In addition, there has been a re-imposition of the “improperly accumulatedearnings tax,” under Section 29 of the NIRC of 1997 for corporations at the rate of 10% annually.
7. Compared With Other Media of Business Endeavors
- Distribution of Risk, Profit and Control
(a) Sole Proprietorships(b) Business Trusts (Article 1442, Civil Code)(c) Partnerships and Other Associations (Arts. 1768 and 1775, Civil Code)- Can a defective attempt o form a corporation result at least in the formation of apartnership?
Pioneer Insurance v. Court of Appeals,
175 SCRA 668 (1989).(d) Joint Ventures
is defined as an association of persons or companies jointly undertakingsome commercial enterprise; generally all contribute assets and share risks. It requires acommunity of interest in the performance of the subject matter, a right to direct and governthe policy in connection therewith, and duty, which may be altered by agreement to shareboth in profit and losses. the acts of working together in a joint project. x
Kilosbayan, Inc. v.Guingona, Jr.
, 232 SCRA 110, 143 (1994), citing B
, Sixth ed., 839.(e) Cooperatives (Art. 3, R.A. No. 6938)(f)
was considered a commercial partnership, a sort of a corporation,“where upon the execution of the public instrument in which its articles of agreement appear,and the contribution of funds and personal property, becomes a juridical person—an artificialbeing, invisible, intangible, and existing only in contemplation of law—with power to hold,buy, and sell property, and to sue and be sued—a corporation—not a general copartnershipnor a limited copartnership . . . The inscribing of its articles of agreement in the commercialregister was not necessary to make it a juridical person—a corporation. Such inscription onlyoperated to show that it partook of the
of a commercial corporation.” x
, 21 Phil. 95,106 (1911). The
were introduced in Philippine jurisdiction on 1 December1888 with the extension to Philippine territorial application of Articles 151 to 159 of theSpanish Code of Commerce. Those articles contained the features of limited liability andcentralized management granted to a juridical entity. But they were more similar to theEnglish joint stock companies than the modern commercial corporations. x
Benguet Consolidated Mining Co. v. Pineda
, 98 Phil. 711 (1956)Our Corporation Law recognizes the difference between
andcorporations and will not apply legal provisions pertaining to the latter to the former
xPhil.Product Co. v. Primateria Societe Anonyme
, 15 SCRA 301 (1965).(g)
Cuentas En Participacion
cuentas en participacion
as a sort of an accidental partnership constituted in such amanner that its existence was only known to those who had an interest in the same, therebeing no mutual agreement between the partners, and without a corporate name indicatingto the public in some way that there were other people besides the one who ostensiblymanaged and conducted the business, governed under article 239 of the Code of Commerce. Those who contract with the person under whose name the business of such partnershipof
cuentas en participacion
is conducted, shall have only a right of action against suchperson and not against the other persons interested, and the latter, on the other hand, shallhave no right of action against third person who contracted with the manager unless suchmanager formally transfers his right to them.
xBourns v. Carman
7 Phil. 117 (1906).
III. NATURE AND ATTRIBUTES OF A CORPORATION1. Nature of Power to Create a Corporation
(Sec. 16, Article XII, 1987 Constitution)
2. Corporation as a Person
(a) Entitled to due process
The due process clause is universal in its application to all persons without regard toany differences of race, color, or nationality. Private corporations, likewise, are "persons"within the scope of the guaranty insofar as their property is concerned." x
Smith Bell & Co. v.Natividad
, 40 Phil. 136, 144 (1920).
(b) Equal protection clause
Smith Bell & Co. v. Natividad
, 40 Phil. 136 ).
(c) Unreasonable Searches and Seizure