TITLE VII - STOCKS AND STOCKHOLDERS

• In stock corporations, shareholders may generally transfer their shares.

  TRUE
• Membership in and all rights arising from a nonstock corporation are personal and non-transferable.

  FALSE
• Is an action brought by minority shareholders in the name of the corporation to redress wrongs committed against it, for which the directors refuse to sue.

  DERIVATIVE SUIT
• Where a stockholder or member is denied the right of inspection, his suit would be individual because the wrong is done to him personally and not to the other stockholders or the corporation.

  INDIVIDUAL SUIT
• Where the wrong is done to a group of stockholders, as where preferred stockholders' rights are violated, a class suit will be proper for the protection of all stockholders belonging to the same group.

  REPRESENTATIVE SUIT
• Any contract for the acquisition of unissued stock in an existing corporation or a corporation still to be formed shall be deemed a subscription notwithstanding the fact that the parties refer to it as a purchase or some other contract.

  SUBSCRIPTION CONTRACT
• As long as the shares are not considered delinquent, stockholders are entitled to all rights granted to it whether or not subscribed capital stocks are fully paid.


  TRUE
• Shares of stock shall not be issued in exchange for promissory notes or future service.

  TRUE
• Stocks shall not be issued for a consideration less than the par or issued price thereof.

  TRUE
• Where the consideration is other than actual cash, or consists of intangible property such as patents of copyrights, the valuation thereof shall initially be determined by the incorporators or the board of directors, subject to approval of the SEC.

  FALSE
• Unit of interest in a corporation.

  SHARES OF STOCK
• Evidence of the holder's ownership of the stock and of his right as a shareholder.

  CERTIFICATE OF STOCK
• The stock and transfer book is the basis for ascertaining the persons entitled to the rights and subject to the liabilities of a stockholder.

  TRUE
• On the death of a shareholder, the executor or administrator duly appointed by the Court is vested with the legal title to the stock but not entitled to vote it.

  FALSE
• The rule is that the endorsement of the certificate of stock by the owner or his attorney-in-fact or any other person legally authorized to make the transfer shall be sufficient to effect the transfer of shares only if the same is coupled with delivery.

  TRUE
• The delivery of the stock certificate duly endorsed by the owner is the operative act of transfer of shares from the lawful owner to the new transferee.

  TRUE
• The certificate of stock itself once issued is a continuing affirmation or representation that the stock described therein is valid and genuine.

  TRUE
• Stock issued without authority and in violation of law is voidable and no liabilities. confers no rights on the person to whom it is issued and subjects him to.

  FALSE
• A certificate of stock is one, entire and divisible contract.

  FALSE
• The stockholder shall not be entitled to a certificate until he has remitted the full payment of his subscription together with any interest or expenses, if any is due.

  TRUE
• The general rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are their joint liabilities.

  FALSE
• It is basic that a corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it.

  TRUE
• As a rule, the doctrine of corporate opportunity is violated where the stocks are issued by the corporation for a consideration which is less than its par value.

  FALSE
• Subscribers for stock shall pay to the corporation interest on all unpaid subscriptions from the date of subscription, if so required by, and at the rate of interest fixed in the by-laws.

  FALSE
• Bidder who shall offer to pay the full amount of the balance on the subscription together with accrued interest, costs of advertisement and expenses of sale, for the smallest number of shares or fraction of a share.

  HIGHEST BIDDER
• A subscription of shares in a corporation still to be formed shall be irrevocable for a period of at least six (6) months from the date of subscription.

  TRUE
• No pre-incorporation subscription may be revoked after the articles of incorporation is submitted to the Commission.

  TRUE
• The party bringing suit should be a shareholder as of the time of the act or transaction complained of, the number of his shares not being material is a requisite of a derivative suit.

  TRUE
• He has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief but the latter has failed or refused to heed his plea is a requisite of a derivative suit.

  TRUE
• The cause of action actually devolves on the corporation, the wrongdoing or harm having been, or being caused to the corporation and not to the particular stockholder bringing the suit is a requisite of a derivative suit.

  TRUE
• There must be delivery of the stock certificate for a valid transfer of stock.

  TRUE
• The certificate must be endorsed by the owner or his attorney-in-fact or other persons legally authorized to make the transfer for a valid transfer of stock.

  TRUE
• To be valid against third parties, the transfer must be recorded in the books of the corporation for a valid transfer of stock.

  TRUE
• To be valid against third parties, the transfer must be recorded in the SEC. This is a requirement for a valid transfer of stock.

  FALSE
• When directors and trustees or, in appropriate case, the officers of a corporation vote for or assent to patently unlawful acts of the corporation is an exceptional circumstance warranting the disregard of the doctrine of separate personality.

  TRUE
• When a director or officer has consented to the issuance of watered down stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto is an exceptional circumstance warranting the disregard of the doctrine of separate personality.

  TRUE
• When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation is an exceptional circumstances warranting the disregard of the doctrine of separate personality.

  TRUE
• When a director, trustee or officer is made, by specific provision of by-laws, personally liable for his corporate action is an exceptional circumstance warranting the disregard of the doctrine of separate personality.

  FALSE
• Solidary liabilities may be incurred and the veil of corporate fiction may be pierced when directors and trustees or, in appropriate case, the officers of a corporation voted for or assented to patently unlawful acts of the corporation.

  TRUE
• Solidary liabilities may be incurred and the veil of corporate fiction may be pierced when directors and trustees or, in appropriate case, the officers of a corporation acted in bad faith or with gross negligence in directing the corporate affairs.

  TRUE