1. Create a study schedule and stick to it. Block out specific times each week to review different subjects. 2. Focus your review on your weakest subjects first. Spend more time reviewing areas you struggled with on practice tests. 3. Practice old exams. Work through multiple choice and essay questions from prior exams. Compare your answers. 4. Study with a group. Quiz each other on key concepts, formulas, and technical details. Explain things to others. 5. Make flashcards of important terms, rules, exceptions. Carry them with you and review during downtime.

2. 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.

3. 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

4. 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.

5. 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

6. Commencement of Existence
Complete the following sentence:
8. A corporation gains juridical
personality from the date of
_________________________________
(Hint: Certificate)

7. A Corporation attains juridical
personality from the date of
isssuance of the certificate of
incorporation

8. 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)

9. 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.

10. 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.

11. 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?

12. 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?

13. 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

14. 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?

15. 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.

16. 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?

17. 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.

18. 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

19. 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?

20. 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?

21. 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?

22. Removal of director
24. True or False. A director may be removed by
2/3 of Outstanding Capital Stock even without just
cause.

23. 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?

24. 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.

25. 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.

26. 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.

27. For Recitation
Express Powers
Implied Powers
Incidental Powers

28. Question: What’s the best way to Review for the
CPA Board?
Answer:

29. 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.