Regulatory Framework for Business Transactions (RFBT) CEGG Practice Exam

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• Which statement best reflects must-carry rule impact on rebroadcasting and retransmission rights?
• A demand must be performed on the due date of the obligation in order for delay to exist in one of the following cases. Which is it?
• A qualified indorser is secondarily liable for his warranties. He is not liable if the instrument is dishonored due to the insolvency of the primary liable party. True or false?
• Which type of obligation extinguishes automatically upon occurrence of a specified event?
• If a corporation dissolves and no trustee is appointed within three years, who may be permitted to continue as trustee?
• The following statements relative to liquidation and dissolution of cooperatives are presented: I. Upon the dissolution of the cooperative, the reserve fund shall be distributed among the members. II. All subsidies, donations, legacies, grants, aids and other assistance from any local or foreign institutions shall escheat to the community where the cooperative operates. III. 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. What is the correct evaluation?
• When a corporation is dissolved, can it apply for a new certificate or a secondary franchise?
• What doctrine applies when a contract capable of performance becomes impossible due to later events, making the contract void?
• When is the last day of filing in SEC?
• Which option best describes the relationship among the three-year term, board continuation, and creditor involvement?
• In the absence of BOD/BOT, trustee or receiver, creditors may ask the SEC to appoint them as trustee for liquidation. Which option correctly reflects this arrangement?
• Asset Preservation / Protection Order comes from which court?
• Which statements about dissolution of cooperatives are correct? I. Upon dissolution, reserve shall be distributed among members. II. All subsidies and aids donated to the community. III. Payment to creditors shall be in accordance with contract and priority rules.
• Which courts are associated with Freeze Orders and Asset Preservation Orders respectively?
• Which type of obligation is due immediately and is not subject to any condition or period?
• Obligations arising from contracts have the force of law between the contracting parties.
• Statement I: Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain. Statement II: The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question.
• Extrajudicial expenses required by the payment shall be for the creditor's account unless there is an express stipulation to the contrary.
• Which of the following is included as part of customer due diligence (CDD) requirements?
• If no trustee has been designated by the end of the three-year life, who may complete liquidation?
• Under a pooling agreement, stockholders remain as the legal owners of the shares.
• Treasurer - required to be a resident of the Philippines. Need not be a citizen. Secretary - required to be a resident-citizen of the Philippines
• Which of the following will not cause the automatic dissolution of a general partnership?
• Preemptive right - Right of shareholders to subscribe/ acquire newly issued shares of the corporation (proportionate to his present shares) before said shares are sold to the public. Effect if violated?
• A writes a check to B, B uses it to pay C; C did not encash for several years; the bank goes bankrupt and A dies. How is B's obligation extinguished?
• Which of the following statements about liability for fraud and negligence is not true?
• What is the prescriptive period for an action based on breach of warranty of sale of immovable against non-apparent and unregistered burden or servitude?
• Removal of directors by the stockholders may be with or without cause provided that removal without cause may not be used to deprive the minority stockholders of their
• Pactum commissorium is a provision whereby the creditor automatically acquires ownership of pledged property upon default. This type of clause is generally:
• Which of the following is not a type of damages?
• What is the minimum reserve fund in the first five years of operation of a cooperative?
• Under a voting trust, which statement is true?
• What government instrumentality was created in 1963 to insure deposits of all banks in the Philippines?
• Statement I: A person criminally liable is also civilly liable. Statement II: Obligations arising from contracts have the force of law between the contracting parties.
• In stoppage in transitu, which scenario keeps goods in transit allowing the unpaid seller to exercise stoppage in transitu in case of buyer insolvency?
• Unless the bylaws provide otherwise, written notice of regular meeting shall be sent to all stockholders of record at least
• What term describes a sustained increase in the general price level of goods and services in an economy over time?
• In a voting trust, which statement is correct?
• The stock certificate is the evidence of ownership of the stock.
• Under Ease of Doing Business, a transaction is considered simple if it primarily requires which type of actions?
• It is presumed that when a period is designated in an obligation, the period is for the benefit of which party?
• A creditor lent P500,000 to a debtor. The debtor dies before repayment; the debtor's heir seeks to collect from the debtor. Which statement is correct?
• T/F: An unanticipated event outside the control of the contracting parties is known as a supervening event.
• A contract to sell an item is entered into; before delivery but after the agreement, the item is lost due to a fortuitous event making performance impossible. What do you call this loss?
• What does copyright protect?
• In law, the term describing signing an instrument without understanding its negotiable nature due to deceit is called what?
• Which entity is not eligible to be incorporated as a Close Corporation?
• Which statement about stockholders' or members' meetings is true?
• When the debtor binds themselves to pay when his means permit him to do so, the obligation is:
• These are damages agreed upon by the parties to a contract, to be paid in case of breach.
• A contract between two corporations with interlocking directors is valid under which conditions?
• Which term refers to a bill drawn and payable in the same country?
• Equitable-PCI Bank and BDO Unibank present what type of business combination?
• What term describes the voluntary administration of the property of another without consent?
• An indorsement that makes the indorser a mere assignor of title and is typically written with the words 'without recourse' is called what?
• X stole a promissory note payable to P's order. X forged P's signature as indorser to A. A indorsed the note to B with 'Pay to B sans recourse, (Sgd.)A.' Who among the parties shall be liable to B?
• An educational institution's obligation to provide a secure environment arises from which source?
• The creditor has a right that is enforceable against a definite passive object. This is known as which type of right?
• Which statement about a supervening event is correct?
• What is the government instrumentality created in 1963 by virtue of Republic Act 3591 to insure deposits of all banks which are entitled to the benefits of insurance and considered as an attached agency of the Department of Finance?
• The following are the requisites of an obligation, except:
• If a trustee or receiver is appointed during the three-year term, which statement about their authority is correct?
• During dissolution, the statement 'the reserve fund shall be distributed among the members' is typically true. This statement is false. Which option correctly reflects this evaluation?
• If the three-year life expires without a trustee or receiver being expressly designated by the corporation within that period, who may continue as trustee by legal implication to complete the corporate liquidation?
• Which statement does NOT characterize a share?
• Who may call on the SEC to appoint a trustee when there is no BOD/BOT?
• Under what circumstance is extraordinary inflation or deflation applied?
• Which organizational type is described as being organized for the purpose of providing a wide range of financial services to cooperatives and their members?
• Which of the following can an executive committee validly act on?
• Under estoppel, a creditor may foreclose a chattel mortgage on land because of the doctrine of estoppel. Which statement best explains this?
• In conducting Customer Due Diligence, covered persons shall verify the true identity of clients based on which approach?
• If a trustee is appointed during the three-year term, which statement about their authority is correct?
• The risk-based approach in customer due diligence is used to tailor the process based on which factors?
• Under trademark law, which scenario leads to cancellation of a mark?
• During the life insurance application, substitution of a healthy twin brother occurred. What remedy is available to Sun Life upon discovery of the substitution?
• Which statement best describes a real right?
• Which statement describes trademark infringement?
• After the first five years of operation, what is the minimum reserve fund of a cooperative?
• Which government instrumentality insures the deposits of all banks and serves as an attached agency of the Department of Finance?
• The three-year-term provision most directly influences which of the following?
• If the three-year life expires without designation, who may continue as trustee by legal implication to complete the liquidation?
• Under a voting trust, which statement is true about ownership?
• A domestic bill is defined as a bill drawn and payable within the same country.
• Which statement best describes the Philippine Deposit Insurance Corporation (PDIC)?
• Copying a photographer's original photograph to print on postcards without permission constitutes copyright infringement.
• The BOD approved issuance of new shares without asking for the stockholders' permission, a stockholder complained that his right was violated. What right was violated?
• Which right is not available to an assignee of a limited partner?
• A debt is secured by a collateral but the creditor accepts it as payment in kind. This results in the loan being extinguished regardless of collateral value.
• Which organizational type is described as being organized to engage in savings and credit services and other financial services?
• Accion Subrogatoria allows the creditor to do what?
• Protest is required in the case of which type of bill or note?
• Which term best describes an obligation with no conditions or events affecting it?
• Accion Pauliana permits a creditor to do which of the following?
• M made a promissory note payable to P or bearer. P specially indorsed the note to A. A also specially indorsed it to B. X stole the note from B and delivered it to C without any indorsement. Who is liable to C?
• Statement I: A natural obligation can be enforced in a court of law. Statement II: A waiver for future fraud is valid.
• DEF Corp. has a board of five directors. The company president learns of a chance to acquire a related business and wants the board to consider and approve the deal. The president sends a notice to the directors of a special meeting to happen in three days, but not to director D for whom the corporation has no address. The meeting is attended by three directors (but not D), two of them by Skype. The three at the meeting all approve. Is their action valid?
• Financial cooperatives are supervised by which authority?
• This refers to the delay on the creditor's part.
• Which statement does NOT characterize a par value share?
• Which of the following obligations is not immediately demandable?
• Which type of cooperative is focused on savings and lending to its members?
• In the loan scenario where D pledged a laptop as collateral and later the parties agree that the laptop will be used to settle the loan at maturity, which statement is correct?
• This is the offer made by the obligor to extinguish his obligation to the obligee.
• Which statement about a trustee appointed during the term is accurate?
• A waiver for future fraud is valid.
• In a promissory note case, M made a note payable to P's order. X stole the note and forged P's signature as indorser to A. A indorsed the note to B with the instruction 'Pay to B sans recourse.' Who among the parties shall be liable to B?
• The debtor shall lose every right to make use of the period, except which of the following situations qualifies as an exception?
• Which statement is not correct about payment and fulfillment?
• Which document is described as used to obtain information and estimates of hidden costs for government services, serving as basis for awards for excellent delivery?
• In reciprocal obligations, when does delay by the non-performing party begin?
• Which option summarizes the possible actions during dissolution?
• In a negotiable instrument endorsement, which phrase is commonly added to create a qualified indorsement?
• X subscribed for 1,000 shares; 600 unpaid; 21,000 accrued interest; 4,000 sale costs. Which bid should be accepted?
• These are damages imposed, by way of example or correction for the public good.
• Who may continue as trustee by legal implication if not designated within three years?
• Which statement about infringement and unfair competition is correct?
• Which of the following is a void obligation?
• During dissolution, who may appoint a trustee or receiver during the three-year term?
• Which statement is true about forming an executive committee?
• Which statements about presumption of payment are false?
• Lack of funds shall not be used as an excuse for non-use of a mark.
• Which of the following is not a feature of preferred stock?
• Which statement describes quasi-contract?
• Under Old and Revised Corporation Code, which corporate officer is required to be resident-citizen of the Philippines?
• A person who is criminally liable is also civilly liable.
• When is the subject matter of a contract of sale determined to be specific?
• What is the minimum price of a par value share?
• Equitable-Bank and PCI-Bank combined which result to formation of new corporation named Equitable-PCI Bank. What is the type of this business combination?
• Which term describes a wrong committed without any pre-existing relationship between the parties?
• In a dacion en pago, when the debtor offers collateral and the creditor accepts, what is the effect on the debt and ownership?
• Freeze Order comes from which court?
• Who files the petition for a bank inquiry order under the anti-money laundering framework?
• T owes M 4,000 and MAGIC Company 6,000. On December 15, T pays 4,000 to M and M issues a receipt in his own name. Which credit should be applied?
• Which indorsement is described by writing 'for deposit only' or similar restrictions?
• The following are the remedies of the creditor to pursue against the debtor, except
• If time is of the essence in a contract, what is the consequence of a debtor's delay?
• Dissolution by the Authority may be ordered for which grounds?
• Which of the following is an example of a determinate thing?
• A bill of exchange drawn on a bank and payable on demand is called a
• What is the maximum period allowed for the Court of Appeals to resolve a petition filed by the Anti-Money Laundering Council for the issuance of a bank inquiry order or freeze order involving accounts of a suspected launderer?
• Which of the following is not a legal tender in the Philippines?
• Which member in a cooperative may invest in the common stocks of the cooperative?
• In a quasi-delict case arising from a breach of contract, which statement best applies?
• What is the quorum requirement for regular or special meetings of a Cooperative Bank?
• Which statement best describes a 'condition subsequent' in contract law?
• The debtor shall lose the right to make use of the period in the following cases, except when he:
• Dolocausante and doloincidente refer to different types of fraud. Which statement correctly matches them?
• Which statement best captures the overall effects described for dissolution and liquidation?
• A complex transaction is required to be transferred for a period not longer than how many working days from the date of receipt?
• A promise to pay a debt is conditioned on obtaining a license in the future. This describes which type of obligation?
• Which option best describes a merger?
• DEEP-FREEZE Medical Products installed refrigeration units in its Makati warehouse to store its vaccines. The City of Makati wants to assess DEEP-FREEZE for real property tax on the land, warehouse, and the refrigeration units. Which of the following is correct?
• An obligation to deliver a specific car to a person if that person passes a professional licensure exam is which type of obligation?
• Which of the following describes the effects of dissolution and liquidation of a corporation?
• Which statement about extrajudicial payments and debt retention is incorrect?
• No liability in case of fortuitous events.
• When the government, upon the failure of any person to comply with health or safety regulations concerning property, undertakes to do the necessary work, even over his objection, this liability arises from what source?
• One of the following is a feature of a share of stock?
• An obligation that becomes enforceable only upon a future event, such as passing a licensure exam on or before a deadline, is an example of which type of condition?
• Which statement correctly describes when a debt is considered paid?
• It is a thing that is specially designated from all others of the same class. Which term describes this concept?
• Extinguishment of an obligation by passage of time is called?
• Which type of audit is described as forensic audit used in cases involving fraud and financial crimes?
• The doctrine that a contract capable of performance may later become impossible to perform or unlawful and thus void is known as?
• In a commissioned painting where Person A hires Person B to paint A's garden, who owns the painting and the copyright, respectively?
• D borrowed P100,000 and pledged his land as collateral via a chattel mortgage. At maturity, D defaults. Which statement is correct?
• If an obligor substantially performs a contract in good faith, what remedy is available?
• Which term describes the currency that the obligor may compel the obligee to accept in payment of the obligation?
• In the absence of BOD/BOT, trustee or receiver, creditors may ask the SEC to appoint them as trustee. Which statement best describes who may seek appointment?
• Which of the following is a determinate thing?
• Obligations may arise from any of the following, except
• Non-use of a trademark due to a government order is considered abandonment.
• Under the real property tax scenario, which items are taxable?
• Financial Service Cooperatives (FSC) are supervised by which agency?
• Partial payments may be compelled only if there is an express stipulation to that effect.
• Which type of member is described as having no right to vote or be voted upon, and is entitled only to such rights and privileges by the bylaws?
• Unless the law or the stipulations require another standard of care, every person obliged to give something is bound to exercise which standard of diligence?
• With MAGIC Company as a partnership (M as manager) where a debtor pays 4,000 to M in December for M’s credit and MAGIC’s credit, if the receipt is issued in the partnership name, how should the payment be applied?
• Appraisal right - Right of dissenting shareholder to compel the corporation to buy his share at fair value when he disagrees on the following: