PART II - PRIVATE CORPORATION

TITLE I - GENERAL PROVISIONS (DEFINITION AND CLASSIFICATION)

SECTION 1. Title of the Code. – This Code shall be known as “The Corporation Code of the
Philippines”. 

•Law governing private Corporations is now embodied in Batas Pambansa.

•Took effect on- May 1, 1980.

•Act No. 1459 popularly known as Corporation Law enacted on March 1, 1906 by the Philippines
Commission.

•Then the legislative body of the Philippines during American regime Act No.1459 took effect on April 1,
1906.

SECTION 2. Corporation defined. – A corporation is an artificial being created by operation of law,

having the right to succession and the powers, attributes and properties expressly authorized by law
or incident to its existence.

Attributes of a corporation

1. Corporation as artificial being.

The Corporation Code has embodied the accepted concept of a corporation as an “artificial” being. A
Corporation is given by law with rights, powers and liabilities usually accorded a natural person.

Consequences of the legal concept of separate personality of a corporation

a. Liability for debt/ownership of credit
b. Right to bring actions
c. Right to acquire and possess property
d. Liability for contracts
e. Tax exemption/liability
f. Changes in individual membership
g. Liability under exemptional circumstances

2. Created by operation of law.

A corporation comes into being by authorities of the state.

a. Special authority or grant by the state required

b. Governing general laws/special laws

c. Exception

3. Right of succession.

A private corporation may continue regardless of the death, insolvency, incapacity of any of its
directors, officers or employees, and regardless of transfer of shares from one stockholder to another.

4. Power, attributes and properties.

A corporation, being a mere creature of law, has such powers only as are expressly, or impliedly
conferred upon it by the Charter or act of incorporation.

Distinctions between a partnership and a corporation