Majoy’s Reflective Essay about the subject (Story, journey and Learnings)

I never really liked business. When I was in senior high, accountancy was never in my list
but never did I expect that destiny is that naughty that I fell with the thing that I hate the most.
Throughout my first year in college, I never really excelled on anything, in fact, I hardly even
understood our lessons, not until now. It was one of my dreams to be a lawyer, I was very eager
to study law, but not business law, but rather criminal laws and stuffs. I like the drama circling
it, it always excites me reading some detective files but whenever I study, I lost the fire and
sometimes in the middle of nowhere, I paused and wonder myself if I just followed my heart?
Would it be the same? Or would it be better? Would things go easier or do I have a reassurance
with my future? There are times when I thought of shifting to other course because I believe
that this path doesn’t fit my personality and my dreamed environment. But whenever I am lost
with these thoughts, a picture of my family flashed through my mind, especially their sacrifices
just to put me where I am now. So, I continued and stood up again for their sake and for my
family. I don’t want to waste anything. It was hard studying subject, I had countless sleepless
nights, I missed important family events, I lost track of my commitments, I barely go out and go
home to my province. What makes it even harder is when you pretend to be okay so they don’t
have to worry and so that they won’t lose hope on you.

I am a person that doesn’t really study that much. I just study if it is an important quiz or
if it is periodical or if there is a municipal contest. I am always 3rd in the rank. In short, I am just
an average student. I am known as very lazy in high school, I survive watching movies until
morning but not studying but college changed me especially law. The pressure of this subject
gave produces two effects. Somehow, it improved me but it cost my happiness. Movies, my
passion, fun, sleep, family, friends and my commitment to God. But as what they’ve said, he
who gave his best never regretted it.

Because of this subject, I have discovered my study habit and created my own study
technique and I am also satisfied with my grades but the bad thing is, I have also developed
anxiety especially when there are some unfinished business.

So far, if I am going to assess my present self compared to what I was in the past, I think
I improved a little. I may be slow compared to others but at least there is a progress. I realized
that if I am just going to give my 100%, I can do it but I hope I could do the same to my other
major.

The difference between our previous law subject to this is that, before, there are only
few decent discussions but now, it is more than much. Somehow, our tuition did not go to
waste. Even though sometimes we felt like we are being choked, at least as earlier as now, we
are trained for future battles and we learned things. At least now, we had a taste of the bitter
life of accountancy, we were able to take precautions for the future and we have realized that
this life isn't ordinary, its scary and tough but not impossible.

CIVIL CODE OF THE PHILIPPINES

I may have started bad but I still managed to climb up. My journey was never
easy especially whenever I’m thrown at unexpected situations (I’m referring to the unexpected
questions in the exam, especially the situational problems). I did my best but it wasn’t enough. I
first heard partnership first year, first sem but honestly I haven't really learned that much. But
now, its a little bit clear. I have learned that partnership is consensual, it can be created by
mere consent and requires no form except when the capital is 3,000 or more, when immovable
property is concerned or real rights or inventory. It must be in public instrument. I have also
learned that partnership is one created where two or more persons bund themselves to
contribute money/industry to a common fund with the intention of dividing the profits among
themselves. It must be not be entered into by persons not capacitated to enter a contract such
as those unincapacitated minors, insane/demented persons, deaf-mutes who do not know how
to read and write, civilly interdicted person, and those incompetent who are under
guardianship. The requisites for contract must be present, there must be mutual contribution
to a common fund, the object must be lawful , the primary purpose must be to obtain profits
and divide it among parties. I have also learned that the partnership is given a juridical
personality and distinct from that of each partner. Thus, just like a person, it can acquire and
possess property of all kinds, it can incur obligation and it can bring civil or criminal actions. If
the purpose or object if partnership is unlawful or illegal, the contract is void, so it is not given a
legal personality, thus the profits is be confiscated in favor of the government, the instruments
or tools and proceeds are also forfeited in favor of the government. I have also learned that
profits and losses are divided according to their stipulation but in the absence of such
stipulation, in proportion to their contribution. I have also learned that industrialist partner who
contributed his labor and services to the partnership is not liable for losses in the partnership
except liabilities to third parties however, he can recover such amount from his co-partners. I
have also learned the different property rights of a partner in the partnership as stated in
article 1810. These includes his right in specific partnership property, his right in the interest in
the partnership and his right to participate in the management. As a general rule, a partner is a
co-owner with his partners in specific partnership property. Thus, he has equal rights with his
partners to possess the property but only for the partnership purposes. He may possess such
property for other purposes provided that the others expressly or impliedly gave their consent.
Furthermore, a partner cannot also assign his right to the property, nor can be
attached/executed and is not subject for legal support. It is for this reason that such property
belongs to the partnership which is considered as a juridical person and also, for reservation
against partnership creditors. A partners interest in the partnership is his share of the profits
and surplus wherein it can be assigned, attached and can be subject for legal support. Article
1813 permits the conveyance by a partner of his whole interest in the partnership as a
collateral security for a loan. Generally, mere conveyance does not necessarily dissolve the
partnership neither make the assignee a partner to the partnership. The rights of the assignee
in the partnership is limited only to (1) get whatever profits the assignor would have obtained,
(2) to avail himself of the usual remedies provided by law in cases of fraud in the management,
to receive the assignor interest and demand an accounting if the partnership is dissolved. He
cannot interfere in the management of the partnership business nor to demand any
information or account, or to inspect any of the partnership books.

I have also learned that separate or individual creditors of the partners can go to
court and apply for a charging order or attach the interest of the partner-debtor in the
partnership for the satisfaction of his credit. Furthermore, when the charging order is applied
for or granted, the court may appoint a receiver of the partners share in the profits. However,
interest charged may be redeemed at any time before foreclosure. The article further stated
that the interest charged may be redeemed after foreclosure with (1) separate property by one
or more of the partners OR (2) with partnership property with the consent of all the partners
whose interest are not charged or sold.

I have also learned in article 1815 that partners, in selecting partnership names for their
firms. As a general rule, every partnership shall operate under a firm name and they may or
may not include the name of one or more of the partners. Furthermore, strangers who include
their names in the firm are liable as partners because of estoppel. As stated in article 1816,all
partners including industrial ones shall be liable pro-rata with all their property and after all the
partnership assets have been exhausted. While industrial partners are exempted from losses as
between partners, he is not exempted from liability insofar as third persons are involved but he
may recover what he has paid from the capitalist partners. A stipulation exempting liability to
third persons is VOID. I have also learned that partnership can be dissolved by express will of
the partners by loss of specific thing due, by death, insolvency, civil interdiction of partners or
by decree of court. Whoever has caused the partnership unjustified reason for dissolution is
liable for damages.

CORPORATION CODE OF THE PHILPPINES

We were warned that this is not an easy subject, so I armed myself. Turns out, it was
really difficult. There are a lot of requirements and “provided” and the “unless-ses”. Things are
connected to each other, one thing (section) is this but later, it is contradicted or further more
expanded. Worse, there is an amendment which is very material to the formation of the
corporation which means that our previous discussions and learnings became useless. It would
be better if at the first place, we tackled already the new one so we’ll not get confused and our
knowledge will not be jumbled.

There is a huge difference between partnership and corporation. The latter is very
complicated to form and complicated to handle. If there is no law governing its creation, there
is no corporation. When I was studying this, I have added a dream and that is to build a one
person corporation someday but as we finished, I stepped back.

I have learned according to Sec. 2 of the corporation code of the Philippines, a

corporation is an artificial being,created by law, having the right of succession & the powers
and attributes and properties expressly authorized by law or incident to its existence. A
corporation is a legal or juridical person with personality separate from and apart from its
stockholders and individual members. There are instances where the separate personality is
pierce or also known as the piercing of corporate veil. It occurs when the corporation functions
for the benefit of a single person, when it is a mere instrumentality of the individual
stockholders, if its controlled by aliens, where it is organized to defraud creditors. I have also
learned that unlike partnership, it is not created by mere consent, it requires special authority
and grant by state. It must comply with all the requirements set forth by law and authority in
order to exist. Even though corporation has high capital requirement, takes time to organized,
has a complexity of organization; and shareholders control is limited, stockholders are liable
only to the extent of their contribution stockholders hold their shares as personal property with
rights to dispose, assign or encumber them as they may desire, and all corporate powers are
vested in the board of directors. A corporation has a personality separate and distinct from that
of its stockholders and members and is not affected by the personal rights, obligations, and
transactions of the latter. The first step in the formation of corporation is filing to SEC the AOI
with corresponding treasurer’s affidavit indicating that 25 percent of the capital stock has been
subscribed and 25 percent of such subscribed stock has been actually paid and is in his
possession. In case of banks, banking institution, insurance corporation etc. (see last par of Sec.
17), favorable recommendation of the government agency is necessary before such corporation
may be formed. After payment of appropriate fees, SEC shall issue a certificate of incorporation
which commence the corporate existence of the corporation.

 Thereupon the incorporators, stockholders/members and their successors shall

constitute a body politic and corporate under the name stated in the AOI for the period of time
mentioned therein, unless said period is extended or the corporation is sooner dissolved in
accordance with law (Ibid).

A de facto corporation is one which actually exists for all practical purposes as a

corporation but has defect in the compliance with the mandatory legal requirements while de
jure corporation has legal right as a corporation and has complied with all the requirements of
the law. When group of persons assume to act as corporation, knowing it to be without
authority, such persons shall be liable as general partners for all debts, liabilities and damages
incurred or arising as a result thereof When corporation does not formally organize and
commence the transaction of its business or the construction of its works within two years from
the date of its incorporation,   the corporation is deemed dissolved. When the corporation has
commenced its business transaction, but becomes continuously inoperative for a period of five
years, the same is ground for suspension or revocation of its certificate of incorporation.

Commencement of business may take the form of contracting for lease or sale of
properties to be used as business site of the corporation and other preparatory acts geared
towards fulfillment of the purpose for which the corporation was established. However, when
the causes, non-use or non-operation of the corporation was due to causes beyond the control
of the corporation as determined by SEC, e.g., mineral lands to be developed by the corporation
as per its purpose are the object of court litigation and a court injunction against the corporate
activities has been issued, said periods is not the point of recon but it shall from the point
where such cause ceased.

All corporate powers, business conducted and all property of corporations are exercised

by the BOD/T (Sec.  23). BOD/T are selected thru an election and they shall hold office for one
year and until their successors are elected and qualified (ibid). Stockholders cannot interfere
with the board’s exercise of its powers and functions except when the law expressly gives them
the authority.

Directors owe their duties to corporation rather than to individual shareholders. The

directors or trustees shall not act individually nor separately but as a body in a lawful meeting.
Contracts entered into without a formal board resolution does not bind the corporation except
when majority of the board has knowledge of the contract and the contract benefited the
corporation. Every director must own at least one (1) share of the capital stock of the
corporation, which share shall stand in his name on the books of the corporation. Any director
who ceases to be the owner of at least one (1) share of the capital stock of the corporation of
which he is a director shall thereby cease to be a director. Majority of BOD/T should be resident
of the Philippines In a stock corporation, stockholders may exercise cumulative voting or
straight voting. Cumulative voting is done by casting as many votes as he has number of
shares multiplied by the number of directors up for election.  Corporation can be dissolved
either voluntary or involuntary. SEC may dissolve a corporation upon filing of a verified
complaint and after notice and hearing on the following grounds: a) Continuous inoperation for
a period of at least five years (Sec. 22); b)       Failure to organize and commence business within
two years from incorporation (ibid);c)       Commission of ultra vires acts (Sec. 45);d)       Serious
dissention in close corporation (Sec. 104); e)       Illegality, fraud and misused of asset of close
corporation (Sec. 105)  f)        Quo warranto proceedings under rule 66 g)       Issuance of
watered stock;

COOPERATIVE LAW OF 2008

I thought that cooperative is that easy to form or organize because in our small
barangay, we were able to create a multi-purpose cooperative and the organizers are
professional but it isn’t.

I have learned that a cooperative is an autonomous and duly registered association of

persons, with a common bond of interest, who have voluntarily joined together to achieve their
social, economic, and cultural needs and aspirations by making equitable contributions to the
capital required, patronizing their products and services and accepting a fair share of the risks
and benefits of the undertaking in accordance with universally accepted cooperative principles.
The law which governs cooperatives, prior to the recent enactment of Republic Act No.
9520 (“Philippine Cooperative Code of 2008”), is Republic Act No. 6938 . The par value of shares
of a primary cooperative shall not exceed PhP1,000. No member of primary cooperative other
than cooperative itself shall own or hold more than 10% of the share capital of the cooperative.

New members may only be admitted to the cooperative after undergoing Pre-
Membership Education Seminar. Cooperatives which do not transact any business with non-
members or the general public shall not be subject to any taxes and fees imposed under the
internal revenue laws and other tax laws. Cooperatives transacting business with both
members and non-members shall be subject to another set of rules, but transactions with
members shall remain to be non-taxable. Audit shall be conducted by an external auditor, who
must be a member of good standing of the Philippine Institute of Certified Public Accountants,
accredited by the CDA and the Board of Accountancy.

Anyone who uses the word “Cooperative” without being registered with the CDA is
punishable by imprisonment (5 years) and a fine (PhP20,000). Electric cooperatives registered
with the National Electrification Administration (NEA) are exempt and may not register with the
CDA.

Any person who willfully attempt in any manner to evade or defeat tax in violation of
the tax treatment/privileges provided under the Code is punishable by imprisonment (2 years
but not more than 4 years) and a fine (not less than PhP30,000 but not exceeding PhP100,000),
without prejudice to a separate action to collect the taxes.

There are other penalties provided, including violations of the reportorial requirements
of cooperatives.