RFBT 1st Preboard

1. Non-compliance with this kind of obligation gives a right of action to compel performance.
A. Natural Obligations
B. Moral Obligations
C. Civil Obligations
D. All of the choices

2. Fluffy Iglesias is indebted to Marisol for P100,000. The debt became due and no payment was made by Fluffy.
Eventually, the right of action prescribed before Marisol can initiate any court proceedings to compel performance.
However, out of his own conscience, Fluffy eventually paid the P100,000. In this case,
A. Fluffy can ask for the return of the P100,000 since the debt already prescribed.
B. Fluffy can ask for the return of the P100,000 on the ground of solution indebiti.
C. Fluffy cannot ask for the return of the P100,000 since Marisol has the right to retain payment.
D. Fluffy cannot ask for the return of the P100,000 since ownership passes upon delivery of the same.

3. The obligation to give support is an obligation arising from:

A. Law
B. Contract
C. Quasi-contract
D. Quasi-delict

4. Ms. X, a Filipino citizen who resides in the US, instructed her bank to make a transfer of US$1,000. Mellon Bank US
facilitated the transfer but, by mistake, transferred US$1,000,000 to the account of Ms. Y in Prudential Life
Philippines. Mellon Bank now sues for the recovery of the excess US$999,000. On what ground may the recovery
be allowed?
A. Contract
B. Quasi-contract
C. Delict
D. Quasi-delict

5. The civil liability arising from a crime requires:

A. Proof beyond reasonable doubt
B. Preponderance of evidence
C. An iota of evidence
D. Any of the choices

6. Mr. D, a driver of a jeepney owned by Mr. O, while driving recklessly, hit a pedestrian, Mr. X and injured his
passenger Mr. P. Mr. P can sue for damages against Mr. O on the ground of:
A. Delict
B. Delict and Quasi-Delict
C. Delict, Quasi-Delict and Contract
D. Delict, Quasi-Delict, Contract and Quasi-Contract

7. A potestative suspensive condition solely dependent on the will of the debtor:

A. Does not affect the validity of the obligation
B. Makes the obligation voidable
C. Makes the obligation void
D. Is void and thus the obligation is treated as a pure obligation

8. During the pendency of the suspensive condition in an obligation to deliver a specific or determinate thing, if the
thing suffers an impairment with the fault of the debtor, the creditor can:
A. Exact fulfillment and ask for damages
B. Ask for rescission and ask for damages
C. Both choices
D. Neither of the choices

9. In all of the following, the obligation is already extinguished, except:

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A. “I promise to deliver a cow or carabao” Debtor has the right of choice but all the things were lost due to
fortuitous event.
B. “I promise to deliver a cow or carabao” Creditor has the right of choice but all the things were lost due to
fortuitous event.
C. “I promise to delivery a cow” but debtor has the option to deliver a carabao instead and the carabao was lost
due to fortuitous event before substitution.
D. “I promise to delivery a cow” but debtor has the option to deliver a carabao instead and the cow was lost due
to fortuitous event before substitution.

10. A, B and C wrote a promissory note that reads “I promise to pay X and Y P120,000”. X and Y are joint creditors.
Which of the following is correct?
A. X can collect P20,000 from A
B. X can collect P40,000 from C
C. Y can collect P60,000 from B
D. Y can collect P120,000 from A, B or C.

11. Those joined to or included with the principal for the latter’s better use, perfection or enjoyment.
A. Accessories
B. Accessions
C. Additions
D. Alluvion

12. Substitute performance is not available in case of non-performance of:

A. Obligation to deliver a determinate thing
B. Obligation to deliver a generic thing
C. Both choices
D. Neither of the choices

13. Defense of diligence of a good father in the selection and supervision of employees is available in:
A. Culpa contractual
B. Culpa aquiliana
C. Culpa criminal
D. All of the choices

14. D is indebted to C for P100,000. X paid the obligation with the consent of D without the intention of being
reimbursed, but D did not accept the gratuitous act of X. In this case,
A. The payment to C is without any effect
B. There is a donation
C. X is now the creditor of D
D. All of the choices are correct

15. In application of payments where the debts are of the same nature and burden, the payment of the debtor:
A. Will extinguish the oldest debt
B. Will extinguish the newest debt
C. Will be applied proportionately
D. The court will decide to which debt it will apply

16. This mode of extinguishment requires compliance with the formal requisites of a donation in order to be valid:
A. Confusion
B. Remission
C. Novation
D. Impossibility of Performance

17. P hired A as his agent empowered to borrow money. A himself became the lender at the market rate of interest. A
then gave his consent as the lender in the contract of loan, and in behalf of P as the borrower. What is the status
of the contract?
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A. Valid
B. Unenforceable
C. Voidable
D. Rescissible

18. A warranty against non-apparent encumbrance is example of what element of a contract?

A. Essential
B. Natural
C. Accidental
D. None of the choices

19. This stage in the life of a contract is when there is already meeting of the minds:
A. Conception
B. Generacion
C. Birth
D. Termination

20. On March 1, 2021, Mr. OR made an offer through telegram which was received by Mr. OE on March 3, 2021. Mr.
OE then sent a letter of acceptance on March 4, 2021 which was received by Mr. OR on March 6, 2021. However,
on March 5, 2021, Mr. OR already sent a letter withdrawing his offer, which was received by Mr. OE only on March
7. When was the contract perfected?
A. March 4, 2021
B. March 6, 2021
C. March 7, 2021
D. There is no perfected contract

21. The capacity or fitness to be the subject of legal relations which is inherent in every natural person and is lost only
through death, the absence of which makes the contract void, is known as:
A. Legal Capacity
B. Juridical Capacity
C. Capacity to Act
D. All of the choices

22. In which of the following will there be vitiation of consent through fraud?
A. Failure to disclose facts even if there is no duty to reveal them
B. Usual exaggerations in trade when the other party had an opportunity to know the facts
C. Expression of an opinion by an expert and the other party relied on the expert’s special knowledge
D. Misrepresentation made in good faith

23. The sale of heavenly bodies is considered a void contract because the object is
A. Contrary to morals
B. Impossible
C. Not within the commerce of man
D. Not determinate

24. S sold his land to B for P1,000,000 in a public instrument. At the time of sale, the land had a fair market value of
P3,000,000. What is the status of the contract?
A. Valid
B. Rescissible
C. Voidable
D. Void

25. The sale or transfer of a large cattle is classified as ___________ as to its perfection:
A. Consensual
B. Formal
C. Real
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D. None of the choices

26. Mr. X was empowered by the barangay to purchase a small parcel of land where they would erect a signage
containing the names of the barangay officials. Mr. X was able to do so. He entered an oral sale with Mr. S for a
small portion of the latter’s lot for a price of P499. What is the status of the contract?
A. Valid and enforceable
B. Rescissible
C. Voidable
D. Unenforceable

27. A entered into a written lease of real property with B concerning the former’s house and lot for a rental rate of
P10,000 a month covering a period of 2 years. B now demands from A to execute a public instrument for the said
lease. In this case,
A. B may validly do so since the contract is valid and enforceable
B. B may validly do so since the contract was perfected by mere consent without need of a specific form even
for enforceability
C. B may not validly do so since the contract is void
D. B may not validly do so since the contract is unenforceable

28. Reformation is allowed in which of the following cases?

A. Donations intervivos wherein no condition is imposed
B. Wills
C. When the real agreement is void
D. If the mistake in the instrument is mutual

29. Which of the following stipulation is valid?

A. A stipulation prohibiting the real estate mortgagor from disposing the mortgaged property
B. A stipulation providing for automatic appropriation of the thing given by way of pledge/mortgage in case of
non-payment
C. A stipulation excluding a partner from sharing in the profits and losses
D. None of the choices

30. As a rule, a contract takes effect only between the parties, their assigns and their heirs. Which of the following is
not an exception to this rule?
A. A contract of real estate mortgage that is registered
B. A creditor initiating an action to rescind the fraudulent contract entered into by his debtor
C. A person who maliciously induces another person to violate the terms of his contract
D. A third person who receives an incidental benefit from a contract

31. If a contract is gratuitous, there will be a presumption that the same was entered into fraudulently when:
A. The debtor received a judgment relative to the claim of the creditor
B. The debtor received a judgment even if it does not relate to the creditor directly
C. The debtor leaves sufficient properties to cover his debts
D. The debtor did not reserve sufficient properties to cover his debts

32. X promised to deliver to Y one of his 5 cars without specifying which one. In this case,
A. The contract will be interpreted to effect the least transmission of rights
B. The contract will be interpreted to effect the greatest reciprocity of interest
C. The contract is voidable
D. The contract is void

33. Which of the following is NOT a characteristic of a contract of sale?

A. Purpose of delivery is to transfer ownership
B. Subject matter is a determinate thing
C. Perfection is upon execution of the required formality
D. Onerous as to cause
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34. A husband and his wife may enter into a contract of sale with each other in which of the following marital property
regimes?
A. Absolute Community of Property
B. Conjugal Partnership of Gains
C. Complete Separation of Property
D. None of the choices

35. When the price in a contract of sale cannot be determined:

A. The courts will fix it
B. The contract is voidable
C. There is no contract of sale
D. There is a perfected contract of sale

36. This is the sale of a future thing which must come into existence otherwise, the sale will not be effective:
A. Emptio spei
B. Emptio rei speratae
C. Sale of vain hope
D. Sale of future inheritance

37. S sold to B through an oral sale a house and lot worth P10M. S gave B 30 days within which to pay the price. They
shook hands and B gave S, a valuable watch as a token of his appreciation. However, on the 15th day, S found X
who was willing to buy the same house and lot for P15M. S then told B, that he is withdrawing his offer to sell. B
insisted that S cannot withdraw his offer since it was founded on a valuable consideration. Who is correct in this
case?
A. S
B. B
C. Both
D. Neither

38. S sold to B a motorcycle for P100,000, where P20,000 is payable as downpayment, while the balance is payable in
equal montly installments of P10,000 due at the end of each month and was secured by a mortgage on the
motorcycle. B paid the first installment, but defaulted in the next 3. S foreclosed the mortgage. In this case,
A. If the foreclosure sale resulted in a deficiency, S may still collect the balance
B. If the foreclosure sale resulted in an excess proceeds, S is entitled to such
C. S can still collect from B the balance regardless of the results of the foreclosure sale
D. S can no longer cancel the sale nor recover any deficiency

39. S Realty Development Co. (SRDC) sold to B a condominium unit in installments. B was able to pay P5,000,000,
equivalent to 10 years of installment and downpayment of P1,000,000. SRDC now wants to cancel the sale due to
non-payment of more than 2 installments beyond the grace period allowed by law. How much would be the cash
surrender value that B is entitled to?
A. P4,500,000
B. P3,750,000
C. P3,000,000
D. P2,500,000

40. If a sale covers an immovable property for a certain price per unit of measure or number, and the deliver was for
an area less than that agreed upon by the parties, and specific performance is no longer an available option, which
of the following is NOT a correct remedy of the buyer?
A. Accion quanti minoris
B. Rescission in case the deficiency is at least 1/10 of the area agreed
C. Rescission if the buyer would not have entered into the contract knowing of the deficiency
D. None of the choices is an incorrect remedy

41. Which of the following is NOT a ground to invoke rescission as a right of an unpaid seller?
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A. The goods are perishable in nature
B. The right of rescission is stipulated
C. The buyer is in default for an unreasonable length of time
D. All of the choices are grounds to invoke right of rescission by an unpaid seller

42. If the buyer executes a waiver without knowing the risk of eviction, and the seller is in bad faith, how much can
the buyer recover from the seller in case of eviction?
I. Value of the thing sold at the time of eviction;
II. Income or fruits, if he has been ordered to deliver them to the party who won the suit against him;
III. Costs of the suit which caused the eviction, and, in a proper case, those of the suit bought against the vendor
for the warranty;
IV. Expenses of the contract, if the vendee has paid them
V. Damages and interests and ornamental expenses

A. All of the above

B. I to IV only
C. I only
D. None

43. A, B and C are co-owners of a rural land. Adjacent to said land is that of X, which has an area of 100 sqm. to the
left, and to the right is that of Y, which has an area of 150 sqm. C sold his share to Z. And Y, X and B signified their
intention to redeem the share of C, in the order they were mentioned. Who will be able to redeem?
A. All of them proportionately
B. Y because he signified his intention first
C. X because he has the smaller lot area
D. B because he is a co-owner

44. Harlequin and Diane, members of the Seven Deadly Sins, borrowed P100,000 from Meliodas, their Captain, where
their liability is joint. To secure the payment of the loan, Harlequin gave his spear Chastiefol and Diane gave her
war hammer Gideon by way of pledge. On maturity date, Harlequin paid P50,000 to Meliodas. In this case,
A. Meliodas cannot be compelled to return the Chastiefol
B. Harlequin can demand the return of his Chastiefol
C. If the Chastiefol is returned to Harlequin, the loan will be extinguished
D. Diane can demand the return of her Gideon

45. Legendairy Corporation (LC) borrowed money from Goliath Bank (GB) in the amount of P100M. To secure the
payment of the loan, LC executed a real estate mortgage over its two parcels of land. On due date, LC failed to
pay, and GB caused the extrajudicial foreclosure of the mortgage. How long is the redemption period?
A. Three months from the foreclosure sale or until registration of the sale, whichever is earlier
B. Three months from the foreclosure sale
C. One year from the foreclosure sale
D. Ninety days to one hundred twenty days from the foreclosure sale or until a judicial order of confirmation of
the sale

46. Teddy pledged her diamond ring to secure her debt to Bobbie amounting to P20,000. Teddy was not able to pay
the said debt on due date and Bobbie caused the foreclosure of the pledge. In this case, which of the following is
false?
A. The foreclosure sale will be conducted by a notary public.
B. If the ring sold for P25,000, Teddy would be entitled to the excess if there is stipulation to that effect
C. If the ring sold for P18,000, Bobbie would be entitled to the deficiency if there is stipulation to that effect
D. Whether or not the ring was sold for more or less than the amount of the loan, the loan shall be extinguished.

47. An accessory contract of pledge or mortgage may secure any of the following, except:
A. A pure obligation
B. An obligation with a suspensive condition
C. An obligation with a resolutory condition
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D. None of the above

48. The right of a mortgagor in a judicial foreclosure to redeem the mortgaged property after his default in the
performance of the conditions of the mortgage but before the confirmation of the sale by the court is known as:
A. Accion publiciana C. Right of pre-emption
B. Equity of redemption D. Right of redemption

49. In which of the following accessory contracts is delivery a requirement for perfection?
A. Pledge C. Chattel Mortgage
B. Real Estate Mortgage D. None of the above

50. The disposal of the property subject to this accessory contract, during the existence of the contract, cannot be
prohibited by the creditor-pledgee/mortgagee:
A. Pledge C. Chattel Mortgage
B. Real Estate Mortgage D. None of the above

51. Which of the following is not a negotiable instrument?

A. Pay to the order of Sidney P100,000 at UST, Espana, Manila. Sgd. D to X, UST, Espana, Manila
Accepted: Payable at 14 Loans St. Proj. 8, QC. Sgd. X
B. Pay to Ivan or bearer P20,000. Sgd. M to D
Accepted: For P10,000 only Sgd. D
C. Pay to Ruther P50,000. Sgd. D to X
Accepted: For P50,000 Sgd. X
D. Pay to Edward or bearer P10,000. Sgd. Lloyd, To Denver and BJ
Accepted: If Edward graduates by 2018. Sgd. Denver

52. “Pay to A without recourse”, Sgd. P is an example of which type of indorsement:

A. Restrictive
B. Conditional
C. Qualified
D. Special

53. In this type of instrument, the party primarily liable is the maker:
A. Promissory Note
B. Bill of Exchange
C. Both
D. Neither

54. Which of the following is an incorrect requisite for a bill of exchange to be negotiable:
A. The instrument is in writing and signed by the maker
B. The instrument contains an unconditional order to pay a sum certain in money
C. The instrument is payable on demand, or at fixed or determinable future time
D. The instrument is payable to order or bearer

55. M issued a promissory note in favor of P and authorized the latter to fill-up the note for P10,000. P, however, put
the amount P20,000 and negotiated the same to A. Which of the following is true?
A. M is not liable to A because he can validly raise the defense that the instrument was completed in breach of
the authority given
B. M is liable to A for P10,000 if A is a holder in due course
C. A can only collect P10,000 from P if he is not a holder in due course
D. A can collect P20,000 from M if he is a holder in due course

56. Which of the following requires the element of deceit?

A. Violation of BP Blg. 22
B. Estafa through post-dating or issuing a worthless check
C. Both
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D. Neither

57. B received a check from A in payment of a pre-existing obligation. Without encashing it, B indorsed and discounted
the check to C, representing it to be a good check, for which he received 80% of its face value. Eventuall, when C
deposited the check within 90 days from its date, it was returned due to insufficiency of funds. Who may be charged
with the violation of BP Blg 22 assuming the required notice was already provided?
A. Mr. A
B. Mr. B
C. Both
D. Neither

58. The life of a corporation generally begins from the issuance of its Certificate of Registration by the SEC. This
exemplifies which attribute of a corporation?
A. It is an artificial being
B. It is created by operation of law
C. It has the right of succession
D. It can only exercise express, implied and incidental powers

59. First Statement: A corporation may be a partner in a partnership under the Revised Corporation Code
Second Statement: Foreign corporations are allowed to donate for political partisan activities under the Revised
Corporation Code
A. Both statements are correct
B. Both statements are incorrect
C. Only the first statement is correct
D. Only the second statement is correct

60. X Corporation was incorporated under Philippine Laws. However, it is 100% owned by non-Filipinos. For purposes
of classification, X Corporation is considered a:
A. Domestic Corporation
B. Foreign Corporation
C. Eccesiastical Corporation
D. Corporation Sole

61. The legal existence and personality of this type of corporation can only be questioned through a direct attach
through a quo warranto proceeding:
A. De Jure Corporation
B. De Facto Corporation
C. Corporation by Estoppel
D. All of the choices

62. ABC Corporation was incorporated in 1970 with a life of 50 years. Upon effectivity of the Revised Corporation Code,
A. ABC Corporation will continue its life until 2020 only
B. ABC Corporation needs to re-register to extend its life as a corporation
C. ABC Corporation would need to file for extension of its life at least 5 years prior to expiration of the original
term
D. ABC Corporation will have perpetual existence except if a majority of the stockholders notifies the SEC of their
intention to retain the term

63. Which of the following is a requirement applicable to incorporators under the Revised Corporation Code?
A. They must be at least 5 but not more than 15
B. They must all be natural persons
C. Natural Persons must be of legal age
D. Majority of them must be residents of the Philippines

64. A and B are lovers, they want to incorporate “Wah! Me and My Jowa, Inc.”, for general merchandising, under the
Revised Corporation Code,
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A. They are now allowed to incorporate even if they are only two incorporators
B. They must include at least 3 more, to reach the minimum number of 5 incorporations
C. They must include at least 12 more, to reach the minimum number of 15 incorporators
D. At least 20% of the board must be independent directors

65. A, B and C wanted to incorporate ABC Corporation. They have an authorized capital stock of P100,000. How much
would be the minimum paid-up capital requirement applicable to them?
A. P25,000
B. P12,500
C. P5,000
D. P0

66. In providing for preferences and restrictions in the shares of stock of an ordinary stock corporation, the same must
be indicated in the:
I. Articles of Incorporation
II. By-Laws
III. Certificate of Stock

A. I, II and III
B. I and II only
C. I and III only
D. II and III only

67. Under the Revised Corporation Code, within 5 years from conviction of the following, a person cannot be appointed
or elected as a Director within 5 years from such conviction, except:
A. A crime punishable by imprisonment for a period exceeding 6 years
B. Violation of the Corporation Code
C. Violation of the Securities Regulation Code
D. Administratively liable for any offenses involving fraudulent acts

68. Which of the following is a permanent disqualification under the Revised Code of Corporate Governance
A. Refusal to comply with the disclosure requirements of the SRC and its IRR
B. Absence of more than 50% of all regular and special meetings of the Board
C. Any person declared judicially insolvent
D. Dismissal or termination for cause as director of any corporation covered by the Code of Corporate Governance

69. Under the Revised Corporation Code, should a director, trustee, or officer die, resign or in any manner cease to
hold office, the secretary or the director, trustee or officer of the corporation, or in case of death, the officer’s heirs
shall report in writing such with the SEC within ___ days
A. 5
B. 7
C. 15
D. 30

70. A, B, C, D and E are directors of ABC Corporation. E died and C abandoned his post. Who shall fill-up the vacancy?
A. The remaining directors since they still constitute a quorum
B. The remaining directors regardless if there is a quorum or not
C. The stockholders since the remaining directors no longer constitute a quorum
D. The stockholders whether or not the remaining directors still constitute a quorum

71. Under the Revised Corporation Code, the non-use of the corporate charter or failure to organize for a period of __
years from the issuance of its Certificate of Registration will result in the automatic dissolution of the corporation:
A. 2
B. 3
C. 5
D. 10
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72. A contract entered into by two corporations with the same director (an interlocking director) is generally:
A. Valid
B. Voidable
C. Unenforceable
D. Rescissible

73. Which of the following is now a required corporate officer under the Revised Corporation Code for corporations
vested with public interest:
A. Treasurer
B. Compliance Officer
C. President
D. Internal Auditor

74. Which of the following corporate officer positions may be held concurrently by the same person:
A. President and Secretary
B. Treasurer and Secretary
C. President and Treasurer
D. None of the above

75. Which of the following is false with regards no-par value shares?
A. The shares are deemed fully-paid and non-assessable, thus cannot result to issuance of watered stocks.
B. The consideration should not be less than P5
C. The entire consideration constitutes capital, not available for dividend declaration
D. Cannot be issued by banks, trust companies, insurance companies, public utilities and buildings and loans
associations.

76. A subscriber will be entitled to all the rights of a stockholder even before full-payment of the subscription, except:
A. Right to vote
B. Appraisal right
C. Right to dividends
D. Right to a certificate of stock

77. To delegate the power to amend by-laws to the Board of Directors, the required number of votes from the stockholders
is ________; to revoke the same, the required number of votes is ________.
A. Majority; Majority
B. Majority; Two-thirds
C. Two-thirds; Majority
D. Two-thirds; two-thirds

78. A corporation can retain earnings in excess of 100% of the paid-up capital in the following cases, except:
A. For definite corporate expansion projects
B. When prohibited from declaring dividends by a loan agreement with any financial institution or creditor
C. When necessary under special circumstances such as a special reserve for probable contingencies
D. When declaring dividends would subject the individual stockholders to a separate tax from the corporate tax
already paid

79. Under the Revised Corporation Code, the place of stockholders’ meeting shall be:
A. The principal office
B. The city or municipality where the principal office is located
C. Anywhere in the Philippines
D. Anywhere even outside the Philippines

80. The merger or consolidation of two corporations is deemed effective:

A. On the date the parties agreed to a consolidation or merger
B. On the date the stockholders ratified the Board resolution for consolidation or merger
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C. Upon submission of the articles of merger or consolidation to the SEC
D. Upon issuance of the certificate of merger or consolidation

81. Under the Revised Corporation Code, the required number of votes in case of voluntary dissolution of a corporation
where creditors are affected:
A. 25%
B. Majority
C. 2/3
D. ¾

82. The following are not applicable to a One Person Corporation, except:
A. Articles of Incorporation
B. By-laws
C. Minutes of the Meeting
D. Authorized Capital Stock

83. Under the Revised Corporation Code, any asset distributable to any creditor or stockholders or members who is
unknown or cannot be found shall be escheated in favor of:
A. The national government
B. The city or municipality where the asset is located
C. The city or municipality where the corporation had its principal office
D. A charitable institution designated by the corporation

84. To qualify as a foreign corporation, the consideration is

A. Ownership of the shares of stock
B. Appointment of a resident agent
C. Agreement of the parties
D. Under what country’s law it was incorporated

85. In the stockholders’ meeting for the election of directors/trustees, the Revised Corporation Code now allows the
stockholders or members to vote through remote communication or in absentia, in case (choose the exception):
A. The by-laws authorizes the same
B. The majority of the BOD authorizes the same
C. Even without authorization under the by-laws or from the BOD in case of corporations vested with public
interest
D. None of the above is an exception

86. Under the Revised Corporation Code, alternative certification of the financial statements shall be allowed if:
A. The paid-up capital is less than P500,000
B. The paid-up capital is less than P600,000
C. The total assets or liabilities is less than P500,000
D. The total assets or liabilities is less than P600,000

87. A stockholder was denied of his right to inspect the books of accounts and be furnished with the financial statements
of the corporation. In this case, what type of suit will the corporation be filing?
A. Individual Suit
B. Class Suit
C. Derivative Suit
D. Any of the choices

88. Under the Revised Code of Corporate Governance, this Committee, composed of at least three directors shall have,
among others, the function of coordinating, monitoring and facilitating compliance with laws, rules and regulations:
A. Audit Committee
B. Nomination Committee
C. Remuneration Committee
D. Executive Committee
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89. In no case shall the total yearly compensation of directors:

A. Exceed 10% of the total net income before tax
B. Exceed 20% of the total net income before tax
C. Exceed 10% of the total net income after tax
D. Exceed 10% of the total net income before tax

90. A common stockholder’s right to vote may only be limited by this type of share:
A. Founder’s Shares
B. Redeemable Shares
C. Preferred Shares
D. Treasury Shares

91. The following are the instances when a preferred stockholder may vote. All, except one, shall require 2/3 vote of
the stockholders. Which one is the exception?
A. Amendment of the Articles of Incorporation
B. Sale of all or substantially all of the corporate property
C. Merger or Consolidation of the Corporation with another Corporation
D. Amendment of the by-laws

92. As a rule, the rights of a delinquent subscriber shall be suspended, except:

A. Right to vote
B. Right to be voted upon
C. Right to receive dividends
D. Right to inspect books of accounts

93. The following requires the majority vote of the stockholders, without the need of a Board Resolution, except:
A. Revoking the delegated power to amend by-laws
B. Calling a special meeting to remove directors
C. To fix the compensation of directors
D. Ratify a business opportunity entered into by a member of the Board

94. The appraisal right of a stockholder may be exercised in all of the following instances, except:
A. Amendment of the Articles of Incorporation to change the name of the corporation
B. Disposal of all or substantially all of the corporate property
C. Mergers or consolidation
D. Investment of funds in another corporation

95. The following are characteristics applicable to close corporations, except:

A. The number of stockholders cannot exceed 20
B. Shares of stock are required to have specified restrictions
C. The pre-emptive right may be denied in certain instances
D. The appraisal right may be exercised for any reason

96. Thefollowing are securities exempt from the coverage of the Securities Regulations Code, except:
A. Securities issued by the Philippine Government or Government of any country
B. Certificates issued by a trustee or a receiver in bankruptcy
C. Securities or derivatives, the sale or transfer of which is under the supervision or regulation of the Insurance
Commission, the Housing and Land Use Regulatory Board, or the Bureau of Internal Revenue.
D. Securities issued by a bank, including its own shares of stock.

97. The following are covered by the Mandatory Tender Offer Rule, except:
A. A, B and C plans to acquire 40% of the shares of X corporation over a period of 10 months
B. D, who owns 20% of the shares of X corporation plans to acquire an additional 32%
C. E, who owns 18% of X corporation, plans to acquire 50% of Y corporation which in turn owns 64% of X
corporation
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D. None of the choices

98. The financial statements of a corporation using the fiscal year, as a general rule, shall be filed within ____________
calendar days from the end of the fiscal year:
A. 105
B. 110
C. 120
D. 150

99. Which of the following may not be considered an insider in relation to material non-public information relative to
an issuer corporation?
A. The director of the issuer corporation
B. The secretary of a director of the issuer corporation
C. Auditor of the issuer corporation
D. None of the choices

100. The sale of securities to any number of the following qualified buyers are exempt from the registration
requirement, except:
A. Bank
B. Investment House
C. Insurance Company
D. Pension fund managed by a corporation

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