2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

BLR 221 (Business Regulations 2) Prelims

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EXAM PROPER: TRUE OR FALSE

1. A corporation is not in fact and in reality a person, but the law treats it as 1 point
though it were a person by process of fiction, or regarding it as an artificial
person distinct and separate from its individual stockholders.

TRUE

FALSE

2. Shareholders are not owners of corporate property which are owned by 1 point

the corporation.

TRUE

FALSE

3. Stockholders as a rule are not directly, individually and/or personally, 1 point

liable for the indebtedness of the corporation.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

4. A corporate debt or credit is not the debt nor credit of the stockholder 1 point
nor is the stockholder’s debt or credit.

TRUE

FALSE

5. The interest of stockholders in corporate property is purely inchoate and 1 point

will not entitle them to intervene in litigation involving corporate property.

TRUE

FALSE

6. A stock corporation is one where the ownership of the interest or equity 1 point
is represented in the form of shares of stock.

TRUE

FALSE

7. A foreign corporation is one which is organized and existing under and 1 point
by virtue of the laws of a country other than the Philippines.

TRUE

FALSE

8. Corporation by estoppel is founded on the principles of equity and is 1 point

designed to prevent injustice and unfairness.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

9. Educational corporations are organized as non-stock and non-profit 1 point

corporations.

TRUE

FALSE

10. A stockholder is liable for the obligations of the corporation only to the 1 point
extent of the amount of his subscription.

TRUE

FALSE

11. Due to financial muscle, a corporation is in a better position to attract 1 point

able and competent executives than a sole proprietorship or a partnership.

TRUE

FALSE

12. A certificate of stock is a personal property that can be pledged and/or 1 point
mortgage.

TRUE

FALSE

13. The birthday of the corporation is the date when the Securities and 1 point

Exchange Commission issues the Articles of Incorporation.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

14. Non-user of Corporate Franchise for a period of five (5) years from the 1 point
date of incorporation provides a ground for the filing of a petition for
dissolution of the said corporation.

TRUE

FALSE

15. Continuous non-operation for a period of five (5) years is a ground for 1 point
the suspension or revocation of its corporate franchise and its certificate
of incorporation.

TRUE

FALSE

16. Only a natural person can be an incorporator of a corporation. 1 point

TRUE

FALSE

17. A corporation as a natural entity cannot be made as an incorporator of 1 point

another corporation.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

18. A married woman cannot be an incorporator without the consent of the 1 point
husband, if it involves the common property under the system of absolute
community property.

TRUE

FALSE

19. Any person of legal age as long as he owns at least one share of stock is 1 point

qualified as incorporator.

TRUE

FALSE

20. The residence of the corporation is the place where any of its branch is 1 point
situated.

TRUE

FALSE

21. A corporation cannot be held liable for torts committed by its officers 1 point

for a corporate purpose.

TRUE

FALSE

22. A corporation has no right to due process. 1 point

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

23. A corporation has the constitutional right against self-incrimination. 1 point

TRUE

FALSE

24. As a rule, a corporation is entitled to moral damages. 1 point

TRUE

FALSE

25. A corporation can be made civilly and criminally liable. 1 point

TRUE

FALSE

26. A corporation, in order to acquire corporate existence, should first 1 point

adopt its By-Laws and file the same with the Securities and Exchange
Commission.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

27. In case of mortgaged or pledged shares in stock corporations, the 1 point

pledgor or mortgagor generally has the right to attend stockholders’
meetings and vote. However, the pledgee or mortgagee may be allowed to
vote if such right is expressly given in writing and recorded in the books of
the corporation.

TRUE

FALSE

28. The Board of Directors of a stock corporation may declare dividends 1 point

out of the capital stock of the corporation.

TRUE

FALSE

29. An act by the corporation which is absolutely illegal is nonetheless 1 point

capable of ratification by the corporation’s stockholders.

TRUE

FALSE

30. Mr. A appoints Cecile to attend the stockholders’ meeting of 1 point

Corporation X and vote on his behalf. The terms of the proxy state that it
shall be valid for six (6) years from the time it was executed. Thus, Cecile
can attend the shareholders’ meetings and vote for Mr. A for the entire 6
years in accordance with the authority granted her.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

31. Natural persons who are licensed to practice a profession, and 1 point

partnerships or associations organized for the purpose of practicing a

profession are allowed to organize as a corporation.

TRUE

FALSE

32. A partnership can join another partnership in order to form a 1 point

corporation.

TRUE

FALSE

33. Corporation created under the Revised Corporation Code can legally 1 point
exist for fifty years renewable for another fifty years.

TRUE

FALSE

34. Corporation which were issued a Certificate of Incorporation under BP 1 point

68 now have perpetual existence.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

35. Amendments of the Articles of Incorporation may take effect from the 1 point
date of its filing if not acted upon the Securities and Exchange Commission
within six (6) months from the date of its filing for a cause not attributable
to the corporation.

TRUE

FALSE

36. Amendment to articles of incorporation of banks needs favorable 1 point

recommendation from the Bangko Sentral ng Pilipinas.

TRUE

FALSE

37. Independent Director is necessary for corporations vested with public 1 point
interest, in which case, they shall compose at least 20% of the Board of
Directors.

TRUE

FALSE

38. Executors, administrators, guardians or other persons in a position of 1 point

trust can be elected as directors.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

39. The disposition of all the shares of the Director happened after the 1 point

election is a ground for the cessation of being a director in such

corporation.

TRUE

FALSE

40. Incorporators must be residents of the Philippines. 1 point

TRUE

FALSE

41. A SEC Commissioner will hold office for a period of seven (7) years from 1 point
the time of his or her appointment by the Chairman of the Commission.

TRUE

FALSE

42. A security issued or guaranteed by the government of any country with 1 point

which the Philippines maintains diplomatic relations is considered an

exempt security on the basis of reciprocity.

TRUE

FALSE

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2/24/22, 8:42 AM BLR 221 (Business Regulations 2) Prelims

43. A judicial sale, or sale by an executor, administrator, guardian or 1 point

receiver or trustee in insolvency or bankruptcy is considered an exempt
transaction.

TRUE

FALSE

44. The issuance of bonds or notes secured by mortgage upon real estate 1 point
or tangible personal property, when the entire mortgage together with all
the bonds or notes secured thereby are sold to multiple purchasers at a
single sale is considered an exempt transaction.

TRUE

FALSE

45. Securities shall not be sold or offered for sale or distribution within the 1 point
Philippines, without a registration statement duly filed with and approved
by the Commission

TRUE

FALSE

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