GAMES

1. A subscribed to 1,000 shares of stock of X corporation and paid 25% of the said subscription. Can he
vote all his subscribed shares?
a. No because the subscription has not been fully paid
b. No because his shares have become delinquent shares
c. Yes as regards the paid percentage of the subscription
d. Yes because shares although unpaid but not delinquent can be voted
2. A subscribed to 100 shares of X corporation, paying 25% thereof. Despite the demand by for the
issuance of stock certificate, the corporation refuses to issue one corresponding to the 25% paid.
Meanwhile, the corporation has become insolvent and A now refuses to pay his unpaid balance on his
subscription. Is the refusal to issue a stock certificate valid?
a. Not value because stock certificate can be issued for the paid portion of the subscription
b. Valid because stock certificate can only be used after full payment of the subscription
c. Valid as regards the unpaid percentage on the subscription
d. Not valid because only delinquent shares may be denied stock certificate

3. Based on the facts in the preceding number, can a validly refuse to pay the unpaid balance on his
subscription now that the corporation has become insolvent?
a. No under the trust fund doctrine for the protection of creditors
b. No under the doctrine of piercing the veil of corporation fiction
c. Yes because of the insolvency of the corporation which also extinguished his obligation to pay
the balance
d. Yes because of the denial of his right to stock certificate

4. . ABC corporation has an authorized capital stock of P1M divided into 50,000 common shares and
50,000 preferred shares. At its inception, the corporation offered for subscription of all the common
shares. However, only 40,000 shares were subscribed. Recently, the directors thought of raising
additional capital and decided to offer to the public all the authorized shares at their market value. Would
X, the stockholder of 4,000 shares have pre-emptive right to the remaining 10,000 shares?
a. Yes because all stockholders have pre-emptive rights to all issues of shares of any class in
proportion to their shareholdings.
b. No because pre-emptive right does not apply to unissued shares to be issued.
c. Yes because pre-emptive right applies only to the issuance of unissued shares.
d. No because he has waived this right when he subscribed to a part only of the issuance of
shares.
5. Based on the facts of the preceding number, would X also have pre-emptive right to the 50,000
preferred shares?
a. Yes, because all stockholders have pre-emptive rights to all issues of shares of any class in
proportion to their shareholdings.
b. No because pre-emptive rights do not apply to the issuance of unissued shares.
c. Yes because pre-emptive rights apply only to the issuance of unissued shares.
d. No because X has waived his pre-emptive rights to the issuance of preferred shares when he
subscribed to the common shares.
6. X Corp. operates a call center that received orders for pizzas on behalf of Y Corp. which operates a
chain of pizza restaurants. The two companies have the same set of corporate officers. After two years, X
Corp. dismissed its call center agents for no apparent reason. The agents filed a collective suit for illegal
dismissal against both X and Y Corp based on the doctrine of piercing the veil of corporate fiction. The
latter set up the defense that the agents are in the employ of X Corp which is a separate juridical entity. Is
the defense appropriate?
a. No, since the doctrine would apply, the two companies having the same set of corporate
officers
b. No, the real employer is Y Corp, the pizza company with X Corp. serving as an arm for
receiving its outside orders for pizzas.
c. Yes, it is not shown that one company completely dominates the finances, policies and
business practices of the other.
d. Yes, since the two companies perform two distinct businesses
7. It is settled that neither par value nor book value is an accurate indicator of the fair value of a share of
stock of a corporation. As to unpaid subscription to its shares of stock, as they are regarded as corporate
assets, they should be included in the
a. Capital value
b. Book value
c. Par value
d. Market value
8. The rule is that valuation of the shares of a stockholder who exercises his appraisal rights is
determined as of the day prior to the date on which the vote was taken. This is true
a. Regardless of any depreciation or appreciation in the shares fair value
b. Regardless of any appreciation in the shares fair value

c. Regardless of any depreciation in the shares fair value

d. Only if there is no appreciation or depreciation in the shares fair value
9. X Corp. whose business is to manufacture and sell vehicles, invested its funds in Y Corp. an
investment firm, through a resolution of its Board of Directors. The investment grew tremendously on
account of Y Corps excellent business judgment. But a minority stockholder in X Corp assails the
investment as ultra vires. Is he right and if so, what is the status of the investment?
a. Yes it is an ultra vires act of the corporation itself but voidable only subject to stockholders
ratification
b. Yes it is an ultra vires act of its Board of Directors and thus void
c. Yes it is an ultra vires act of its Board of Directors but voidable only subject to stockholders
ratification
d. Yes it is an ultra vires act of the corporation itself and consequently, void

10. In case of disagreement between the corporation and withdrawing stockholder who exercises his
appraisal right regarding the fair value of his shares, a three-member group shall by majority vote resolve
the issue with finality. May the wife of the withdrawing stockholder be name to the three member group?
a. No the wife of the withdrawing shareholder is not a disinterested person
b. Yes since she could best protect her husbands shareholdings
c. Yes since the rules do not discriminate against wives
d. No since the stockholder himself should sit in the three-member group
11. Several American Doctors wanted to set up a group of clinic in the Philippines so they could render
modern medical services. If the clinic is to be incorporated under our laws, what is the required foreign
equity participation in such corporation?
a. 40%
b. 0%
c. 60%
d. 70%
12. Which of the following statements is correct?
a. Treasury stock sold for less than their par or issued value are considered watered stock and
as such is prohibited by law.
b. Five but not more than 15 juridical and natural persons, majority of whom are residents of the
Philippines may form a private corporation.
c. No par value shares of stock cannot be issued by banks, trust companies, insurance
companies, building and loan association and public utilities.
d. Membership in nonstock corporation and rights arising there are from are personal and
nontransferable and therefore cannot be transferred even if provided in the Articles of
Incorporation or in the By-Laws.
13. Every corporation whose charter expires by its own limitation, or annulled by forfeiture or otherwise, or
whose corporate existence for other purposes is terminated in any other manner shall nevertheless be
continued as a body corporate for 3 years after the time when it would have been dissolved for the
purpose of the following, except
a. Prosecuting and defending suits by or against it and enabling it to settle and close its affairs
b. To dispose and convey its property
c. To distribute its assets
d. Continuing the business for which it was established
14. At an annual meeting of stockholders, a resolution was approved empowering the president of the
corporation to enter into a contract with New York firm. Can the president validly act by virtue of such
resolution?
I. Yes the action of the stockholders was approved during annual stockholders meeting
II. No the power to contract for and in behalf of the corporation resides primarily in the board of
directors.
a. True, True
b. True, False
c. False, True
d. False, False
15. I. Treasury shares shall have no voting rights as long as such stock remains in treasury.
II. Shares of stocks shall not be issued in exchange for future services.
a. True, True
b. True, False
c. False, True
d. False, False
16. When the preferred shares are issued by a corporation with a fixed interest on the face thereof, the
effect is
a. The contract of subscription subsists
b. The said stockholder is a creditor of the corporation
c. The said shares of stocks become negotiable instruments
d. The stockholder is a plain investor who may benefit or suffer with financial success or failure of
the corporation
17. Three of the following are not authorized to issue no-par value shares, except
a. Industrial companies b. Insurance companies
c. Trust companies
d. Public utilities
18. The power to deny pre-emptive rights to stockholder is
a. Incidental power
b. Express power
c. Implied power
d. Discretionary power
19. A gratuitous reissue of treasury shares will result in
a. Capital surplus
b. Stock dividend
c. Watered stock
d.
Property
dividend

20. If the authorized capital stock is P60,000 divided into 600 shares with par value of P100 per share.
What is the minimum subscribed capital?
a. P12,000
b. P15,000
c. P10,000
d. P30,000
21. Using the same data in number 87, what is the minimum paid up capital?
a. P3,750
b. P5,000
c. P3,000
d. P4,000
22. If 1,000 shares are outstanding and 5 members of the BoD are to be elected, the least number of shares
needed by a candidate to be elected is
a. 501 shares
b. 250 shares
c. 200 shares
d. 167 shares
23. Using the preceding number, the minimum number of votes needed by a candidate to be elected is
a. 2,501 votes
b. 1,250 votes
c. 1,000 votes
d. 835 votes