Favorite Bar Areas of Justice Ramon Paul L. Hernando [Part 3] Ultra vires -an ultra vires act of its Board of Directors [voidable only], subject to stockholders’ ratification. (2011, 2009 Bar). - When is there an ultra vires act on the part of [a] the corporation; [b] the board of directors; and [c] the corporate officers. (2009, Bar). When is there an ultra vires act on the part of [a] the corporation; [b] the board of directors; and [c] the corporate officers. - The Corporation Code sanctions a contract between two or more corporations which have interlocking directors, provided there is no fraud that attends it and it is fair and reasonable under the circumstances. The interest of an interlocking director in one corporation may be either substantial or nominal. It is nominal if his interest: [does not exceed 20% of the outstanding capital stock] (2011, Bar). - Several American doctors wanted to set up a group clinic in the Philippines so they could render modern medical services. If the clinic is to be incorporated under our laws, what is the required foreign equity participation in such a corporation? ANS. [0℅] (2011, Bar). - The Board of Directors of XYZ Corp. unanimously passed a Resolution approving the taking of steps that in reality amounted to willful tax evasion. On discovering this, the government filed tax evasion charges against all the company’s members of the board of directors. The directors invoked the defense that they have no personal liability, being mere directors of a fictional being. Are they correct? ANS. [No, since the law makes directors of the corporation solidarily liable for gross negligence and bad faith in the discharge of their duties]. (2011, Bar). - the stockholders cannot delegate their right to amend the By-laws to the Board. (2011, Bar). Required paid-up capital A group of Malaysians wanted to invest in the Philippines’ insurance business. After negotiations, they agreed to organize "FIMA Insurance Corp." with a group of Filipino businessmen. FIMA would have a PhP50 Million paid up capital, PhP40 Million of which would come from the Filipino group. All corporate officers would be Filipinos and 8 out of its 10-member Board of Directors would be Filipinos. Can FIMA operate an insurance business in the Philippines? ANS  [No, since an insurance company must have at least PhP75 Million paid-up capital]. (2011, Bar). - The Articles of Incorporation of ABC Transport Co., a public utility, provides for ten (10) members in its Board of Directors. What is the prescribed minimum number of Filipino citizens in its Board? ANS. [6] (2011, Bar). - The corporate term of a stock corporation is that which is stated in its Articles of Incorporation. It may be extended or shortened by an amendment of the Articles when approved by majority of its Board of Directors and: ANS. [ratified by at least 2/3 of the stockholders representing the outstanding capital stock.] (2011, Bar). - advice on whether one can be removed as board director and stockholder even without cause. What is your advice? Explain "amotion" and the procedure in removing a director.  (2016, Bar) - Requisite of derivative suit (2011, Bar). - intra-corporate dispute; Requisites; Jurisdiction. - Redemptive right, Right of first refusal - Law on Secrecy of Bank Deposits (Rep. Act No. 1405). (2016, Bar) Security and Exchange Commission - Under the Securities Regulation Code, what is the Margin Trading Rule? (2%) (2009, Bar). - Registration of securities; Security and Exchange of Commission (SEC). (2016, Bar) - What are the so-called exempt securities under the Securities Regulation Code? (2009, Bar). - Philippine Palaces Realty (PPR) had been representing itself as a registered broker of securities, duly authorized by the Securities and Exchange Commission (SEC). On October 6, 1996, PPR sold to spouses Leon and Carina one (1) timeshare of Palacio del Boracay for US$7,500.00. However, its Registration Statement became effective only on February 11, 1998 after the SEC issued a resolution declaring that PPR was authorized to sell securities, including timeshares. On March 30, 1998, Leon and Carina wrote PPR rescinding their purchase agreement and demanding the refund of the amount they paid, because the Palacio del Boracay timeshare was sold to them by PPR without the requisite license or authority from the SEC. PPR contended that the grant of the SEC authority had the effect of ratifying the purchase agreement (with Leon and Carina) of October 6, 1996. Is the contention of PPR correct? Explain. (2009, Bar) - Explain what is a "Letter of Credit" as a financial device and a "Trust Receipt" as a security to the Letter of Credit. (2016, Bar) - Validity of "Escalation Clause" (2016, Bar) [END OF PART 3] fb_@PhilJuris https://bit.ly/3hg0Zxc