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NATURE AND FORMATION Issue: Whether the Benguet Consolidated Inc is covered by the

orders of the COURT.

Corporation an artificial being created by operations of law having
the right of succession and the powers, attributes and properties Held: The Supreme Court Held that a corporation is an artificial
expressly authorized by law or incident to its existence. being created by operation of law, it owes its life to the state, its
birth being purely dependent on its will. It is logically inconceivable
therefore that it will have rights and privileges of a higher priority
Tri-level Existence in the Corporate Setting
than that of its creator. More than that, it cannot legitimately
REFUSE to yield obedience to acts of its state organs, certainly not
First, the corporation as a juridical entity or a juridical fiction, which
excluding the JUDICIARY, whenever called. It is not immune to
views the relationship between the State and the corporation. judicial control in those instances, where a duty under the law as
ascertained in an appropriate legal proceeding is cast upon it.
Second, the corporate setting provides for contractual relationships
on four (4) sub-levels, namely:
Ang Pue & Co vs. Secretary of Commerce
(a) Between the corporation and its agents or representatives
Facts: Ang Pue and Tan Siong organized a partnership for a term of
to act in the real world, such as its directors and its
5 years. Their agreement provides that they can extend the
officers, governed suppletorily by the Law on Agency. partneship for another 5 years by mutual consent.
(b) Between the corporation and its shareholders or
members; In 1954, RA 1180 was enacted to regulate the retail business. Said
(c) Between and among the shareholders in a common law provided that, after its enactment, a partnership not wholly
venture; and formed by Filipinos could continue to engage in the retail business
(d) Between the corporation and third parties or outsiders, until the expiration of its term so registration of said Ang was refused
on the ground that the extension was in violation of the aforesaid
which is essentially governed by Contract Law, and Labor
Law when it comes to relationship with officers and
employees. Plaintiff Company filed a petition for declaratory relief contending
their original articles of partnership provided that they could extend
Third, the corporation becomes in its operation a business economic the term of their partnership; that it constitutes a property right of
which the partners can not be deprived without due process or
unit, a business enterprise, or what is called in Accounting as a
without their consent; and that the provisions of RA 1180 cannot
going concern. adversely affect them. Lower court dismissed their petition. Plaintiff
Co. interposed an appeal.
Being well-aware of the tri-level existence in the corporate
setting provides a better way to both understand and Issue: Whether the extension of the partnership established before
the enactment of RA 1180, is in violation of the said act.
explain the varying and interweaving doctrines prevailing
in Corporate Law. Held: The SC ruled that organizing a corporation is not a matter of
right but a mere privilege which may be enjoyed under the terms
NATURE OF CORPORATIONS provided by state / law. When the partners amended the articles of
partnership, the provisions of RA 1180 were already in force, and so
1. Corporate Attributes the right claimed by plaintiff-appellants to extend the original term
a. Theories in the formation of a corporation of their partnership to another five years would be in violation of the
clear intent and purpose of the said law.
Tayag vs. Benguet consolidated INC (1) Theory of Concession
26 SCRA 242 - Looks at a corporation simply as a creature of the State
and of limited powers and capabilities, completely within
Facts: Idonah Slade Perkins died in New York on March 1960, the
domestic administrator in New York refused to give the Stock the control of the State.
Certificates owned by Perkins in the Benguet Consolidated Inc. to the - Applies within the juridical entity level, and the issues to
Ancillary administrator here in the Philippines for the purpose of be resolved arise between the State and its
satisfying the legitimate claims of local creditors. The Court of First instrumentalities and the corporation.
Instance of Manila decided that the Stock Certificates was - Tayag v. Benguet Consolidated, Inc., characterized a
considered lose because of the refusal of the domestic administrator corporation as an artificial being, created by operation of
in New York to give such certificates to the ancilliary administrator law, and that it owes its life to the state, its birth purely
here in the Philippines and ordered Benguet Consolidated Inc to dependent on its will.
issue New Stock Certificates to the Ancilliary administrator. Benguet - Ang Pue & Co. v. Secretary of Commerce and Industry,
refuses to obey the order of the CFI of Manila on the ground that it is
would hold that to organize a corporation that could
in violation of the Corporation By Laws.
claim a juridical personality of its own and transact

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business as such, is not a matter of absolute right but a or secondary franchises. The former is the franchise to exist as a
privilege which may be enjoyed only under such terms as corporation, while the latter are certain rights and privileges
the State may deem necessary to impose. conferred upon existing corporations, such as the right to use the
(2) Theory of Enterprise Entity streets of a municipality to lay pipes or tracks, erect poles or string
- The corporate entity is viewed as taking its significant wires The primary franchise of a corporation, that is, the right to
primarily from the reality of the underlying enterprise, exist as such, is vested in the individuals who compose the
formed or in formation; that the States approval of the corporation and not in the corporation itself and cannot be conveyed
corporate form sets up a prima facie case that the assets, in the absence of a legislative authority so to do. But the special or
liabilities and operations of the corporation are those of secondary franchises of a corporation are vested in the corporation
the enterprise. and may ordinarily be conveyed or mortgaged under a general
- Is meant to cover the situations where the courts have
power granted to a corporation to dispose of its property, except
either: (a) erected corporate personality which the State
such special or secondary franchises as are charged with public use.
had not granted; or (b) disregarded corporate personality
where the State had granted it; both for the purpose of JRS Business Corporation vs. Imperial Insurance
giving legal effect to factual relationships set up between
an economic entity and an outsider. FACTS: J.R.S. Business Corporation, an establishment duly
- The corporation is not merely an artificial being, but more franchised by the Congress of the Philippines, to conduct a
of an aggregation of persons doing business, or an messenger and delivery express service. The respondent Imperial
underlying business unit. Insurance, Inc., presented with the CFI of Manila a complaint for sum
- The enterprise entity theory hinges itself on the fact that of money against the petitioner corporation. After the defendants
therein have submitted their Answer, the parties entered into a
there can be no corporate existence without persons to
Compromise Agreement, assisted by their respective counsels. The
compose it; there can be no association without its lower court rendered judgment embodying the contents of the said
associates. compromise agreement.
b. Creature of the Law
1. Constitution One day after the date fixed in the compromise agreement, within
- Sec. 16, Article XII of the Constitution states that The which the judgment debt would be paid, but was not, respondent
Congress shall not, except by general law, provides for Imperial Insurance Inc., filed a "Motion for the Insurance of a Writ of
formation, organization or regulation of private Execution". A Writ of Execution was issued by respondent Sheriff,
corporation. GOCC may be created or established by Notices of Sale were sent out for the auction of the personal
properties of the petitioner J.R.S. Business Corporation. a Notice of
special charters in the interest of the common good &
Sale of the "whole capital stocks of the defendants JRS Business
subject to the test of economic viability. Consequently, it Corporation, the business name, right of operation, the whole
has been held that a private corporation created pursuant assets, furnitures and equipments, the total liabilities, and Net
to a special law is a nullity, and such special law is void for Worth, books of accounts, etc., etc." of the petitioner corporation
being in violation of the Constitution. was, handed down. Petitioner, thru counsel, presented an "Urgent
2. Civil Code Petition for Postponement of Auction Sale and for Release of Levy on
- Under Article 44 of the Civil Code of the Philippines, other the Business Name and Right to Operate of Defendant JRS Business
than the State and its political subdivisions, and other Corporation", stating that petitioners were busy negotiating for a
corporations, institutions and entities for public interest or loan with which to pay the judgment debt; that the judgment was
for money only and, therefore, plaintiff (respondent Insurance
purposes, the law recognizes corporations, partnerships
Company) was not authorized to take over and appropriate for its
and associations for private interest or purpose to which own use, the business name of the defendants; that the right to
are granted a juridical personality, separate and distinct operate under the franchise, was not transferable and could not be
from that of each shareholder, partner or member. considered a personal or immovable, property, subject to levy and
- Under Article 45, the juridical persons organized as public sale.
corporations are governed by the laws creating or
recognizing them, while private corporations are regulated In the sale which was conducted in the premises of the JRS Business
by laws of general application on the subject. Corporation, all the properties of said corporation contained in the
3. Franchise Notices of Sale, were bought by respondent Imperial Insurance, Inc.
- J.R.S. Business Corp v. Imperial Insurance, Inc., recognized
ISSUE: Whether the business name or trade name, franchise (right to
the differences between the primary franchise and
operate) and capital stocks of the petitioner are properties or
secondary franchise of a corporation, thus: property rights which could be the subject of levy, execution and
For practical purposes, franchises, so far as relating to corporations,
are divisible into a (a) corporate or general franchises; and (b) special HELD: Sec. 56 of the Corporation Law provides:

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business name cannot be sold separately from the franchise, and the
Any franchise granted to a corporation to collect tolls or to occupy, capital stock of the petitioner corporation or any other corporation,
enjoy, or use public property or any portion of the public domain or for the matter, represents the interest and is the property of
any right of way over public property or the public domain, and any stockholders in the corporation, who can only be deprived thereof in
rights and privileges acquired under such franchise may be levied the manner provided by law
upon and sold under execution, together with the property necessary
for the enjoyment, the exercise of the powers, and the receipt of the c. Four attributes of a corporation
proceeds of such franchise or right of way, in the same manner and (1) It is an artificial being with separate and distinct
with like effect as any other property to satisfy any judgment against personality
the corporation: Provided, That the sale of the franchise or right of - it is the fiction of law which creates the person of the
way and the property necessary for the enjoyment, the exercise of corporation, with the same attributes of an individual with
the powers, and the receipt of the proceeds of said franchise or right
full capacity to enter into contractual relations.
of way is especially decreed and ordered in the judgment: And
1. Created by operation of law
provided, further, That the sale shall not become effective until
- The juridical existence of a corporation is dependent on
confirmed by the court after due notice.
the consent or grant of the State. From a strict legal point
A franchise is a special privilege conferred by governmental of view, and under the theory of concession, a corporation
authority, and which does not belong to citizens of the country cannot come into being by mere consent of the parties;
generally as a matter of common right. Its meaning depends more or there must be a law granting it, and once granted, forms
less upon the connection in which the word is employed and the the primary franchise of the corporation.
property and corporation to which it is applied. It may have different 2. It enjoys the right of success
significations. - By specific definition under Section 2 of the Corporation
"For practical purposes, franchises, so far as relating to corporations, Code granting it the right of succession, a corporation has
are divisible into (1) corporate or general franchises; and (2) special
the capacity for continuous existence despite the death or
or secondary franchises. The former is the franchise to exist as a
corporation, while the latter are certain rights and privileges replacement of its shareholders or members, for it has a
conferred upon existing corporations, such as the right to use the personality separate and distinct from those who compose
streets of a municipality to lay pipes or tracks, erect poles or string it.
wires." 3. It has the powers, attributes and properties expressly
The primary franchise of a corporation that is, the right to exist as authorized by law or incident to its existence
such, is vested "in the individuals who compose the corporation and - It defines every corporation to be a creature of limited
not in the corporation itself" but the specify or secondary franchises powers.
of a corporation are vested in the corporation and may ordinarily be - Under the classic concession theory, once a corporation
conveyed or mortgaged under a general power granted to a has been granted juridical personality by the State, it is
corporation to dispose of its property, except such special or
allowed and can legally exercise only such powers granted
secondary franchises as are charged with a public use
The right to operate a messenger and express delivery service, by by the law for its creation, as opposed to a natural person,
virtue of a legislative enactment, is admittedly a secondary franchise, who has the ability to exercise any power and enter into
and, as such, under our corporation law, is subject to levy and sale any business activity and the only limitation would be that
on execution together and including all the property necessary for an individual has no right to enter into an act or
the enjoyment thereof. The law, however, indicates the procedure transaction that is contrary to law, morals and public
under which the same (secondary franchise and the properties
necessary for its enjoyment) may be sold under execution. Said
d. Advantages of the Corporate Medium
franchise can be sold under execution, when such sale is especially
(1) Strong Juridical Personality
decreed and ordered in the judgment and it becomes effective only
- It has a strong juridical personality having a separate and
when the sale is confirmed by the Court after due notice. The
compromise agreement and the judgment based thereon, do not distinct personality from the members composing it,
contain any special decree or order making the franchise answerable unaffected by the death, incapacity, withdrawal, or
for the judgment debt. The same thing may be stated with respect to insolvency of any of its stockholders or members.
petitioner's trade name or business name and its capital stock. (2) Centralized Management
Incidentally, the trade name or business name corresponds to the - Centralized in the Board of Directors, to whom also are
initials of the President of the petitioner corporation and there can granted all corporate powers under Section 23 of the
be no serious dispute regarding the fact that a trade name or Corporation Code. Shareholders are not agents of the
business name and capital stock are necessarily included in the corporation, nor can they bind the corporations.
enjoyment of the franchise. Like that of a franchise, the law - Imbues the corporate medium with stable and efficient
mandates, that property necessary for the enjoyment of said
system of governance and dealings with third parties, since
franchise, can only be sold to satisfy a judgment debt if the decision
especially so provides. As We have stated heretofore, no such management prerogatives are centralized in its Board of
directive appears in the decision. Moreover, a trade name or Directors. By imposition of law, and except in particularly

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designated instances, stockholders are bound by the - Investors have very little voice over the conduct of
management decisions and transactions of the Board of business of the corporation.
Directors of the corporation, whether they like it or not. (3) Limited Liability Hits Innocent Victims
(3) Limited Liability to Investors - The limited liability feature of the corporation has often
- The liability of investors in a corporation is limited to their been abused by business in order to avoid having to
shares as distinguished from partnerships where even if provide adequate protection and compensation for victims
the assets of the partnership are already exhausted, of the business ventures they undertake. Also the limited
creditors can still go after the individual properties of the liability feature has tended to increase transaction costs by
partners. the parties being forced to enter in to contractual schemes
- Affords a more efficient means to encouraging investments skirting the limited liability features of the corporation
in the venture, and traditional economic cost is spent only when it is a party to a transaction.
when parties attempt to go around the limited liability (4) Double Taxation
feature. - The corporation has traditionally been subjected to heavier
(4) Free Transferability of Units of Investment taxation than other forms of business organizations; the
- In a corporate setting, as a general rules, the shares of profits of the corporation which are already subjected to
stocks can be transferred without the consent of the other corporate income tax when declared and distributed as
stockholders. This would assure investors of a ready dividends to the stockholders are again subjected to
mechanism to dispose of their investments when their further income tax.
personal or financial situation may require it. - Tax Reform Act of 1997 imposed starting in 1998 the
- Presumes a well-developed market for shares of stocks following tax burdens:
(5) Advantages Over Unregistered Associations Re-imposition of final tax on cash and property dividends
- It enjoys perpetual succession under is corporate name received by individuals from domestic corporations.
and in an artificial form; it has the capacity to take and Imposition of minimum corporate income tax at 2% of
grant property, and contract obligations; it can sue and be gross income on the fourth taxable year from
sued in its corporate name as a juridical person; it has the commencement of business operations, when the
capacity to receive and enjoy common grants of privileges minimum income tax is greater than the regular corporate
and immunities; and its stockholders or members have income tax
generally no personal liability beyond the value of their Re-imposition of improperly accumulated earnings tax at
shares. the rate of 10% of the defined improperly accumulated
- Subject to the application of the corporation by estoppels taxable income.
e. The Corporate entity compared with other business
Disadvantages of the Corporate Medium endeavors
(1) Sole Proprietorships
(1) Complicated and Costly Formation and Maintenance - Where the business enterprise is not endowed with a
- The corporation entails relatively high cost of formation, separate juridical personality is less saddled with the many
operation, and maintenance. There is a greater degree of requirement and regulations to which corporations are
governmental control and supervision than in other forms often subjected to by law, rules and regulations. The owner
of business organizations. is in command of his whole business and in the event the
- For example, corporate entities, especially banking and business venture goes bankrupt, he stands to lose as much
insurance institutions, are subjected to more reportorial as he puts in and even more to the extent of all his
and record-keeping obligations under the Anti-Money personal holdings. Consequently, the doctrine of limited
Laundering Act. They are likewise subjected to greater liability does not apply to a sole proprietorship that will
responsibilities to expanded stakeholders under regulatory limit the claims of business creditors to the assets of the
rules on corporate governance. business enterprise. This is in contrast to a corporation
(2) Lack of Personal Element and Abuse of Corporate
where control of the corporate enterprise is vested in the
Board of Directors, and there is limited liability on the
- There is ordinarily lack of personal elements in view of the
part of the shareholders.
transferability of shares, and the vesting of management
- Represents the highest form of unlimited liability when
powers in the Board of Directors who may be professional
it comes to the sole proprietor because he has in his
manages. Under the theory that those vested with
person not only the prerogatives of management but also
corporate powers have no personal or proprietary stake in
the benefits of ownership, and the flow of transactions
the corporate business enterprise.

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and income is not limited within the confines of the
business enterprise. Issue: Whether or not the contention of the plaintiff appellee
regarding the real party in interest is correct?
(2) Partnership (1768, 1772, and 1775 of the Civil Code)
- Article 1768 of the Civil Code provides that the partnership Held: It is true that the complaint also states that the plaintiff is
has a juridical personality separate and distinct from that "represented herein by its Managing Partner Gregorio Araneta, Inc.",
another corporation, but there is nothing against one corporation
of each of the partners, even in case of failure to comply
being represented by another person, natural or juridical, in a suit in
with the registrations requirements of the said Code. court.
- The most important distinction between the corporation
and the partnership is in their legal capacities. With the The contention that Gregorio Araneta, Inc. can not act as managing
right of succession, a corporation has a stronger legal partner for plaintiff on the theory that it is illegal for two
personality, enabling it to continue despite the death, corporations to enter into a partnership is without merit, for the true
incapacity, withdrawal or insolvency of any of its rule is that "though a corporation has no power to enter into a
stockholders or members. In a partnership, the partnership, it may nevertheless enter into a joint venture with
another where the nature of that venture is in line with the business
withdrawal, death, incapacity or insolvency of any
authorized by its charter."
partner would automatically bring about the dissolution
of the partnership. It is true that the complaint also states that the plaintiff is
- Limited liability is a main feature in a corporate setting, "represented herein by its Managing Partner Gregorio Araneta, Inc.",
whereas partners are liable personally for partnership another corporation, but there is nothing against one corporation
debts not only to what they have invested in the being represented by another person, natural or juridical, in a suit in
partnership but even as to their other properties. court. The contention that Gregorio Araneta, Inc. can not act as
- Generally, every partner is an agent of the partnership managing partner for plaintiff on the theory that it is illegal for two
and by his sole act, he can bind the partnership, whereas corporations to enter into a partnership is without merit, for the true
rule is that "though a corporation has no power to enter into a
in a corporation, only the Board of Directors or its agents
partnership, it may nevertheless enter into a joint venture with
can bind the corporation. another where the nature of that venture is in line with the business
- In a partnership setting, although a partner has the power authorized by its charter."
to sell or dispose of his capital interest or proprietary
interest, the buyer or transferee does not assume
transferors position as partner, but merely has a right to (3) Joint Venture
demand for accounting or distribution of the profits - The concept of a joint venture is of common law origin,
pertaining thereto. The principle of delectus personae and has no precise legal definition. Under Philippine Law, a
prevails in the partnership setting. In a corporate setting, joint venture is a form of partnership and should thus be
every stockholder has the right to transfer his shares in governed by the Law on Partnerships, which would then
the corporation, and the buyer or transferee assumes the include the features of separate juridical personality,
role of stockholder of said shares when the transfer has mutual agency among the co-venturers, and unlimited
been duly registered in the corporate books. Free liability.
- Defined as an association of persons or companies jointly
transferability of the units of ownership is a hallmark
undertaking some commercial enterprise; generally all
feature in the corporate setting.
contribute assets and share risks. It requires a community
Tuason v. Bolanos of interest in the performance of the subject matter, a
right to direct and govern the policy in connection
Facts: This is an appeal in the decision of the Court of Fuist Instance therewith, and duty, which may be altered by agreement
of Rizal regarding the action brought by the plaintiff, Tuason as to share both in profit and losses. The acts of working
represented by its managing partner Gregorio Araneta pf Araneta together in a joint project.
and Araneta to recover possession of registered land situated in
barrio Tatalon Quezon City.
The plaintiff appellee in this case contends that the case CORPORATION
was not brought by the real party in interest which is JM Tuason and
Co. Inc. because the complaint was signed by Gregorio Araneta, Inc. FACTS: In 1961, Saniwares, a domestic corporation was
its managing partner. It also claims that Gregorio Araneta Inc. cannot
act as managing partner of plaintiff on theory that it is illegal for two incorporated for the primary purpose of manufacturing
corporations to enter into a partnership. and marketing sanitary wares. One of the incorporators,
Mr. Baldwin Young went abroad to look for foreign

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partners, European or American who could help in its stockholders then proceeded to the election of the
expansion plans. On August 15, 1962, ASI, a foreign members of the board of directors. The ASI group
corporation domiciled in Delaware, United States nominated three persons namely; Wolfgang Aurbach,
entered into an Agreement with Saniwares and some John Griffin and David P. Whittingham. The Philippine
Filipino investors whereby ASI and the Filipino investors investors nominated six, namely; Ernesto Lagdameo, Sr.,
agreed to participate in the ownership of an enterprise Raul A. Boncan, Ernesto R. Lagdameo, Jr., George F. Lee,
which would engage primarily in the business of and Baldwin Young. Mr. Eduardo R, Ceniza then
manufacturing in the Philippines and selling here and nominated Mr. Luciano E. Salazar, who in turn
abroad vitreous china and sanitary wares. The parties nominated Mr. Charles Chamsay. The chairman, Baldwin
agreed that the business operations in the Philippines Young ruled the last two nominations out of order on
shall be carried on by an incorporated enterprise and the basis of section 5 (a) of the Agreement, the
that the name of the corporation shall initially be consistent practice of the parties during the past annual
"Sanitary Wares Manufacturing Corporation." stockholders' meetings to nominate only nine persons
as nominees for the nine-member board of directors,
At the request of ASI, the agreement contained and the legal advice of Saniwares' legal counsel.
provisions designed to protect it as a minority group,
including the grant of veto powers over a number of ISSUE: WHETHER THE PARTIES TO A PARTICULAR
corporate acts and the right to designate certain CONTRACT HAVE THEREBY ESTABLISHED AMONG
officers, such as a member of the Executive Committee THEMSELVES A JOINT VENTURE?
whose vote was required for important corporate
transactions. RULING:

Later, the 30% capital stock of ASI was increased The rule is that whether the parties to a
to 40%. The corporation was also registered with the particular contract have thereby established among
Board of Investments for availment of incentives with themselves a joint venture or some other relation
depends upon their actual intention which is
the condition that at least 60% of the capital stock of
determined in accordance with the rules governing the
the corporation shall be owned by Philippine nationals. interpretation and construction of contracts. In the
instant cases, our examination of important provisions
The joint enterprise thus entered into by the of the Agreement as well as the testimonial evidence
Filipino investors and the American corporation presented by the Lagdameo and Young Group shows
prospered. Unfortunately, with the business successes, that the parties agreed to establish a joint venture and
there came a deterioration of the initially harmonious not a corporation. The history of the organization of
Saniwares and the unusual arrangements which govern
relations between the two groups. According to the
its policy making body are all consistent with a joint
Filipino group, a basic disagreement was due to their venture and not with an ordinary corporation. Premises
desire to expand the export operations of the company considered, we believe that under the Agreement there
to which ASI objected as it apparently had other are two groups of stockholders who established a
subsidiaries of joint joint venture groups in the countries corporation with provisions for a special contractual
where Philippine exports were contemplated. On March relationship between the parties, i.e., ASI and the other
8, 1983, the annual stockholders' meeting was held. The stockholders. (pp. 4-5)
meeting was presided by Baldwin Young. The minutes
Section 5 (a) of the agreement uses the word
were taken by the Secretary, Avelino Cruz. After "designated" and not "nominated" or "elected" in the
disposing of the preliminary items in the agenda, the selection of the nine directors on a six to three ratio.

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Each group is assured of a fixed number of directors in
the board.

Moreover, ASI in its communications referred to the

enterprise as joint venture. Baldwin Young also testified
that Section 16(c) of the Agreement that "Nothing
herein contained shall be construed to constitute any of
the parties hereto partners or joint venturers in respect
of any transaction hereunder" was merely to obviate
the possibility of the enterprise being treated as
partnership for tax purposes and liabilities to third

(4) Business Trusts (Article 1441 of the Civil Code)

Art. 1441. Trusts are either express or implied. Express
trusts are created by the intention of the trustor or of the
parties. Implied trusts come into being by operation of
- As compared to a corporation, A business trust is created
under the terms of a deed of trust which is easier and less
expensive to constitute for it is not bounded by any legal
requirements like the former. It does not have a separate
juridical personality, and is mainly governed by contractual
doctrines and the common law principles on trust.
- It requires the fourth requisite of delivery; trust is crated
when ownership over the property subject thereof (the
corpus) is split between the trustee who assumes legal or
naked title, and the beneficiary who has beneficial title.
- The naked title to the corporate properties are held by the
Board of Directors pursuant to the provisions of Section 23
of the Corporation Code; whereas, the beneficial title to
the corporate enterprise is vested with the group of
- The Board of Directors basically acts as trustee with full
powers to manage the corporate enterprise as the corpus
of the legal relationship, with the stockholders as the
beneficiary group with certain legal powers to enforce the
fiduciary obligations of the Board.

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