Cajucom, Katrina Monica T.

2002-2003
098253
2002

Topic: Corporation; Incorporation; Requisites

Question:

You have been asked to incorporate a new company to be called FSB Savings & Mortgage Bank,
Inc. List the documents that you must submit to the Securities and Exchange Commission (SEC)
to obtain a certificate of incorporation for FSB Savings & Mortgage Bank, Inc.

Answer:

The documents to be submitted to the Securities and Exchange Commission (SEC) to incorporate
a new company to be called FSB Savings & Mortgage Bank, Inc. and to obtain the certificate of
incorporation for said company, are:
1) Articles of Incorporation
2) Treasurer‘s Affidavit;
3) Certificate of Authority from the Monetary Board of the BSP;
4) Verification slip from the records of the SEC whether or not the proposed name has alrea
dy beenadopted by another corporation, partnership or association;
5) Letter undertaking to change the proposed name if already adopted by another
corporation, partnership or association;
6) Bank certificate of deposit concerning the paid-up capital;
7) Letter authorizing the SEC or Monetary Board or its duly authorized representative to
examine the bank records regarding the deposit of the paid-up capital;
8) Registration Sheet;

Topic: Corporation; Voluntary Dissolution (2002)

Question:

Name three (3) methods by which a stock corporation may be voluntarily dissolved. Explain
each method.

Answer:
The three (3) methods by which a stock corporation may be voluntarily dissolved are:
1) Voluntary Dissolution where no creditors are affected. This is done by a majority vote of
the directors, and resolution of at least 2/3 vote of stockholders, submitted to the Securities
and Exchange Commission.
2) Voluntary dissolution where creditors are affected by filing a petition for dissolution with
the Securities and Exchange Commission, signed by a majority of the members of the board
of directors, verified by the president or secretary, upon an affirmative vote of stockholders
representing at least 2/3 of the outstanding capital stock.
3) Dissolution by shortening of the corporate term through amendment of the articles of
incorporation
Cajucom, Katrina Monica T. 2002-2003
098253
2003

Topic: By-Laws; Validity; limiting qualifications of BOD members (2003)

Question

To prevent the entry of Marlo Enriquez, whom it considered as one antagonistic to its interests,
into its Board of Directors, Bayan Corporation amended its articles of incorporation and by-laws
to add certain qualifications of stockholders to be elected as members of its Board of Directors.
When presented for approval at a meeting of its stockholders duly called for the purpose, the
amendments were overwhelmingly ratified. Marlo Enriquez brought suits against Bayan
Corporation to question the amendments. Would the action prosper? Why?

Answer:
In the case of SMC vs. SEC (April 11, 1979), that it is recognized by all authorities that 'every
corporation has the inherent power to adopt by-laws 'for its internal government, and to regulate
the conduct and prescribe the rights and duties of its members towards itself and among themselves
in reference to the management of its affairs.'" At common law, the rule was "that the power to
make and adopt by-laws was inherent in every corporation as one of its necessary and inseparable
legal incidents. And it is settled throughout the United States that in the absence of positive
legislative provisions limiting it, every private corporation has this inherent power as one of its
necessary and inseparable legal incidents, independent of any specific enabling provision in its
charter or in general law, such power of self-government being essential to enable the corporation
to accomplish the purposes of its creation."

Topic: Derivative Suit; Minority Stockholder

Question:

Gina Sevilla, a minority stockholder of Bayan Corporation, felt that various investments of the
company‘s capital were ultra vires if not, indeed, made in violation of law. She filed a derivative
suit seeking to nullify the questioned investments. Would her action prosper? Why?

Answer:

Yes, she is already a stockholder at the time the allegedmisappropriation of corporate funds. And
that filing such action as a derivative suit even by a lone stockholder is one of the protections
extended by law to minority stockholders against abuses of the majority. Nevertheless, Gina must
first exhaust any administrative remedies before her suit be consider in court.