Sec. 5. Corporators and incorporators, stockholders and members.

Corporators - those who compose a corporation, whether as stockholders or as members.

Incorporators - those stockholders or members mentioned in the articles of incorporation as

originally forming and composing the corporation and who are signatories thereof.

Corporators in a stock corporation are called stockholders or shareholders.

Corporators in a non-stock corporation are called members.

DOCTRINE OF SEPARATE JURIDICAL PERSONALITY

A corporation is a legal or juridical person with a personality separate and apart from its individual
stockholders or members and from any other legal entity to which it may be connected.

Cease v. Court of Appeals, G.R. No. L-33172

FACTS:
Forrest Cease and five (5) other American citizens formed Tiaong Milling and Plantation
Company. Eventually, the shares of the other original incorporators were bought out by Cease
with his children. The company's charter lapsed in June 1958.

Forrest Cease died in August 1959. There was no mention whether there were steps to
liquidate the company. Some of his children wanted an actual division while others wanted a
reincorporation.

Two of his children, Benjamin and Florence initiated a special proceeding with the CFI for
the settlement of the estate of Forrest Cease and asking that the Tiaong Milling and Plantation
Corporation be declared identical to Forrest Cease and that its properties be divided among his
children as intestate heirs.

ISSUE: Whether or not the properties registered to Tiaong Corp. are also the properties of the
estate of Forrest Cease

HELD:
YES. The Court sustained respondents' theory of merger of Forrest L. Cease and the Tiaong
Milling as one personality, or that the company is only the business conduit and alter ego of the
deceased Forrest L. Cease and the registered properties of Tiaong Milling are actually properties
of Forrest L. Cease and should be divided equally, share and share alike among his six children.

A corporation is invested by law with a personality separate and apart from its individual
stockholders or members and from any other legal entity to which it may be related. This separate
and distinct personality is, however, merely a fiction created by law for convenience and to
promote the ends of justice.

It is necessary and imperative to pierce the corporate veil as an exception to the general
rule where the corporate entity is being used as an alter ego, adjunct, or business conduit for the
sole benefit of the stockholders or of another corporate entity.
DOCTRINE OF PIERCING THE CORPORATE VEIL
The doctrine that a corporation is a legal entity distinct from the persons composing is a theory
introduced for purposes of convenience and to serve the ends of justice.

But when the veil of corporate fiction is used as a shield to defeat public convenience, justify
wrong, protect fraud, or defend a crime, this fiction shall be disregarded and the individuals composing it
will be treated identically.

GROUNDS FOR APPLICATION OF DOCTRINE

When the corporate fiction is used to defeat public convenience, justify wrong, protect
fraud or defend crime; or where the corporation is a mere alter ego or a business conduit of a
person or another corporation.

The corporate fiction may be pierced if used: DECF

(1) to defraud the government of taxes due it;
(2) to evade payment of civil liability;
(3) to evade compliance with contractual obligations; or
(4) to evade financial obligation to its employees.