BM1905

QUIZ ON POWERS OF A CORPORATION PT. 3

NAME: SECTION: DATE: SCORE:

MULTIPLE CHOICE: Encircle the letter of the correct answer. (25 items x 1 point)
1. It refers to a business combination whereby one (1) or more existing corporations are absorbed by
another corporation which survives and continues the combined business.
a. Merger c. Joint arrangement
b. Consolidation d. Joint venture
2. It refers to a business combination whereby two (2) or more existing corporations form a new
corporation different from the combining corporation.
a. Merger c. Joint arrangement
b. Consolidation d. Joint venture
3. What is the required vote for the approval or ratification of merger or consolidation?
a. Approval by at least majority vote of the board of directors and ratification by stockholders representing at
least 2/3 of the outstanding capital stock of the merging or consolidating corporations
b. Approval by at least majority vote of the board of directors and ratification by stockholders representing at
least majority of the outstanding capital stock of the merging or consolidating corporations
c. Approval by stockholders representing at least 2/3 of the outstanding capital stock of the merging or
consolidating corporations
d. Approval by at least majority vote of the board of directors merging or consolidating corporations
4. Which of the following is NOT a requisite for merger or consolidation?
a. It must be approved by the board of each corporation by majority vote.
b. There must be ratification by vote of stockholders representing 2/3 of outstanding capital stock or members.
c. There must be approval by the Securities and Exchange Commission (SEC).
d. There must be consent or approval of the creditors of the corporation.
5. Will the workers transferred to the new corporation still form part of the labor union of the original
corporation?
a. No, if the spin-off was done for valid business c. No under all circumstances.
cause and in good faith. d. Yes, because it will always amount to circumvention
b. Yes, because it amounts to merger or of labor right to association.
consolidation.
6. It is a corporation where no part of its income is distributable as dividends to its members and the
capital of the corporation is not divided into shares of stocks.
a. Stock corporation c. Open corporation
b. Non-stock corporation d. Close corporation
7. How may a non-stock corporation be converted to a stock corporation?
a. By mere amendment of articles of incorporation c. By amendment of by-law
b. By dissolving the corporation and forming a new d. By mere agreement of the board of directors
one
8. Unless otherwise provided in the articles of incorporation or by-laws, what is the number of the board
of trustees of ordinary Nonstock Corporation?
a. It should be not less than five (5) but not more than 15.
b. It should be not less than five (5) but may exceed 15 as provided in the articles of incorporation or by-laws.
c. It should be not less than five (5) but not more than 10.
d. It should be not less than five (5) but not more than 20.
9. What is the term of office of the Board of Trustees of an ordinary nonstock corporation?
a. One (1) year c. Three (3) years
b. Two (2) years d. Four (4) years
10. What is the location of the regular or special meetings of members of a nonstock corporation?
a. In the principal office of the corporation
b. At any place even outside the principal office of the corporation as long as provided in the by-laws and within
the Philippines
c. In the residence of the founding members
d. In the residence of the President

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11. Which of the following rules is NOT applicable to non-stock corporations?

a. Prohibition against distribution of dividends
b. Non-profit character of corporation
c. The right to vote cannot be limited or even denied in the articles of incorporation or by-laws.
d. A corporation is not qualified to occupy the position of a trustee.
12. Which of the following statements is TRUE concerning termination of membership in a nonstock
corporation?
I. Membership shall be terminated in the manner and for the causes provided in the articles of
incorporation or the by-laws.
II. 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.
a. Statement I c. Both statements
b. Statement II d. None of the statements
13. It refers to a mode of dissolving a private corporation wherein the initiative comes from the board of
directors/trustees and stockholders/members by virtue of which the board of directors/trustees and its
stockholders/members filed wither the board resolution or petition for dissolution to Securities and
Exchange Commission (SEC).
a. Voluntary dissolution c. Dissolution by operation of law
b. Involuntary dissolution d. Legal dissolution
14. It refers to a mode of dissolving a private corporation made by the Securities and Exchange
Commission (SEC) upon filing of a verified complaint and after proper notice and hearing on the
grounds provided by existing laws, rules, and regulations.
a. Voluntary dissolution c. Dissolution by operation of law
b. Involuntary dissolution d. Legal dissolution
15. When a corporation is voluntarily dissolved by amending its articles of incorporation to shorten its
corporate term, when will the corporation be deemed dissolved?
I. Upon approval of the amended articles of incorporation or the expiration of the shortened term
II. Upon approval of the corporate creditors
a. Statement I c. Both statements
b. Statement II d. None of the statements
16. What are the automatic grounds of corporate dissolution or those which will ipso facto dissolve the
corporation by operation of law?
I. Approval by SEC of certificate of merger or consolidation in so far as the absorbed corporations
are concerned
II. Approval of shortening of corporate term by SEC in appropriate cases
a. Statement I c. Both statements
b. Statement II d. None of the statements
17. It refers to the process by which all the assets of the corporation are converted into liquid assets in
order to facilitate the payment of obligations to creditors, and the remaining balance, if any, is to be
distributed to the stockholders or members.
a. Incorporation c. Liquidation
b. Dissolution d. Consolidation
18. After the dissolution of a corporation, what is the remaining period of the corporate body?
a. One (1) year from the time it is dissolved for the c. Three (3) years from the time it is dissolved for the
purpose of liquidation of its corporate affairs but purpose of liquidation of its corporate affairs but not
not for entering into new business for entering into new business
b. Two (2) years from the time it is dissolved for the d. Four (4) years from the time it is dissolved for the
purpose of liquidation of its corporate affairs but purpose of liquidation of its corporate affairs but not
not for entering into new business for entering into new business
19. Which of the following is TRUE about one person corporations?
I. One person corporations are required to submit and file corporate by-laws.
II. One person corporations are not required to submit and file corporate by-laws.
a. Statement I c. Both statements
b. Statement II d. None of the statements

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20. Which of the following is TRUE about the procedure for the death or permanent incapacity of the single
stockholder?
I. In case of death or permanent incapacity of the single stockholder, the nominee shall sit as director
and manage the affairs until the legal heirs of the single stockholder have been lawfully
determined.
II. In case of death or permanent incapacity of the single stockholder, the nominee, or the designated
heir, will discharge the functions of the as director and manager of the corporation.
a. Statement I c. Both statements
b. Statement II d. None of the statements
21. It occurs when distressed businesses sell their assets to work out of their weak financial condition.
a. Reorganization c. Merger
b. Reincorporation d. Sale
22. it refers to the amendment of a charter.
a. Reorganization c. Merger
b. Reincorporation d. Sale
23. It is the selling of authorized but unissued stock.
a. Reorganization c. Merger
b. Reincorporation d. Sale
24. It refers to a corporation absorbing another corporation that remains in existence while the other is
dissolved.
a. Reorganization c. Merger
b. Reincorporation d. Sale
25. In this type of acquisition, the transferee merely continues the same business of the transferor since
he obtains the earning capability of the venture.
a. “Asset-only” level c. “Business-enterprise” level
b. “Equity” level d. “Stock” level

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