TITLE IV - POWERS OF CORPORATIONS

Cards (53)

  • 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.

    TRUE