Take the Commercial Law Review MCQs – Set 3 Quiz.
Commercial Law Review - Set 3 [25 items]
Commercial Law Review MCQs
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Question 1 |
[CLR0309] Contracts for water transportation from foreign ports to Philippine ports are primarily governed by:
A | Carriage of Goods by Sea Act |
B | The Civil Code of the Philippines |
C | Salvage Law |
D | The Code of Commerce |
Question 2 |
[CLR0308] Ultra vires acts are acts of a corporation which are:
A | Not within the corporate powers conferred by the Code or articles of incorporation. |
B | Necessary and incidental to the exercise of the powers conferred upon the corporation. |
C | Exercised by the Board of Directors but not ratified by the stockholders. |
D | None of the choices |
Question 3 |
[CLR0302] An instrument is rendered non-negotiable if
A | none of the choices |
B | there is an indication of a particular account to be debited with the amount. |
C | there is an indication of a particular fund out of which reimbursement is to be made. |
D | the instrument is payable out of a particular fund. |
Question 4 |
[CLR0306] When does a stock become delinquent?
A | When no payment is made within one (1) month from date as fixed in the contract or call. |
B | None of the choices |
C | When no payment is made within two (2) months as fixed in the contract or call. |
D | When no payment is made within fifteen (15) days from the date as fixed in the subscription contract or in the call made by the Board of Directors. |
Question 5 |
[CLR0321] In the following cases, the Trust Fund Doctrine is violated, except:
A | When the corporation allows the issuance of watered stocks. |
B | None of the choices |
C | When there is payment of dividends without unrestricted retained earnings. |
D | When the corporation releases or condones payment of the unpaid subscription. |
Question 6 |
[CLR0322] Which of the following are prohibited considerations for the issuance of stocks?
A | accounts receivables |
B | past services |
C | goodwill |
D | none of the choices |
Question 7 |
[CLR0316] Which of the following conforms with the requirements of the Corporation Code?
A | Corporators are those who compose a corporation and is a term which includes stockholders, members and incorporators. |
B | An incorporator in a domestic corporation may be an alien and a non-resident. |
C | Incorporators are those who originally compose the corporation, whose names are mentioned in the articles of incorporation majority of whom have signed the said articles. |
D | Every incorporator must be residents of the Philippines, must be a natural person and must own or subscribe to at least one share of stock. |
Question 8 |
[CLR0303] When can a corporation deny pre-emptive right to stockholders?
A | None of the choices |
B | Where a stockholder is delinquent in the payment of unpaid balance of his subscription. |
C | Where the articles of incorporation so provides. |
D | Where the shareholder does not pay fifty percent of the value of the shares to be subscribed. |
Question 9 |
[CLR0312] As used in the Corporation Code, “outstanding capital stock” means:
A | The same as authorized capital stock. |
B | The total shares issued to subscribed or stock holders, whether or not, fully or partially paid, as long as there is a binding subscription agreement, except treasury shares. |
C | The same as subscribed capital stock. |
D | It represents the paid up capital stock. |
Question 10 |
[CLR0315] A policy of insurance is contestable:
A | on the ground of concealment or misrepresentation |
B | within 2 years from its inception or last reinstatement |
C | if all the the choices are present |
D | if it is a life insurance policy |
Question 11 |
[CLR0324] In the following instances, appraisal right may be exercised, except:
A | Investment of corporate funds in another business or purpose. |
B | Appointment of an executive committee. |
C | Extension of term |
D | Reduction of term. |
Question 12 |
[CLR0317] The pre-emptive right if not denied by the corporation generally extends to all issues of shares in proportion to a stockholder’s shareholdings. Even if not denied, the right does not extend to certain specified issuances enumerated below. Which is the exception?
A | Shares to be issued in compliance with laws requiring stock offerings to the public. |
B | Shares to be issued in good faith with the approval of the stockholders representing 2/3 of the outstanding capital stock in exchange for property needed for corporate purposes. |
C | Shares to be issued in payment of a previously contracted debt. |
D | Shares to be issued to incorporators. |
Question 13 |
[CLR0313] Which is not a consequence of the corporation’s separate personality?
A | The corporation may sue but it cannot be sued. |
B | The corporation has a nationality or citizenship. |
C | The corporation may acquire and dispose of properties. |
D | The corporation may enter into contracts with another corporation. |
Question 14 |
[CLR0325] Which of the following cannot be a close corporation?
A | mining corporation |
B | educational institution |
C | all choices |
D | stock exchange |
Question 15 |
[CLR0320] The following are the corporate officers of a corporation, except:
A | Treasurer |
B | Secretary |
C | Vice-President |
D | President |
Question 16 |
[CLR0314] Under the provisions of the Carriage of Goods by Sea Act, claim has to be made for the damage sustained by goods.
A | The claim should be made within three (3) days from receipt when the damage or average could be ascertained from the outside. |
B | The claim should be made upon receipt when the damage or average could be ascertained from the outside. |
C | The claim should be made within twenty four (24) hours from receipt when the damage or average could be ascertained from the outside. |
D | The claim should be made within twenty four (24) hours from receipt when the damage or average could be ascertained only upon opening the package. |
Question 17 |
[CLR0323] The following are remedies available to a corporation to enforce payment of stocks except:
A | Deduction from cash dividends |
B | Withholding of stock dividends |
C | Mandamus |
D | Extra-judicial sale |
Question 18 |
[CLR0301] One of the following has no insurable interest in the life of Alberto:
A | his wife |
B | his mother |
C | his mistress |
D | his daughter |
Question 19 |
[CLR0307] This is not negotiation of a negotiable instrument.
A | Indorsement completed by delivery of an instrument payable to order |
B | Delivery of a bearer instrument |
C | Assignment |
D | Delivery of an instrument to the payee |
Question 20 |
[CLR0305] What are watered stocks?
A | Stocks issued for a consideration less than P10. |
B | Stocks issued for a consideration more than its par or issued value. |
C | None of the choices |
D | Stocks issued for a consideration less than its par or issued value. |
Question 21 |
[CLR0318] The acquisition of shares and the declaration of cash dividends require that the corporation has unrestricted retained earnings. The law also requires that shares should not be issued below its par or issued value. These requirements is a consequence of the
A | The trust fund doctrine. |
B | The theory of separate personality. |
C | The doctrine of general capacity. |
D | The doctrine of limited capacity. |
Question 22 |
[CLR0304] The following shall produce the effect of payment of debts:
A | Delivery of promissory note |
B | Tender of Central Bank notes |
C | Delivery of check |
D | None of the choices |
Question 23 |
[CLR0311] Which one of the following is not a characteristic of a voting trust agreement?
A | The stockholder remains the beneficial or equitable owner of the shares while the trustee is the legal owner. |
B | A voting trust is irrevocable during the time stipulated. |
C | A voting trust is created for the purpose of conferring upon the trustee the right to vote and other rights pertaining to the shares. |
D | All voting trust agreements shall not exceed five (5) years. |
Question 24 |
[CLR0319] The Board of Directors alone may declare the following type of dividends, except in case of
A | stock dividends |
B | cash dividends |
C | script dividends |
D | property dividends |
Question 25 |
[CLR0310] Why is a de facto corporation not considered a de jure corporation?
A | Its corporate existence may be challenged in court by any taxpayer. |
B | None of the choices |
C | Because it failed to incorporate under existing statutory authority. |
D | The corporation’s exercise of corporate powers is not recognized by the courts for reason of public policy. |
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