TABLE OF CONTENTS

MERCANTILE LAW

TOPICS PAGES
I.THE CORPORATION CODE (181 QUESTIONS)

BOARD OF DIRECTORS AND TRUSTEES (29 Questions) 1

Fiduciary Duties and Liability Rules (15 Questions) 1
Elections (7 Questions) 2
Tenure, Qualifications and Disqualifications of
Directors or Trustees (2 Questions) 4
Meetings (2 Questions) 5
Removal (2 Questions) 5
Doctrine of Centralized Management (1 Question) 6

INCORPORATION AND ORGANIZATION (27 Questions) 6

Articles of Incorporation (11 Questions) 6
Number and Qualifications of Incorporators (8 Questions) 8
Minimum Capital Stock and Subscription Requirements (3 Questions) 8
Adoption of By-Laws (3 Questions) 9
Corporate Name: Limitations on Use of Corporate Name (1 Question) 11
Registration and Issuance of Certificate of Incorporation (1 Question) 12

CAPITAL STRUCTURE (27 Questions) 13

Consideration for Stocks (9 Questions) 13
Stock and Transfer Book (6 Questions) 14
Payment of Balance of Subscription (5 Questions) 14
Shares of Stock (3 Questions) 14
Certificate of Stock (3 Questions) 15

STOCKHOLDERS AND MEMBERS (26 Questions) 16

Proprietary Rights (13 Questions) 16
Participation in Management (4 Questions) 19
Rights of a Stockholder and Members (4 Questions) 19
Remedial Rights (3 Questions) 20
Obligation of a Stockholder (1 Question) 21
Meetings (1 Question) 21

CORPORATE POWERS (12 Questions) 22

Specific Powers, Theory of Specific Capacity (19 Questions) 22
How Exercised (2 Questions) 24
Trust Fund Doctrine (2 Questions) 25
 CORPORATE JURIDICAL PERSONALITY (18 Questions) 25
Doctrine of Separate Juridical Personality (11 Questions) 25
Doctrine of Piercing the Corporate Veil (6 Questions) 26

CORPORATION (11 Questions) 28

Attributes of the Corporation (7 Questions) 28
Definition (Corporation) (2 Questions) 28

DISSOLUTION AND LIQUIDATION (8 Questions) 28

NATIONALITY OF CORPORATIONS (5 Questions) 31

Control Test (3 Questions) 31
Place of Incorporation Test (2 Questions) 32

CLASSES OF CORPORATIONS (3 Questions) 32

OTHER CORPORATIONS (3 Questions) 34

Foreign Corporations (3 Questions) 34

II.  NEGOTIABLE INSTRUMENTS LAW (125 QUESTIONS)

FORMS AND INTERPRETATION (29 questions) 36

SIGNATURE (20 Questions) 37

Forgery (11 Questions) 37
Signature of Agent (7 Questions) 38
Signing in Trade Name (1 Question) 38
Indorsement by Minor or Corporation (1 Question) 38
Rights of the Holder (13 Questions) ` 39

CHECKS (10 Questions) 40

Kinds of Checks (9 Questions) 41
Presentment for Payment (of Checks) (1 Question) 42

COMPLETION AND DELIVERY (9 Questions) 42

Incomplete and Undelivered Instruments (5 Questions) 42
Completion of Blanks (2 Questions) 42
Insertion of Date (2 Questions) 43

NEGOTIATION (6 Questions) 43
Kinds of Indorsements (5 Questions) 43
Modes of Negotiation (1 Question) 44

CONSIDERATION (5 Questions) 44
 LIABILITIES OF PARTIES (5 Questions) 45
Indorser (4 Questions) 45
Maker (1 Question) 45

PRESENTMENT FOR PAYMENT (5 Questions) 46

Dispensation with Presentment for Payment (4 Questions) 46
Necessity of Presentment for Payment (1 Question) 47

NOTICE OF DISHONOR (5 Questions) 47

ACCEPTANCE (5 Questions) 48
Rules Governing Acceptance (4 Questions) 48
Manner (1 Question) 49

PROMISSORY NOTES (4 Questions) 49

ACCOMMODATION PARTY (3 Questions) 49

MATERIAL ALTERATION (3 Questions) 50

DISCHARGE OF NEGOTIABLE INSTRUMENT (2 Questions) 50

Discharge of Negotiable Instrument (1 Question) 51
Discharge of Parties Secondarily Liable (1 Question) 51

PRESENTMENT FOR ACCEPTANCE (1 Question) 51

Effect of Failure to Make Presentment (1 Question) 51

III.  INSURANCE LAWS R.A. NO. 10607 (87 QUESTIONS)

CLASSES (33 Questions) 52

Marine Insurance (13 Questions) 52
Life Insurance (10 Questions) 52
Fire Insurance (5 Questions) 53
Compulsory Motor Vehicle Liability Insurance (CMVLI) (4 Questions) 54
Casualty Insurance (1 Question) 54

INSURABLE INTEREST (25 Questions) 54

In Property (11 Questions) 54
Double Insurance and Over Insurance (7 Questions) 55
In Life/Health (6 Questions) 55
Multiple or Several Interests on Same Property (2 Questions) 56

PERFECTION OF THE CONTRACT OF INSURANCE (10 Questions) 56

Premium Payment (8 Questions) 56
Refund of Premiums (2 Questions) 57

CLAIMS SETTLEMENT AND SUBROGATION (8 Questions) 57

 ELEMENTS OF AN INSURANCE CONTRACT (4 Questions) 59

RESCISSION OF INSURANCE CONTRACTS (7 Questions) 59

Concealment (6 Questions) 59
Concept of Insurance (1 Question) 61

IV.  SPECIAL LAWS (71 QUESTIONS)

THE CHATTEL MORTGAGE LAW AND REAL ESTATE MORTGAGE LAW

(34 QUESTIONS) 62

(Excluded and made a part of Civil Law coverage)

ANTI-MONEY LAUNDERING ACT (R.A. NO. 9160, AS AMENDED

BY R.A. NO. 9194) (18 Questions) 62
Obligations of Covered Institutions (3 Questions) 62
Unlawful Activities or Predicate Crimes (3 Questions) 62
Freezing of Monetary Instrument or Property (2 Questions) 63
Covered Transactions (1 Question) 63
Suspicious Transactions (1 Question) 63
When Is Money Laundering Committed (1 Question) 64
Anti-Money Laundering Council (1 Question) 64

FOREIGN INVESTMENTS ACT (R.A. NO. 7042) (13 Questions) 64

Definition of Terms (6 Questions) 64
Registration of Investments of Non-Philippine Nationals (3 Questions) 65
Foreign Investment Negative List (2 Questions) 65
Policy of the Law (1 Question) 66
Foreign Investments in Domestic Market Enterprise (1 Question) 66

FINANCIAL REHABILITATION AND INSOLVENCY ACT (FRIA) (R.A. 10142)

(5 QUESTIONS) 67

ELECTRONIC COMMERCE ACT OF 2000 (R.A. NO. 8792) (1 QUESTION) 72

DATA PRIVACY ACT (R.A. NO. 10173) (1 QUESTION) 74

V.   TRANSPORTATION LAW (63 QUESTIONS)

MARITIME COMMERCE (23 Questions) 77

Accidents and Damages in Maritime Commerce (13 Questions) 77
Carriage of Goods by Sea Act (COGSA) (5 Questions) 78
Liability of Ship Owners and Shipping Agents (3 Questions) 79

CHARTER PARTIES (2 QUESTIONS) 80

COMMON CARRIERS (22 Questions) 81

Liabilities of Common Carriers (13 Questions) 81
Diligence Required of Common Carriers (9 Questions) 82
 SAFETY OF PASSENGERS (8 questions) 83
Liability for Acts of Others (5 Questions) 83
Extent of Liability for Damages (2 Questions) 84
Duration of Liability (1 Question) 84

VIGILANCE OVER GOODS (5 Questions) 84

Stipulation for Limitation of Liability (3 Questions) 84
Exempting Causes (1 Question) 85
Liability for Baggage of Passengers (1 Question) 85

BILL OF LADING (4 Questions) 86

Delivery of Goods (3 Questions) 86
Three-Fold Character (1 Question) 87

THE WARSAW CONVENTION (1 Question) 87

VI.   BANKING LAWS (63 QUESTIONS)

GENERAL BANKING LAW (GBL) OF 2000 (R.A. NO. 8791) (37 Questions) 89
Bank Powers and Liabilities (14 Questions) 89
Grant of Loans and Security Requirements (8 Questions) 90
Nature of Bank Funds and Bank Deposits (5 Questions) 91
Stipulation on Interests (5 Questions) 91
Definition and Classification of Banks (4 Questions) 91
Distinction of Banks from Quasi-Banks and Trust Entities (1 Question) 92

LAW ON SECRECY OF BANK DEPOSITS (R.A. NO. 1405, AS AMENDED)

(14 Questions) 93
Deposits Covered (6 Questions) 93
Exceptions (5 Questions) 93
Garnishment of Deposits, Including Foreign Deposits (3 Questions) 94

THE NEW CENTRAL BANK ACT (R.A. NO. 7653) (11 Questions) 94
Responsibility and Primary Objective (7 Questions) 94
Creation of the Bangko Sentral ng Pilipinas (BSP) (2 Questions) 95
State Policies (2 Questions) 96
How the BSP Handles Banks in Distress (1 Question) 96

VII.  INTELLECTUAL PROPERTY CODE (62 QUESTIONS)

COPYRIGHT (20 Questions) 98

Limitations on Copyright (7 Questions) 98
Rights of Copyright Owner (5 Questions) 99
Rules on Ownership of Copyright (4 Questions) 100
Non-Copyrightable Works (2 Question) 101
Basic Principles (1 Question) 101
Copyrightable Works (1 Question) 102
TRADEMARKS (20 Questions) 102
Infringement and Remedies (6 Questions) 103
Rights Conferred by Registration (4 Questions) 104
Tests to Determine Confusing Similarity between Marks (3 Questions) 104
Unfair Competition (2 Questions) 104
Acquisition of Ownership of Trade Name (1 Question) 105
Prior Use of Mark as a Requirement (1 Question) 105
Well-Known Marks(1 Question) 105
Use by Third Parties of Names, etc. Similar to Registered Mark (1 Question) 105
Trade Names or Business Names (1 Question) 106

PATENTS (13 Questions) 106

Rights Conferred by a Patent (5 Questions) 106
Ownership of a Patent (2 Questions) 106
Patent Infringement (2 Questions) 107
Non-Patentable Inventions (2 Questions) 107
Patentable Inventions (1 Question) 108

INTELLECTUAL PROPERTY RIGHTS IN GENERAL (7 Questions) 108

Differences between Copyrights, Trademarks and Patent (6 Questions) 108
Technology Transfer Arrangements (2 Question) 109
Intellectual Property Rights (1 Question) 109

VIII. TRUST RECEIPT LAW (37 QUESTIONS)

OBLIGATION AND LIABILITY OF THE ENTRUSTEE (15 Questions) 110

Liability for Loss of Goods, Documents or Instruments (8 Questions) 110
Return of Goods, Documents or Instruments in Case of Non-Sale (4 Questions) 110
Penal Sanction if Offender Is a Corporation (3 Questions) 111

WAREHOUSEMAN’S LIEN (12 Questions) 111

DEFINITION/CONCEPT OF A TRUST RECEIPT TRANSACTION (7 Questions) 112

RIGHTS OF THE ENTRUSTER (2 Questions) 112

REMEDIES AVAILABLE (1 Question) 113

IX.  SECURITIES REGULATION CODE (R.A. No. 8799) (26 QUESTIONS)

PROHIBITIONS ON FRAUD, MANIPULATION AND INSIDER TRADING

(9 Questions) 113
Insider Trading (7 Questions) 113
Manipulation of Security Prices (1 Question) 114
Short Sales (1 Question) 115
SECURITIES REQUIRED TO BE REGISTERED (8 Questions) 115

PROTECTION OF INVESTORS (5 Questions) 117

CIVIL LIABILITY (4 Questions) 117

X. LETTERS OF CREDIT (14 QUESTIONS)

BASIC PRINCIPLES OF LETTER OF CREDIT (11 Questions) 119

Doctrine of Independence (9 Questions) 119
Doctrine of Strict Compliance (2 Questions) 119

DEFINITION AND NATURE OF LETTER OF CREDIT (3 Questions) 120