TITLE III - BOD/T AND OFFICERS

• Stockholders or members periodically elect the board of directors or trustees, who are charged with the management of the corporation.

  TRUE
• Stockholders or members also elects officers to carry out management functions on a day-to-day basis.


  FALSE
• Acts of management pertain to the stockholders or members.

  FALSE
• Acts of ownership pertain to the board.

  FALSE
• Once the directors or trustees are elected, the stockholders or members relinquish corporate powers to the board in accordance with law.

  TRUE
• Contracts intra vires entered into by the board of directors are binding upon the corporation.

  TRUE
• Every director must own at least 100 share of the capital stock of the corporation of which he is a director, which share shall stand in his name on the books of the corporation.

  FALSE
• Trustees of non-stock corporations must be members thereof.

  TRUE
• The governing body of a corporation is its board of directors.

  TRUE
• The board of directors of a corporation is a creation of law.

  FALSE
• It is well settled in this jurisdiction that where corporate directors are guilty of a breach of trust, a stockholder may institute a suit in behalf of himself and other stockholders and for the benefit of the corporation.

  TRUE
• The board of directors (or trustees, in case of non-stock corporations) has the sole authority to determine policies, enter into contracts, and conduct the ordinary business of the corporation within the scope of its charter.

  FALSE
• The property of the corporation is not the property of its stockholders or members; however, it may be sold by the stockholders or members.

  FALSE
• The power and responsibility to decide whether a corporation can enter into a binding contract is lodged with the board of directors.

  TRUE
• The board of the following corporations vested with public interest shall have independent directors constituting at least 10% of such board.

  FALSE
• Independent directors must be elected by the other directors present or entitled to vote in absentia during the election of directors.

  FALSE
• It is a person who, apart from shareholdings and fees received from the corporation, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director.

  INDEPENDENT DIRECTOR
• The acts of corporate officers within the scope of their authority are binding on the corporation.

  TRUE
• Any 2 or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and vice-president at the same time.

  FALSE
• The power to remove directors or trustees belongs to the officers exclusively.

  FALSE
• Removal of directors or trustees may be with or without cause.

  FALSE
• The requisites for removal of directors are the following, except:
• The directors of a corporation shall not receive any compensation for being members of the board of directors, except for reasonable per diems.

  TRUE
• In no case shall the total yearly compensation of directors, as such directors, exceed 10% of the net income after income tax of the corporation during the preceding year.

  FALSE
• The general rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities, and vice versa.

  TRUE
• A contract of the corporation with one or more of its directors or trustees or officers is void.

  FALSE
• A contract of the corporation with one or more of its directors or trustees or officers.


  Doctrine of self-dealing board of directors
• A director, by virtue of his office, acquires for himself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all such profits by refunding the same.

  Doctrine of corporate opportunity
• It is a body created by the by-laws and composed of not less than three members of the board which, subject to the statutory limitations, has all the authority of the board of directors to the extent provided in the by-laws.

  Executive committee
• The executive committee may act, by 2/3 vote of all its members.

  FALSE
• The act of a director violating the doctrine of corporate opportunity can be ratified by a vote of the stockholders owning or representing at least majority of the outstanding capital stock.

  FALSE
• A stockholder or member who participates through remote communication or in absentia, shall be deemed present for purposes of quorum.

  TRUE
• The directors or trustees elected shall perform their duties as prescribed by law, rules of good corporate governance, and bylaws of the corporation.

  TRUE
• If the corporation is vested with public interest, the board shall also elect a compliance officer.

  TRUE
• The officers shall manage the corporation and perform such duties as may be provided in the bylaws and/or as resolved by the board of directors.

  TRUE
• A person shall be disqualified from being a director, trustee or officer of any corporation if, within 5 years prior to the election or appointment as such, the person was convicted by final judgment.

  1. Of an offense punishable by imprisonment for a period exceeding 6 years;
  2. For violating the Revised Corporation Code.
  3. For violating The Securities Regulation Code.
  4. All of the above.

  4
• The SEC shall, motu proprio or upon verified complaint, and after due notice and hearing, order the removal of a director or trustee elected despite the disqualification, or whose disqualification arose or is discovered subsequent to an election.

  TRUE
• The removal of a disqualified director shall be without prejudice to other sanctions that the SEC may impose on the board of directors or trustees who, with knowledge of the disqualification, failed to remove such director or trustee.

  TRUE
• Any vacancy occurring in the board of directors or trustees other than by removal or by expiration of term may be filled by the vote of at least a majority of the remaining directors or trustees, if still constituting a quorum.

  TRUE
• Any directorship or trusteeship to be filled by reason of an increase in the number of directors or trustees shall be filled only by an election at a regular or at a special meeting of stockholders or members duly called for the purpose, or in the same meeting authorizing the increase of directors or trustees if so stated in the notice of the meeting.

  TRUE