Multiple Choice Questions (MCQ)

CORPORATION

1. The following are attributes of a corporation, except

a. It is an artificial being
b. It is created by operation of law
c. It enjoys the right of succession
d. It does not have the powers, attributes, and properties expressly authorized by law or
incident to its existence

2. As a general rule, may a corporation enter into a contract of partnership?

a. Yes, a corporation has all the power to enter into partnership.
b. No, a corporation has no power to enter into a partnership.
c. Both A and B are correct
d. None of the above

3. Karylle, Yana, Patrish, Nika and Ieano formed KAYAPANI, INC. and was issued a
certificate of registration by the appropriate government agency. It turned out,
however, that Karylle, Yana, and Nika are not residents of the Philippines. What type
of corporation is KAYAPANI, INC.?
a. De Jure Corporation
b. De Facto Corporation
c. Corporation by Estoppel
d. Corporation by Prescription

4. Shares classified as such in the articles of incorporation which may be given certain
rights and privileges not enjoyed by the owners of other stocks.
a. Redeemable shares
b. Retained shares
c. Funder’s share
d. Founder’s share

5. Corporations, which have capital stock divided into shares and are authorized to
distribute to the holders of such shares, dividends, or allotments of the surplus
profits based on the shares held.
a. Stock Corporations
b. Open Corporations
c. Non-Stock Corporations
d. Government-Owner and Controlled Corporations
6. The due incorporation of any corporation claiming to be in good faith to be a
corporation under this code.
a. De Facto Corporation
b. De Facto Partnership
c. De Jure Corp
d. De Jure Partnership

7. All persons who assume to act as a corporation knowing it to be without authority to

do so.
a. Third person
b. Corporation by estoppel
c. Estoppel
d. Corporation by third person

8. In the matter of management of the corporation, this is the supreme

a. President
b. Chairman of the board
c. Stockholders
d. Board of directors

9. The amendment of the articles of incorporation must be approved by

a. vote or written assent of all of the Board of Directors or Trustees
b. vote or written assent of majority of the Board of Directors or Trustees and vote or
written assent of the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock of the corporation
c. written assent of the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock of the corporation
d. vote or written assent of majority of the Board of Directors or Trustees and vote or
written assent of the stockholders representing at least two-thirds (1/3) of the
outstanding capital stock of the corporation

10. A. For a stock corporation, ownership of atleast 1 share capital stock of the
corporation in his own name, and if he ceases to own at least one share in his own
name, he automatically become a director.
B. Only natural persons can be elected directors/trustees. Other qualifications as
may be prescribed in the by-laws of the corporation or any other special law.
Which statement is true?
a. A is true and B is false
b. B is true and A is false
c. Both statements are true
d. Both statements are false.
11. GENERAL RULE: The corporate powers of the corporation shall be exercised, all
business conducted and all property of such corporation and held by the board of
directors or trustees.
a. True
b. False
c. Sometimes true
d. Maybe

12. A delinquent corporation shall have a period of (5) years to resume operations and
comply with all requirements that the Commission shall prescribe. Upon compliance
by the corporation, the Commission shall issue an order lifting the delinquent status.
Failure to comply with the requirements and resume operations within the period
given by the Commission shall cause the revocation of the corporation's certificate
of incorporation.
a. True
b. Sometimes True.
c. False, a delinquent corporation shall have a period of (2) years.
d. False, a delinquent corporation shall have a period of (3) years.

13. Which of the following statements is true?

Statement l: A president must be a director and of course a stockholder. Hence, a
president cannot be concurrently a treasurer or secretary.
Statement ll: Even without the authority by a majority of the board of directors, the
stockholders or members may still vote through remote communication or in
absentia: Provided that the right to vote through such modes may be exercised in
corporations vested with public interest.
a. Both statements are true
b. Only statement I is true
c. Only Statement II is true
d. Both statements are false

14. The following statements are true about election of directors/trustees, except:
a. Cumulative voting is allowed in non-stock if stated in the articles of incorporation.
b. Quorum is not required in every election.
c. No proxy shall be valid and ehective for a period longer than five (5) years at any one
time.
d. The election must be by ballot if requested by any voting member or stockholder.

15. Manner of filing. — The filing of pleadings and other court submissions shall be made
by, except:
a. Submitting personally the original thereof, plainly indicated as such, to the court
b. Sending them by registered mail
c. Sending them by accredited courier
d. None of the above
16. Validity of summons and issuance of alias summons — Summons shall remain valid
until duly served, unless it is recalled by the court. In case of loss or destruction of
summons, the court may, upon motion, issue an alias summons.
a. True
b. False
c. Partly true
d. Partly false

17. Which of the following must be indicated in the articles of incorporation?

a. Classification of shares, their corresponding rights, privileges, or restrictions and
their stated market value, if any.
b. Classification of shares, their corresponding demands, privileges, or restrictions, and
their stated market value, if any.
c. Classification of shares, their corresponding rights, privileges, or restrictions, and
their stated par value, if any.
d. Classification of shares, their corresponding rights, demands, privileges, or
restrictions.

18. How many years does the certificate of incorporation shall be deemed revoked, if a
corporation does not formally organize and commence its business?
a. Within 5 years
b. Less than 5 years
c. 2 years
d. 2-5 years

19. The following statements refers to the Corporation and Organization of Private
Corporation under Number and Qualifications of Incorporators, which of the
statements are true?
I. Any person, partnership, association or corporation, singly or jointly with other but
not more than 15 in number may organize a corporation for any lawful purpose or
purposes.
II. Any person, partnership, association or corporation, singly or jointly with other but
not more than 15 in number cannot organize a corporation for any lawful purpose or
purposes.
III. Provided that natural persons who are licensed to practice a profession, and
partnerships or associations organized for the purpose of practicing a profession,
shall not be allowed to organize as a corporation unless under special laws.
IV. Provided that natural persons who are licensed to practice a profession, and
partnerships or associations organized for the purpose of practicing a profession,
shall not be allowed to organize as a corporation unless otherwise provided under
special laws.
a. Statements II and IV
b. Statements I and III
c. Statements I and IV
d. Statements II and III

20. He is a person who is independent of management and free from any business or
other relationship which could, or could reasonably be perceived to materially
interfere with the exercise of independent judgment in carrying out the
responsibilities as a director.
a. Interlocking directors
b. Trustees
c. Independent directors
d. Executive committee

21. A person shall be disqualified from being a director, trustee, or ohicer of any
corporation if, within five (5) years prior to the election or appointment as such, the
person was convicted with the following final judgment, EXCEPT:
a. For an ohense punishable by imprisonment for a period exceeding six (6) years
b. For violation of the Revised Corporation Code
c. For violating republic act no. 8799 or otherwise known as "The Securities Regulation
Code"
d. For violating the natural laws

22. Which of the following statement is TRUE?

Statement I: Each stockholder or member shall have the right to nominate any
director or trustees who possess all of the qualifications set forth in this code.
Statement II: The Election should not be by ballot.
a. Only Statement II is False
b. Both Statement is True
c. Only Statement II is True
d. Only Statement I is False

23. Which is NOT included in the legitimate corporate purposes if a stock corporation
having the power to acquire its own shares?
a. To pay dissenting or withdrawing stockholders entitled to payment for their shares
under the provisions of this Code.
b. To eliminate fractional shares arising out of stock dividends.
c. To have perpetual existence unless the certificate of incorporation provides
otherwise.
d. To collect or compromise an indebtedness to the corporation, arising out of unpaid
subscription, in a delinquency sale, and to purchase delinquent shares sold during
said sale.
24. Statement I: Directors or trustees who cannot physically attend or vote at board
meetings can participate and vote through remote communication such as
videoconferencing, teleconferencing, or other alternative modes of communication
that allow them reasonable opportunities to participate.
Statement II: Directors and Trustees can also attend or vote by proxy at board
meetings.
a. Both statements are true.
b. Only statement I is true.
c. Only statement II is true.
d. Both statements are false.

25. In the contents of bylaws, a private corporation may provide the following, except:
a. The time, place and manner of calling and conducting regular or special meetings of
the directors and trustees.
b. Mode of notifying the stockholders or members.
c. The modes by which a stockholder, member, director, or trustee may attend meetings
and cast their votes
d. None of the above.

26. Statement I: Regular meetings of stockholders or members shall be held annually on

a date fixed in the bylaws, or if not so fixed, on any date after April 15 of every year as
determined by the board of directors or trustee.
Statement II: Provided, That written notice of regular meetings shall be sent to all
stockholders or members of record at least two (2) days prior to the meeting, unless
a diherent period is required in the bylaws, law, or regulation.
a. Both statements are true.
b. Both statements are false.
c. Only Statement I is true.
d. Only Statement II is true.

27. A director or ohicer of a corporation shall be liable to the corporation or its creditors,
solidarily with the stockholder when he:
a. Having no knowledge of the insuhicient consideration, does not file a written
objection with the Corporate secretary
b. Consents to the issuance of stocks for a consideration less than its par or issued
value
c. Consents to the issuance of stocks for a consideration other than cash, valued in
excess of its fair value.
d. Both B and C are correct

28. The following statement refers to the Interest on Unpaid Subscriptions in the Revised
Corporation Code of the Philippines.
 I: Subscribers to stocks shall be liable to the corporation for interest on all unpaid
subscriptions from the date of subscription, if so required by and at the rate of interest
fixed in the Subscription contract
II: Subscribers to stocks shall not be liable to the corporation for interest on all unpaid
subscriptions from the date of subscription, if so required by and at the rate of interest
fixed in the Subscription contract
III: If no rate of interest is fixed in the subscription contract, the prevailing legal rate
shall not apply
IV: If no rate of interest is fixed in the subscription contract, the prevailing legal rate
shall apply
Which of the following statements are true?
a. Statement I only
b. Statement Il and III
c. Statement I and IV
d. All of the statements.

29. The provisions of Republic Act No. 8293, otherwise known as the?
a. Intellectual Property Code of the Philippines
b. Data Privacy Act of 2012
c. Act Providing for the Revised Corporation Code of the Philippines
d. The Securities Regulation Code

30. The following statements refer to Appraisal Right in the Revised Corporation Code of
the Philippines.
I. Only the directors of a corporation shall have the right to dissent and demand
payment of the fair value of the shares.
II. Right of Appraisal may be exercised in case of merger or consolidation of the
corporation.
III. In case of investment of corporate funds for only the primary purpose of the
corporation, the exercise of right of appraisal may be practice.
IV. In case of sale of all or substantially all of the corporate property or assets as provided
in the Revised Corporation Code, the exercise of right of appraisal may be practice.
Which of the following statements are true?
a. Statement I
b. Statement I and III
c. Statement II and IV
d. All of the statements

31. Which of the following is the ehect of merger?

a. The constituent corporations shall become a single corporation shall be the surviving
corporation designated in the plan of merger.
b. The surviving corporation losses all rights and privileges, immunities and powers.
c. The surviving corporation undergoes dissolution due to change of relation of its
stockholders.
d. It creates a new organization where the constituent corporations unite into one
corporate body.

32. Trustees of educational institutions organized as nonstock corporations shall be:

a. The number of trustees are multiples of two (2)
b. Less than five (5) or more than fifteen (15)
c. Not less than five (5) nor more than fifteen (15)
d. Exactly fifteen (15)

33. The submission of the Articles of Incorporation of Religious Corporations are:

a. Duly certified to be correct by any notary public.
b. Must be verified, by ahidavit or ahirmation of the chief archbishop, bishop, priest,
minister, rabbi, or presiding elder.
c. Accompanied by a copy of the commission, certificate of election or letter of
appointment of such chief archbishop, bishop, priest, minister, rabbi, or presiding
elder.
d. All of the things mentioned.

34. The One Person Corporation is required to submit and file corporate by-laws.
A One Person Corporation shall indicate the letters “OPC” either below or at the end
of its corporate name.
a. True
b. First statement is true, second statement is false
c. First statement is false, second statement is true
d. False

35. Which statement is correct about agreements by stockholders

Statement I: A written agreement signed by two or more stockholders may provide
that in exercising any voting right, the share holds by them shall be voted as provide
as they agreed.
Statement II: All provision in written agreement signed by the stockholders, relating
to any phase to corporate ahairs, shall be invalidated between the parties on the
ground that its ehect is to make them partners among themselves.
Statement III: stockholders inactively engaged in the operation of the business and
ahairs of a close corporation shall be held to strict fiduciary duties to each other and
among themselves.
a. only statement I is correct
b. none of the above
c. only statements I and III are correct
d. all statements are correct
36. Trustees of educational institutions organized as nonstock corporations shall not be
less than?
a. 6
b. 4
c. 5
d. 8

37. The articles of incorporation of a close corporation may provide for:

a. Greater quorum or voting requirements in meetings of stockholders or directors than
those provided in this Code.
b. A classification of directors into one (1) or more classes, each of whom may be voted
for and elected solely by a particular class of stock.
c. A classification of shares or rights, the qualifications for owning or holding the same,
and restrictions on their transfers, subject to the provisions of the following section.
d. All of the aforementioned

38. The following statements are provided:

Statement I: Religious corporations may be incorporated by only three persons. Such
corporations may be classified into corporations sole and religious societies.
Statement II: For the purpose of administering and managing, as trustee, the ahairs,
property and temporalities of any religious denomination, sect or church, a
corporation sole may be formed by the chief archbishop, bishop, priest, minister,
rabbi, or other presiding elder of such religious denomination, sect, or church.
a. Only statement I is correct.
b. Only statement II is correct.
c. Both statements are correct.
d. None of the statements are correct.

39. The statement given;

I. That the incorporation of the religious society or religious order, diocese, synod, or
district organization is not forbidden by competent authority or by the Constitution,
rules, regulations or discipline of the religious denomination, sect, or church of which
it forms part;
II. The names, nationalities, and residence addresses of the trustees, not less than
five (5) but limited to fifteen (15), elected by the religious society or religious order, or
the diocese, synod, or district organization to serve for the first year or such other
period as may be prescribed by the laws of the religious society or religious order, or
of the diocese, synod, or district organization.
a. I and II are correct
b. Only II is correct
c. Only I is correct
d. I and II are incorrect
40. What books are required to be maintained by the secretary of a One Person
Corporation?
a. Records of Corporation’s expenditure
b. By-laws
c. Book of accounts
d. Minutes Book

41. If the dissolution of a corporation does not prejudice the rights of any creditor having
a claim against it, the dissolution may be ehected by majority vote of the board of
directors or trustees, and by a resolution adopted by the ahirmative vote of the
stockholders owning at least majority of the outstanding capital stock or majority of
the members of a meeting to be held upon the call of the directors or trustees.
a. Voluntary dissolution where creditors are ahected
b. Dissolution where no creditors are ahected
c. Dissolution by shortening corporate term
d. Involuntary dissolution

42. Statement I: The single stockholder may change its nominee and alternate nominee
at any time.
Statement II: Upon submitting the names of the new nominees and their written
consent to the Commission, the articles of incorporation need to be amended.
a. Only Statement I is correct.
b. Only Statement II is correct.
c. Both statements are correct.
d. None of the statements are correct.

43. The following are grounds for involuntary dissolution of a corporation except:
a. Continuous inoperation of a corporation
b. Upon receipt of a lawful court order dissolving the corporation
c. Use of corporate charter
d. Upon finding by final judgment that the corporation procured its incorporation
through fraud

44. I. The unauthorized use of a corporate name shall be punished with a fine ranging
from P10,000.00 to P200,000.00.
II. A corporation that conducts its business through fraud shall be punished with a
fine ranging from P200,000.00 to P 2,000,000.00.
a. Only I is True
b. Only II is True
c. Both are True
d. Both are False
45. The SEC shall have the power and authority to:
a. Exercise supervision and jurisdiction over all corporations and persons acting on
their behalf.
b. Impose sanctions for the violation of the Revised Corporation Code, its implementing
rules and orders of the SEC.
c. Promote corporate governance and the protection of minority investors, through,
among others, the issuance of rules and regulations consistent with international
best practices.
d. All of the above.

46. Whenever the Commission has reasonable basis to believe that a person has
violated, or is about to violate, this Code, rule, regulation, or order of the Commission,
it may direct such person to desist from committing the act constituting the violation.
The commission may:

a. Issue a cease and desist order ex parte to enjoin an act or practice which is fraudulent
or can be reasonably expected to cause significant, imminent, and irreparable danger
or injury to public safety or welfare.
b. Issue suspension or revocation of the certificate of incorporation.
c. Provide reasonable notice to and coordinate with the appropriate regulatory agency
prior to any such publication involving companies under their special regulatory
jurisdiction.
d. May investigate an alleged violation of this Code, rule, regulation, or order of the
Commission.

47. The term “outstanding capital stock” under the Miscellaneous Provisions of the
Revised Corporation Code 2019 is defined as.
a. The total shares of stock issued under binding subscription agreements to
subscribers or stockholders, whether or not fully or partially paid, except treasury
shares.
b. The total shares of stock issued without binding subscription agreements to
subscribers or stockholders, whether or fully or partially paid, except treasury shares.
c. The total shares of stock issued under binding subscription agreements to
subscribers or stockholders, whether fully or partially paid, except treasury shares.
d. The total shares of stock issued without binding subscription agreements to
subscribers or stockholders, whether or not fully or partially paid, except treasury
shares.

48. These statements are presented to you:

Statement I: Everything in this law shall be construed as amending existing provisions
of special laws governing the registration, regulation, monitoring and supervision of
special corporations such as banks, non-bank financial institutions and insurance
companies.
 Statement II: Notwithstanding any provision to the contrary, regulators such as the
Bangko Sentral ng Pilipinas and the Insurance Commission shall exercise the last
authority over special corporations.
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 statement II is true.

49. Which of the following statements does not belong to the process improvements
upon doing corporate activities under Section 180?
a. Developing electronic filing and monitoring system
b. Promulgating rules to facilitate submission of documents
c. Sharing of pertinent information with other government agencies
d. None of the above

50. If any provision of this Act is declared invalid or unconstitutional, other provisions
hereof which are not ahected thereby shall not continue to be in full force and ehect.
a. True
b. False
c. Sometimes True
d. Sometimes False