Home / My courses /

UGRD-LAW6149-2123T /
Midterm Examination /
Midterm Exam

Started on Sunday, 20 March 2022, 10:40 AM

Question 1
Correct

Mark 1.00 out of 1.00

If the paid-up capital of the corporation is less than P50,000.00,

Select one:
a. the financial statements must be signed by the majority stockholder

b. the financial statements must be signed by an Independent Certified Public Accountant

c. the financial statements may be certified under oath by the treasurer or any responsible officer of the corporation 

d. the financial statements must be signed by the director

Question 2
Correct

Mark 1.00 out of 1.00

This contains the records of all stocks in the names of the stockholders alphabetically arranged; the installment paid and unpaid on all stock
for which subscription has been made, and the date of payment of any installment; a statement of every alienation, sale or transfer of stock
made, the date thereof, and by and to whom made; and such other entries as the by-laws may prescribe.

Select one:
a. secretarial record book

b. minutes of the meeting

c. no correct answer 

d. stock book
Question 3

Correct

Mark 1.00 out of 1.00

This is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time.

Select one:
a. Statement of Financial Performance

b. Balance Sheet 

c. Corporate Journal

d. Statement of Changes in Equity

Question 4
Correct

Mark 1.00 out of 1.00

The issuance of watered stock is a form of

Select one:
a. Illegal act and ultra vires act 

b. Intra vires act

c. Illegal act

d. Ultra vires act

Question 5

Correct

Mark 1.00 out of 1.00

The power to o establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees is one of the

Select one:
a. General express powers of a corporation 

b. Specific express powers of a corporation

c. Implied powers of a corporation

d. Inherent powers of a corporation

Correct

Mark 1.00 out of 1.00

No stock transfer agent or one engaged principally in the business of registering transfers of stocks in behalf of a stock corporation shall be
allowed to operate in the Philippines unless he secures a license from the _____________________.

Select one:
a. Securities and Exchange Commission 

b. Department of Trade and Industry

c. Bureau of Internal Revenue

d. Department of Foreign Affairs

Question 7
Correct

Mark 1.00 out of 1.00

A corporate director acts within that granted authority. This is a form of

Select one:
a. Ultra vires act

b. Illegal act

c. Intra vires act 

d. Illegal act and ultra vires act

Question 8
Correct

Mark 1.00 out of 1.00

In case of stock corporations, to issue or sell stocks to subscribers and to sell stocks to subscribers and to sell treasury stocks in accordance
with the provisions of this Code: and to admit members to the corporation if it be a non-stock corporation. This is one of the

Select one:
a. General express powers of a corporation 

b. Inherent powers of a corporation

c. Implied powers of a corporation

d. Specific express powers of a corporation

Correct

Mark 1.00 out of 1.00

The power to declare dividends is one of the

Select one:
a. Implied powers of a corporation

b. Inherent powers of a corporation

c. Specific express powers of a corporation 

d. General express powers of a corporation

Question 10
Correct

Mark 1.00 out of 1.00

The power to make to decide and do things in order to protect debts due to the corporation is one of the

Select one:
a. General express powers of a corporation

b. Specific express powers of a corporation

c. Implied powers of a corporation 

d. Inherent powers of a corporation

Question 11

Correct

Mark 1.00 out of 1.00

The following are the liabilities of a stockholder, except

Select one:
a. Liability to the corporation and its creditors for watered stock

b. Liability for dividend lawfully received 

c. Liability to corporate creditors for unpaid stock subscriptions

d. Liability to the corporation for interest on unpaid subscriptions

Correct

Mark 1.00 out of 1.00

Statement 1. At the regular meeting of stockholders or members, the board of directors or trustees shall present to such stockholders or
members a financial report of the operations of the corporation for the preceding year

Statement 2. Within fifteen days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most
recent financial statement

Select one:
a. Statement 1 is true: Statement 2 is false 

b. Statement 1 is false: Statement 2 is false

c. Statement 1 is false: Statement 2 is true

d. Statement 1 is true: Statement 2 is true

Question 13

Correct

Mark 1.00 out of 1.00

No action to recover delinquent stock sold can be sustained upon the ground of irregularity or defect in the notice of sale, or in the sale itself
of the delinquent stock, unless the party seeking to maintain such action first pays or tenders to the party holding the stock the sum for
which the same was sold, with interest from the date of sale at the legal rate: and no such action shall be maintained unless it is commenced
by the filing of a complaint within __________ from the date of sale.

Select one:
a. 1 month

b. 3 months

c. 6 months 

d. 9 months

Question 14
Correct

Mark 1.00 out of 1.00

Which of the following statements correctly describes the liability of the board

Select one:
a. Board of trustees of a stock corporation are jointly and severally liable if they are found guilty of gross negligence or bad faith in
directing the affairs of the corporation

b. Board of directors of a stock corporation are jointly and severally liable if they acquire any personal interest in conflict with their 
duty

c. Board of directors of a stock corporation are jointly and severally liable if they did not willfully vote for patently unlawful acts of the
corporation

d. Board of trustees of a stock corporation are jointly and severally liable for the issuance of watered stock
Question 15

Correct

Mark 1.00 out of 1.00

The board of directors may, by resolution, order the sale of delinquent stock and shall specifically state the amount due on each subscription
plus all accrued interest, and the date, time and place of the sale which shall not be less than ____________ nor more than __________ from the
date the stocks become delinquent.

Select one:
a. 20 days, 40 days

b. 30 days, 60 days 

c. 15 days, 30 days

d. 10 days, 20 days

Question 16
Correct

Mark 1.00 out of 1.00

This is a financial statement that reports a company's financial performance over a specific accounting period.

Select one:
a. Income statement 

b. Statement of Changes in Equity

c. Statement of financial position

d. Statement of Cash Flow

Question 17
Correct

Mark 1.00 out of 1.00

Which of the following statements is not allowed in the organization of corporate officers?

Select one:
a. The treasurer is not a director

b. The secretary is also the treasurer

c. The president is not a director 

d. The secretary is a resident citizen of the Philippines

Correct

Mark 1.00 out of 1.00

The following positions in a corporation are presented to you

I. President

II. Treasurer

III. Corporate Secretary

IV. Chairman of the Board

Who of the foregoing must be a director of the corporation at the same time?

Select one:
a. III. Corporate Secretary and IV. Corporate Secretary

b. I.President and III. Corporate Secretary

c. I. President and IV. Chairman of the Board 

d. I. President and II. Treasurer

Question 19
Correct

Mark 1.00 out of 1.00

Which of the following is a liability of a stockholder?

Select one:
a. Liability to corporate debtors for unpaid stock subscriptions

b. Liability for dividend unlawfully received 

c. Liability to the corporation and its debtors for watered stock

d. Liability to the corporation for interest on paid subscriptions

Question 20
Correct

Mark 1.00 out of 1.00

If the paid-up capital of the corporation is greater than P50,000.00,

Select one:
a. the financial statements must be signed by an Independent Certified Public Accountant 

b. the financial statements must be signed by the majority stockholder

c. the financial statements may be certified under oath by the treasurer or any responsible officer of the corporation

d. the financial statements must be signed by the director

Correct

Mark 1.00 out of 1.00

What may be the composition of the executive committee of a corporation?

Select one:
a. Officers who are neither offices nor directors

b. Stockholders who are neither offices nor directors

c. Directors 

d. All of the answers correct

Question 22
Correct

Mark 1.00 out of 1.00

A contract for the acquisition of unissued stock in an existing corporation or a corporation still to be formed shall be deemed a ___________.

Select one:
a. contract of lease

b. subscription 

c. contract of sale

d. certificate of stock

Question 23

Correct

Mark 1.00 out of 1.00

The following positions in a corporation are presented to you

I. Treasurer

II. President

Who of the foregoing may or may not be a director?

Select one:
a. II. President only

b. I. Treasurer and II. President

c. I. Treasurer only 

d. No correct answer
Question 24

Correct

Mark 1.00 out of 1.00

Where the consideration is other than actual cash, or consists of intangible property such as patents of copyrights, the valuation thereof shall
initially be determined by the incorporators or the board of directors, subject to approval by the _________________________.

Select one:
a. Securities and Exchange Commission 

b. Philippine Stock Exchange

c. majority of the stockholders

d. Department of Trade and Industry

Question 25
Correct

Mark 1.00 out of 1.00

Within ten (10) days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most recent
financial statement, which shall include

Select one:
a. profit or loss statement and cash flow stament

b. statement of financial position and profit or loss statement 

c. Income statement and declaration of dividends

d. balance sheet and statement of changes in equity

Question 26
Correct

Mark 1.00 out of 1.00

Company by-laws must be

Select one:
a. not impair the obligations of contracts 

b. inconsistent with the morals and public policies

c. directed against a particular individual

d. consistent with the non-existing law

Correct

Mark 1.00 out of 1.00

Holders of subscribed shares not fully paid which are not delinquent shall have ___________________________________.

Select one:
a. all the rights of a stockholder 

b. no right to vote

c. the right to declare dividends

d. limited rights

Question 28
Correct

Mark 1.00 out of 1.00

Watered stocks are

Select one:
a. those issued with consideration or bonus shares

b. those issued as fully paid when the corporation has received a greater amount of money than the par or issued value of the stock

c. those issued as stock dividend when there are no sufficient retained earnings or surplus to justify it 

d. those issued for consideration other than actual cash such as property or services when the fair value of such thing or service is
greater than the par or issued value of the stock

Question 29
Correct

Mark 1.00 out of 1.00

Which of the following statements does not describe a watered stock?

Select one:
a. These are shares issued without consideration

b. Watered stock is an asset with an artificially-inflated value

c. It is a stock that is issued with a value much greater than the value of the issuing company's assets.

d. Shares issue offered to the public at prices that are highly deflated when compared with the book value of the issuer's assets 
Question 30

Correct

Mark 1.00 out of 1.00

These are powers that are necessary to carry into effect the powers expressly granted upon a corporation

Select one:
a. Express powers

b. Inherent powers

c. Implied powers 

d. All of the answers correct

Question 31
Correct

Mark 1.00 out of 1.00

Subscribers for stock shall pay to the corporation interest on all unpaid subscriptions from ________________________.

Select one:
a. the date of subscription 

b. the date of incorporation

c. the date of issuance of certificate of stock

d. the date of acquiring shares

Question 32

Correct

Mark 1.00 out of 1.00

Statement 1. A person who is already a stockholder of a corporation may acquire additional shares when the corporation declares dividends

Statement 2. Treasury shares are shares reacquired by the issuing company through purchase

Select one:
a. Statement 1 is false{: Statement 2 is false

b. Statement 1 is false: Statement 2 is true

c. Statement 1 is true: Statement 2 is true 

d. Statement 1 is true: Statement 2 is false

Correct

Mark 1.00 out of 1.00

In a corporation, a corporate officer had committed acts that fall outside the scope of their legal authority. This is a form of

Select one:
a. Illegal act and ultra vires act

b. Ultra vires act 

c. Illegal act

d. Intra vires act

Question 34
Correct

Mark 1.00 out of 1.00

Arrange the following sentence in order to properly describe the processes in the election of directors or trustees

I. There must be presence of majority of the outstanding capital stock or member entitled to vote, may it be in person or by representative
authorized by written proxy.

II. The election must be by ballot if requested by any voting stockholder or member. If there is no such request, voting may be made through
other methods like raising of hands

III. Report the results to the SEC, within thirty days, the names, nationality and residences of the elected officers and directors or trustees.
Deaths and resignation must likewise be reported.

IV. A meeting must be called for a purpose

V. The candidate receiving highest number of votes shall be declared elected

Select one:
a. IV, I, III, II, V

b. IV, I, II, V, III 

c. IV, II, I, III, V

d. IV, II, I, V, III

Correct

Mark 1.00 out of 1.00

Payment of any unpaid subscription or any percentage thereof, together with the interest accrued, if any, shall be made on the date specified
in the contract of subscription or on the date stated in the call made by the board. Failure to pay on such date shall render the entire balance
due and payable and shall make the stockholder liable for interest at the legal rate on such balance, unless a different rate of interest is
provided in the bylaws, computed from such date until full payment. If within __________ days from the said date no payment is made, all
stocks covered by said subscription shall thereupon become delinquent and shall be subject to sale as hereinafter provided, unless the board
of directors orders otherwise.

Select one:
a. 30 

b. 15

c. 90

d. 60

Question 36
Correct

Mark 1.00 out of 1.00

In a proxy,

Select one:
a. The ownership is transferred to the proxy

b. The proxy has rights in all meetings within 5 years

c. The proxy votes as an agent 

d. The agreement is irrevocable

Question 37
Correct

Mark 1.00 out of 1.00

The following are included in the specific express powers of a corporation, except,

Select one:
a. Power to deny redemptive rights 

b. Power to Incur, Create or Increase Bonded Indebtedness

c. Power to Invest corporate funds in another corporation or business

d. Power to Acquire Own Shares

Incorrect

Mark 0.00 out of 1.00

The following are acceptable considerations for the issuance of the stocks, except

Select one:
a. Cash 

b. Outstanding shares in exchange for stocks in the event of reclassification or conversion

c. Land

d. Amounts transferred from stated capital to unrestricted retained earnings

Question 39
Correct

Mark 1.00 out of 1.00

In a voting trust,

Select one:
a. The agreement is notarized 

b. The principal does not cease to become stockholder

c. All of the answer correct

d. Rights are limited to a particular meeting

Question 40

Correct

Mark 1.00 out of 1.00

Which of the following persons may not vote are on a per head basis?

Select one:
a. trustees

b. members

c. directors

d. stockholders 
Question 41

Correct

Mark 1.00 out of 1.00

The power to make to decide and do things in usual course of business is one of the

Select one:
a. Specific express powers of a corporation

b. Inherent powers of a corporation

c. Implied powers of a corporation 

d. General express powers of a corporation

Question 42
Correct

Mark 1.00 out of 1.00

The form for proxies of stockholders and members and the manner of voting them

Select one:
a. May be included in the certificate of incorporation

b. May be included in the by-laws of a corporation 

c. May be included in the company mission and vision

d. May be included in the articles of incorporation

Question 43

Correct

Mark 1.00 out of 1.00

This is a power granted to a corporation by its charter

Select one:
a. Implied powers

b. Inherent powers

c. Express powers 

d. No correct answer
Question 44

Correct

Mark 1.00 out of 1.00

Which of the following is/are a ground/s to disallow inspection of company records?

Select one:
a. If such person was not acting in good faith or for a legitimate purpose in making his demands. 

b. Both statements are grounds to disallow inspection of company records

c. No correct answer

d. If the person making the demands has properly used any information secured through any prior examination of the records of such
corporation or of any other corporation.

Question 45
Correct

Mark 1.00 out of 1.00

The issued price of no-par value shares may be fixed in the articles of incorporation or by the board of directors pursuant to authority
conferred upon it by the articles of incorporation or the by-laws, or in the absence thereof, by the stockholders representing _________________
of the outstanding capital stock at a meeting duly called for the purpose.

Select one:
a. at least two thirds

b. at least thirty percent

c. at most three fourths

d. at least a majority 

Question 46
Correct

Mark 1.00 out of 1.00

Statement 1. Records of business transactions and minutes of meetings are kept at the principal office of the corporation

Statement 2. Stock and transfer book shall be kept in the principal office of the corporation or in the office of its stock transfer agent

Select one:
a. Statement 1 is true: Statement 2 is true 

b. Statement 1 is false: Statement 2 is false

c. Statement 1 is true: Statement 2 is false

d. Statement 1 is false: Statement 2 is true

Correct

Mark 1.00 out of 1.00

Which of the following situations is not allowed in a corporation

Select one:
a. The board secretary is a shareholder of the company

b. The board secretary is also the president 

c. The board secretary is a director of the company

d. The board secretary is also the treasurer

Question 48
Correct

Mark 1.00 out of 1.00

The board of directors shall perform three major functions, which is not included?

Select one:
a. To exercise corporate powers

b. To be involved in ultra vires acts 

c. To conduct all corporate business

d. To control and hold corporate property

Question 49

Correct

Mark 1.00 out of 1.00

Statement 1. Certificate of Stock is the corporation's written acknowledgement of the stockholder's interest in the management, profits, and
assets of the corporation

Statement 2. The certificate of stock requires that it would be signed by the president or the vice-president

Statement 3. The certificate of stock requires that it would be countersigned by the secretary or the assistant secretary

Statement 4. The certificate of stock requires that it would bear the corporation's seal

Select one:
a. Statement 1 is true, Statement 2 is true, Statement 3 is true , Statement 4 is true 

b. Statement 1 is true, Statement 2 is true, Statement 3 is false , Statement 4 is false

c. Statement 1 is true, Statement 2 is false, Statement 3 is false , Statement 4 is false

d. Statement 1 is true, Statement 2 is false, Statement 3 is true , Statement 4 is false

Correct

Mark 1.00 out of 1.00

Statement 1. When a director or trustee takes advantage of the business opportunity and obtained profits that should belong to the
corporation he is serving, he must account to of the all profits and return them to the corporation

Statement 2. Interlocking directors are those who sit in the boards of two or more corporations that contract with one other, whether on
isolated or regular basis.

Select one:
a. Statement 1 is true: Statement 2 is false

b. Statement 1 is false: Statement 2 is true

c. Statement 1 is true: Statement 2 is true 

d. Statement 1 is false: Statement 2 is false

◄ Prelim Exam

Jump to...