CORPORATION LAW

Atty. Hilario N. Magsino, Jr.

REVISED CORPORATION CODE

(Republic Act No. 112321)
I. NATURE AND FORMATION
1. Definition of a corporation
(Section 2 of the Revised Corporation Code [RCC])
2. Tri-Level Existence in the Corporate Setting
A. NATURE OF CORPORATIONS
1. Corporate Attributes
a. Theories in the formation of a corporation
Tayag vs. Benguet Consolidated, G.R. No. L-23145 (1968)
Ang Pue & Co. vs. Secretary, 5 SCRA 645 (1962)
1. Theory of Concession
2. Theory of Enterprise Entity
b. Creature of the Law
1. Constitution – Section 16, Article XII of the Constitution
NDC vs. Phil. Veterans Bank, 192 SCRA 257 (1990)
2. Civil Code - Articles 44 and 45 of the Civil Code
3. Franchise
JRS vs. Imperial Insurance, 11 SCRA 634 (1964)
c. Four attributes of a corporation
d. Advantages and Disadvantages of the Corporate Form
e. The Corporate entity compared with other business endeavors
1. Sole Proprietorship
2. Partnership (Articles 1768, 1772 and 1775 of the Civil Code)
J. M. Tuazon vs. Bolaños, 95 PHIL 106 [28 May 1954]
3. Joint Venture
Aurbach vs. Sanitary Wares, 180 SCRA 130 (1989)
4. Business Trusts (Article 1441 of the Civil Code)
f. The Corporation and the Bill of Rights
1. Equal Protection
Smith Bell vs. Natividad, 40 PHIL 136 (1919)
2. Unreasonable search and seizure
Stonehill vs. Diokno, 20 SCRA 283 (1967)
Bache & Co. vs. Ruiz, 37 SCRA 823 (1971)
3. Self-incrimination
Bataan Shipyard vs. PCGG, 150 SCRA 181 (1987)
(As to item 23 on the issue above)
2. Classification Of Corporations
a. In relation to the State (Section 3, Act No. 1459 [The Corporation Law])
- Private
- Public or Quasi-Public
National Coal Co. vs. CIR, 46 PHIL 583 (1924)
Philippine Society vs. COA, GR No. 169752 (2007)
Davao Water District vs. CSC, 201 SCRA 593 (1991)
b. As to place of incorporation
- Domestic
- Foreign (Section 140 of the RCC)
c. As to nationality (Section 176 of the RCC)
Tests - Place of Incorporation Control
- Principal Place of Business
- Investment Test
1. Exploitation of Natural Resources
Register of Deeds vs. Ung Sui Si Temple, 97 PHIL 58 (1955)
2. Public Utilities - Section 11, Art. XII of the Constitution
People vs. Quasha, 93 PHIL 333 (1953)
3. Mass Media - Section 11 (1), Art. XVI of the Constitution
4. Advertising Industry
- Section 11 (2), Art. XVI of the Constitution
5. War-Time test
Filipinas Comania vs. Christern, 89 PHIL 744 (1952)
6. Grandfather Rule
Narra Nickel Mining vs. Redmont Consolidated,
G.R. No. 195580 (2014) and G.R. No. 195580 (2015)
d. As to purpose of incorporation
- Municipal
- Educational (Sections 105 to 106 of the RCC)
(Section 25, BP 232)
- Religious (Sections 107 and 114 of the RCC)
- Charitable, Scientific or Vocational
- Business Corporation
e. As to number of members
- Aggregate Corporation
- Corporation Sole (Sections 107 and 113 of the RCC)
Roman Catholic Administrator vs. LRC, 102 PHIL 597 (1957)
Republic vs. Villanueva, 114 SCRA 875 (1982)
f. As to existence of shares (Sections 3 and 5 of the RCC)
- Stock
- Non-Stock (Sections 86 and 87 of the RCC)
CIR vs. Club Filipino, 5 SCRA 321 (1962)
g. As to relationship of management and control
- Holding company
- Affiliate company
- Parent and subsidiary company

h. Close Corporations
- Definition (Section 95 of the RCC)
- Articles of Incorporation Requirements (Section 96 of the RCC)
- Restriction on Transfer of Shares (Section 97 of the RCC)
- Breach of Qualifying Conditions (Section 98 of the RCC)
- Agreements by Stockholder (Section 99 of the RCC)
- No Necessity of Board (Section 100 of the RCC)
Dulay Enterprises, Inc. vs. CA (G.R. No. 91889 [1993])
- Preemptive Right (Section 101 of the RCC)
- Amendments to Articles of Incorporation (Section 102 of the RCC)
- Deadlocks (Section 103 of the RCC)
- Withdrawal and Dissolution (Section 104 of the RCC)
Financing Corp vs. Teodoro, 93 PHIL 678
i. One Person Corporations (OPC)
- Definition (Section 116 of the RCC)
- No Minimum Capital Requirement (Section 117 of the RCC)
- Articles of Incorporation (Section 118 of the RCC)

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 - Bylaws (Section 119 of the RCC)
- Corporate Name (Section 120 of the RCC)
- One Shareholder, Director and President (Section 121 of the RCC)
- Other Corporate Officers (Section 122 of the RCC)
- Functions of Corporate Secretary (Section 123 of the RCC)
- Nominees (Sections 124 to 126 of the RCC)
- Corporate Records (Sections 127 and 128 of the RCC)
- Reportorial Requirements (Section 129 of the RCC)
- Shareholder Liability (Section 130 of the RCC)
- Conversion (Sections 131 and 132 of the RCC)
B. FORMATION OF CORPORATIONS
1. Organizing the Corporation
a. Promoters (Section 2 [r] of the Revised Securities Act [BP 178])
Cagayan Fishing Development vs. Sandiko (65 PHIL 223 [1937])
Rizal Light & Ice Co. vs. Municipality, 25 SCRA 285 (1968)
Caram, Jr. vs. CA, 151 SCRA 372 (1987)
b. Subscription Contracts and Purchase Agreements
(Sections 59 and 71 of the RCC)
- Definition of “outstanding capital stock”
(Section 173 of the RCC)
Trillana vs. Quezon College, 93 PHIL 383
Bayla vs. Silang Traffic, Co., 73 PHIL 557 (1942)
1. Trust Fund Doctrine
Phil Trust vs. Rivera, 44 PHIL 469 (1923)
2. Pre-Incorporation Subscription (Section 60 of the RCC)
- Offer Theory
- Contract Theory
3. Release from subscription obligation
Velasco vs. Poizat, 37 PHIL 802
PNB vs. Bitulok Sawmill, Inc., 23 SCRA 1366
2. Formalities in Organizing
a. Generally
Government vs. Manila Railroad, 103 PHIL 757 (1929)
Rural Bank of Salinas vs. CA, 210 SCRA 510 (1992)
b. Articles of Incorporation
1. Procedure and Documentary Requirements
- As to contents and form (Sections 13 and 14 of the RCC)
- As to corporate name (Section 17 of the RCC)
Red Line Transit vs. Rural Transit, 60 PHIL 549 (1934)
Philippine Insurance vs. Hartigan, 34 SCRA 252 (1970)
Universal Mills vs. Universal Textile, 78 SCRA 62 (1977)
- As to purpose (Section 13 [b] of the RCC)
Uy Siuliong vs. Director, 40 PHIL 514 (1919)
- As to principal office (Section 13 [c] of the RCC)
Clavecilla vs. Antillon, 19 SCRA 379 (1967)
- As to Corporate Term (Section 11 of the RCC)
Alhambra Cigar & Cigarette vs. SEC, 25 SCRA 269 (1968)
Benguet Consolidated vs. Pineda, 98 PHIL 711 (1956)
- As to Qualifications of Incorporators (Section 10 of the RCC)

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 - As to no minimum capitalization (Section 12 of the RCC)
- The 25-25 Rule (Section 37 of the RCC)
2. Grounds for Disapproval (Section 16 of the RCC)
Asuncion vs. De Yriate, 28 PHIL 67 (1914)
3. Commencement of Corporate Existence (Section 18 of the RCC)
c. By-Laws
Loyola Grand Villas vs. CA, GR No. 117188 [07 August 1997]
PMI Colleges vs. NLRC, GR No. 121466 [15 August 1997]
Pena vs. CA, 193 SCRA 7117 (1991)
a. Adoption Procedure (Section 45 of the RCC)
b. Contents (Section 46 of the RCC)
c. Amendments (Section 47 of the RCC)
C. RECOGNITION AND DISREGARD OF CORPORATENESS
1. Separate Juridical Personality
Santos vs. NLRC, GR No. 101699 [13 March 1996]
Stockholders of F. Guanzon vs. Register, 6 SCRA 373 (1962)
Manila Gas vs. CIR, 62 PHIL 895 (1936)
Magsaysay-Labrador vs. CA, 180 SCRA 266 (1989)
Good Earth vs. CA, 194 SCRA 544 (1991)
2. Defective Incorporation
1. De jure
2. De facto (Section 19 of the RCC)
i. Rationale for the doctrine
Tayko vs. Capistrano, 53 PHIL 866 (1928)
ii. Requisites
Fernandez vs. Cuerva, 21 SCRA 1095 (1967)
Hall vs. Piccio, 86 PHIL 603 (1950)
Benguet Consolidated vs. Pineda, 98 PHIL 711 (1956)
3. Corporation by estoppel (Section 20 of the RCC)
i. Rationale for the doctrine
Asia Banking vs. Standard Products, 46 PHIL 144 (1924)
Vda. De Salvatierra vs. Garlitos, 103 PHIL 757 (1958)
Albert vs. University Publishing, 13 SCRA 84 (1965)
Lim vs. Philippine Fishing Gear (G.R. No. 136448 [1999])
3. Piercing the veil of corporate fiction
Umali vs. CA, 189 SCRA 529 (1990)
Koppel (Phil) vs. Yatco, 77 PHIL 496 (1946)
Tantongco vs. Kaisahan, 106 PHIL 199 (1959)
Robledo vs. NLRC, 238 SCRA 52 [1994]
a. Fraud cases
Gregorio Araneta, Inc. vs. Tuazon, 91 PHIL 786 (1952)
Palacio vs. Fely Transportation Co., 5 SCRA 1011 (1962)
Palay, Inc. vs. Clave, 124 SCRA 636 (1983)
Pabalan vs. NLRC, 184 SCRA 495 (1990)
Del Rosario vs. NLRC, 187 SCRA 777 (1990)
Villia Rey Transit vs. Ferrer, 25 SCRA 845 (1968)
b. Alter ego cases
Arnold vs. Willets and Paterson, Ltd., 44 PHIL 634 (1923)
La Campana Coffee vs. Kaisahan, 93 PHIL 160 (1953)
Yutivo Sons Hardware vs. CTA, 1 SCRA 160 (1961)

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 Liddell & Co. vs. Collector, 2 SCRA 632 (1961)
Ramirez Telephone vs. Bank of America, 29 SCRA 191
Guatson International vs. NLRC (GR No. 100322 [1994])
Concept Builders, Inc. vs. NLRC (GR No. 108734 [1996])
c. Equity cases
TESCO vs. WCC, 104 SCRA 354 (1981)
AD Santos vs. Vasquez, 22 SCRA 1158 (1968)
4. Due Process
McConnel vs. CA, 1 SCRA 723 91961)
Emilio Cano Enterprises vs. CIR, 13 SCRA 291 (1965)
NAMARCO vs. Associated Finance Co. Inc., 19 SCRA 962
Jacinto vs. CA, 198 SCRA 211 (1992)
Arcilla vs. CA, 215 SCRA 120 (1986)
AC Ransom Labor Union vs. NLRC, 142 SCRA 269
Lim vs. NLRC, 171 SCRA 328 (1989)
De Guzman vs. NLRC, 211 SCRA 723 (1992)
5. Anti-Trust Issues
Garcia vs. Executive Secretary (G.R. No. 132451 [1999])
Standard Oil Co. vs. US, 221 U.S. 1 (1910)

D. CORPORATE POWERS
1. Sources of Corporate Powers
a. Corporate Powers and Capacity
1. Express Powers (Section 35 of the RCC)
2. Implied Powers (Section 36 [k] of the RCC)
3. Incidental Powers (Section 2 of the RCC)
b. Specified Powers
1. Power to sue and be sued
(Section 35 [a] of the RCC)
BS Savings Bank vs. Sia (GR No. 131214 [2000])
2. Power to extend or shorten corporate term
(Sections 36 and 81 [a] of the RCC)
3. Power to increase or decrease capital stock
(Section 37 of the RCC)
Madrigal & Co. vs. Zamora, 151 SCRA 355 (1987)
4. Power to deny pre-emptive rights
(Section 38 of the RCC)
Datu vs. SEC, 123 SCRA 722 (1907)
Gokongwei vs. SEC, 89 SCRA 336, (1979)
5. Power to sell or dispose assets
(Section 39 of the RCC)
Pena vs. CA, 193 SCRA 717 (1991)
Islamic Directorate vs. CA, GR No. 117897 [1997]
6. Power to purchase own shares
(Section 40 of the RCC)
Boman Environmental vs. CA, 167 SCRA 540 (1988)
7. Power to invest corporate funds in another corporation
or business or for any other purpose
(Section 41 of the RCC)
Dela Rama vs. Ma-ao Sugar, 7 SCRA 247 (1969)

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 8. Power to declare dividends
(Section 42 of the RCC)
9. Power to enter into a management contract
(Section 43 of the RCC)

2. Ultra Vires Acts (Section 44 of the RCC)

a. Types of Ultra Vires Acts
b. Test to Determine Ultra Vires
Montelibano vs. Bacolod-Murcia, 5 SCRA 36 (1962)
c. Cases
Pirovano vs. De la Rama Streamship, 96 PHIL 335 (1954)
Luneta Motors vs. AD Santos, 5 SCRA 809 (1962)
Republic vs. Acoje Mining, 3 SCRA 361 (1963)
Crisologo-Jose vs. CA, 177 SCRA 594 (1989)
d. Ratification of Ultra Vires Acts
Carlos vs. Mindoro Sugar, 57 PHIL 343 (1932)
3. Liability for Torts or Crimes
a. For Torts
PNB vs. CA, 83 SCRA 237 (1978)
b. Criminal Liability
People vs. Tan Boon Kong, 54 PHIL 607 (1930)
Sia vs. People, 121 SCRA 655 (1983)
c. Moral Damages
ABS-CBN vs. CA (G.R. No. 128690 [January 1999])
Filipinas Broadcasting vs. AMEC-BCCM (GR No. 141994 [2005])

II. FINANCIAL STRUCTURE

Lirag Textile Mills, Inc., vs. SSS (GR No. L-33205 [1987])
Garcia vs. Lim Chu Sing, 59 PHIL 562
Roy III vs. Herbosa (G.R. No. 207246 [2016])
- (As to the difference between debt and equity instruments)

A. DEBT SECURITIES
1. Authority to Issue Debt Securities
- Power to incur, create or increase bonded indebtedness
(Section 37 of the RCC)
2. Types of Debt Securities
- Unsecured Bonds
- Secured Bonds
- Income Bonds
- Convertible Bonds
- Callable Bonds

B. EQUITY SECURITIES
Generally - Garcia vs. Lim Chu Sing, 59 PHIL 562
1. Issuance of Shares
a. Certificate of Stock (Section 62 of the RCC)
b. Pre-Emptive Rights (Section 38 of the RCC)
c. Consideration (Section 61 of the RCC)
National Exchange vs. Dexter, 51 PHIL 601
1. Par Value
2. No Par Value

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 d. Payment of the Balance of the Subscription
(Sections 65 and 66 of the RCC)
Lingayen Gulf vs. Baltazar, 93 PHIL 404
e. Liability for Unpaid Subscriptions
Keller vs. COB Group, 141 SCRA 86
f. Delinquency Subscription
(Sections 67 to 71 of the RCC)
Phil Trust vs. Rivera, 44 PHIL 496
Miranda vs. Tarlac Rice Mill, 57 SCRA 619
De Silva vs. Aboitiz, 44 PHIL 755

2. Classes of Shares
a. Classification of Shares (Section 6 of the RCC)
Roy III vs. Herbosa (G.R. No. 207246 [2016])
1. Preferred Shares
- Participating and Non-Participating
- Cumulative and non-Cumulative
2. Founder’s Shares (Section 7 of the RCC)
3. Redeemable Shares (Section 8 of the RCC)
Republic Planters vs. Hon. Agana (GR No. 51765 [1997])
4. Treasury Shares (Section 9 of the RCC)
Commissioner vs. Manning, 66 SCRA 14
b. Watered Stocks (Section 65 of the RCC)
c. Quasi-Reorganization (Section 37 of the RCC)
- Reduction of Capital Stock
- Stock Splits
C. DIVIDENDS AND OTHER DISTRIBUTIONS
Right to Dividends (Section 42 of the RCC)
1. Types of Dividends and Other Distributions
Nielsen & Co. vs. Lepanto Consolidated, 26 SCRA 540 (1968)
2. Legal Restrictions on Dividends and Other Distributions
Republic Planters vs. Hon. Agana (GR No. 51765 [1997])

3. Declaration and Payment of Dividends

CIR vs. Court of Appeals , GR No. 108576 (20 January 1999)
4. Liability for Improper Dividends and Distributions
Steinberg vs. Velasco, 52 PHIL 953 (1929)

D. TRANSFER OF INVESTMENT SECURITIES

1. Ownership of Securities
a. Right to Issuance (Sections 63 of the RCC)
Baltazar vs. Lingayen Gulf, 14 SCRA 522
b. Administrators (Section 54 of the RCC)
c. Joint Ownership (Section 55 of the RCC)
d. Stock and Transfer Book (Section 73 of the RCC)
Chua Guan vs. Samahang Magsasaka, 62 PHIL 472
Monserat vs. Ceran, 58 PHIL 469
Fua Cun vs. Summers, 44 PHIL 705
Nava vs. Peers Marketing, 74 SCRA 65
e. Lost or Destroyed Certificates (Sec. 72 of the RCC)

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 2. Transfer of Securities
Ponce vs. Alsons Cement (GR No. 139802 [2002])
a. Transfer of Shareholding
(Sections 62, 73 [1.b], [7] and [8] of the RCC)
Uson vs. Diosomito, 61 PHIL 535
Escano vs. Filipinas Mining, 74 PHIL 711
Tan vs. SEC (GR No. 95696 [1992])
b. Remedy if Transfer is Refused
Hager vs. Bryan, 19 PHIL 138
Batong Buhay vs. CA, 147 SCRA 4
Won vs. Wack Wack Golf Club, 104 PHIL 466
d. Validity of Restrictions
Lambert vs. Fox, 26 PHIL 588
Fleishcher vs. Botica Nolasco, 47 PHIL 583
Padgett vs. Babcock and Templeton, 59 PHIL 232
e. Forged Transfers
Sta. Maria vs. Hongkong and Shanghai, 89 PHIL 780
De Los Santos vs. Republic, 96 PHIL 577
f. Non-transferability of Membership in a Non-Stock Corporation
(Section 89 of the RCC)
III. MANAGEMENT STRUCTURE
A. CORPORATE GOVERNANCE
1. Powers of the Board or Trustees (Section 22 [1] of the RCC)
Gamboa vs. Victoriano, 90 SCRA 40 (1979)
Gokongwei vs. SEC, 89 SCRA 336, (1979)
a. Must act as a body
(Section 52 [1] of the RCC)
Islamic Directorate vs. CA, GR No. 117897 [14 May 1997]
Ramirez vs. Orientalist, 38 PHIL 634 (1918)
Board of liquidators vs. Kalaw, 20 SCRA 987 (1967)
Acuna vs. Batac Producers, 20 SCRA 562 (1967)
Harden vs. Benguet Consolidated, 58 PHIL 1140 (1948)
b. Executive Committee
(Section 34 of the RCC)
B. ROLE OF SHAREHOLDERS
Right to Vote and Attend Meetings (Section 88 of the RCC)
Price vs. Martin, 58 PHIL 707
a. Instances:
i. Acts of Ownership
- Amendment of Articles of Incorporation
(Section 15 of the RCC)
- Adoption and Amendment of By-Laws
(Section 45 and of the RCC)
- Sale of all or substantially all corporate assets
(Section 39 and of the RCC)
- Incurring, Creating or Increasing Bonded Indebtedness
(Section 37 of the RCC)
- Increase and Decrease of Authorized Capital Stock
(Section 37 of the RCC)
- Merger and Consolidation
(Section 76 of the RCC)
- Investment in another Business
(Section 41 of the RCC)
- Voluntary Dissolution of the Corporation
(Section 134 of the RCC)

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 ii. Others
- Election of Directors and Trustees
(Sections 23 and 25 of the RCC)
- Declaration of Stock Dividends
(Section 42 of the RCC)
- Management Contracts
(Section 43 of the RCC)
- Fixing of Consideration for Par Value Shares
(Section 61 [2] of the RCC)
b. Treasury Shares (Section 56 of the RCC)
c. Conduct of Stockholders’ or Members’ Meetings
- Kinds and Requirements of Meetings
(Sections 48 and 49 of the RCC)
Bernas vs. Cinco, G.R. Nos. 163356-57 (2015)
- Time and Place of Meeting
(Section 50 of the RCC)
- Quorum (Section 51 of the RCC)
Lanuza vs. Court of Appeals (GR No. 131394 [2005])
- Waiver of Defect in Notice (Section 49 [6] of the RCC)

d. Contracts and Agreements Affecting Stockholders

a. Proxy (Section 57 of the RCC)
b. VTA (Section 58 of the RCC)
Lee vs. Court of Appeals, 205 SCRA 752 [1992]
NIDC vs. Aquino, 163 SCRA 153
c. Pooling agreements (Section 99 [b] of the RCC)

C. ENFORCEMENT OF RIGHTS OF SHAREHOLDERS

a. Right to Inspect
1. Coverage (Title VIII, Sections 73 and 74 of the RCC)
Veraguth vs. Isabela Sugar, 57 SCRA 266
2. Remedies
Philpots vs. Phil Manufacturing, 40 PHIL 471
Pardo vs. Hercules, 46 PHIL 964
Gonzales vs. PNB, 122 SCRA 489
3. Confidential Nature of SEC Examinations
(Section 178 of the RCC)
b. Appraisal Right Appraisal Right
(Title X, Sections 80 and 85 of the RCC)
Turner vs. Lorenzo Shipping Corporation, G.R. No. 157479 (2010)

c. Derivative Suits
Richardson vs. Arizona Fuels Corp., 614 P.2d 636
SMC vs. Khan, 176 SCRA 447
Pascual vs. Orosco, 19 PHIL 83
Evangelista vs. Santos, 86 PHIL 387
Republic Bank vs. Cuadero, 19 SCRA 671
Reyes vs. Tan, 3 SCRA 198

D. ROLE OF DIRECTORS AND OFFICERS

1. Function of the Board of Directors
a. Role of directors, officers and trustees
Generally:
Bernas vs. Cinco, G.R. Nos. 163356-57 (2015)

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2. Election and Tenure of Directors/Trustees
a. Qualifications and Disqualifications of directors and trustees
(Sections 22 and 26 of the RCC)
Lee vs. Court of Appeals, 205 SCRA 752 [1992]
Gokongwei vs. SEC, 89 SCRA 336, (1979)
Detective & Protective Bureau vs. Cloribel, 26 SCRA 255 (1968)
b. Election of Directors or Trustees
Directors (Sections 23 and 25 of the RCC)
Grace Christian HS vs. CA, GR No. 108905, [23 October 1997]
Trustees (Section 91 of the RCC)
c. Cumulative Voting (Villianueva, Philippine Corporate Law)
1. Cole Formula
2. Glassner Formula
3. D’Hondt Remainders Table
d. Vacancy in the board
(Section 28 of the RCC)
e. Term of office; Hold-Over Principle
(Section 22 of the RCC)
Ponce vs. Encarnacion, 94 PHIL 81 (1953)
f. Removal of directors or trustees
(Section 27 of the RCC)
Roxas vs. Dela Rosa, 49 PHIL 609 (1926)

4. Exercise of Directors’ Functions

a. Meetings of directors or trustees

(Sections 53 and 54 of the RCC)
Expertravel & Tours, Inc. vs. CA (GR No. 152392 [2005])
b. Compensation for directors or trustees
(Section 29 of the RCC)
Western Institute of Technology vs. Salas (GR No. 113032 [1997])
5. Officers
(Section 24 of the RCC)
Ongkingco vs. NLRC, 270 SCRA 613 [1997]
Tabang vs. NLRC, 266 SCRA 462 [1997]
Gurrea vs. Lezama, 103 PHIL 553 (1958)
PSBA vs. Leano, 127 SCRA 778 (1984)
Pearson & George vs. NLRC, 67 SCAD 698, 30 Jan 1996 (113928)
Reahs Corporation vs. NLRC, GR No. 117473 [14 April 1997]
6. Duties of Directors and Officers
a. Duty of Obedience
b. Duty of Diligence; Business Judgement Rule
(Section 30 [1] of the RCC)
Smith vs. Van Gorkom, 488 A.2nd 858 (1985)
Montelibano vs. Bacold-Murica, 5 SCRA 36 (1962)
Board of Liquidators vs. Kalaw, 20 SCRA 987 (1967)
c. Duty of Loyalty; Doctrine of Corporate Opportunity
(Section 30 [2] and 33 of the RCC)
d. Corporate Dealings
(Section 31 of the RCC)
Mead vs. McCullough, 21 PHIL 95 (1911)
Prime White Cement vs. IAC, 220 SCRA 103 (1993)

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 e. Contracts between corporations with interlocking directors
(Section 32 of the RCC)

IV. FUNDAMENTAL CHANGES

A. CHARTER AMENDMENTS
a. Articles of Incorporation (Section 15 of the RCC)
b. By Laws (Section 47 of the RCC)
B. COMBINATIONS
a.Concept of Merger and Consolidation
PNB vs. Andrada Electric (GR No. 142936 [2002])
b. Procedure
- Plan of Merger or Consolidation
(Section 75 of the RCC)
- Stockholders’ or Members’ Approval
(Section 76 of the RCC)
- Articles of Merger or Consolidation
(Section 77 of the RCC)
- Effectivity
(Section 78 of the RCC)
c. Effects of Merger or Consolidation
(Section 79 of the RCC)
Associated Bank vs. CA (GR No. 123793 [1998])
Filipinas Port Services, Inc. vs. NLRC (GR No. 97237 [1991])
C. REHABILITATION
PVB Employees Union-N.U.B.E. vs. Vega (G.R. No. 105364 [2001])
PAL vs. Spouses Sadic (GR No. 146698 [2002])
RCBC vs. IAC (GR No. 74851 [1999])
D. DISSOLUTION
a. Dissolution (Section 133 of the RCC)
1. Voluntary
- No creditors are affected (Section 134 of the RCC)
- Creditors are affected (Section 135 of the RCC)
2. Involuntary Dissolution
(Section 138 of the RCC)
(Section 2 of Rule 66 of the Rules of Court)
- Quo-Warranto
Republic vs. Bisaya Land Transportation, 81 SCRA 9
Government vs. Philippine Sugar Estate, 38 PHIL 15
Republic vs. Security Credit, 19 SCRA 58
3. Expiration of Term (Section 139 [1] of the RCC)
4. Shortening of Corporate Term (Section 136 of the RCC)
5. Non-Use of Corporate Charter and Continuous Inoperation
(Section 21 of the RCC)
b. Liquidation of Corporate Assets (Section 139 of the RCC)
Buenaflor vs. Camarines Sur Industry, 108 SCRA 472
National Abaca vs. Pore, 2 SCRA 989
Tan Tiong Bio vs. CIR, 100 PHIL 86
Gelano vs CA, 103 SCRA 90
c. Methods of Liquidation
Board of Liquidators vs. Kalaw, 20 SCRA 987
China Banking vs. Michelin, 58 PHIL 261
Republic vs. Marsman, 44 SCRA 418
Alhambra Sugar vs. SEC, 24 SCRA 269

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 d. Rules for Non-Stock Corporations and Foundations
(Sections 93 and 94 of the RCC)
e. Right to Proportionate Share of Remaining Assets upon Dissolution
V. Foreign Corporation
a. Definition (Section 140 of the RCC)
Avon Insurance PLC vs. CA (GR No. 97642 [1997])
b. Concept of “Doing Business”
(Article 44 of the Omnibus Investments Code)
(Section 1 (f) of the Implementing Rules of the Omnibus Investments Code)
- Application for License
(Section 142 of the RCC)
(Article 48 of the Omnibus Investments Code)
- Issuance/Amendment
(Sections 143 and 148 of the RCC)
(Article 49 of the Omnibus Investments Code)
Columbia Pictures, Inc. vs. CA (GR No. 110318 [1996])
Granger Associates vs. Microwave Systems, 189 SCRA 631
Marubeni vs. Tensuan, 190 SCRA 105
Facilities Management vs. Dela Osa, 89 SCRA 131
Top-Weld vs. ECER, 138 SCRA 118 (GR 44944 (1985)]
Schmid vs. Oberly, 116 SCRA 186
Mentholatum vs. Mangaliman, 72 PHIL 525
Aetna Casualty vs. Pacific Star Line, 80 SCRA 635
Agilent vs. Integrated Silicon,(GR No. 154618 [2004])
- Effects of Failure to Obtain License
(Section150 of the RCC)
Commissioner vs. KMK Gani, 182 SCRA 591
Marshal Wells vs. Elser, 46 PHIL 71
Western Equipment vs. Reyes, 51 PHIL 115
c. Resident Agent (Sections 144 and 145 of the RCC)
d. Applicable Laws to Foreign Corporations (Section 146 of the RCC)
- Grey vs. Insular Life, 67 PHIL 139
e. Amendment of Articles of Incorporation (Section 147 of the RCC)
f. Merger and Consolidation (Section 149 of the RCC)
g. Revocation of License (Sections 151 and 152 of the RCC)
h. Withdrawal of Foreign Corporation (Section 153 of the RCC)

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