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Doctrines in Corporation Law
Doctrines in Corporation Law
A corporation has a juridical personality separate and distinct from that of its stockholders or members.
Consequences:
1. Liability for acts or contracts- obligations incurred by a corporation, acting through its authorized agents are
sole its sole liabilities (Creese vs CA, 93 SCRA 483)
2. Right to bring actions – may bring civil and criminal actions in is own name in the same manner as natural
persons.
3. Right to acquire and possess property – property conveyed to or acquired by the corporation is in law the
property of the corporation itself as a distinct legal entity and not that of the stockholders or members.
4. Acquisition of court of jurisdiction – service of summons may be mad on the president, general manager,
corporate secretary, treasure or in-house counsel (Sec 11, Rule 14, Rules of Court)
5. Changes in individual membership - Remains unchanged and unaffected in its identity by changes in its
individual membership
6. Entitlement to constitutional guarantees:
Due Process
Equal protection of the law
Protection against unreasonable searches and seizures
Note: A corporation is not entitled to invoke the right against self-incrimination. (Bataan
Shipyard vs PCGG)
2. Liability for torts – a corporation is liable whenever a tortuous act is committed by an officer or agent under
the express direction or authority of the stockholders or members acting as a body or generally, from the
directors as the governing body.
3. A corporation is not entitled to moral damages because it has no feelings, no emotions, no senses (ABS-CBN
vs CA)
4. Liability for crimes – since a corporation is a mere legal fiction, it cannot be held liable for a crime committed
by its officers, since it does not have the essential element of malice; in such case the responsible officers
would be criminally liable (People vs Tan Boon Kong, 54 Phil 607)
DOCTRINE OF IMMUNITY
Protects a person acting for and in behalf of the corporation from being himself personally liable for his authorized
actions
RULES ON CONVERSION
1. Stock to non-stock corporation
Conversion may be made by mere amendment of the articles of incorporation.
2. Non-stock to stock corporation
The corporation must first be dissolved; mere amendment of the articles of incorporation would not
suffice because the conversion would change the corporate nature from non-profit to monetary gain.
The conversion without dissolving it first would be tantamount to distribution of its assets or income to
its members inasmuch as after its conversion, the asset of the non-stock corporation would now be
treated as payment to the subscriptions of the members who will now become stockholders of the
corporation.