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Module 4, Activity 2

The document consists of a series of questions related to corporation law, covering topics such as express powers of corporations, valid by-laws, subscription and paid-up capital requirements, and qualifications of incorporators. It includes multiple-choice questions that test knowledge on issued and outstanding capital stock, election of directors, and the organization of corporate officers. The questions are designed to assess understanding of legal principles governing corporations.

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8 views4 pages

Module 4, Activity 2

The document consists of a series of questions related to corporation law, covering topics such as express powers of corporations, valid by-laws, subscription and paid-up capital requirements, and qualifications of incorporators. It includes multiple-choice questions that test knowledge on issued and outstanding capital stock, election of directors, and the organization of corporate officers. The questions are designed to assess understanding of legal principles governing corporations.

Uploaded by

San San
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CORPORATION LAW

Activity 2

Write the letter of your answer on the space provided.

_______1. the following statements pertain to the express powers of a corporation.

I. a corporation may establish pension, retirement, and other plans for the benefit of its
directors, trustees, officers and employees.

II. A corporation may make donations for the benefit of a political party or candidate or
for purposes of a partisan political activity provided the donations are reasonable.

A. both statements are true

B. both statements are false

C. statement I is true; statement II is false

D. statement I is false; statement II is true

_______2. which of the following by laws is valid?

A. a by-law provides that one need be the owner of a share of stock to become a
director of the corporation.

B. a by-law which provides that one must be the owner of more than one share of stock
of the corporation to become a director.

C. a by-law which provides that one can continue to be a director throughout his term
although he has disposed all his shares in the corporation.

D. a by-law which provides a greater number of directors than that stated in the articles
of incorporation.

_______3. which of the following subscription does not comply with the subscription and paid-up
capital requirements at the time of incorporation?

Authorized Subscribed Paid-up

A. P1,000,000.00 P250,000.00 P 62,500.00

B. P300,000.00 P 75,000.00 P 50,000.00

C. P100,000.00 P100,000.00 P 100,000.00

D. P50,000.00 P12,500.00 P 3,125.00


CORPORATION LAW
Items 4, 5, 6 are based on the following information:

The articles of incorporation of ABC Corporation provide, among other matters, for an
authorized capital stock of P1,000,000.00 divided into 10,000 shares at P100.00 par value
per share. 5000 shares have been subscribed at P100.00 per share of which 3,000 shares
have been paid in full while 2,000 shares have been paid at 80% of the subscription
price. Of the 3,000 shares paid in full, 100 shares were reacquired at par value.

_______4. the issued capital stock of the corporation is:

A. P360,000.00

B. P500,000.00

C. P300,000.00

D. P290,000.00

_______5. the outstanding capital stock of the corporation is:

A. P 1,000,000.00

B. P500,000.00

C. P490,000.00

D. P290,000.00

________6. the subscribed capital stock of the corporation is:

A. P500,000.00

B. P490,000.00

C. P190,000.00

D. P200,000.00

________7. how many shares are needed to elect 3 directors and assure each of them a seat in
the board of directors assuming that the articles of incorporation provide for 11 directors
and the corporation has 5,000 shares outstanding and entitle to vote?

A. 1251 shares

B. 5,000 shares

C. 1667 shares

D. 1364 shares
CORPORATION LAW
_______8. which of the following is not a qualification of incorporators of a stock corporation?

A. they must be natural person.

B. they must be of legal age.

C. majority of them must be citizens of the Philippines.

D. they must be subscribers to at least 1 share of stock of the corporation.

________9. which of the following statements pertaining to the purpose or purposes of a stock
corporation is incorrect?

A. a stock corporation may have more than one purpose.

B. the purposes, if there are several, must be susceptible of being lawfully combined.

C. the primary purpose and the secondary purposes may be stated together as one
purpose in the articles of incorporation.

D. the purposes must be lawful.

_______10. these equations are presented to you:

I. A + B = A

II. A + B = X

What do the above equations represent?

A. I, merger; II, consolidation

B. I, consolidation; II, merger

C. both equations represent merger

D. both equations represent consolidation.

_______11. Green Livelihood Projects, Inc. is a non stock, non profit corporation whose articles of
incorporation provide for 9 trustees with staggered terms. The trustees first elected and
their respective terms of office are: Afable, Bernabe and Calimag, 3 years; Dayag. Estacio
and Formeloza, 2 years; and Gesmundo, Hilacan and Ibero, 1 year. After 1 year, Jalmasco,
Kintanar and Lopez were elected to replace, Gesmundo, Hilacan and Iberp whose terms
expired. What is the term of office of Jalmasco, Kintanar and Lopez?

A. one year B. two years

C. Three years D. five years


CORPORATION LAW
______12. refer to the preceding number. Assume that Afable resigned after one year and three
months in office and Modena was elected to replace him. What is the term of office of
Modena?

A. one year

B. one year and nine months

C. one year and three months

D. three years

_______13. these statements concerning the number of trustees of a non-stock corporation at


the time of its incorporation are presented to you:

I. the number of trustees may be more than 15.

II. The number of trustees may be less than 5.

In your evaluation of the foregoing statements:

A. both I and II are correct

B. both I and II are incorrect

C. I is correct. II is incorrect

D. I is incorrect. II is correct.

________14. immediately after their election, the directors must formally organize by the election
of the following officers, except:

A. President

B. Vice President

C. Treasurer

D. Corporate Secretary

________15. the president of a corporation may at the same time be the:

A. Treasurer

B. Corporate Secretary

C. Chairman of the Board of Directors

D. None of the foregoing

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