) All of the above
 f) None of the above
41. A foreign corporation without a license to transact business can still sue for violation by
Philippine residents of R.A 8293 otherwise known as the intellectual property code of the
Philippines. True
42. Involuntary dissolution of corporation is caused by, except. C
a) Legislative enactment
b) Judicial decree of forfeiture or by order of the SEC.
c) Failure to organize formally and commence the transaction of its business within 2years
from the date of incorporation.
d) All of the above
e) None of the above

43. The right of refusal shall be available to all existing stockholders. True
44. The interest or right of the owner in the management of the corporation in its surplus profits
and on dissolution, in the balance of its assets after the payment of debts is: D
a) Certificate of stock
b) Dividend
c) Legal capital
d) Share of stock
e) Option 4
f) None of the above

45. Dividends are payable to stockholders of the corporation as of the date of declaration of
dividends and not to stockholders at the time the dividends become payable. True
46. If dissolution of a corporation does not prejudice the rights of any creditor having a claim
against it, the dissolution may be affected by majority vote of the board of directors or
trustees, and by a resolution adopted by the affirmative vote of the stockholders owning at
least 2/3 of the outstanding capital stock or 2/3 of the members of a meeting to be held upon
the call of the directors or trustees. False
47. Cooperatives registered under the Philippine cooperative code may derive their capital from
any of the following sources: E
a) Member’s share capital
b) Loans and borrowings including deposits
c) Revolving capital which consists of the deferred payment of patronage refunds, or
interest on share capital
d) Subsidies, donations, legacies, grants, aids and other assistance from any local or foreign
institutions
e) All of the above
f) None of the above
48. A distribution by a corporation of shares of stock held by it in another corporation is a: D
a) Situation equivalent to a sale of assets
b) Situation equivalent to a merger consolidation
 c) Stock dividends
d) Property dividend or an actual distribution of corporate assets.
e) All of the above
f) None of the above
49. In delinquency sale of shares, who is the highest bidder? A
a) The bidder who shall offer to pay the full amount of the balance on the subscription
together with accrued interest, cost of advertisement and expenses of sale, for the
smallest number of shares or fraction of share.
b) The bidder who shall offer to pay the full amount of the balance on the subscription
together with accrued interest, cost of advertisement and expenses of sale, for the
highest number if shares or fraction of a share.
c) The bidder who shall offer to pay the highest amount for the whole subscription together
with accrued interest, cost of advertisement and expenses of sale.
d) All of the above
e) None of the above

50. Any stockholder of a corporation shall have the right to dissent and demand payment of the
fair value of his share/s in three of the following corporate acts. Which is the exception? D
a) In case of any amendment to the Article of Incorporation which has the effects of
changing or restricting the rights of any stockholder or class of shares.
b) In case of merger or consolidation
c) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all
substantially all of the corporate assets and property of the corporation.
d) In case of incurring, creating or increasing bonded indebtedness.
51. The due incorporation of any corporation claiming in good faith to be a corporation, and its
right to exercise corporate powers shall not be inquired into collaterally in any private suit to
which such corporation may be a party. D
a) Government-earned or controlled corporation
b) Quasi-public corporation
c) De jure corporation
d) De facto corporation
e) None of the above
52. A corporation that has been dissolved shall nevertheless remain as a body corporate for three
years after the effective date of dissolution, for the purpose of prosecuting and defending
suits by or against it and enabling it to settle and close its affairs, dispose and convey its
property, and distribute its assets, but not for the purpose of continuing the business for
which it was established. True
53. The pre-emptive right of stockholders in all corporation shall extend to all stock to be issued,
including reissuance of services, or in payment or corporate debts, unless the articles of
incorporation provide otherwise. False
54. Which of the following will not qualify as incorporator of a corporation? E
a) Cooperatives
 b) A married woman without the consent of her husband where the property involved in
the act of incorporation is her separate property.
c) A corporation
d) All of the above
e) None of the above

55. In case of estoppel of the other party, a foreign corporation transacting a business in the
Philippines without a license, or its successor or assigns, may be permitted to maintain or
intervene in any action, suit or proceeding in any court or administrative agency of the
Philippines. True
56. No foreign corporation transacting business in the Philippines without license or successor or
assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines; but such corporation may be sued or
proceeded against before the Philippine courts or administrative tribunals on any valid cause
of action recognized under Philippine laws. True
57. No delinquent stock shall be voted. True
58. Cooperative directors shall be elected for a term of two year among the holders of stocks
registered in the corporation’s books. True
59. The following are the qualifications of a board of directors/trustees except a: B
a) For a stock corporation, ownership of at least 1 share of the capital stock of the
corporation in his own
b) Majority of the board of directors or trustees must be citizens of the Philippines.
c) The director or trustees must be capacitated.
d) The director or trustees must be of legal age
e) All of the above
f) None of the above

60. When preferred shares are issued by a corporation with a fixed annual interest on the face
thereof the effect is: B
a) The contract of subscription between the corporation and stockholders subsists.
b) The stockholder is a plain investor who may rise or fall with the financial success or
failure of the corporation.
c) The stockholder is a creditor of the corporation.
d) The shares of stocks are negotiable instruments under the negotiable instrument law
e) All of the above
f) None of the above
61. In a close corporation, the restriction in the transfer of shares shall not more onerous than
granting the existing stockholders or the corporation the option to purchase the shares of the
transferring stockholder may sell their shares to any third person. True
62. A partnership or a corporation can be an incorporator of another corporation. True
63. In filing in vacancy in the corporate board, the remaining directors constituting can fill the
vacancy caused by: C
 a) Removal
b) Expiration of term
c) Death or resignation
d) Increase in the number of directors or trustees
e) None of the above
64. No share of stock shall be issued to a subscriber until the full amount of subscription together
with interest and expenses (in case of delinquent shares), if any is due, has been paid. False
65. The right given to stockholders to dissent and demand payment of the fair value of their
shares is called: B
a) Right of proxy
b) Appraisal right
c) Registrar
d) Stock right
e) None of the above
66. The general assembly shall be the highest policy-making body of the cooperative and shall
exercise such powers as are stated under the law in the articles of cooperation and in the by
laws of the cooperative. True
67. Voting requirement for the amendment of by-laws of a corporation: C
a) 2/3 of the outstanding capital stock
b) Majority of the board of directors.
c) Majority of the board of directors consented by 2/3 of the outstanding capital stock.
d) Majority of the board of directors consented by majority of the stockholders.

68. Any corporation may be incorporated as a close corporation including mining or oil
companies, stock exchanges, banks, insurance companies, public utilities, educational
institutions and corporations declared to be vested with public interest. False
69. Management of a corporation may be delegated to an executive committee, composed of not
less than 3 members of the board to be appointed by the board provided the creation of such
executive committee is provided for in the by-laws. True
70. When there is an impairment of the value of a stockholder’s share by reason of
mismanagement or wrongful acts directors or third parties, his remedy, as rule, is by: D
a) Pooling agreement
b) Individual right of action
c) Voting trust agreement
d) A derivative or representative suit

71. Amendments of the articles of incorporation can take effect even without the approval of the
securities and exchange commission. False
72. A foreign corporation shall have the right to transact business in the Philippines after
obtaining a license for that purpose. True
73. The factor for the application of the doctrine of piercing the corporate veil are the following
except: C
 a) Stock ownership by one or common ownership of both corporations.
b) Identity of directors and officers.
c) The manner of keeping corporate books and records
d) Identity of the stockholders
e) All of the above
f) None of the above

74. In the absence of any provision in the by-laws fixing their compensation, the directors shall
receive reasonable per diems. True
75. The principle of reciprocity applies in determining whether a foreign corporation can transact
business in our country. True
76. The roman catholic church is an example of a? D
a) Non-stock corporation
b) Stock corporation
c) Corporation aggregate
d) Corporation by prescription
e) All of the above
f) None of the above

77. Stockholders or members meetings whether regular or special shall be held in the principal
office of the corporation as set forth in the articles of incorporation. True
78. Right of the corporation to continue as juridical entity for the period stated in the articles of
incorporation despite the death of any stockholder. A
a) Right of succession
b) Right of pre-emption
c) Right of existence
d) None of the above

79. It is artificial being created by operation of law, having the right of succession and the
powers, attributes and properties expressly authorized by the law or incidental to its
existence. B
a) Sole proprietorship
b) Corporation
c) Corporation sole
d) Partnership
e) All of the above
f) None of the above
80. Removal a corporate board may be with or without cause. True
81. A contract of the corporation with one or more of its directors or trustees or officers. A
a) Doctrine of self-dealing board of directors
b) Doctrine of corporate opportunity
c) Doctrine of double compensation
d) Doctrine of trust fund
e) All of the above
 f) None of the above
82. No certificate of stock shall be issued to a subscriber until the full amount of subscription
together with interest and expenses (in case of delinquent shares) if any is due, has been
paid. True
83. One of which has exercised corporate powers for an indefinite period without interfere on the
part of the government. C
a) Foreign corporation
b) Domestic corporation
c) Corporation by prescription
d) Corporation by estoppel
84. Directors or trustees who cannot physically attend or vote at board meetings can participate
and vote through remote communication. True\
85. Refers to an equitable right of stockholders to subscribe to newly issued shares of the
corporation in proportion to their present shares in the order to maintain their equity in their
surplus as well a proportionate standing in the corporation. C
a) Right of redemption
b) Right to be sued
c) Pre-emptive right
d) Concept of corporate entity

86. Each share shall be equal in all respects to every other share except as otherwise provided in
the articles of incorporation and stated in the certificate of stock. C
a) Doctrine of indivisibility of shares
b) Doctrine of divisibility of shares
c) Doctrine of equality of shares
d) Doctrine f corporate opportunity
e) All of the above
f) None of the above
87. Each member of a primary cooperative shall have only one vote, regardless of his share
ownership. True
88. Trustees of educational institutions organized as nonstock corporations shall either be five,
ten, fifteen. True
89. Subscribers to stock shall be liable to the corporation for interest on all unpaid subscriptions
from the date if subscription without need of demand. True
90. Are shares of stock which have been issued and fully paid for, but subsequently reacquired
by the issuing corporation by purchase, redemption, donation or through some other lawful
means.
a) Redeemable shares
b) Founder’s share
c) Convertible shares
d) Treasury shares
e) All of the above
 f) None of the above
91. Dividends are declared by stockholders. False
92. Stockholdings of 20% of the outstanding capital stock shall be considered substantial for
purposes of interlocking directors. False
93. Rights that are attached to owners of shares such as the right to dividends, the right to vote at
meetings and right to inspect corporate books: A
a) Stockholder’s right
b) Director’s right
c) Promoter’s right
d) All of the above
e) None of the above
94. A corporation created in strict or substantial conformity with the mandatory statutory
requirements for incorporation and the right of which to exist as a corporation cannot be
successfully attacked or questioned by any party even in a direct proceeding for the purpose
by the state. C
a) Government-earned or controlled corporation
b) Quasi-public corporation
c) De jure corporation
d) De facto corporation
e) None of the above