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UP08 Commercial Law

UP08 Commercial Law

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Published by: jojitus on Jun 21, 2010
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UNIVERSITY OF THE PHILIPPINESCOLLEGE OF LAW
Bar Operations 2008
COMMERCIAL LAW
Bar Operations Head
Arianne Reyes
Academics Head
Henry AgudaRyan Balisacan
Subject Head
Henry AgudaTere Licaros
Subject Committee
Lynn Ramos * Johaira WahabRuby Alberto * Dianne Capco
Information Management │Committee
Chino Baybay [Head * !imoun !alinas [Deputy * Rania Joya [Design " Lay#out * Ludee $ulido [Documentations * Linus %adamba * Des %ayoralgo * Jillian De Dumo * %i&e 'campo * Abel %aglan(ue * )dan %arri R Ca+ete * Carmie Rome Cargo
Commercial Law
 
TABLO! CO"T"TSC#IMI"AL LA$ I
TA L O! CO"T"TS
I%
Corporation Law&
II%"egotiable Instruments Law''III%Insurance Code()*I+%Transportation Law),&+%Code of Commerce)**+I% an-ing Law).*+II%Intellectual /ropert0 Law&).
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CO#/O#ATIO" LA$COMM#CIAL LA$
CORPORATION LAW
a
.
THE CORPORATION CODE OF THE PHILIPPINES(BATAS PAMBANSA BLG. 68)
Chapter IINTRODUCTION. The C!rp!rat"!# a$ a Le%a& C!#'ept
. C!rp!rat"!# De"#e
A Corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incident to its existence. (§2)
 A corporation is a creature of:
 A general enabling statute (requirements of the law must be complied with); and 
The agreement of individuals who seek to incorporate (internal contractual arrangements: articles of incorporation and by-laws)
.* F!+r attr",+te$ ! a '!rp!rat"!#
An artificial being!.a "uridical person capable of having rights and obligations, w# a personality separate and distinct fro$ its $e$bers or stoc%holders2.hence, stoc%holders are not personally liable for corp. obligations and cannot be held liable to third persons who have clai$s against the corp. beyond their agreed contribution to the corporate capital
(paid-up capital and unpaid subscriptions)
&his is %nown as the doctrine of li$ited liability.Created by operation of law!.$ere consent of the parties to for$ a corp. is not sufficient the 'tate $ust give its consent either through a special law (in the case of a govt corp.) or a general law (for a private corp.)2.the general law under w#c a private corp. $ay be for$ed or organized is the Corporation Codeas the right of succession!.its continued existence during the ter$ stated in its articles of incorp. cannot be affected by any change in the $e$bers or stoc%holders2.nor is it affected by the transfer of shares by a stoc%holder to a *
rd
 personas the powers, attributes and properties expressly authorized by law or incident to its existence as it is a $ere creature of the law, it can exercise only such powers as the law $ay choose to grant it, either expressly or i$pliedly
.-..Aa#ta%e$ ! the C!rp!rate Or%a#"/at"!#$
!)'eparate "uridical personality + personality separate and distinct fro$ individual stoc%holders and $e$bers2)i$ited liability to investors + stoc%holders are liable only to the extent of their contribution
-eneral rule here a corporation buys all the shares of another corporation, this will not operate to dissolve the other corporation and as the two corporations still $aintain their separate corporate entities, one will not answer for the debts of the other. /0ell v 1acific ar$s (!3 'C4A 5!3), 0ov. 2*, !6738
9xceptions
o
:f there is an express assu$ption of liabilities;
o
&here is a consolidation or $erger;
o
:f the purchase was in fraud of creditors;
o
:f the purchaser beco$es a continuation of the seller;
o
:f there are unpaid subscriptions (stoc%holder is liable for the unpaid balance).*)ree transferability of units of ownership + stoc%holders hold their shares as personal property with rights to dispose, assign or encu$ber the$ as they $ay desire
(!"#)
5)Centralized <anage$ent + all corporate powers are exercised by the board of directors
(!$#)
.0 Part#er$h"p $. C!rp!rat"!#
!.9xtent of iability=partners are personally liable for the debts of the partnership; stoc%holders cannot be $ade to personally answer to corporate creditors2.Creation=$ere agree$ent of the parties, w#c can be co$posed of "ust 2 persons, gives rise to the "uridical personality of the partnership, whether or not registered w# the '9C (Art. !>7?, 0CC); a corp., w# a $ini$u$ of 3 incorporators, derives its  "uridical personality fro$ the certificate issued by the '9C
(!%&)
*.<anage$ent=:n $ost cases, all the owners in a partnership actively participate in $anage$ent, w# capacity to bind it by any usual contract (Art. !?!?, 0CC); in a corp., $anage$ent is centralized in the board of directors w#c has exclusive power to bind the corp.
(!$#)
5.0ature of 4elationship=partnership is based on $utual trust and confidence (delectus personae) so that its existence is precarious because of the facility w# which it can be dissolved (i.e. through the death or unilateral act of a partner); a corp. has $ore stability as it en"oys the right of
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