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Law on corporation part 2

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Law on corporation part 2

  1. 1. Incorporation 1. There should be 5 to 15 corporators in corporation 2. A majority of incorporators should be citizens of the Philippines. 3. All Incorporators are corporators, and all incorporators are stockholders.
  2. 2. Incorporation 4. A corporation could be an incorporator of another corporation A corporation could be a corporator of another corporation A. True; True B. True; False C. False; True D. False; False
  3. 3. Corporate Term 5. A corporation may exist for a period not exceeding ____ years unless extended. 6. True or False. A corporation's life may be extended by amending the articles of incorporation at any time before the expiration of the term.
  4. 4. Corporate Term Amendments to Articles of Incorporation (Hint: 50.67) 7. A corporation has 10 directors and 20 shares outstanding. How many directors and shares are needed to pass an amendment? //Effectivity
  5. 5. Commencement of Existence Complete the following sentence: 8. A corporation gains juridical personality from the date of _________________________________ (Hint: Certificate)
  6. 6. A Corporation attains juridical personality from the date of isssuance of the certificate of incorporation
  7. 7. Corporate Name 9. Realizing the opportunity for easy popularity, the stockholders of a new corporation named its corporation SGV corporation. It contends that the name is valid since no corporation is named SGV (The audit firm SGV&Co is a partnership). Is the contention Valid? (Yes or No)
  8. 8. Corporate Name • Sec. 18. Corporate name. - No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws. When a change in the corporate name is approved, the Commission shall issue an amended certificate of incorporation under the amended name.
  9. 9. De Facto Corporation Requisities of a de facto corporation A. There must be a valid law under which a corporation might incorporate B. There is an attempt in good faith to incorporate C. Actual exercise of corporate powers D. Issuance of certificate of incorporation despite noncompliance with some legal requirements.
  10. 10. De Facto Corporation A, B, C, D and E, with mere agreement, proclaimed themselves as a corporation and started to transact business as "Z Corporation". 10. Is Z corporation a de facto corporation?
  11. 11. De Facto Corporation A, B, C, D and E filed on June 1, 2006 Articles of Incorporation of S'acto corporation with the SEC. Only 20% of the shares were subscribed but SEC issued a certificate of incorporation due to oversight. The Corporation transacted business with X through credit sale. Later, the corporation sued X for payment. X counter-sued by questioning the validity of the identity of the corporation. Recitation Question: Is S’acto Corporation a De Facto Corporation 11. Will X's suit prosper?
  12. 12. Aesthetics 12. Pogi si Sir Ralph Walang mas pogi pa kay Sir Ralph A. True; True B. True; True C. True; True D. True; True
  13. 13. Corporation by Estoppel 13. A, B, C, D and E, with mere agreement, proclaimed themselves as a corporation and started to transact business as "Z Corporation". They transacted business and purchased merchandise on account from Y. Later, Y sued Z Corporation for payment. A and Company contends that Y cannot sue Z Corporation because there is no such valid corporation. Will A and Company escape liability?
  14. 14. Corporation by Estoppel • Sec. 21. Corporation by estoppel. - All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof: Provided, however, That when any such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not be allowed to use as a defense its lack of corporate personality.
  15. 15. Corporation by Estoppel 14. A, B, C, D and E, with mere agreement, proclaimed themselves as a corporation and started to transact business as "Z Corporation". They transacted business and sold merchandise on account to Y. Later, Z sued Y for payment. Y contends Z Corporation has no right against him since Z does not have a corporate identity. Will Y escape liability?
  16. 16. Corporation by Estoppel Sec. 21 Continued… On who assumes an obligation to an ostensible corporation as such, cannot resist performance thereof on the ground that there was in fact no corporation.
  17. 17. Inoperation 15. If a corporation fails to commence business from two(2) years from date lf its incorporation, there shall be automatic dissolution If a corporation, after commencing business, subsequently becomes continuously inoperative for a period of five (5) years, there shall be automatic dissolution. A. True; True B. True; False C. False; True D. False; False
  18. 18. The Board of Directors/Trustees 16. Identify: They are those with sole authority to determine policy and conduct the ordinary business of the corporation. 17. True or False. A director must always be a stockholder, and a trustee must always be a member. 18. True or False. A director shall hold office for three (3) years and until their successors are elected or qualified 19. Yes or No. Mr. Ralpogi, a director of X corporation, signed a contract on behalf of X Corporation to be the sole supplier of goods of Y corporation for the next several years. Is the contract binding upon the corporation?
  19. 19. Voting 20. A owns 100 shares. The number of directors to be voted on are 5. If he wishes to vote for 5 candidates equally, how many votes can he give to each of the 5 candidates? 21. Refer to number 49. If A wishes to vote for one candidate only, how many votes can he give that candidate?
  20. 20. Voting Requirements - BOD meeting 22. The BOD of X corporation is composed of 10 members. The articles of incorporation prescribe that there must be at least 7 to constitute a quorum. In a certain meeting, 8 of them was present. how many votes are needed in order to bind the corporation in a contract? 23. Suppose the decision was to elect the officers of the corporation. How many votes are needed?
  21. 21. Removal of director 24. True or False. A director may be removed by 2/3 of Outstanding Capital Stock even without just cause.
  22. 22. Vacancies 25. X Corp has a BOD of 10 directors. Five of them died in an accident. Who will vote to fill the vacancy? 26. Y Corp has a BOD of 10 directors. 2 of the directors died. Of the 8 remaining, 6 of them attended a meeting to vote on the vacancies. How many votes are need to fill them?
  23. 23. Liability of Directors 27. True or False. The directors of a corporation voted on an illegal act to be executed by the corporation. The directors will be liable solidarily to the corporation, stockholders and other persons.
  24. 24. Related Party Transaction - Director and Corporation 28. A corporation entered into a contract with a director. All of the following should exist for the contract to be voidable A. Presence of such director was not necessary in the meeting for the contract. B. Vote of such director not necessary for the approval of the contract. C. Contract is fair an reasonable. D. If an officer, the officer was previously authorized by the BOD. • *contract may be ratified by 2/3 of OSC if the defect is only A and/or B.
  25. 25. Related Party Transaction - Director and Corporation 29. An executive committee, composing of not less than three members of the BOD, may vote on matters delegated to it by the by-laws. However, they may not vote on the following, exceptA. to adopt a corporate seal B. approval of any action for which shareholders' approval is also required; C. the filing of vacancies in the board; D. the amendment or repeal of by-laws or the adoption of new bylaws; E. the amendment or repeal of any resolution of the board which by its express terms is not so amendable or repealable; and F. a distribution of cash dividends to the shareholders.
  26. 26. For Recitation Express Powers Implied Powers Incidental Powers
  27. 27. Question: What’s the best way to Review for the CPA Board? Answer:
  28. 28. 30. A corporation has Ordinary Capital of P100,000 and APIC of P200,000. What is the maximum amount of surplus profit that the corporation will retain? 31. These are acts done by the corporation that are not within its express, implied or incidental powers.

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