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CORPORATION FINAL EXAM (SUMMER 2015)MULTIPLE CHOICE. CHOOSE THE CORRECT/BEST ANSWER. WRITE THE LETTER OF YOUR CHOICE ON THE SPACE PROVIDED BEFORE THE NUMBER.______1. XY is a recreational club which was organized to operate a golf course for its members with an original authorized capital stock of P100,000,000. The articles of incorporation and by-laws did not provide for distribution of dividend although there is a provision that after its dissolution, the assets shall be given to a charitable corporation. Is XY a stock corporation?a. XY is a stock corporation because it has an authorized capital stock divided into shares of stock.b. It is not a stock corporation because the articles of incorporation and the by-laws do not provide for the distribution of dividends.c. It is a stock corporation because of the provision in the articles of incorporation that after dissolution, the assets shall be given to a charitable corporation.d. It is not a stock corporation because the purpose is to operate a golf course for its members only as a recreational club.______2. Corporation A passed a board resolution removing X as manager of the corporation. X objected to his removal by mere majority vote of the board of directors alleging that 2/3 of the outstanding capital is necessary for the removal of the manager. Decide.a. The removal of a manager requires a mere board resolution as an act of management by the board of directors.b. The removal must be with the concurrence of 2/3 of the outstanding capital stock.c. The removal by 2/3 vote of the outstanding capital stock refers only to corporate officers.d. The removal by 2/3 vote of the outstanding capital stock refers to directors but there must be cause for removal.______3. For the past three years, Corporation X has been earning tremendously in excess of 100% of the corporations paid in capital. All of the stockholders have been claiming that they share in the profits of the corporation by way of dividends but the board of directors failed to lift its finger. Is the corporation obliged to declare dividends?a. No, because the corporation can retain surplus profits in excess of 100% of its paid-up capitalb. Yes, because a corporation cannot retain surplus profits in excess of 100% of its paid-up capital always.c. Yes, because a corporation as a rule cannot retain surplus profits in excess of 100% of its paid-in capital.d. No, because it is a management prerogative of the board of directors whether or not it will declare dividends.______4. A is the registered owner of Stock Certificate No. 0007. He entrusted the possession thereof to B who borrowed the said endorsed certificate to support Bs application for passport (or for a purpose other than transfer). But B sold the certificate to X, a bona fide purchaser who relied on the endorsed certificate and believed him to be the true owner. Can A claim the shares of stocks from X?a. No, because X is an innocent purchaser for value of shares of stock evidenced by a duly endorsed stock certificate.b. No, if X has registered the sale with the corporation.c. Yes, because A did not sell the shares of stock to B and therefore the latter cannot transfer title to X.d. Yes, because the transfer of shares was not registered with the corporation and hence it is not valid even between B and X._______5. A corporation acquires juridical personality a. Upon the filing of the articles of incorporation b. Upon the filing of the by-lawsc. Upon the issuance of the certificate of incorporation d.Within 30 days from receipt of notice of the issuance of the certificate of incorporation

_______6. A delinquent stockholder is not entitled to the following rights, except the right: a. To be voted b. To vote or be represented in the meetings of stockholdersc. To dividendsd. He is not entitled to all the rights of a stockholder______7. A corporation is deemed dissolved ifa. Ceased operation for at least five yearsb. No commencement of business transactions within 2 years from issuance of certificate of incorporationc. A member of the board is convicted of an offensed. Majority of the members of the board are dead_______8. Which of the following corporate acts requires the approval of the majority of the outstanding capital stock or of the members of the private corporationa. To invest corporate funds in another corporation or business.b. To amend the articles of incorporation.c. To adopt by-lawsd. To dissolve the corporation______9. Except for one, every corporation whose character expires by its own limitation, or annulled by forfeiture or otherwise, or whose corporate existence for other purpose is terminated in any other manner shall nevertheless be continued as a body corporate for three years after the time when it would have been dissolved for the purpose of the following. The exception isa. Prosecuting and defending suits by or against it and enabling it to settle and close its affairs.b. To dispose and convey its propertyc. To distribute its assetsd. Continuing the business for which it was established______10. Where a director by virtue of his office, acquired for himself opportunity which belongs to the corporation, thereby obtaining profits to the prejudice of such corporation, must account to the latter for all such profits by refunding the same, unless his act is ratified bya. A vote at a regular or special meeting by stockholders owning or representing a majority of the outstanding capital stock.b. A vote of the stockholders owning or representing at lease one-third of the outstanding capital stockc. A unanimous vote of all the stockholders of the corporationd. A vote of the stockholders owning or representing at least two-thirds of the outstanding capital stock______11. A distribution by a corporation of shares of stock held by it in another corporation isa. Case of declaration of stock dividendb. Situation equivalent to a sale of assetsc. Situation equivalent to a merger or consolidationd. Property dividend or an actual distribution of corporate assets______12. The following are the qualifications of directors in a corporation. Choose the exception:a) Majority of the directors must be Filipino citizens.b) He must at least own one share of stock in his own name in the books of the corporation.c) Majority of the directors must be residents of the Philippines.d) He must not be convicted by final judgment of an offense with imprisonment of more than 6 years.______13. The right of the corporation to continue as a juridical entity for the term stated in the articles of incorporation despite the death of the stockholders:a) right of existencec) right of successionb) pre-emptive rightd) right of appraisal______14. The minimum requirement of the corporation to incorporate: Authorized Capital Subscribed Capital Paid In Capital a) P50,000 P10,000 P5,000 b) P16,000 P 4,000 P4,000 c) P20,000 P 5,000 P5,000 d) P48,000 P16,000 P4,000

_______15. This forms part of the outstanding shares:a) treasury sharesc) delinquent sharesb) redeemed redeemable sharesd) unissued shares______16. The voting requirement in case of incurring or increasing bonded indebtedness.a) majority of the board and majority of the outstanding capital stockb) majority of the board and 66 2/3% of the outstanding capital stockc) 2/3 majority of the board and majority of the outstanding capital stockd) 2/3 majority of the board and 2/3 of the outstanding capital stock_______17. ABC Corporation is engaged in investment of funds as shown in its primary purpose. If today, ABC Corporation decides to invest in XYZ Corporation, what is the voting requirement?a) majority of the board and majority of the outstanding capital stockb) majority of the board and 66 2/3% of the outstanding capital stockc) 2/3 majority of the board and majority of the outstanding capital stockd) 2/3 majority of the board and 2/3 majority of the outstanding capital stocke) majority of the board and none of the outstanding capital stockf) none of the board and none of the outstanding capital stock._______18. A day after the issuance of the certificate of incorporation of XYZ Inc., M, one of the directors discovered that the paid in capital was only 24% of the subscribed capital stock. Nevertheless, it organized itself and represented to the public as a corporation. What kind of corporation is XYZ Inc.?a) de jure corporation c) de facto corporationb) corporation by estoppel d) corporation by prescription______19. Define Corporation.______20. Define Watered Stocks.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxGOOD LUCKxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx