NOTES B - Different kinds of corporations.

A. Aggregate and sole

1. Corporation aggregate – one which is or may be composed of

more than one member (18 C.J.S. 393), such as the San Miguel
Corporation.

2. Corporation sole – one which is composed of a single member

and his successors in office. (18 C.J.S. 393) Thus, for the
administration of the temporalities of any religious denomination,
society, or church, and the management of the estate and
properties thereof, it shall be lawful for the bishop, chief priest or
presiding elder of any such religious denomination, society or
church to become a corporation sole, unless inconsistent with the
rules, regulations or discipline of his religious denomination ,
society or church or forbidden by competent authority thereof.

3.
B. Ecclesiastical and lay

1. Ecclesiastical corporation - one created to secure the public

worship of God (1 Bouvier’ss Law Dict. 683), such as the Roman
Catholic Church.

2. Lay corporation - one established for temporal purposes and is

comprised of laymen (18 C.J.S. 393), such as the Toyota Motor
Corporation.

C. Stock and Non-stock

1. Stock corporations - those which have a capital stock divided into

shares and are authorized to distribute to the holders of such
shares dividends or allotments of the surplus profits on the basis of
the shares held, such as the San Miguel Corp.

2. Non-stock corporation - one in which there is no such stock, but

the membership therein is otherwise represented (18 C.J.S. 399),
such as the Manila Lions Club.

D. De jure and De facto

a. De jure corporation -one created in strict or substantial conformity to

the governing corporation statutes, and whose right to exist and act as
such cannot be successfully attacked in a direct proceeding for that
purpose by the estate. (8 Fletcher 62)

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 b. De facto corporation- one so defectively created as not to be a de jure
corporation, but nevertheless the result of a bona fide attempt to
incorporate under existing statutory, authority, coupled with the
exercise of corporate powers. (8 Fletcher 69)

E. Eleemosynary and civil

a. Eleemosynary corporations- those which are created for purposes of

charities, such as hospitals, schools, and the like. (1 Bouvier’s Law
Dict. 683)

b. Civil corporations - those which are created to facilitate the

transaction of business (1 Bouvier’s Law Dict. 688), such as the Atlas
Consolidated Mining and Development Corporation.

F. Public and Private

a. Public Corporations- those formed or organized for the government

of a portion of the state, such as the City of Manila.

b. Private Corporations - those which are created wholly or in part, for

purposes of private emolument (1 Ruvier’s Law Dict. 683), such as the
Amon Trading Corporation.

G. Domestic and Foreign

a. Domestic Corporation - a domestic corporation with respect to a

particular state or country is one created by or existing under the laws
of that state or country. (18 C.J.S. 399)

b. Foreign Corporation - one created by or existing under the laws of

some other state or country. (18 C.J.S. 399)

H. Open and Close

a. Open Corporation - one in which the general public may become

stockholders or members thereof.

b. Close Corporation- one in which the stockholders or members are

limited to a few persons such as members of a family.

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I. Parent and Subsidiary

a. Parent or holding Corporation - one which is so related to another

corporation that it has the power either directly or indirectly through
another corporation, to elect a majority of the directors of such other
corporation.

b. Subsidiary Corporation- one which is so related to another that a

majority of its directors can be elected directly or indirectly, by such
other corporation.

J. Wasting assets corporation - one the sole purpose of which is to invest its
capital in a specific property and afterward to consume that property or
extract its value at a profit, such as mining property, oil or gas well.
(Ballantine, 0. 587)

K. Affiliated corporation- one related to another by owning or being owned by

common management or by a long-term lease of its properties or other
control device. An affiliation exists between a holding or parent company and
its subsidiary, or between two corporations owned or controlled by a third.
(Kohler, Dictionary for Accountants, p. 26).

L. Government owned or controlled corporations - those organized by the

government or corporations of which the government is the majority
stockholder, such as the Philippine Air Lines, Philippine National Bank,
Philippine National Railways, Metro Manila Transit Corporation, National
Power Corporation, etc..

M. Corporation by Prescription - one where corporate powers have been

exercised by a body of men for such a length of time as to raise a
presumption of the grant of an ancient charter to their predecessor. (18
C.J.S. 406), such as the Roman Catholic Church).

N. Corporation by Estoppel - one which really is not a corporation, but which has
represented itself to the public as a real corporation, and which cannot now
be permitted to deny such representation. (Brown vs. Atlanta, 39 S.E. 71)

O. Quasi-public corporations -private corporations which have accepted from the

state the grant of a franchise or contract involving the performance of public
duties. (1 Fletcher 217), such as the Manila Electric Company.

P. Quasi corporations - associations and government or political institutions or

officers which are not corporations in the full sense, but which are invested by
law with some of the attributes of a corporation, as the capacity to sue or to
be sued as corporate body, to have a continued existence unaffected by

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 death or disability of members, or to make particular contracts or hold
particular property or rights as a corporate body (18 C.J.S. 399), such as the
Board of Accountancy.

Q. Trading corporation - A corporation engaged in the business of buying and

selling of various merchandise.

R. Tramp corporation - A corporation organized in one state without any

intention of doing business in that state, but instead it will carry its business
operations in other states. (Kinds of corporation were primarily taken from the
book of B. Paulino, Law on Business Organization)

Effect of ownership of stock by government.

The fact that the government happens to be a stockholder of a corporation

does not make it a public corporation. Thus, the following corporations,
Philippine Air Lines, Philippine National Bank, Philippine National Railways,
Metro Manila Transit Corporation, National Power Corporation, National Coal
Company, although owned and controlled by the government, are private
corporations they have no greater powers, rights, or privileges than any other
corporation which might be organized for the same purpose under the
Corporation Law. (National Coal Co. vs. Collector of Internal Revenue, 46 Phil.
583)

Effect of public nature or character of corporate undertaking.

The mere fact that the undertaking of the corporation is one which the
state itself might enter as part of its public works, does not make the corporation
a public one. Education is a public or governmental function. Article II, Section
17 of the Philippine Constitution of 1986 provides that “the State shall give
priority to education, science and technology, arts, culture, and sports to foster
patriotism and nationalism, accelerate social progress and promote total human
liberation and development. Thus, U.P., P.U.P., P.N.C. and the Philippine
Science High School are public corporations. But still many colleges and
universities are private corporations, such as PSBA, U.E., F.E.U., N.U.,
N.C.B.A., and the University of Manila. (B. Paulino, Law on Business
Organization)

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Test in determining whether corporation is public or private.

The test for determining whether a corporation is public or private is

dependent upon the purpose of its creation. If a corporation is created as an
agency or instrumentality of the state for political or public purpose connected
with the administration of government, then it is a public corporation. If not, the
corporation is private although the government is a stockholder or the owner of
all its capital stock.

Distinctions between public and private corporations.

1. A public corporation is an agency or instrumentality of the state; while a

private corporation is an agency or instrumentality of private persons.

2. A public corporation is organized for political or public purpose; while a

private corporation is organized for private purpose, benefit, aim and end.

3. The officers of public corporations are appointed by the state and are
subject to removal by the state; while the officers of private corporations
are elected by the stockholders and are subject to removal by the
stockholders.