iCARE Preweek

1. X, Y and Z are partners in XYZ Partnership, Ltd. with Y as limited partner. After five years
of operations, the partnership incurred debts in favor of third persons totaling P5 million.
The total partnership assets is P2M. Who among the partners shall be liable with their
separate property in favor of creditors?
A. X, Y and Z for P1 million each.
B. X and Y for P1 million each.
C. X and Z for P1.5 million each because they were general partners.
D. X, Y and Z depending upon their capital contribution.

2. A limited partner is prohibited on account of his claim against the partnership from
performing the following acts, EXCEPT:
A. To receive and hold as collateral security any partnership property.
B. None of the choices.
C. To receive from a general partner or the partnership any payment, conveyance or
release from liability if partnership liabilities to outside creditors are not yet paid.
D. Transact business with the partnership

3. At the annual meeting of the Corporation for the election of five (5) directors as provided for
in its Articles of Incorporation, A, B, C, D, E, F, and G were nominated. A, B, C, D, and E
received ten votes less than E. Subsequently E sold all his shares to F. At the next meeting of
the Board, Directors both E and F appeared. Who is entitled to sit as member of the Board?
A. E C. E and F
B. Neither E nor F D. F

4. ________________ refers to those accounts and funds and sources of which originated from
and/or materially- linked to the monetary instruments or properties subject of the freeze
order or an order of inquiry:
A. Materially- linked accounts
B. Related accounts
C. Anonymous accounts
D. “In trust for “accounts

5. Mr. Angelito Ramos maintained the following deposits at ABC Bank:

Name of Depositor Type of Deposit Balance

Angelito Ramos Savings Deposit

(Maintained in the Head Office [HO]) P100, 000
Angelito Ramos Time Deposit
(Maintained in the HO) P500, 000
Angelito Ramos Demand Deposit
(Maintained in Branch 1) P100, 000
Angelito Ramos Time Deposit
(Maintained in Branch 2) P200, 000
Angelito Ramos and XYZ Corp. Demand Deposit
(Maintained in HO) P500, 000
ABC Bank was liquidated by the Bangko Sentral ng Pilipinas due to financial reverses. How
much is the UNINSURED deposits of Angelito Ramos? (P900,000 – P500,000 = P400,000)

A. P400, 000 C. None of the choices

B. P500, 000 D. P900, 000

6. High yield but high- risk bonds issued by heavily indebted or financially weak corporations
that are desperately in need of additional capital are known as _________.
A. Junk Bonds C. Convertible Bonds
B. Guaranteed Bonds D. Callable Bonds

7. Which of the following “covered persons” under the AMLA, is supervised or regulated by
the Insurance Commission?
A. Investment houses (SEC) C. Trust entities (BSP)
B. Pawnshops (BSP) D. Holding Companies (IC)
8. Which of the following NOT a responsibility of Audit Committees is of publicly- listed
companies?
A. Management Compensation
B. Monitoring Management
C. Review corporate reporting procedure
D. Relations with the independent auditor

9. The stockholders, as owners of the corporation have the following rights expressly
recognized by the corporation law, EXCEPT the right ___________:
A. to elect and remove directors
B. as a co- owner of the corporate property
C. to inspect corporate books and records
D. to receive dividends when declared

10. Samson, Inc. and Goodfit Construction, Inc. are only construction companies available to
bid of the construction of the new building at the Katipunan Institute of Technology.
Executives from the two companies agreed to fix the bids so that Samson, Inc. reneges on
the deal and wins both contracts, Goodfit construction, Inc. sues for breach of contract. Will
Samson, Inc. win?
A. Yes, agreements to defeat competitive bidding are legal
B. Yes, agreements to defeat competitive bidding are legal only in the construction
industry.
C. No, agreements to defeat competitive bidding are illegal only in the construction
industry.
D. No, agreements to defeat competitive bidding are illegal.

11. A, B, C, D, E, F and G are the members of the board of directors of cooperative.

Unfortunately, E, F, and G resigned for personal reasons. How shall the vacancies be filled-
up?
A. Vacancies shall be filled- up by the vote of at least a majority of the remaining
directors, if still constituting a quorum.
B. By the vote of at least ¾ of all the members with voting rights.
C. Vacancies shall be filled- up by the vote of all the remaining directors in a special
meeting.
D. By the majority vote of the general assembly in a regular or special meeting duly
called for the purpose.

12. Which of the following statements regarding BP 22 is FALSE?

A. Prosecution in a BD 22 case must establish that a written notice of dishonor was
actually received by the maker or drawer of the dishonored check.
B. A drawer of a dishonored check may be convicted under BD 22 even if he had
issued the dishonored check for payment of pre- existing obligation.
C. None of the choices.
D. The constitutional guarantee that no person shall be imprisoned for non- payment
of debt was held to be a valid defense of a drawer or maker who issued a dishonored
check upon its presentation for payment.

13. S sold a parcel of land to B for P1,000,000.00 with B paying the said amount immediately.
Although S delivered the transfer certificate of title of the land to B, the parties did not
execute any document at all for the sale except the receipt for the payment which S issued to
B. B now wants to register the sale with the Register of Deeds.

A. B can compel S to execute a Deed of Sale which is duly notarized so that B can
register the sale.
B. The contract between S and B is rescissible; hence B can sue for damages.
C. The contract between S and B is void because it was not in the form required by law.
D. B cannot compel S to execute a Deed of Sale because the contract is enforceable.

14. Some institution may be used by criminals to transfer and hide illegal wealth. The
institutions are often located in countries with well- developed secrecy laws and attractive
tax structures. These institutions are called _____________.
A. Trusts C. Offshore banks
B. Shell companies D. Front companies
15. It is a principle expressly embodied in the Declaration Policy of RA No. 9520, otherwise
known as the Cooperative Code of 2008, where the state recognizes the importance of the
cooperative sector in organizations, training and research, audit and support services
relating to cooperatives with government assistance where necessary.
A. Proportionality C. Subsidiarity
B. Sustainability D. Equity

16. Can the SEC refuse to register corporation on the ground that it is owned and controlled by
a single stockholder and the rest of the stockholders are mere nominees:
A. No, because there are nominees appointed.
B. No, because a corporation has personality separate and distinct from its stockholders.
C. Yes, because it will not consistent with the principle that a corporation has a
personality separate and district form its stockholder.
D. Yes, because the SEC is empowered to regulate all private corporation.

17. All cooperative registered with the Cooperative Development Authority (CDA) shall be
required to submit annually a Cooperative Annual Progress report (CAPR) with supporting
documents with the CDA. Which of the following is NOT a supporting document to be
attached to the CAPR?
A. Social Audit report including its program of activities pursuant to its socio-civic goals
B. Report on the total compensation of each of the directors and officers
C. List of officers and training undertaking/ completed
D. Audited financial statement.

18. An amendment in the articles of incorporation that would shorten the corporate term
requires the approval of the:
A. Majority vote of the board of directors/ trustees and 2/3 vote of the outstanding
capital stock/ member
B. Majority vote of the board of directors/ trustees and 2/3 vote or written assent of the
outstanding capital stock/ members.
C. Majority vote of the board of directors/ trustees and majority vote or written assent
of the outstanding capital stock/ members.
D. 2/3 vote of the board of directors/ trustees and 2/3 vote of the outstanding capital
stock/ member.

19. Which of the following statements relative to R.A No. 1508, as amended, otherwise known
as the Chattel Mortgage Law is FALSE?
A. Aside from the Chattel Mortgage Registry of the register of deeds where the property
located, registration shall also be made where the mortgagor resides if he resides in place
other than where the property is located.
B. Where the parties executed chattel mortgage on a building, they shall be bound to the
chattel mortgage contract.
C. Failure to execute the affidavit of Good faith and to register the chattel mortgage
contract shall invalidate the mortgage.
D. Registration of the Chattel mortgage is made in the Chattel Mortgage Register
of Deeds where the property is located.

20. The specific of goods are those goods which are identified ___________.
A. at the time of contract of sale
B. after the formation of contract of sale
C. during the performance of contract of sale
D. at the time of enforcement of contract of sale

21. LMN are equal stockholder of LMN Inc., a closely held corporation. All three are directors
but only L and M are corporate officers receiving salaries from the corporation. When N
complains that the corporation failed to pay dividends and “let him in the cold “ L and M
tell him to “take a hike”- or sell your shares are worth much more than P35/share. He asks
for the indications by outside parties of an interest in buying in the business or its shares? Is
N has the right to inspect the records?
A. N does not have the right inspect those documents because a non- officer stockholder,
he may only request to see the articles of incorporation, by- laws and board minutes.
B. N has the right to inspect those documents because he is a stockholder.
C. N has the right to inspect because he is a stockholder, and seeking the value the
business and his shares is a legitimate purpose.
D. N does not have the right to inspect those documents as a stockholder, but only as a
director.
22. Where an after agreement to sell for the sale of specific goods, the good perish without any
fault of the buyer or seller, the contract of sales becomes void if the goods perish __________
A. Before the rick passes to the buyer
B. After the risk passes to the buyer
C. Without any knowledge of the seller
D. Without any knowledge of the buyer

23. Removal of directors by the stockholder may be with or without cause provided that
removable without cause may not be used to deprive the minority stockholders of their
_________.
A. pre- emptive right
B. right of the representation to which they may be entitled under the law
C. right to file derivative suit against the majority stockholders
D. appraisal right

24. Which of the following is NOT an essential element of a contract of sale?

A. There must be transfer of possession of goods
B. There must be transfer of ownership in the goods
C. There must be some price for goods
D. There must be some goods as subject matter

25. In the sale of thing pledged, where the proceeds of the sale are less than the amount due,
when can the pledgee recover the deficiency?
A. In the case of Pawnshop
B. if there is stipulation allowing such recovery
C. The pledge can never recover the deficiency
D. In case of pledge by operation of law

26. A pledge agreement allowed the pledgee to transfer the pledged shares in pledgee’s name
in the corporate books if the pledgor fails to remedy a payment default within thirty (30)
days from receipt of a written demand from the pledgee. Is the stipulation VALID?
A. No, because it constitutes pactum commissorium
B. No, because it dispenses with the payment of taxes due on to the transfer
C. Yes, because the transfer is only as act of administration
D. Yes, because the transfer is not automatic i.e, only after pledgor fails to pay during
the period

27. Which of the following statements relative to a partnership and partners is INCORRECT?
A. The partnership comes into existence only thru an agreement
B. The true test of partnership is the mutual agency i.e, agency relationship among
partners.
C. A person who receives the profit is always a partner
D. A person who receives the profit is not necessarily a partner

28. Which of the following persons is EXEMTED from registration with the SEC before he
engages in the business of buying and selling of securities in the Philippines?
A. Brokers and dealers
B. None of the choices
C. Salesmen of Brokers or dealer
D. Associated person of broker or dealer

29. The following statements pertaining to express powers of a corporation are presented to
you for evaluation:
I. A domestic corporation may make donation for the benefits of a political party or
candidate or for purpose of partisan political activity provided the donation are reasonable
II. A corporation may enter into a partnership, joint venture, merger consolidation, or any
other commercial agreement with natural and juridical persons.
A. Both statements are true
B. Both statements are false
C. Statement I is true, Statement II false
D. Statement I is false, Statement II true
30. B purchased a motor vehicle from S for P1,200,000 payable by a downpayment of P600, 000
and the balance in 12 monthly installment of P50,000 each. A chattel mortgage on the vehicle
was executed to serve as security. B defaulted on the 7th and 8th monthly installments. The
chattel mortgage was foreclosed but the auction sale resulted into a deficiency of P100, 000.

Under R.A No. 1508, as amended, otherwise known as the Chattel Mortgage Law, in
relation to Article 1484 of the Civil Code, more popularly known as the Recto Law, what is
the remedy of S to recover the deficiency?
A. Auction the other properties of B for P100, 000
B. No other remedy on the deficiency
C. Cancel the installment sale
D. File a collection suit for P100, 000 against B.

31. According to the Data Privacy Act of 2012, which of the following is the definition of
“processing of personal data?”
A. Any operation that can be performed on personal date except erasing and destroying
B. Only operation in which the data is being shared on social media or transferred by
email or otherwise through the internet
C. Any operation that can be performed on personal data.
D. Only operation in which the personal data is used for the purposes for which it was
collected.

32. Where the money received from a third party by the partnership, in the ordinary course of
business, is misapplied by one of the partners to his own use, then the ______________.
A. Third party has no remedy
B. Partnership is not liable for the same
C. Defaulting partner alone is liable for the same
D. Partnership is liable for the same

33. In conducting customer due diligence, covered persons shall maintain a system of verifying
the true identity of the client’s based on the_______________.
A. None of the choices C. Risk- based approach
B. Cognitive-based approach D. Principle- based approach

34. Which of the following is NOT a responsibility of the Chairperson of a publicly- listed
company as contained under the existing Code of Corporate Governance?

A. Guarantees that the board receives accurate timely, relevant, insightful, concise and
clear information to enable to make sound decision
B. Serves as the link between external operations and external stockholders
C. Adopt corporate governance policies and ensures that these are reviewed and update
regularly and consistently implemented in form and substance
D. Determines the corporation’s strategic direction and formulates and implements its
strategic plan on the direction of the business

35. The following are the requisites for the filling of action pauliana or rescissory action,
EXCEPT:
A. The third person who received the property conveyed of, by onerous title, has been
an accomplice in the fraud.
B. The right and actions are not purely personal or inherent in the person of the debtor.
C. The act being impugned is fraudulent
D. The debtor has made a subsequent contract conveying a patrimonial benefit to a third
person.

36. XYZ Corporation has 1,000,000 authorized voting shares of which 400,000 are outstanding.
The XYZ Board concludes that the corporation needs more capital and wants to issue
another 500,000 shares. The board adopts a resolution to this effect. What action is needed to
make the adopted resolution binding, if there is any?
A. A vote of a simple majority of the shares present at a properly convened stockholders
meeting assuming there is a quorum.
B. A vote of the majority of the outstanding shares (200, 000 + 1) in a stockholder
meeting.
C. The Board resolution is sufficient since the board of directors has the authority to
approve the issuance of authorized shares, without stockholder vote.
D. A vote of at least one stockholder since a plurality is enough.
37. Every contract of partnership having a capital of three thousand pesos or more, in money or
property shall appear in a public instrument, which must be recorded in the SEC. Failure to
comply with this requirements:
A. Does not affect the liability of the partnership to third persons and the partnership
have legal personality
B. Renders the contract of partnership void
C. Render the contract of partnership unenforceable
D. Affect the liability of the partnership to third persons and the partnership has no legal
personality.

38. Which of the following is NOT a responsibility of the Chief Executive Officer of a publicly-
listed company under the existing Code of Corporate Governance?
A. Facilitates discussion on key issues by fostering an environment conducive for
constructive debate and leveraging on the skills and expertise of individual directors.
B. Manage the corporation’s resources prudently and ensures a proper balance of the
same
C. Builds the corporate culture and motivates the employees of the corporation.
D. Serves as the link between internal operations and external stockholders.

39. Which of the following statement is the BEST description of a “condition”?

A. A term in a contract which provides that the contract will terminate on the happening
of a particular event.
B. A term in a contract, the consequences of breach of which cannot be determined until
after the breach has occurred and the seriousness of the effects of the breach can be
ascertained.
C. A term which must be satisfied before a contract can come into existence.
D. A term in a contract, non- performance of which may result in rescission of the
contract and/or damage to the plaintiff.

40. ABC Corporation’s corporate existence expired on December 31, 2017. The stockholders of
ABC Corporation wish to continue its operation and asked your advice what legal action is
required? What is your best advice?
A. Secure from the Securities and Exchange Commission, a Certificate of Revival of
Corporate existence subject to all the requirements prescribed by the SEC
B. File with the Securities and Exchange Commission (SEC) for an extension of the
corporate term of the corporation for another fifty (50) years.
C. Establish a new corporation, since the corporation has no legal personality.
D. No action is required; as corporation shall have perpetual existence and hence, the
corporation shall continue its business operations.

41. Betina Furniture Co. undertook to deliver to Mr. Magsaysay specified pieces of living room,
dining room and bedroom furniture- all made of narra, for a price started in the contract.
The contract had a penalty clause to damage in the amount of P100,000.00. The furniture
delivered by Betina was made, not of narra but of inferior wood. In a suit to recover
damages, Mr. Magsaysay was able to prove that the actual damages he sustained amounted
to P200,000.00. If you were to decide based on legal ground, how much claim would you
award to Mr. Masaysay?
A. P300,000.00 C. P100,000.00
B. P200,000.00 D. P50,000.00

42. The corporation may deny the exercise of the stockholders of his right to inspect over
business secrets or confidential matters base on the principle that
A. the right to inspect should be for a legitimate purpose that is protective of the
interests of the corporation.
B. what every person can do himself; he has a right to designate another person to do it
for him.
C. the exercise of the power to inspect can be exercise only in consonance with the
germane to the property right of the stockholders pertaining his shares of stock in the
corporation.
D. the right to inspect being a common law right is absolute.
43. Unless by- laws provides otherwise, written notice of special meetings shall be sent to all
stockholders of record at least _________________:
A. (2) weeks prior to the meeting
B. (21) days prior to the meeting
C. (2) days prior to the meeting
D. (1) week prior to the meeting

44. Roy and Carlos undertook a contract to deliver to Raul in Manila a boat docked in Subic.
Before they could deliver it, however, the boat sank in a storm. The contract provides that
fortuitous events shall not exempt Roy and Carlos from their obligations. Owing to the loss
of the motor boat, such obligation is deemed converted into one of indemnity for damages.
Is the liability of Roy and Carlos joint or solidary?
A. Neither solidary nor joint since they cannot waive the defense of fortuitous event.
B. Joint since the conversion of the liability to one of indemnity for damages made it
joint.
C. Solidary, since Roy and Carlos failed to perform their obligation to deliver the motor
boat.
D. Solidary or joint upon the discretion of Raul.

45. A corporation was organized for the purpose of engaging in the buying and selling of home
appliances. The act of buying and selling motor vehicle by the corporation would be
__________
A. Intra vires C. Unenforceable
B. Illegal per se D. Ultra vires

46. The following statement regarding dissolution of corporation by shortening its corporate
term is presented to you for evaluation.

I. Upon the expiration of the shortened term, as started in the approved amended articles of
incorporation, the corporation shall only be considered dissolved after its liquidation.

II. In the case of expiration of corporate term, dissolution shall take effect after the issuance of
the Securities and Exchange Commission of a Certificate of dissolution.
A. Statement I, is true, Statement II, is False
B. Statement I, is false, Statement II, True
C. Both statements are true
D. Both statements are false.

47. Demand is necessary in this situation for the debtor to be in delay:

A. when the time is a controlling motive
B. when the obligator has rendered it beyond his power to perform.
C. when the obligation has been fulfilled.
D. when the debtor delivers a wrong thing on the due date.

48. Unless the by-laws provides otherwise, written notice of regular meeting shall be sent to all
stockholders of record at least __________
A. (2) weeks prior to the meeting
B. (14) days prior to the meeting
C. (21) days prior to the meeting
D. one week prior to the meeting

49. Which of the following cannot be patented?

a. An improvement in mascots used in restaurants by the use of a device to move
the facial parts of the mascot.
b. Anything which is not contrary to public order or public morality.
c. Plant varieties or animal breeds or essentially biological process for the
production of plants and animals.
d. Aesthetic creations.
50. Notwithstanding the provisions in the Cooperative Code to the contrary, the quorum
requirement for amendments of Articles of Cooperation and by laws of cooperative banks
shall be
a. ¾ of all the members with voting rights, present and constituting a quorum.
b. 20% of all the members in good standing, present and constituting a quorum
c. 2/3 vote of all members with voting rights, present and constituting a quorum
d. ½ plus one of the number of voting shares of all the members in good standing

51. A promise to buy and sell a determinate thing for a price certain is
a. Reciprocally demandable
b. Legally demandable
c. Unilaterally demandable
d. All of the above

52. What cannot be demanded at once

a. Obligations subject to a resolutory period
b. Deliverable subject to a resolutory condition
c. Obligations subject to no condition
d. Agreements subject to a suspensive period

53. Mr. A was appointed by the court as guardian of the minor, X. Mr. A sold the vegetables
that were planted in the lot of X. The value of the vegetable is P5,000 but Mr. A sold the
vegetables for only P2,000. The contract is
a. Unenforceable
b. Void
c. Voidable
d. Rescissible

54. A, a minor, 16 years of age, together with his brothers B and C, both of legal age are jointly
and severally liable in a contract of loan to pay X the amount of P120,000. Upon maturity of
the obligation A:
a. Is liable to pay only the amount of which benefits him
b. Is liable to pay the amount of P60,000
c. Is liable to pay the amount of P30,000
d. Is liable to pay him the whole amount of P120,000

55. One type of risk is the risk of failed internal control processes, people and systems caused
by external risk factors such as money laundering activities. If a covered person is unable to
manage this risk effectively, it can result in exposure to legal action, reputational risks and
financial losses. This type of risk is known as
a. Operational risk
b. Reputational risk
c. Concentration risk
d. Legal risk

56. Where before making the contract of sale, the goods had perished without the knowledge of
the seller, the contract of sale is void if the contract is for the sale of
a. Unascertained goods
b. Contingent goods
c. Future goods
d. Specific goods

57. W, X, Y and Z organized a general partnership with W and X as industrial partners and Y
and Z as capitalist partners. Y contributed P5M and Z contributed P2M to the common
fund. By a unanimous vote of the partners, W and X were appointed managing partners,
without any specification of their respective powers and duties. A applied for the position of
secretary while B applied for the position of accountant of the partnership. The hiring of A
was decided by W and X, but was opposed by Y and Z. The hiring of B was decided by W
and Z but was opposed by X and Y. Who of the applicant’s should be hired by the
partnership?
a. Both A and B
b. B only
c. Neither A nor B
d. A only
58. It is a type of cooperative that is organized for the primary purpose of providing a wide
range of financial services to cooperatives and their members.
a. Credit cooperative
b. Financial service cooperative
c. Cooperative bank
d. Multipurpose cooperative

59. Informed consent is a lawful basis to process personal data under the Data Privacy Act of
2012. The purpose of the processing for which consent is given should be documented. At
what time in the process should the data subject’s consent be obtained?
a. Before the purpose specification is conceived and presented
b. Before the personal data is published and disseminated
c. Before the personal data is processed
d. After the purpose specification is presented and before the personal data is
collected.

60. The majority vote of the quorum of the board of directors and at least 2/3 vote of the
outstanding capital stock or members, as the case may be, shall be necessary for the
approval of
a. Amendment of articles of incorporation
b. Amendment of by-laws
c. Issuances of stock dividends
d. None of the above

61. Which of the following situations is the best example of executory consideration?
a. Anton promises to pay Manny P50 tomorrow, in return, for Manny giving
Anton, an orange tomorrow
b. Anton promises to pay Manny P50 tomorrow, in return, for Manny giving
Anton, an orange yesterday
c. Anton pays Manny P50 today, in return, for Manny giving an orange today.
d. All of the choices

62. The following statements relative to merger or consolidation of cooperative are presented to
you for evaluation:
a. Cooperatives belonging to the different category can be parties to the merger or
consolidation.
b. The affirmative vote of at least ¾ of all members with voting rights, present and
constituting a quorum from each of the constituent cooperatives, at separate
general / representative assembly meetings shall be necessary for the approval
of the plan of merger or consolidation.
c. In case of merger or consolidation of the cooperative, the constituent
cooperatives shall become a single cooperative which, in case of merger, shall be
the surviving cooperative, and in case of consolidation, shall be the consolidated
cooperative.
A. Statement I – True; Statement II – False; Statement III – False
B. All statements are true.
C. Statement I – False, Statement II – True; Statement III – True
D. All statements are true

63. Which of the following circumstances will payment of lesser amount fail to discharge a debt,
despite a creditor’s promise to accept the lesser amount in full satisfaction of the debt?
a. When the creditor has requested that the debtor pay the lesser amount by cheque
instead of cash.
b. Where the creditor has requested that the debtor pay the lesser amount on an
earlier date.
c. Where the creditor has requested that the debtor accompany payment of the
lesser amount with some other act they were not originally bound by the contract
to perform
d. Where the creditor has requested that the debtor pay the lesser amount at a
different place.
64. One of these statements relative to the ownership of patent is false?
a. When two or more persons jointly make an invention, the patent belong to them
jointly.
b. Even if the contract provides otherwise, the person who commission a work will
own the patent.
c. The patent belongs to the inventor, his heirs or assigns.
d. The person who commissioned a work will own the patent.

65. Which of the following statements relative to the Board of Directors of a cooperative is false?
a. Any person engaged in business similar to that of the cooperative is qualified
from election as a director of said cooperative.
b. The term of office of directors shall be fixed in the by-laws but not exceeding a
term of two years.
c. Only member of cooperative who has the right to vote is eligible for election as a
director
d. Number of directors must not be less than five (5) nor more than fifteen (15)

66. Which of the following is an absolute duty of a partner in a partnership and cannot be
excluded by an agreement to the contrary?
a. Duty to account for profits of a competing business
b. Duty to share losses equally
c. Duty to indemnity for loss caused by negligence
d. Duty to indemnify for loss caused by partner’s fraud

67. A agreed to sell to B all the 100 bales of long staple Philippine cotton lying in his bodega.
Unknown to both the parties, the cotton had already destroyed in accidental fire. In this
case, the contract of sale is
a. Voidable at the option of the seller
b. Voidable at the option of the buyer
c. Not void as the contract of sale is for unascertained goods
d. Void as the contract of sale is for specific goods

68. Which of the following situations appears to involve a conduct that amount to
unconscionability which can be used as a defense to challenge the validity of contract?
a. An elderly couple sign a mortgage in favor of a bank guaranteering their son’s
debts, the bank manager knows that the couple are unaware of the son’s financial
difficulties
b. A man induced another to sign a contract by telling him that if he did not, he
would report his son to the policies for committing a criminal offense
c. A woman gave all of her property to the religious order of which he was a
member
d. All of the above

69. What vote is needed to consider every decision of the Board of Directors to a valid corporate
act?
a. At least a majority of the directors present at the meeting
b. 2/3 of the directors present at the meeting which there is a quorum
c. At least majority of the directors present at the meeting which there is a quorum
d. 2/3 of the directors present at the meeting

70. An electronic data message or electronic document is any electronic file providing
information that is generated, sent, received, or stored by electronic, optical or similar
means. Which of the following is an example of electronic file providing information that is
sent or received by electronic means?
a. Short message service (SMS)
b. Word processing
c. Telegram
d. Electronic mail
71. Under the Bank Secrecy Law, it prohibits any person from disclosing to any person any
information relative to the funds or properties belonging to the depositor in the custody of
the bank. Which of the following acts is not an exception to this rule?
a. Upon order of the court in cases of plunder committed by public officials
b. Upon order of the CIR in an application for compromise of tax liability or
determination of a decedent’s gross estate
c. Written permission or consent in writing by the depositor
d. Upon a subpoena issued by the Ombudsman concerning its fact finding
investigation relative to the information provided by an anonymous complainant

72. For a contract to exist, the agreement that was negotiation between the parties must
a. Contain a promise which is exchanged for something of value
b. Contain a commitment in undertaking to abide by the agreement
c. Clearly evidence the promise between the promissor and the promissee
d. All of the choices

73. The corporate term of a stock corporation is that which is stated in the Articles of
Incorporation. It may be extended or shortened by an amendments of articles of
incorporation when approved by a majority of the board of directors and
a. Approved and ratified by at least 2/3 of all stockholders
b. The written assent of the stockholders representing at least majority of
outstanding capital stock
c. Ratified at a meeting by the stockholders representing at least 2/3 of the
outstanding capital stock
d. The written assent of the stockholders representing at least 2/3 of the
outstanding capital stock

74. The following statements relative to the liquidation and dissolution of cooperatives are
presented to you for evaluation
a. Upon the dissolution of the cooperative, the reserve fund shall be distributed
among the members.
b. All subsidies, donations, legacies, grants, aids and other assistance from any local
or foreign institutions whether public or private shall be donated to the
community where the cooperative operates.
c. Payment of creditors shall be in accordance with the contract upon which it is
based and the provision of the new Civil Code on the Preference and
Concurrence of Credits
A. All statements are false.
B. Statement I – False, Statement II – False, Statement III – True
C. Statement I – True, Statement II – True, Statement III – False
D. All statements are true

75. One of the following is not an attribute of a close corporation

a. A close corporation is deemed not a close corporation when at least 2/3 of its
voting stock is owned or controlled by another corporation which is not a close
corporation.
b. A corporation vested with public interests cannot be organized as a close
corporation.
c. Any stockholder may petition the SEC for the dissolution of the corporation by
reason of illegal, fraudulent, dishonest, oppressive or unfair acts of directors or
officers, or misapplication of corporate assets.
d. A stockholder may not, withdraw and demand that the corporation buy his
shares at their fair value which shall not be less than the par or issue value;
provided, that corporation has sufficient assets to cover its liabilities.

76. Which of the following will not extinguish the debtor’s obligation?
a. The condonation and the acceptance are in public instrument. The condonation
involves a parcel of land.
b. The condonation is in a public instrument. The acceptance is made in a private
instrument. The condonation involves a television set worth P20,000.
c. The condonaton is in a public instrument. The acceptance is made orally. The
condonation involves a computer printer whose value is P4,000.
d. The condonation and the acceptance are made orally with the creditor delivering
to the debtor simultaneously the promissory note amounting to P10,000.
77. On the death of a partner, public notice of death is not given and the partnership continuous
the business, then for the acts of the partnership done after his death, the estate of the
deceased partner is
a. Proportionately liable
b. Treated as security
c. Liable
d. Not liable

78. Arnel, Butch, Leo and Fred are partners in BIGATIN Company, which is engaged in the
buying and selling of rice. Arnel is the manager. Butch was also given a special power of
attorney of the partnership to buy a van for the company. No other power was given to all
the partners. In which of the following acts or contracts is the partnership not bound by the
acts of the partners?
a. Leo buying a van for the partnership from Joy who has no knowledge of Leo’s
lack of authority.
b. Butch buying a van for the partnership from Flora.
c. Butch buying rice for the partnership from Teddy who has no knowledge of
Butch’s lack of authority.
d. Arnel selling rice for the partnership.

79. Under the law, anything paid or delivered before the arrival of the suspensive period the
obligor being unaware of the period, may be recovered with the fruits and interests. Which
is the exception?
a. The period is for the benefit of the creditor and debtor
b. The obligor delivered before the period
c. The obligor is not aware of the period
d. The obligation involved is an obligation to do and not to do.

80. When a partnership dissolves and winds up, of the following, who would be the last to
received distribution of partnership assets?
a. The partners in repayment of capital
b. The partners in repayment of loans
c. The creditors of the partnership
d. The partners in repayment of profits

81. The pre-emptive rights of stockholders in a corporation are not statutory rights, but are
___________, and exist even no specific grant or recognition of such right is provided by
statutory law. Which of the following answers best complete the statement?
a. Inherent rights
b. Implied rights
c. Common law rights
d. Provided by the Corporation Code

82. The government agency granted the power to conduct an independent special examination
of banks and inquire into or examine deposit account of ailing banks in the event there is a
finding of unsafe and unsound banking practice is
a. Bangko Sentral ng Pilipinas
b. Anti-Money Laundering Council
c. Philippine Deposit Insurance Corporation
d. Securities and Exchance Commission

83. Which of the following statements does not characterize a no-par value shares?
a. It may be issued even if the subscription is not yet fully paid.
b. It has no stated value appearing on the certificate of stock.
c. It may be issued together with par value shares.
d. It always has an issued value.
84. Which of the following statements relative to the dissolution of corporation is false?
a. Liquidation involves the sale or conversion of all corporate assets into cash and
payment of all liabilities.
b. Corporate creditors who do not belong to the corporation shall be preferred in
payment than corporate creditors who are also stockholders, members, directors,
trustees or officers of the corporation.
c. Winding up involves the final distribution of whatever remains, if any, to the
stockholders as a return of their investment
d. A corporation has only a period of five years from the time it was dissolved
within which to liquidate its affairs

85. BP uses the phrases any check and a check in defining the offenses sought to be punished by
it. Which of the following types of checks is not within the purview of the punitive
provisions of BP 22?
a. Cashier’s check
b. Corporate check
c. Accommodation check
d. Personal check

86. Which of the following statements relatives to the registration of cooperative is false?
a. A cooperative acquires juridical personality from the date CDA issues a
certificate of registration under its official seal.
b. In case of a denial of the application for registration, the cooperative has to file
another application for registration.
c. A certificate of registration shall be conclusive evidence that the cooperative is
duly registered.
d. Application for registration is deemed approved if CDA failed to act on it within
a period of 60 days from the date of filing.

87. Under the Bank Secrecy Law, it prohibits any person from disclosing to any person any
information, relative to the funds or properties belonging to the depositor in the custody of
the bank. Which of the following is an exception to this rule?
a. Oral permission or consent by the depositor
b. Upon order of the CIR in an application for compromise of tax liability or
determination of a decedent’s gross estate
c. Upon order of the court in cases of estate and falsification of official documents
committed by public officials
d. Upon a subpoena issued by the Ombudsman concerning its fact finding
investigation relative to the information provided by an anonymous
complainant.

88. Under RA No. 11032, it will act or serve as a repository of information on all registered
enterprises in the country that government agencies and LGUs may use as a resource for
verification purposes.
a. Civil Service Commission
b. Department of Trade and Industry
c. Philippine Business Data Bank
d. Department of Information and Communication Technology

89. The following are the requisites for the filing of subrogatory action, except
a. The creditor has a right of credit against the debtor although at the moment is
not liquidated.
b. The act being impugned is fraudulent.
c. There must be failure of the debtor to collect from third persons whether
willfully or through negligence.
d. The credit must be due and demandable.

90. Mr. Seller and Mr. Buyer orally agreed on the following: The land to be sold has an area of
10,000 sqm; price is P5M; and Mr. Seller shall prepare the deed of sale. With fraudulent
intent, Mr. Seller knowing the inadequacies of Mr. Buyer with respect to the land area write
1,000 sqm instead of 10,000 sqm in the deed of sale. The sale is
a. Valid but the instrument may be reformed.
b. Void.
c. Voidable but the contract may be reformed.
d. Valid but the contract may be reformed.
91. Which of the following Board Committee of a publicly listed company is tasked to oversee
the periodic evaluation of the Board and its committee as well as executive management,
and conducts an annual self-evaluation of its performance?
a. Audit Committee
b. Risk Oversight Committee
c. Related Party Transactions Committee
d. Corporate Governance Committee

92. Which of the following statements relative to contracts is incorrect?

a. If the insane party entered into the contract during a lucid interval, the contract is
voidable.
b. If both parties are minors, the contract is unenforceable.
c. A contract entered into while in a state of drunkenness is voidable.
d. If one party is a minor and other is not, the contract is voidable.

93. In case of eviction, the vendor shall be liable to the vendee only for the value of the thing
sold at the time of eviction in which of the following cases?
a. When there is waiver consciente
b. When there is waiver intencionada
c. When the vendor was in bad faith and there was stipulation exempting the
vendor from liability in case of eviction
d. When the vendor was in bad faith and there was no stipulation exempting the
vendor from liability in case of eviction

94. Which of the following acts could be ratified by a vote representing at least 2/3 of the
outstanding capital stock?
a. Acquisition of a business opportunity which should belong to the corporation
thereby acquiring profit which should belong to the corporation.
b. Acts of directors or trustees who are guilty of gross negligence or bad faith in
directing the affairs of the corporation.
c. An attempt by a director to acquire an actual acquisition of any interest adverse
to that of the corporation in respect of any matter reposed upon in confidence.
d. Acts of directors constituting an approval of patently unlawful acts.

95. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing the
latter about it. In any event, the deed of sale expressly stipulated that X is not liable for
hidden defects. Does Y have the right to demand from X a reimbursement of what he spent
to repair the engine plus damages?
a. No because Y waived the warranty against hidden defects.
b. Yes X is liable whether or not he was aware of the hidden defects.
c. No because Y is in estoppel, having changed the engine without prior demand.
d. Yes since the defect was not hidden, X knew of it but he acted in bad faith in not
disclosing the facts to Y.

97. ABC Multi-Purpose Cooperative provided you the following information on the
results of its annual operations for calendar year ending December 31, 2018:
Interest income on Loan P845,000
Service fees revenue 47,000
Membership fees revenue 2,000
Operating Expenses 311,000
Percentage declared by the Board of Directors
- Allocation for interest on share capital 50%
- Allocation for patronage refund 50%
Total average share months P2,000,000

Compute the total statutory reserves to be deducted from the net surplus pursuant to
the provisions of the Cooperative Code:
a. P174,900 ((P845,000+P47,000+P2,000) – P311,000) = P583,000 x 30% = P174,900
b. P116,600
c. P87,450
d. P204,050
98. Using the same data in number 97, what is the amount allocated for reserve fund for
the first five years of operation of cooperative?
a. P58,300
b. P204,050
c. P291,500 (P583,000 x 50%) = 291,500
d. P29,150

99. Using the same data in number 97, what is the amount allocated for reserve fund
starting the sixth year of operation of cooperative?
a. P58,300 (P583,000 x 10%) = P58,300
b. P204,050
c. P291,500
d. P29,150

100. Using the same data in number 97, what is the rate of interest on share capital?
a. 10.20% 50% x (P583,000 – P174,900) / P2,000,000 = 10.20%
b. 48.70%
c. 75.10%
d. 23.20%

101. Using the same data in number 97, what is the rate of patronage refund?
a. 24.15% 50% x (P583,000 – P174,900) / P845,000 = 24.15%
b. 31.32%
c. 18.26%
d. 35.43%