And affiliates exceeds two percent of its subscribed

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and affiliates exceeds two percent of its subscribed capital stock D. Dismissal or termination for cause as director of any corporation covered by this Code 38. The articles of incorporation of ABC Corporation provide for 7 directors. In the monthly meeting of the board of directors held on April 8, 2009, directors B, C, D and E were present and the following resolutions were approved: I. A resolution for the purchase of a delivery truck from E Trading, a sole proprietorship owned by E. B, C, D and E voted for the resolution II. A resolution appointing T as the new corporate secretary where B, C, D and E voted for the resolution. Which is correct? A. Both resolutions are valid and do not need shareholders’ approval B. Both resolutions are valid but need shareholders’ approval C. Resolution I needs shareholders’ approval. Resolution II is valid
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D. Resolution I is not valid. Resolution II needs shareholders’ approval Page 9 39. This vacancy in the board of directors may be filled by the board of directors if the remaining directors still constitute a quorum. A. Removal of a director B. Death of a director C. Increase in the number of directors D. Expiration of the term of a director 40. Which is supreme in the matter of management of the corporation? A. President B. Chairman of the Board of Directors C. Stockholders D. Board of Directors 41. Which of the following statements is correct? A. When a vacancy in the board arises, such vacancy maybe filled by the remaining directors provided they still constitute a quorum B. The officers of a non-stock corporation maybe elected directly by the members instead of by the board of trustees C. The number of trustees in a nonstock corporation maybe five but not more than fifteen D. A director individually and acting as such can bind the corporation because he is an agent of the corporation 42. Land Corporation is a nonstock, nonprofit corporation whose articles of incorporation provide for 9 trustees. The trustees elected and their respective terms are: A, B and C for 3 years, D, E and F for 2 years, and G, H and I for 1 year. After one year, J, K and L were elected to replace G, H and I whose term expired, while M and N were elected to replace B and E, respectively who resigned after one year in office. What is the term of office of L, M and N? L M N A. 3 years 3 years 3 years B. 3 years 2 years 1 year C. 1 year 2 years 1 year D. 2 years 2 years 2 years 43. A, B, C, D and E formed Super Corporation and submitted their Articles of Incorporation to the SEC. Inadvertently, through an oversight; the SEC approved the Articles and issued a certificate of incorporation. Thereafter, it was discovered that they have not completed their required period of residency in the Philippines. As a result, which of the following is not correct? A. The corporation shall be considered as a de-facto corporation and shall be allowed to function as a corporation under the color of law B. The right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which the corporation maybe a party C.
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