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