A corporation has no power except those expressly conferred on it by the Corporation Code and those that are implied or incidental to its existence.
TRUE
In turn, a corporation exercises said powers through its board of directors and/or its duly authorized officers and agents.
TRUE
It is an action brought by a stockholder on behalf of the corporation to enforce corporate rights against the corporation's directors, officers or other insiders.
DERIVATIVE SUIT
It means that a stockholder who dissented and voted against the proposed corporate action, may choose to get out of the corporation by demanding payment of the fair market value of his shares.
APPRAISAL RIGHT
Subscriptions to the capital stock of a corporation constitute a fund to which the creditors have a right to look for the satisfaction of their claims.
TRUST FUND DOCTRINE
It is the preferential right of all stockholders of a stock corporation to subscribe to all issues or disposition of shares of any class, in proportion to their respective shareholdings.
PRE-EMPTIVE RIGHT
The purpose of pre-emptive right is to enable the shareholder to retain his proportionate control in the corporation.
TRUE
A suit to enforce preemptive rights in a corporation is a derivative suit.
FALSE
The corporation may only acquire its own stocks in the presence of unrestricted retained earnings.
FALSE
Preferred shares may be acquired even without surplus profit for as long as it will not result to the insolvency of the Corporations.
FALSE
The requirement of unrestricted retained earnings to cover the shares is based on the doctrine of limited capacity.
FALSE
There can be no distribution of assets among the stockholders without first paying corporate creditors. Hence, any disposition of corporate funds to the prejudice of creditors is rescissible.
FALSE
Any dissenting stockholder shall have pre-emptive right
The retained earnings which have not been reserved or set aside by the board of directors for some corporate purpose.
UNRESTRICTED RETAINED EARNINGS
The right of appraisal may be exercised when there is a fundamental change in the charter or articles of incorporation substantially prejudicing the rights of the stockholders.
TRUE
A corporation can purchase its own shares, provided payment is made out of surplus profits and the acquisition is for a legitimate corporate purpose.
TRUE
Corporate profits set aside, declared, and ordered to be paid by the directors for distribution among stockholders at a fixed time.
DIVIDENDS
payment of dividends to a stockholder is not a matter of right but a matter of consensus.
TRUE
The declaration of dividends is dependent upon the availability of surplus profit or restricted retained earnings.
FALSE
It is an agreement whereby a corporation delegates the management of its affairs to another corporation for a certain period of time.
MANAGEMENT CONTRACT
It refers to an act outside or beyond corporate powers, including those that may ostensibly be within such powers but are, by general or special laws, prohibited or declared illegal.
ULTRA VIRES ACT
Every corporation has the power and capacity to have perpetual existence unless the certificate of incorporation provides otherwise.
TRUE
Every corporation has the power and capacity to enter into a partnership, joint venture, merger, consolidation, or any other commercial agreement with natural and juridical persons.
TRUE
No management contract shall be entered into for a period longer than 5 years for any 1 term.
TRUE
No corporation shall possess or exercise corporate powers other than those conferred by the Revised Corporation Code or by its articles of incorporation and except as necessary or incidental to the exercise of the powers conferred.
TRUE
Where a stockholder or stockholders representing the same interest of both the managing and the managed corporations own or control more than 1/3 of the total outstanding capital stock entitled to vote of the managing corporation.
INTERLOCKING STOCKHOLDERS
Where a majority of the members of the board of directors of the managing corporation also constitute a majority of the members of the board of directors of the managed corporation.
INTERLOCKING BOARD OF DIRECTORS
Approval by a 2/3 vote of the board of directors or trustees is a requisite of the corporate power to extend or shorten corporate term.
FALSE
Ratification by the stockholders representing at least 2/3 of the outstanding capital stock or by at least 2/3 of the members in case of non-stock corporations is a requisite of the corporate power to extend or shorten corporate term.
TRUE
Amendment of the articles of incorporation to reduce the authorized capital stock is an instance for the distribution of corporate capital to happen.
TRUE
Purchase of redeemable shares by the corporation, regardless of the existence of unrestricted retained earnings is an instance for the distribution of corporate capital to happen.
TRUE
Dissolution eventual liquidation of the corporation is instance for the distribution of corporate capital to happen.
TRUE
Amendment of the by-laws to reduce the authorized capital stock is an instance for the distribution of corporate capital to happen.
FALSE
No decrease of the capital stock shall be approved if its effect shall prejudice the rights of corporate creditors is a requirement of increase or decrease of authorized capital stock
TRUE
Approval by a majority vote of the board of directors is a requirement of increase or decrease of authorized capital stock.
TRUE
Ratification by the stockholders holding at least 2/3 of the outstanding capital stock is a requirement of increase or decrease of authorized capital stock.
TRUE
Approval thereof by the DTI is a requirement of increase or decrease of authorized capital stock.
FALSE
SEC approval is required for the sale or other disposition of assets.
FALSE
Approval by the majority vote of its board of directors or trustees is required for the sale or other disposition of assets.
TRUE
Ratification by the vote of the stockholders representing at least 2/3 of the outstanding capital stock, or in case of non-stock corporation, by the vote of at least to 2/3 of the members is a requirement for the sale or other disposition of assets.