Commercial Law, 2011 Bar — Question 90

MULTIPLE CHOICE

A law was passed disqualifying former members of Congress from sitting in the Board of Directors of government-owned or controlled corporations. Because of this, the Board of Directors of ABC Corp.. a government-owned and controlled corporation, disqualified C, a former Congressman, from continuing to sit as one of its members. C objected, however, insisting that under the Corporation Code members of the board of directors of corporations may only be removed by vote of stockholders holding 2/3 of its outstanding capital stock in a regular or special meeting called for that purpose. Is C correct? A) Yes, since the new law cannot be applied to members of the board of directors already elected prior to its passage. B) No, since the disqualification takes effect by operation of law, it is sufficient that he was declared no longer a member of the board. C) Yes, since the provisions of the Corporation Code applies as well to govemment-owned and controlled corporations. D) No, since the board has the power to oust him even without the new law.

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