1.

Articles of universal partnership, entered into without specification of its nature,

constitute a universal partnership of all present property.

Answer: False

2. The _____ is the lead government agency for the promotion of sustained growth and full
development of the Philippines cooperatives for them to become broad - based
instruments of social justice, equity and balanced national progress.

Try: Cooperative Development Authority

3. Any person, partnership, association or corporation, singly or jointly with others

but not more than ten (10) in number, may organize a corporation for any lawful
purpose or purposes.
Answer: False

4. Presentment for payment is not required in order to charge the drawer where he has no
right to expect or require that the drawee or acceptor will pay the instrument.
- True
- False

5. 1st: A corporation formed or organized in the Philippines may be dissolved voluntarily

only.

2nd: No application for dissolution of banks, banking and quasi-banking institutions shall
be approved unless accompanied by a favorable recommendation of Bangko Sentral ng
Pilipinas.

Try: 1st statement is false, 2nd statement is true

6. There is no partnership formed when a loan was obtained to purchase a venture under
the condition that the lender would receive part of the profits of the business in lieu of
interest
Answer: True

7. A private corporation commences its corporate existence and juridical personality

from the date the SEC issues the _______
Answer: certificate of incorporation

8. The following are considered "fiduciary duties/obligations" of a partner:

Answer: - for damages caused to the business

- full accounting to the partnership for partnership transactions
- capitalist partners cannot engage for their own account in similar partnership business
- industrialist partner cannot engage in any form of business

9. Membership in a non-stock corporation and all rights arising therefrom are ____ and
nontransferable, unless the articles of incorporation or the bylaws otherwise provide
Answer: personal

10. When an instrument provides for the payment of interest without specifying the date from
which the interest is to run, the interest runs from the date of the instrument.
- True

11. The _____ of a negotiable instrument, by making it, engages that he will pay it according
to its tenor, and admits the existence of the payee and his then capacity to indorse.
- Maker

12. A warehouse receipt is a ______ contract which imports that goods are in the hands of a
warehouseman and is a symbolical representation of the property itself.

- Bilateral

13. An instrument which is not dated will be considered dated as at the time of:
-negotiation
-acceptance
-issuance
-first indorsement
-last indorsement

14. Common property in a universal partnership:

ANSWER: All present property all profits that they may acquired therewith

15. A corporation formed or organized under the Philippine laws may be dissolved
voluntarily or involuntarily.

Response:True

16. Securities shall not be sold or offered for sale or distribution within the Philippines,
without a _____ statement duly filed with and approved by the SEC.

Response: registration
17. Mark makes a note payable to the order of Pia in the amount of P200,000. Pia indorses
the note to ALbert as follow:
“Pay to Albert if he passes the 2014 Bar Examination.”
- Mark cannot be compelled to pay even if the condition is fulfilled because the conditional
indorsement renders the instrument non-negotiable
- Mark may pay Albert even if the condition has not been fulfilled but ALbertt has to hold
the proceeds subject to the rights of Pia.
- Mark must wait for the condition to be fulfilled before he can pay Albert
- Mark may pay Albert even if the condition has not been fulfilled. The fulfillment of the
condition becomes immaterial and ALbert becomes the absolute owner of the proceeds
of the note
- No answer

18. Three of the following do not prove the existence of a valid partnership. Whis is the
exception:

Answer: there is the intention of dividing the profits among themselves

19. The partners shall have no share in the profits of an illegal partnership. The same shall
be confiscated on favor of the State.
- Answer: True

20. The following can be applied to this situation:

"The stipulation in the articles of partnership that the two managing partners may
contract and sign in the name of the partnership with the consent of the other"

- creates an obligation between the two partners, which consists in asking the other's
consent before contracting for the partnership
- This provision not imposed upon a third person who contracts with the partnership
- It is not necessary for the third person to ascertain if the managing partner with whom he
contracts has previously obtained the consent of the other managing partner.
- A third person may and has a right to presume that the partner with whom he contracts
has, in the ordinary and natural course of business, the consent of co-partner.

21. A corporation formed for the same purpose as corporation sole. It consists of 2 or more
persons.
- corporation aggregate
- non-stock corporation
- Close corporation
- no appropriate answer
- corporation de facto
22. An impartial person who is neither a stockholder nor a creditor of the corporation or of
any subsidiary or affiliate of the corporation, and whose further qualifications, if any,
may be determined by the Securities and Exchange Commission.

Response: Provisional director

23. 1st: Membership shall be terminated in the manner and for the causes provided in the
articles of incorporation or the by-laws

2nd: Termination of membership shall have the effect of extinguishing all rights of a
member in the corporation or in its property, unless otherwise provided in the articles of
incorporation or the by-laws.
- 1st statement is false. 2nd statement is true
- both statements are false
- both statements are true
- 1st statement is true. 2nd statement is false

24. How may a non-negotiable document of title be transferred?

- By delivery
- By assignment
- No appropriate answer
- By delivery and endorsement
- By endorsement

25. The omission of any essential terms of a warehouse receipt under Sec. 2 of the law shall
affect the validity as well as negotiability of the document.
- False

26. Where the name of the payee does not purport to be the name of any person, the
instrument is payable to bearer.
- True

27. A document of title (particularly a warehouse receipt) is deemed non-negotiable when it

states that the goods received will be _______ to the depositor or to any other specified
person.
- delivered

28. Mining or oil companies, stock exchanges, banks, insurance companies, public utilities,
educational institutions and corporations declared to be vested with public interest may
be incorporated as stock corporations with no par value shares.

Response: False
 29. Which of the following is a valid address to a drawee so as to make the instrument
negotiable?
- To Walter Wigbert and Wilfred Wong

30. Mining or oil companies, stock exchanges, banks, insurance companies, public utilities,
educational institutions and corporations declared to be vested with public interest may
be incorporated as stock and close corporations.

Response:False

31. When a single stockholder acquires all the stocks of an ordinary stock corporation, the
latter may apply for conversion into a _______ Corporation.
- One Person

32. Each notice of meeting shall be accompanied by the following:

Response: The agenda for the meeting

Response: A proxy form which shall be submitted to the corporate secretary within a reasonable
time prior to the meeting

Response: the requirements and procedures to be followed when a stockholder or member elects
either option is remote communication or in absentia

33. A corporation formed by the chief archbishop, bishop, priest, minister, rabbi, or other
presiding elder of such religious denomination, sect, or church for the purpose of
administering and managing, as trustee, the affairs, property and temporalities of any
religious denomination, sect or church.

Response: corporation sole

34. Religious corporations may be incorporated only by one (1) person, called as
corporations sole.

Response:False

35. Match the following types of cooperatives:

Response: Credit Cooperative => Promotes and undertakes savings and lending services among
its members. It generates a common pool of funds in order to provide financial assistance to its
members for productive and provident purposes.

Response: Service Cooperative => Engages in medical and dental care, hospitalization,
transportation, insurance, housing, labor, electric light and power, communication, professional
and other services.

Response: Multipurpose Cooperative => Combines two or more of the business activities of
these different types of cooperatives.

Response: Cooperative Bank => Organized for the primary purpose of providing a wide range of
financial services to cooperatives and their members.

Response: Electric Cooperative => Organized for the primary purposed of undertaking power
generations, utilizing renewable energy sources, including hybrid systems, acquisition and
operation of subtransmission or distribution to its household members.

36. If the total assets or total liabilities of the corporation are less than five hundred thousand
pesos (₱500,000.00), or such other amount as may be determined appropriate by the
Department of Finance, the financial statements may be certified under oath by the
treasurer and the president.

Response:False

37. When a signature is forged or made without the authority of the person whose signature
it purports to be, it is _____, and no right to retain the instrument, or to give a ______ to
enforce payment thereof against any party thereto therefor, or
- Wholly inoperative
- discharge

38. The drawer may insert in the instrument an express stipulation negativing or limiting his
own liability to the holder.
- True

39. The sole ground by which a warehouseman loses his lien upon the goods is by
surrendering possession thereof
- False

40. When the electronic commerce law was passed in June 2000 under
Republic Act 8792, its objectives were to
 Response: facilitate domestic and international transactions, contracts and
exchanges

Response: storage of information through the utilization of electronic,

optical and similar medium, mode, instrumentality and technology

Response: recognize the authenticity and reliability of electronic

documents related to such activities and to promote the universal use of
electronic transaction in the government and general public

41. “I promise to pay Paolo or his order the sum of P 10,000,000 30 days after the death of
Mr. Williams”. This is an instrument payable:
- No answer
- On demand
- At an indefinite time hence no negotiable
- At a determinable future time
- Upon the fulfillment of a condition
42. In the Philippines, the business activities that do not allow foreign ownership-

Response: Mass Media

Response: Practice of professions

Response: Retail trade enterprise

Response: Private Security Agencies

43. An exclusive agent to develop a parcel of land who is entitled to receive a 20%
commission on the gross sales may claim to be a partner to the venture on the basis that
he had made personal advances for the expenses in the development/administration of
property, even such amounts were never considered as contributions in the business.
Answer: False

44. A universal partnership has for its object determinate things, their use or fruits, or
specific undertaking, or the exercise of a profession or vocation.

Answer: False

45. For his protection, the warehouseman must bring a complaint in ______ and require the
different claimants to ligitate among themselves.
- interpleader
 46. Under the law, these are exempted securities from registration with the SEC:

Foreign Government Bonds

Fixed Rate Treasury Notes

Treasury Bills

Retail Treasury Bonds

47. The charges included in a warehouseman’s lien:

Response: All lawful charges for storage and preservation of the goods

Response: All lawful claims for money advanced, interest, insurance,

transportation, labor, weighing, coopering and other charges and expenses
in relation to the goods

Response: All reasonable charges and expenses for notice and

advertisements of the sale, and for the sale of the goods where default had
been made in satisfying the warehouseman’s lien

48. 1st: The One Person Corporation shall appoint a treasurer, corporate secretary, and other
officers as it may deem necessary.

2nd: The single stockholder may be appointed as the corporate secretary.

Try: 1st statement is true, 2nd statement is false

49. 1st: A corporation sole may purchase and hold real estate and personal property for its
church, charitable, benevolent, or educational purposes, and may receive bequests or gifts
for such purposes.

2nd: Such corporation may sell or mortgage real property held by it by obtaining an order
for that purpose from the Municipal Trial Court of the province where the property is
situated.

Try: 1st statement is true, 2nd statement is false

 50. During the three (3) year period after the effective date of dissolution when the
corporation is still considered a body corporate, the concerned corporation may:

Response: prosecute and defend suits or pending cases by or against it

Response: enable the corporation to settle and close its affairs

Response: dispose of and convey its property

Response: distribute its assets

51. Each notice of meeting shall be accompanied by the following:

Response: The agenda for the meeting

Response: A proxy form which shall be submitted to the corporate secretary within a reasonable
time prior to the meeting

Response: the requirements and procedures to be followed when a stockholder or member elects
either option is remote communication or in absentia

52. In a universal partnership of all present property, a stipulation for the common
enjoyment of any other profits may also be made: but the property which the partners
may acquire subsequently by ______, _______, or _______ cannot be included in such
stipulation except the fruits thereof

ANSWER: Inheritance, Legacy, Donation

53. Where the investment by the corporation is reasonably necessary to accomplish its
primary purpose stated in the articles of incorporation, the approval of the stockholders
or members shall still be necessary with ⅔ vote of the outstanding capital stock.
- False
54. In 2009, Juan Jimenez was found to be administrative liable for fraud by the SEC, being
the President of J and J Corporation. in 2019, J and J shall elect its new set of directors.
Juan Jimenez is disqualified to be elected in view of his 2009 case on fraud.

Response: False
 55. Non-stock corporations are those which have capital stock divided into shares and are
authorized to distribute to the holders of such shares, dividends, or allotments ofw the
surplus profits on the basis of the shares held.

Response:False

56. Only natural persons not more than fifteen (15) in number, may organize a corporation
for any lawful purpose or purposes, except those persons who are licensed to practice a
profession.
- False
57. A _____ corporation shall have a period of two (2) years to resume operations and
comply with all requirements that the Commission shall prescribe.

Response: Delinquent

58. When a negotiable instrument has been dishonored by non-acceptance or non-payment,

notice of dishonor must be given to the ____ and to each ____.
- Drawer
- Indorser

59. A _____ document of title is a document used in the ordinary course of

business in the sale or transfer of goods as proof of possession or control
of the goods, or authorizing or purporting to authorize the possessor to
transfer or receive either by endorsement or delivery, goods represented
by such document.

Response: negotiable

60. 1st: In stock corporations, shareholders may generally transfer their shares.

2nd: Membership in and all rights arising from a non-stock corporation are transferable.

Response: 1st statement is true, 2nd statement is false

61. any profit which a non-stock corporation may obtain incidental to its operations shall,
whenever necessary or proper, be used for the furtherance of the purpose or purposes for
which the corporation was organized.

Response:True

62. The Electronic Commerce Law in the Philippines applies to

 Response: electronic data message

Response: electronic document used in the context of commercial

activities

Response: electronic document used in the context of non-commercial

activities

Response: domestic and international transactions, contracts and

exchanges and storage of information

63. 1st: Trustees of educational institutions organized as nonstock corporations shall not be
less than 5 nor more than 10.

2nd: The number of trustees of educational institutions organized as nonstock

corporations shall be in multiples of 5.

1st statement is true, 2nd statement is false

64. The feature and function of a negotiable document of title

Response: serve as a contract

Response: serve as receipt of goods

Response: operate as transferable documents of title to the goods they

describe

Response: serve as substitute for money

Score: 0.5 out of 1

TRY: Serve as a contract
Serve as receipt of goods/ Serves as substitute for Money

65. Where there are several persons, not partners, primarily liable on the instrument and no
place of payment is specified, presentment must be made to them all
- True

66. The warranties of a transferor of a negotiable document of tile:

 Response: the document is genuine

Response: he has knowledge of no fact which would impair the validity or

worth of the document

Response: the goods are merchantable or fit for a particular purpose,

whenever such warranties would have been implied if the contract of the
parties had been to transfer without a document of title the goods
represented thereby

Score: 0.66/1
Try:- the document is genuine

- he has knowledge of no fact which would impair the validity or worth of the
document

67. 1st: The owner of the document of title is the sole person who may
negotiate a document of title.

2nd: Endorsers of a Negotiable Document of Title make any warranties.

Response: both statements are false

68. The rights of a person to whom a negotiable document of title was duly
negotiated:

Response: He acquires such title to the goods as the person negotiating the
document to him had or had ability to convey

Response: The direct obligation of the bailee issuing the document to hold
possession of the goods for him as if such bailee had contracted directly with him

Response: Become as judgement creditor

Response: Obligations are considered due even without demand

 69. In the case of fungible goods, the warehouseman may mingle them with the goods of the
same kind and grade provided that he is authorized by agreement or custom.
- True

70. 1st: A member shall be liable for the debts of the cooperative to the extent of his contribution
to the share capital of the cooperative.

2nd: The death or insanity of a member in a primary cooperative, and the insolvency or
dissolution of a member in a secondary or tertiary cooperative may be considered valid grounds
for termination of membership.

Response: both statements are true

70. The articles of incorporation of a close corporation may provide, except for:

Response: A lesser quorum or voting requirements in meetings of stockholders or directors

71. 1st: If goods were released because of a court order, the warehouseman is
free from all liability.

2nd: If goods were released because of a court order, the warehouseman

is not free from all liability as he is still liable to a person to whom the
negotiable receipt has been or shall be negotiated for value without notice
of the proceedings or of the delivery of the goods.

Response: 1st statement is true, 2nd statement is false

Both statements are false

Both statement are true

1st statement is false, 2nd is true

72. Stock corporations may issue no-par value shares except:

Response: banks

Response: preneed companies

Response: loan associations

 73. The document of a cooperative that will show strategic operational studies: economic
aspect, financial aspect, technical aspect as well as organizational structure.

Try: economic survey

74. A bill of exchange which is addressed to 2 or more drawees alternatively

does not affect the negotiable character of an instrument.

- FALSE

75. The SEC considers continuous inoperation as a ground for corporate delinquency if
corporation has commenced its business but subsequently becomes inoperative for a
period of at least

Try: 5 consecutive years

77. The classification of shares, their corresponding rights, privileges, or restrictions, and their
stated par value, if any, must be indicated in the articles of incorporation and in the by-laws.

Response: False

78. The Executive Management Committee may act, by majority vote of all its members, on such
specific matters within the competence of the board, as may be delegated to it in the by-laws or
by majority vote of the board, which include distribution of cash dividends to the shareholders.

Response: False

79. In the case of a voting trust specifically required as a condition in a loan agreement, said
voting trust may be for a period exceeding five (5) years but shall automatically expire upon full
payment of the loan.
- True
- False

80. Robert signs a check amounting to P50,000 but which is blank as to the name of the payee.
He keeps the check in his drawer, but Shiela, his secretary, steals it, places her name as payee
on the blank, and negotiates it to Andrew, Andrew to Brian, Brian to Charlie, and Charlie to
Howard.. Andrew, Brian and Charlie have no knowledge of the theft of the check and its
unauthorized completion by Shiela.
Based on the foregoing, which of the following statements is incorrect?
- Howard may not enforce of the check against Robert, whether Howard is a
holder in due course or not
81. I. An instrument originally payable to order may be converted into a bearer instrument.
II. An instrument originally payable to bearer may be converted into an order instrument.
- Statement I is true; Statement II is false.

82. 1st: A cooperative to be registered must show at least 25% of the authorized share capital has
been subscribed and at least 5% of the total subscription has been paid.

2nd: A cooperative shall have paid-up share capital be less than P15,000.00.

Response: 1st statement is false, 2nd statement is true

83. When there is a conflict between the written and printed provisions of an
instrument, the printed provisions will prevail.
- FALSE

84. The Articles of Incorporation of a Religious Society shall set forth the following, except:

At least majority of its membership has given written consent or has voted to incorporate, at duly
convened meeting of the body

85. An order instrument becomes a bearer of instrument if one of several indorsements is an

indorsement in blank
- FALSE

86. As a rule, no delinquent stock shall be voted for, be entitled to vote, or be represented at any
stockholder’s meeting, nor shall the holder thereof be entitled to any of the rights of a
stockholder, including the right to dividends.

Response:False

87. Presentment for payment is not excused when the drawee is a fictitious
person. Response: False

88. Where an instrument is payable to the order of a "fictitious person", the

instrument is still payable to bearer although such person is actually existing as
long as he was not the intended recipient of the payment.

Response: True

89. Only two (2) corporations are allowed by law to merge into a single corporation which shall
be one of the constituent corporations or may consolidate into a new single corporation which
shall be the consolidated corporation.
 - False

90. Cooperative category where the members are primary cooperatives/primaries:

Try: primary cooperative

91. When induced to sign a note for the price of a worthless stock which was fraudulently
represented by the payee as to its value, this is an example of _____.
- Fraud in inducement

92. _______ is a situation in a corporation that the directors or stockholders are so divided on
the management of the corporation's business and affairs that the votes required for a corporate
action cannot be obtained.

- Deadlock

93. I. When the incapacity of the single stockholder is temporary, the nominee shall sit as
director and manage the affairs of the One Person Corporation until the stockholder, by self
determination, regains the capacity to assume such duties.

II. In case of death or permanent incapacity of the single stockholder, the nominee shall sit as
director and manage the affairs of the One Person Corporation until the legal heirs of the single
stockholder have been lawfully determined, and the heirs have designated one of them or have
agreed that the estate shall be the single stockholder of the One Person Corporation.

III. The alternate nominee shall sit as director and manage the One Person Corporation in case of
the nominee’s inability, incapacity, death, or refusal to discharge the functions as director and
manager of the corporation, and only for the same term and under the same conditions applicable
to the nominee.

Response: I, II and III are true

94. A private corporation may provide the following in the by-laws:

Response: The time, place and manner of calling and conducting regular or special meetings of
the directors or trustees

Response: The time and manner of calling and conducting regular or special meetings and mode
of notifying the stockholders or members thereof

Response: The required quorum in meetings of stockholders or members and the manner of
voting therein

Response: the manner of issuing stock certificates

Response: An arbitration agreement

95. Signing under a belief as a witness to a deed or that a signature was procured by fraudulent
use of carbon paper are examples of _____.
- Fraud in factum

96. In addition to the functions designated by the One Person Corporation, the corporate
secretary shall:
- call the nominee or alternate nominee and the known legal heirs to a meeting and advise
the legal heirs with regard to, among others, the election of a new director, amendment
of the articles of incorporation, and other ancillary and/or consequential matters
- Be responsible for maintaining the minutes book and/or records of the corporation

97. Where the instrument is paid by a party secondarily liable thereon, it is discharged
- False

98. The following refers to the partner's right to specific partnership property:

- equal right to possess but for partnership purpose only

- non-assignable
- not subject to attachment
- not subject to execution

99. Immediately after their election, the directors of a corporation must formally organize and
elect: (a) a president, who must be a resident; (b) a treasurer, who must be a director.

Response:False

100. An instrument where no time for payment is expressed is payable on demand.

- TRUE

A partner whose connection with the partnership is open and public, such as by including his
name in the firm name of the partnership is called:
- Ostensible partner
- Nominal partner
- All of the above
- None of the above
- Secret partner
- Dormant partner

A close corporation is one whose articles of incorporation following, except:

- No appropriate option
 - All the issued stock of all classes shall be subject to 1 or specified restrictions on
transfer.
- The corporation shall not list in any stock exchange or make any public offering of its
stocks of any class.
- 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.

A corporation may be dissolved by the SEC motu proprio or upon filing of a verified complaint by
any interested party on the ground of
- Upon receipt of a lawful court order dissolving the corporation
- Continuous inoperation of a corporation
- Non-use of corporate charter

Any stockholder of a corporation shall have the right to dissent and demand payment of the fair
value of the share in case of a sale of any corporate properties, i.e. real or movable properties,
not necessary all or substantially all.
- False

A private corporation may extend or shorten its term as stated in the articles of incor[oration
when approved by a majority vote of the board of directors or trustees, and ratified at a meeting
by the stockholders or members representing at least two-thirds (⅔) of the outstanding capital
stock or of its members.
- True

A _____ corporation is is one whose articles of incorporation provides that 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.
- close

If a corporation does not formally organize and commence its business within four (4) years
from the date of its incorporation, its certificate of incorporation shall be deemed revoked.
- False

where the holder has a lien on the instrument arising either from contract or by implication of
law, he is deemed a _______ to the extent of his lien.
- holder for value
Directors shall be elected for a term of two (2) years from among the holders of stocks
registered in the corporation’s books, while trustees shall be elected for a term not exceeding
three (3) years from among the members of the corporation.
- False

The coverage for the electronic commerce law is limited only to commercial activities.
- False

Presentment for payment is not necessary in order to change the person primarily liable on the
instrument; but if the instrument is, by its terms, payable at a special place, and he is able and
willing to pay it there at maturity, such ability and willingness are equivalent to a tender of
payment upon his part.
ANSWER: True

A bearer instrument is converted into an order negotiable instrument if it is specially indorsed.

ANSWER: False

Who among the following is the holder of a negotiable instrument originally payable to order?
ANSWER: the indorsee who is in possession of the instrument

The voting trust agreement filed with the corporation shall not be subject to examination by any
stockholder of the corporation in the same manner as any other corporate book or record.
- False

Every contract on a negotiable instrument is incomplete and revocable until ____ of the
instrument for the purpose of giving effect thereto.
ANSWER: delivery

_____ are shares, participation or interests in a corporation or in a commercial enterprise or

profit-making venture and evidenced by a certificate, contract, instruments, whether write or
electronic in character, while _____ is an organized market place or facility that brings together
buyers and sellers and executes trade of securities and/or commodities.
- Securities
- exchange
The costs and expenses of appraisal shall be borne by the corporation, unless the fair value
ascertained by the appraisers is approximately the same as the price which the corporation may
have offered to pay the stockholder, in which case they shall be borne by the latter. In the case
of an action to recover such fair value, all costs and expenses shall be assessed against the
corporation, unless the refusal of the stockholder to receive payment was unjustified.
- True

A warehouse receipt, in a technical sense, is a negotiable instrument, similar to that of a bill of

exchange or promissory note, as the warehouse receipts Act declares it negotiable.
ANSWER: False

Mark signs a note payable to the order of paolo which is blank as to amount. Mark delivers the
note to Paolo with instruction to type the amount of P20,000 on the blank. Paolo, however, types
the amount of P50,000, and negotiates the same to Alex, Alex to Brenda, Brenda to Carlo, and
Carlo to Hubert, a holder in due course. Alex, Brenda, Carlo and Hubert had no knowledge of
the wrongful completion of the blank.
ANSWER: Hubert may collect from Mark P50,000 the amount actually placed by Paolo.

A ______ is a person lawfully engaged in the business of storing goods for profit.
ANSWER: warehouseman

The board of the following corporations vested with public interest shall have independent
directors constituting at least twenty percent (20%) of such board:
- Banks and quasi-banks
- Trust and insurance companies
- Pawnshops
- Non-stock savings and loan associations
- Financial intermediaries

An instrument that is incomplete but delivered, when completed without authority, shall be
considered to have been completed with authority in the hands of a holder in due course.
ANSWER: True

1st: A One Person Corporation may not be converted into an ordinary stock corporation. (F)
2nd: The principles of piercing the corporate veil applies with equal force to One Person
Corporations as with other corporations. (T)
- 1st statement is false, 2nd statement is true
 - Both statements are true
- Both statements are false
- 1st statement is true, 2nd statement is false

1st: Every foreign corporation is authorized to do business in the Philippines as long as the
laws where such corporation came from allow Filipino citizens and corporations to do business
in its own country or State, without need of a license to transact.
2nd: The only requirements before transacting or “doing business” for foreign corporation is to
obtain a license for that purpose only.
- Both statements are true
- 1st statement is false, 2nd statement is true
- 1st statement is true, 2nd statement is false
- Both statements are false

‘I promise to pay Paolo or his order the sum of P10,000 30 days after the death of Mr. Williams.
This is an instrument payable:
ANSWER: at a determinable future time

Mere failure to register the contract of partnership with the sec does not invalidate a contract
that has the essential requisites of partnership-a partnership may exist even if the partners do
not use the words “partner” or “partnership.”
- True

1st: The determination of whether or not “dead members” are entitled to exercise their voting
rights, depends on those articles of incorporation or by-laws.
2nd: In stock corporations, on the death of a shareholder, the executor or administrator duly
appointed by the court is vested with the legal title to the stock and entitled to vote it.
- Both statements are true

The warehouseman is not liable on the altered receipt according to its original tenor if the
alteration is immaterial.
ANSWER: False

The following are the characteristics of a non-stock corporation, except:

- No appropriate answer
- It does not have capital stock divided into shares
- As a general rule, it is not empowered to engage in business. Moreover, it is prohibited
to make income or profits as an incident to its operation.
 - No part of its income during its existence is distributable as dividends to its members,
trustees, or officers.
- There is non-transferability of membership.

It is one where no part of its income is distributed as dividends to its members, trustees or
officers
- Non-stock corporation

A partnership:
- Has juridical personality separate and distinct from that of each of the partners
- Is dissolved by the death of the partner
- Is created by agreement of the partners
- May be constituted in any form, except where immovable property or real rights are
contributed thereto, in which case a public instrument shall be necessary.
- None of the above
- All of the above

The acceptor, according to the tenor of acceptance, admits the existence of the drawer, the
genuineness of his signature, and his capacity and authority to draw the instrument but not as to
the existence of the payee and his then capacity to indorse.
ANSWER: False

A One Person Corporation is a corporation with a single stockholder which may be formed by:
- Natural person
- Trust
- Estate

A Philippine corporation may give donations in aid of any political party or candidate or for
purposes of partisan political activity.
- True

Match the following items with the correct choice.

Act No. 2137 Warehouse Receipts Law

Republic Act No. 8792 Electronic Commerce Act

Republic Act No. 386 Civil Code of the Philippines

 Act No. 2031 Negotiable Instruments Law

[Code of Commerce / Intellectual Property Code of the Philippines / Corporation Code of the
Philippines]

Preferred shares of stock issued by a corporation may be given preference in the distribution of
dividends and in the distribution of corporate assets in case of liquidation, or such other
preferences.
- True

For delinquent shares, the corporation may either proceed with delinquency sale or file an
action of collection in court.
- True

Electronic ______ refers to information generated, sent, received or stored by electronic, optical
or similar means, while electronic _____ refers to information by which a right is established or a
obligation is extinguished, or by which a fact may be proved and affirmed which is received,
recorded, transmitted, stored, processed, retrieved or produced electronically.
- data message
- document

The negotiable character of an instrument is not affected by the fact that it is not dated.
ANSWER: True

The exception to the rule that no title to or right to the possession of goods on the part of the
warehouseman shall excuse him from liability for refusing to deliver the goods according to the
terms of the receipt.
- The warehouseman’s title or right is derived directly or indirectly from a transfer made by
the depositor at the time of or subsequent to the deposit for storage
- The right is based on the warehouseman’s lien

1st: Except by decrease of capital stock ans as otherwise allowed by the Revised
Corporation Code, no corporation shall distribute any of its assets or property except upon
lawful dissolution and after payment of all its debts and liabilities.
2nd: The SEC has jurisdiction to order the dissolution of a corporation, including the
jurisdiction over liquidation of corporations.
- Both statements are false.
 - Both statements are true.
- 1st statement is false, 2nd statement is true.
- 1st statement is true, 2nd statement is false.

Any person to whom stock or a close corporation has been issued or transferred has, or is
conclusively presumed to have notice:
- That the transfer of stocks is in violation of a restriction on transfer of stock
- That he/she is a person not eligible to be a holder of stock of the corporation
- That transfer of stock to him/her would cause the stock of the corporation to be held by
more than the number of persons permitted by its articles of incorporation to hold stock
of the corporation.
- All of the options are correct
The following instruments were presented to you for evaluation:
I. ‘Pay to the order of Pablo Pasco P20,000.’
II. ‘Pay to the order of pablo Pasco P20,000 or deliver to him a smartphone of the same
value at his option.’
III. ‘Pay to the order of Pablo Pasco P20,000 or deliver to him a smartphone of the same
value.’
IV. ‘Pay to the order of pablo Pasco a computer worth P20,000.’
Assuming all the other requisites of negotiability are present, which of the foregoing instruments
are negotiable?
ANSWER: I and II

In e-commerce law, the guiding principle is the ______ approach which means that the
functions of say, a document or a signature is analyzed, and if an equivalent exist in electronic
form, then it will be adopted.
ANSWER: functional equivalent

1st: No person shall be elected as trustee unless he or she is a member of the corporation.
2nd: Unless otherwise provided in the articles of incorporation or the bylaws, officers of a
non-stock corporation may be directly elected by the members.
- Both statements are true
- 1st statement is false, 2nd statement is true
- 1st statement is true, 2nd statement is false
- Both statements are false

An instrument payable to bearer may be negotiated through any of the following means, except:
ANSWER: no delivery is required as long as there is an indorsement, whether blank or
special
Mico makes a note payable to the order of Patrick. He delivers the note to Patrick with the
instruction that Patrick should keep the same until Mico has obtained the proceeds of the loan
from the bank. Patrick, however, disregarded the instruction of Mico and indorsed the note to
Alex, Alex to Bert, Bert to Chad and Chad to Harold, the holder.
Alex, Bert, Chad have no knowledge of Patrick’s defective title. Based on the foregoing, which of
the following statements is incorrect?
ANSWER: Harold may enforce payment against Mico if Harold is a holder in due
course.

Assuming all the other requisites of negotiability are present, which of the following instruments
is not payable to bearer?
ANSWER: Pay to Pedro Padernal, bearer

The following are characteristics of a close corporation, except:

- Where the articles of incorporation provide that the business of the corporation shall be
managed by the stockholders themselves rather than by the board of directors, then the
stockholders shall be deemed to be the directors with all the liabilities imposed by the
Corporation Code on directors. The stockholders shall not be personally liable for
corporate torts.

Any stockholder of a close corporation may, by written petition to the SEC, compel the
dissolution of such corporation whenever:
I. Any acts of the directors or officers is illegal, or fraudulent, or dishonest, or oppressive or
unfairly prejudicial to the corporation or any stockholder.
II. Corporate assets are being misapplied or wasted.
- Both are true
The procedural requirements for voluntary dissolution of a corporation where no creditors are
affected: (0.25 OUT OF 1 -- KULANG NG 3 ANSWERS PA)
- A verified request for dissolution shall be filed with the SEC
- Majority vote of the board of directors/trustees
- Majority vote of the stockholders representing the outstanding capital stock or majority of
members
- Notice shall be given to each shareholder or member of record personally, by registered
mail, or by any means authorized under its bylaws
- ⅔ vote of the stockholders representing the outstanding capital stock or majority of
members
- Unanimous vote of the board of directors/trustees
1st: Any profit which a non-stock corporation may obtain as an incident to its operations
shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for
which the corporation was organized.
2nd: A non-stock corporation can be converted into a stock corporation by mere amendment
of its articles of incorporation.
- 1st statement is true, 2nd statement is false

Mark makes a note payable to the order of Pia in the amount of P200,000. Pia indorses the note
to Albert as follows: ‘Pay to Albert if he passes the 2014 Bar Examination.’
ANSWER: Mark may pay Albert even if the condition has not been fulfilled but Albert
has to hold the proceeds subject to the rights of Pia.

A corporation shall have a maximum of 50 years existence unless its articles of incorporation
provides otherwise.
- False

When partnership real property had been mortgage and foreclosed, the redemption by any of
the partners, when using his separate funds, allows such redemption to be in his sole favor of
the redeeming partner.
- False

The following apply to a negotiable document of title

- Response: Holder is not a holder in due course, but a holder for value
- Response: Mode of transfer is assignment
- Response: may be converted from a bearer document to an order document and back to
a bearer document again
- Response: only the TRANSFEROR makes warranties in favor of the transferee
- Response: Applicable law is the Negotiable Instruments Law
0.1 out of 1

Trustees in a non-stock corporation shall hold office for not more than five (5) years until their
successors are elected and qualified.
- False

When a partner fails to pay to the partnership the whole amount of his promised contribution, it
will authorize the other partners to seek rescission of the partnership contract.
- Response: True
- False
1st: If there was in fact an intent to negotiate the document but possession of the same is
retained by the transferor, the interest of the prior transferee may be defeated if the document is
subsequently transferred to a purchaser in good faith without notice.
2nd: If there was in fact an intent to negotiate the document but possession of the same is
retained by the transferor, The subsequent negotiation of the document under any sale or other
disposition to any person receiving the same in good faith and for value and without notice of
the previous sale, mortgage or pledge, shall have the same effect as if the first purchaser had.
expressly authorized the subsequent negotiation.
- Response: 1st statement is true, 2nd statement is false

1st: Securities that are connected with any judicial sale, or sale by an executor, administrator,
guardian or receiver or trustee in insolvency or bankruptcy shall be registered with the SEC
before sale to the general public.
2nd: The distribution by a corporation actively engaged in the business authorized by its articles
of incorporation, of securities to its stockholders or other security holders as a stock dividend or
other distribution out of surplus requires registration with the SEC.
- Response: 1st statement is true, 2nd statement is false

1st: The pre-emptive right of stockholders in close corporations shall extend to all stock to be
issued, excluding reissuance of treasury shares.
2nd: A close corporation may, at its option, refuse to register the transfer of stock in the name of
the transferee if the person is not qualified to be a stockholder and has notice thereof.
- Response: both statements are true

Stockholdings exceeding thirty (30%) of the outstanding capital stock shall be considered
substantial for purposes of interlocking directors.
- Response: False

A contract of partnership cannot stand alone being dependent upon another contract like loan or
sale.
- Response: False

The circumstance/s where a corporation may be given a 3 year period from date of dissolution
to wind up business:
- Response: charter expires pursuant to its articles of incorporation
- Response: the corporate existence is terminated in any other manner
- Response: corporate rehabilitation status
0.33 out of 1
Stock corporations may issue no-par value shares except:
- Response: banks
- Response: loan associations
- Response: one person corporation
0.33 out of 1

The _____ is the national government regulatory agency charged with supervision over the
corporate sector, the capital market participants, and the securities and investment instruments
market, and the protection of the investing public
Response: Security and Exchange Commission (SEC)
Try: Security and Exchange Commission

One of the following is not a restrictive indorsement. Which is it?

Response: An indorsement that constitutes the indorsee an agent of the indorser

1st: The plan of Distribution of Assets may be adopted by a majority vote of the board of
trustees and approval of majority of the members having voting rights present or represented by
proxy at the meeting during which plan is adopted.
2nd: Members' meetings may be held at any place outside the principal office of the corporation
provided it shall be within the Philippines.
Response: 1st statement is true, 2nd statement is false