CPALE RFBT (Regulatory Framework for Business Transactions) Review

CPALE RFBT (Regulatory Framework for Business Transactions) Review

RFBT is the only CPALE subject with 100 items (the other five have 70), in a three-hour paper on the afternoon of Day 2. The 65% floor applies to it like every other subject, so you can't skip it and pass.

The items cover Civil Code provisions on Obligations and Contracts and Sales, the Negotiable Instruments Law, the Revised Corporation Code (RA 11232), Insurance Code, Labor Code basics, and Anti-Money Laundering Act.

This post is the topic-by-topic plan that the CPALE pillar guide hands off to.

Suggested practice mix

PRC doesn't publish item counts per topic. This is our suggested mix for a 100-item practice set, not an official breakdown:

Obligations and Contracts (heaviest block)

Drill list:

Obligations:

• Sources: law, contracts, quasi-contracts, delicts, quasi-delicts
• Kinds: pure, conditional (suspensive vs resolutory), with a period, alternative, joint vs solidary, divisible vs indivisible, with penal clause
• Modes of extinguishment: payment, loss of thing, condonation, confusion, compensation, novation, prescription, fortuitous event, annulment, rescission

Contracts:

• Essential requisites: consent, object, cause
• Vices of consent: error, violence, intimidation, undue influence, fraud
• Form requirements: when in writing, when notarized, Statute of Frauds
• Defective contracts: rescissible, voidable, unenforceable, void
• Reformation
• Interpretation rules

Practice multi-party scenarios: who can demand what, from whom, and when.

Sales

• Definition + characteristics (consensual, principal, onerous, commutative, bilateral, nominate)
• Distinguished from: barter, dation in payment, contract for piece of work
• Object of sale (existing, future, etc.)
• Price (certain in money or its equivalent)
• Capacity to buy or sell
• Effects of contract: ownership transfer, risk of loss
• Warranties: express, implied (against eviction, against hidden defects)
• Remedies of unpaid seller
• Equitable mortgage vs absolute sale
• Conventional and legal redemption

Negotiable Instruments Law (Act 2031)

• Negotiable instruments: promissory note, bill of exchange, check
• Requirements for negotiability (Section 1)
• Signed in writing, unconditional promise/order to pay sum certain in money, payable on demand or at fixed/determinable future time, payable to order or to bearer, drawee designated with reasonable certainty
• Negotiation: by indorsement + delivery (order paper) vs delivery alone (bearer paper)
• Indorsement types: special, blank, restrictive, qualified, conditional
• Holder in due course (HDC) requirements + rights
• Personal vs real defenses
• Liability of parties: maker, drawer, indorser
• Discharge of instrument

Revised Corporation Code (RA 11232)

Drill the 2019 RCC changes from the old Corporation Code:

• One-Person Corporation (OPC) — new under RCC
• Removal of minimum number of incorporators (was 5; now 1-15)
• Perpetual term default (was 50 years)
• Corporate powers
• By-laws
• Stockholders meetings, voting
• Board of directors: qualifications, term, vacancies
• Corporate officers: chairperson, president, treasurer, corporate secretary, compliance officer
• Corporate liability theories: piercing veil, alter ego
• Foreign corporations (license to do business)
• Mergers + consolidations
• Dissolution + liquidation

Know the One Person Corporation provisions well.

Partnership (Civil Code)

• Definition: contract of two or more persons binding to contribute money, property, or industry to common fund with intention of dividing profits
• Universal vs particular partnership
• General vs limited partnership
• Rights and obligations of partners
• Dissolution causes
• Distinguished from corporation, joint venture

Insurance Code

• Insurable interest
• Concealment, representation, warranty
• Premium payment
• Loss + claim procedure
• Subrogation
• Marine, fire, casualty, life insurance basics

Labor Code basics

• Employer-employee relationship
• Regular, project, seasonal, casual employment
• Probationary employment (6-month rule)
• Termination: just causes vs authorized causes
• Due process: substantive + procedural
• Constructive dismissal
• 13th month pay (PD 851)
• SSS, PhilHealth, Pag-IBIG basics

Banking laws

• General Banking Law (RA 8791)
• New Central Bank Act (RA 7653 as amended by RA 11211)
• Secrecy of bank deposits (RA 1405)
• Foreign currency deposit secrecy (RA 6426)

AMLA + other special laws

• Anti-Money Laundering Act (RA 9160 as amended)
• Covered persons + covered transactions + suspicious transactions
• Reporting requirements
• Other relevant: Data Privacy Act (RA 10173), Bouncing Checks Law (BP 22)

A 4-week RFBT drilling plan

Where Super Tutor fits

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What to read next

The CPALE pillar guide covers the full review. The other Day 2 subject is Taxation.