SCHOOL OF ACCOUNTANCY, BUSINESS AND HOSPITALITY

Business Administration Department

FINAL EXAM on Law on Business Organization (LAWS 1033)
Summer, S.Y. 2017-2018

LAW ON BUSINESS ORGANIZATION

FINAL EXAMINATION
July 18, 2017 .
INSTRUCTIONS

1. This Questionnaire contains four (4) pages. Check the number of pages and make sure it has the correct number of pages and
their proper numbers.

All the items have to be answered within an Hour and Thirty Minutes (1.30). You may write on the Questionnaire for notes
relating to the questions.

Read each question very carefully and write your answers in your Answer Sheet in the same order the questions are posed. In
your answers, use the numbering system in the questionnaire.

YOU CAN BRING HOME THE QUESTIONNAIRE.

True of IDENTIFICATION: Please refer to the choices given.10 POINTS

1. A corporation consisting of more than one member or corporator. _______________

2. It is a corporation established for a charitable purposes. _________________
3. It is a corporation incorporated under the laws of the Philippines. _____________
4. A corporation existing in fact but not in law. ___________________
5. A corporation which exist without formal legislative grant. ________________
6. It is a corporation which is limited to selected persons or members of a family. __________
7. Corporation which is formed or organized for the government of a portion of the State. _______
8. One which has exercised powers for an indefinite period without interference on the part of the sovereign power._________
9. One which is so related to another corporation that the majority of its directors can be elected either, directly or indirectly
by such other corporation. __________
10. It is a religious corporation which consists of one member or corporator only and his successor in interest such as bishop.

A Quasi-corporation H Corporation sole

B Civil Corporation I Eleemosynary corporation
C Corporation Aggregate J Roman Catholic corporation
D Subsidiary Corporation K Corporation by prescription
E De facto corporation L Domestic Corporation
F True Corporation M Parent or holding corporation
G Close Corporation N Public Corporation

MULTIPLE CHOICE
1. A doctrine which states that a corporation, as an artificial being, owes its life to the state, its birth being purely dependent
on the will of the state:
a. theory of concession;
b. enterprise theory;
c. realist theory;
d. symbol theory.
2. One of the attributes of a corporation is that it is an artificial being. It means that:
a. it is a juridical person with a personality separate and apart from its individual members or stockholders;
b. the stockholders or members composing the corporation are the corporation itself;
c. it is in fact and in reality a person and may perform all actions that can be done by natural persons
d. all of the above.

3. It is a legal consequence of theory of corporate fiction or entity:

a. generally, a corporation may be made to answer for acts or liabilities of its stockholders or members;
b. the property of the corporation is the property of its stockholders;
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c. it may bring civil and criminal actions in its own name and in behalf of its members;
d. a corporation is a person within the meaning of due process and equal protection clauses of the constitution.

4. Under the Philippine jurisdiction, the corporate nationality of a corporation is determined by:
a. control test;
b. incorporation test;
c. Grand father Rule;
d. all of the above;
e. none of the above.
5. A principle based on equitable considerations, which treats a corporation and individuals composing it or two corporations as
identical and one:
a. doctrine of piercing the veil of corporate entity;
b. principle of disregarding the fiction of corporate entity;
c. doctrine of corporate alter ego;
d. all of the above;
e. none of the above.
6. The attribute that “a corporation is created by law or by operation of law” means that:
a. a corporation can come into existence by mere agreement of the parties;
b. creation of a corporation does not require a special grant from the State;
c. corporations can only come into existence in the manner prescribed by the concerned government agencies;
d. legislative authority is necessary for the creation of a corporation.

7. It is a corporation created by special law in the interest of common good and subject to the test of economic viability:
a. foundation;
b. government owned and controlled corporation;
c. public corporation;
d. private corporation;
8. The corporation’s right of succession means that:
a. it is subject to estate tax;
b. the life of the corporation is unlimited;
c. its continuous existence is not affected by death, withdrawal, insolvency, or incapacity of its members;
d. it has a capacity of continuous existence except when the shares of stock are eventually owned by less than five (5)
stockholders.
9. A corporation commences to acquire juridical personality from:
a. the moment of execution of articles of corporation;
b. the filing of the articles of incorporation with the SEC;
c. the recording of the articles by the SEC;
d. the date of the issuance of the certificate of incorporation by the SEC.
10. What is required for a corporation to continue its corporate existence?
a. adoption and submission of by-laws with the SEC;
b. election of officers;
c. formal organization and commencement of the transaction of its business or the construction of its works;
d. holding of meetings.
11. A corporation, as distinguished from a partnership;
a. may be organized by mere agreement of the parties;
b. may exercise any power authorized by its members provided it is not contrary to law, morals, good customs, public
order, or public policy;
c. may be dissolved with the consent or through the action of the State;
d. may be established for any period of time agreed upon by the members.
12. A similarity between a corporation and a partnership:
a. they may be established for any period of time stipulated by their members;
b. they can be organized only where there is a law authorizing their organization;
c. their members can personally sue the one managing for mismanagement;
d. they may exercise any power authorized by members provided it is not contrary to law, morals, good custom, public
order or public policy.
13. An advantage that may be obtained by doing business in a corporate form:
a. centralized management;
b. separation of management from ownership;
c. no double taxation;
d. less government restrictions, controls and report requirements.
14. It is one which actually exists for all practical purposes as a corporation but which has no legal right to corporate existence as
against the state:
a. de facto corporation;
b. de jure corporation;
c. ostensible corporation;
d. domestic corporation.
15. All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as:
a. corporation by estoppel;
b. general partners;
c. solidary debtors;
d. joint obligors.
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16. Quasi-public corporations refer to:

a. corporations formed for the government of a portion of the State for the general welfare;
b. those organized by the government or which the government is the majority shareholder;
c. those formed for some private purpose, benefit or end;
d. private corporations with franchise or contract involving the performance of public duties.

17. A corporation related to another corporation that has the power to control the management of the latter:
a. quasi-corporation;
b. close corporation;
c. holding corporation;
d. subsidiary corporation.
18. A person who assist in and brings about the incorporation and organization of a corporation:
a. stockholder;
b. promoter;
c. incorporator;
d. organizer.
19. A corporation can be created by mere agreement of the stockholders.
a. True
B. False
20 In the creation of a corporation, there is less capital and less management.
a. True
b. False

Essay: WRITE LEGIBLY (35 points)

1.) Differentiate Partnership From Corporation 10 points

2.) What is a Corporation? 5 points
3.) Papa Bono was elected director in a corporation. The other directors, who supported his election, assured him a monthly
compensation of 90,000.00. In fact, they approved resolution granting him the compensation. Is Papa bono entitled to the
compensation? 5 points
a.) Is there any instance that a director could be given compensation? If yes, how? 5 points
2. Differentiate Articles of incorporation from by-laws? 10 points

GOD BLESS!
'"Don't cry because it is over- smile because it happened" - Charles Dickens