COURSE OUTLINE

CORPORATION LAW

A. INTRODUCTION

1. Legislative and historical background of Philippine Corporate Law

B. DEFINITION AND ATTRIBUTES OF A CORPORATION

1. Statutory definition (Sec. 2)

2. Attributes

2.1. Artificial being

2.1.1 Doctrine of corporate entity (separate personality)

Cases: Stradcom Corporation v. Orpilla, G.R. No. 206800, July 2, 2018 BALUYOT
Bustos v. Millians Shoe, Inc., G.R. No. 185024, April 4, 2017 DUYAN
Secosa, et al. v. Heirs of Erwin Suarez Francisco, G.R. No. 160039, TAN
June 29, 2004, 433 SCRA 273
PNB v. Aznar, G.R. No. 171805, May 30, 2011 GUAN

2.1.1.1 Nationality

a. Incorporation test
b. Control test [Sec. 3(a), RA 7042, as amended]
c. Grandfather rule (less than 60% Filipino ownership)

Cases: Roy III v. Herbosa, et al., G.R. No. 207246, November 22, MONTERDE
2016
Gamboa v. Teves, G.R. No. 176579, June 28, 2011 and
ASUNCION
October 9, 2012; See SEC Memorandum Circular
No. 8, s. 2013
Narra Nickel Mining and Development Corp. v. Redmont BONDOC
Consolidated Mines Corp., G.R. No. 195580 April 21,
2014 and January 28, 2015

2.1.1.2 Constitutional rights

Cases: Bache & Co, Inc. v. Ruiz, G.R. No. L-32409, February 27, FORMANTES
1971
Stonehill v. Diokno, 20 SCRA 383 (1967) TORRIJOS
Bataan Shipyard & Engineering Co. v. PCGG, G.R. No. UAYAN
L-75885, May 27, 1987, 150 SCRA 181

2.1.1.3 Civil and criminal liability

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 Cases: Professional Services, Inc. v. Court of Appeals, G.R. No. DE VILLA
126297, February 11, 2008
Child Learning Center, Inc. v. Tagario, G.R. No. 150920, BARICAN
November 25, 2005
Espiritu Jr. v. Petron Corporation, G.R. No. 170891, YAP
November 24, 2009
Gosiaco v. Ching, G.R. No. 173807, April 16, 2009 ALCAZAREN
Ching v. Secretary of Justice, G.R. No. 164317, February TORRES
6, 2006, 481 SCRA 626

2.1.1.4 Recovery of moral damages

Cases: Pen Development Corporation v. Martinez Leyba, Inc., CRUZ

G.R. No. 211845, August 9, 2017
Filipinas Broadcasting Network v. Ago Medical and ROSERO
Educational Center, G.R. No. 141994, January 17,
2005, 448 SCRA 413
Manila Electric Co. v. TEAM Corporation, G.R. No. MENDEZ
131723, December 13, 2007, 540 SCRA 62
Crystal v. Bank of PI, G.R. No. 172428, November 28, CASTILLO
2008
UP v. Dizon, G.R. No. 171182, August 23, 2012 DULLAS
Jardine Davies v. CA, 333 SCRA 684

2.1.1.5 Practice of profession

A corporation cannot engage in the practice of a profession

Exception: RA No. 9266

Cases: Samahan ng Optometrists v. Acebedo International Corp., AQUINO

270 SCRA 298 (1997)
Alfafara v. Acebedo Optical Company, 381 SCRA 293 MANABAT
(2002)

2.1.2 Doctrine of piercing the veil of corporate fiction

2.1.2.1 Defeat public convenience

Sarona v. NLRC, et al., G.R. No. 185280, January 18, 2012

Enriquez Security Services, Inc. v. Cabotaje, G.R. No. 147993, July
21, 2006, 496 SCRA 169

2.1.2.2 Fraud cases

Umali v. Court of Appeals, G.R. No. 89561, September 13, 1990

Mendoza and Yotoko v. Banco Real Development Bank, G.R. No.
140923, September 16, 2005

2.1.2.3 Alter ego cases

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 International Academy of Management and Economic v. Litton and
Company, Inc., G.R. No. 191525, December 13, 2017
Zambrano, et al. v. Phil. Carpet Manufacturing Corporation, et al.,
G.R. No. 224099, June 21, 2017
Maricalum Mining Corporation v. Florentino, et al., G.R. No.
221813, July 23, 2018
Heirs of Pajarillo v. Court of Appeals, G.R. Nos. 150056-57, October
19, 2007
Tomas Lao Construction v. NLRC, G.R. No. 116781, September 5, CO
1997
Concept Builders, Inc. v. NLRC, G.R. No. 108734, May 29, 1996, MARII
257 SCRA 149

2.1.2.4 Other cases

Francisco Motors v. Court of Appeals, G.R. No. 100812, June 25,

1999, 309 SCRA 72
Wensha Spa Center, Inc. v. Yung, G.R. No. 185122, August 16,
2010
Zaragoza v. Tan, G.R. No. 225544, December 4, 2017

2.2. Created by operation of law

2.2.1 Created by special law (Sec. 4)

CABANLONG
Cases: Republic v. City of Parañaque, G.R. No. 191109, July 18, 2012
Boy Scouts of the Philippines v, COA, G.R. No. 177131, June 7, 2011 ESPLAGO
Veterans Federation of the Phils. V. Reyes, G.R. No. 155027, February
28, 2006, 482 SCRA 526
Leyson Jr. v. Office of the Ombudsman, G.R. 134990, April 27, 2000 LUBANG
Liban v. Gordon, G.R. No. 175352, January 18, 2011
Feliciano v. COA, G.R. No. 147402, January 14, 2004 LOJO

2.2.2 Created under a general law (See Sec. 16, Article XII of the 1987
Constitution)

2.3. Right of succession

Case: SME Bank, Inc. v. De Guzman, G.R. Nos. 184517 and 186641, October 8,
2013.

2.4. Possess powers, attributes, and properties

2.4.1 Theory of special capacities

2.4.2 Theory of general capacities

C. CLASSIFICATION AND CREATION OF CORPORATIONS

1. Stock and non-stock (Sec. 3)

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 1.1 Corporators, incorporators, stockholders, members (Sec. 5)

1.1.1 Number and qualification of incorporators (Sec. 10)

1.2 Classes of shares (Secs. 6, 7, 8, and 9)

Case: BCDA v. Commissioner of Internal Revenue, G.R. No. 205925, June 20, 2018

2. Public and private

3. De jure, de facto, and corporation by estoppel (Secs. 19 and 20)

Cases: Missionary Sisters of Our Lady of Fatima v. Alzona, G.R. No. 224307, August 6, 2018
Sawadjaan v. Court of Appeals, 459 SCRA 516 (2005)
Lim v. Philippine Fishing Gear Industries, Inc., G.R. No. 136448, November 3, 1999

4. Domestic and foreign

5. Parent, subsidiary, and affiliate

D. INCORPORATION AND ORGANIZATION OF A PRIVATE

CORPORATION

1. Documentary requirements

1.1 Name verification

1.2 Contents and form of the Articles of Incorporation (Secs. 13 and 14)

1.2.1 Corporate name (Sec. 17)

Cases: De La Salle Montessori International of Malolos, Inc. v. De La Salle
Brothers, Inc. et al., G.R. No. 205548, February 7, 2018
L.C. Big Mak Burger, Inc. v. McDonald’s Corporation, G.R. No.
233073, February 14, 2018
Indian Chamber of Commerce Phils., Inc. v. Filipino Chamber of
Commerce in the Phil;ippines, G.R. No. 184008, August 3, 2016
GSIS Family Bank v. BPI Family Bank, G.R. No. 175278, September
23, 2015
Universal Mills Corporation v. Universal Textile Mills, Inc., 78 SCRA
62 (1977)
Ang Mga Kaanib sa Iglesia ng Diyos Kay Kristo Jesus, H.S.K., sa
Bansang Pilipinas, Inc. v. Iglesia ng Diyos Kay Cristo Jesus, Haligi
at Suhay sa Katotohanan, 372 SCRA 171 (2001)
Industrial Refractories Corporation of the Phils. V. Court of Appeals, 390
SCRA 352 (2002)
Philips Export B.V. v. Court of Appeals, G.R. No. 96161, February 21,
1992

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 1.2.1.1 Doctrine of secondary meaning
Case: Lyceum of the Philippines, Inc., v. Court of Appeals, 219 SCRA
610 (1993)

1.2.2 Purpose clause

Case: Gala, et al. v. Ellice Agro-Industrial Corp., et al., G.R. No. 156819,
December 11, 2003, 418 SCRA 431

1.2.3 Principal office

Case: Young Auto Supply v. CA, G.R. No. 104175, June 25, 1993

1.2.4 Term of existence (Sec. 11)

1.2.5 Incorporators (Sec. 10)

Case: Care Best International, Inc. v. SEC, G.R. No. 215510, March 6, 2015

1.2.6 Directors/Trustees
1.2.7 Authorized capital stock/capital (Sec. 12)
1.2.8 Subscribed and Paid-up capital
Cases: Lanuza, et al. v. Court of Appeals, G.R. No. 131394, March 28, 2005
Halley v. Printwell, Inc., G.R. No. 157549, May 30, 2011

1.2.9 Arbitration agreement

1.2.10 Undertaking to change corporate name
1.2.11 Undertaking not to transfer stock or interest (for business reserved
for Filipinos)
1.2.12 Other matters

2. Amendment of articles of incorporation (Sec. 15)

Case: United Church of Christ in the Phils., Inc. v. Bradford United Church of Christ, Inc., et
al., G.R. No. 171905, June 20, 2012

3. Grounds for disapproval of the articles of incorporation or its amendment/s

(Sec. 16)

4. Registration, incorporation, and commencement of corporate existence (Sec. 18)

5. Non-use of corporate charter, continuous inoperation (Sec. 21)

E. CORPORATE MANAGEMENT AND CONTROL

1. Board of Directors/Trustees

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 1.1 Power, qualification, and term; independent directors; disqualification of
directors/trustees or officers (Secs. 22 and 26)
1.2 Election of directors/trustees; report of election (Secs. 23 and 25)

Case: Lim v. Moldex Land, Inc., G.R. No. 206038, January 25, 2017

1.3 Removal of directors/trustees (Sec. 27)

Case: Bernas v. Cinco, et al., G.R. Nos. 163356-57, July 10, 2015

1.4 Filling up of vacancies in the board; emergency board (Sec. 28)

1.5 Compensation of directors/trustees (Sec. 29)
Case: Western Institute of Technology, Inc. v. Salas, G.R. No. 113032, August 21, 1997

2. Corporate officers (Sec. 24)

Cases: Wesleyan University-Philippines v. Maglaya Sr., G.R. No. 212774, January 23, 2017
Renato Real v. Sangu Phils., Inc., G.R. No. 168757, June 19, 2011
Matling Industrial and Commercial Corp. v. Coros, G.R. No. 157802, October 13,
2010
Locsin v. Nissan Lease Phils. Inc., G.R. No. 185567, October 20, 2010
Gomez, v. PNOC Development and Management Corp., G.R. No. 174044, November
27, 2009

3. Liability of directors, trustees, officers (Secs. 30 and 171)

3.1 Criminal liability

Case: ABS-CBN Corp. v. Gozon, G.R. No. 195956, March 11, 2015
Espiritu v. Petron Corporation, G.R. No. 170891, November 24, 2009

3.2 Solidary liability

Cases: PCGG v. Gutierrez, G.R. No. 189800 July 9, 2018
Zaragoza v. Tan, G.R. No. 225544, December 4, 2017
Virata v. Ng Wee, et al., G.R. No. 220926, July 5, 2017
Lozada v. Mendoza, G.R. No. 196134, October 12, 2016
Arco Pulp and Paper Co., Inc. v. Lim, G.R. No. 206806, June 25, 2014
Magaling v. Ong, G.R. No. 173333, August 13, 2008
Garcia v. Social Security Commission, G.R. No. 170735, December 17, 2007

3.3 Derivative suits

Cases: BSP v. Campa Jr., G.R. No. 185979, March 16, 2016
Ang v. Spouses Ang, G.R. No. 201675, June 19, 2013
Yu v. Yukayguan, G.R. No. 177549, June 18, 2009
Majority Stockholders of Ruby Industrial Corp. v. Lim, G.R. Nos. 165887 and
165929, June 6, 2011
Bitong v. Court of Appeals, G.R. No. 123553 July 13, 1998

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 3.4 Self-dealing director/trustee/officer (Sec. 31)

Case: Prime White Cement Corporation v. Intermediate Appellate Court, G.R. No. L-
68555, March 19, 1993

3.5 Inter-locking directors (Sec. 32)

Case: DBP v. Court of Appeals, G.R. No. 126200, August 16, 2001

3.6 Disloyal director (Sec. 33) – Doctrine of corporate opportunity

Case: Ient v. Tullet Prebon (Phils.), Inc., G.R. No. 189158,
January 11, 2017
Gokongwei Jr. v. SEC, G.R. L-45911, April 11, 1979

4. Executive, Management, Special Committees (Sec. 34)

F. CORPORATE POWERS

1. Kinds of powers
1.1 Express
1.2 Implied
1.3 Incidental

2. Statutory powers

2.1 Corporate powers (Sec. 35)

2.2 Extend or shorten corporate term (Sec. 36)
2.3 Increase/decrease capital stock; incur, create or increase bonded
indebtedness (Sec. 37)
2.4 Deny pre-emptive right (Sec. 38)
2.5 Sell or dispose assets (Sec. 39)
Cases: Islamic Directorate of the Phils. v. Court of Appeals, 272 SCRA 454 (1997)
SME Bank, Inc. v. De Guzman, G.R. Nos. 185517 and 186641, October 8, 2013
Jiao v. NLRC, G.R. No. 182331, April 18, 2012

2.6 Acquire own shares (Sec. 40)

2.7 Invest corporate funds (Sec. 41)
2.8 Declare dividends (Sec. 42)
Case: Republic Planters Bank v. Agana, 269 SCRA 1 (1997)

2.9 Enter into management contract (Sec. 43)

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 2.10 Other powers (borrow funds, mortgage, act as surety/guarantor, practice profession
[Sec. 37, RA 9266])]

3. Ultra vires acts (Sec. 44)

Cases: University of Mindanao, Inc. v. BSP, G.R. No. 194964-65, January 11, 2016
Querubin, et al. v. COMELEC, et al., G.R. No. 218787, December 8, 2015
Land Bank of the Phils. v. Cacayuran, G.R. No. 191667, April 17, 2013

G. BY-LAWS

1. Concept of by-laws

Cases: Loyola Grand Villas Homeowners Association, Inc. v. Court of Appeals, 276 SCRA 681
(1997)
China Banking Corporation v. Court of Appeals, 270 SCRA 503 (1997)
Gokongwei Jr. v. SEC, 89 SCRA 336 (1979)

2. Adoption of by-laws; procedure; requisites of valid By-laws (Sec. 45)

Cases: Grace Christian High School v. Court of Appeals, 281 SCRA 133 (1997)
PMI Colleges v. NLRC, 277 SCRA 462 (1997)
Salafranca v. Philamlife (Pamplona), 300 SCRA 469 (1998)

3. Contents of by-laws (Sec. 46)

Case: Barba v. Liceo De Cagayan, G.R. No. 193857, November 28, 2012

4. Amendment to by-laws (Sec. 47)

H. MEETINGS

1. Kinds of meetings (Sec. 48)

1.1. Regular/special meetings of stockholders/members (Sec. 49)

Case: Bernas v. Cinco, et al., G.R. Nos. 163356-57, July 10, 2015

1.2. Regular/special meetings of directors/trustees (Sec. 52)

Case: Expertravel & Tours, Inc. v. Court of Appeals, G.R. No. 152393, May 26, 2005

2. Place and time of meetings (Sec. 50)

3. Quorum (Secs. 51 and 52)
4. Presiding officer (Sec. 53)
5. Voting right of stockholders

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 5.1. Secured creditors, administrators (Sec. 54)

Case: Tan v. Sycip, G.R. No. 153468, August 17, 2006

5.2. Jointly-owned shares (Sec. 55)

5.3. Treasury shares (Sec. 57)
5.4. Delinquent shares (Sec. 70)
5.5. Unpaid non-delinquent shares (Sec. 71)
5.6. Sequestered shares
Case: Republic v. Sandiganbayan, G.R. No. 107789, April 30, 2003
Republic v. Cocofed, G.R. Nos. 147062-64, December 14, 2001

6. Voting, proxies (Sec. 57)

7. Voting trusts (Sec. 58)

I. STOCK SUBSCRIPTION

1. Subscription contract; Trust fund doctrine (Sec. 59)

Cases: Lao v. Lao, G.R. No. 170585, October 6, 2008
Castillo v. Balinghasay, G.R. No. 150976, October 18, 2004
CIR v. First Express Pawnshop Co., Inc., G.R. Nos. 172045-46, June 16, 2009
Phil. Trust Co. v. Rivera, 44 Phil. 469 (1923)
Halley v. Printwell, Inc. G.R. No. 157549, May 30, 2011
Ong Yong v. Tiu, G.R. Nos. 144476 and 144626, April 8, 2003
Nava v. Peers Marketing, 74 SCRA 65

2. Pre-incorporation subscription (Sec. 60)

Case: Fong v. Dueñas, G.R. No. 185592, June 15, 2015

3. Consideration for stocks (Sec. 61)

4. Certificate of stock; issuance (Secs. 62 and 63)
Case: Ponce v. Alsons Cement Corporation, G.R. No. 139802, December 10, 2002

5. Watered stock (Sec. 64)

6. Interest, unpaid subscription (Secs. 65 and 66)
7. Delinquency sale; when sale may be questioned (Secs. 67 and 68)
8. Judicial recovery of unpaid subscription (Sec. 69)
9. Replacement of lost or destroyed certificates (Sec. 72)

J. CORPORATE BOOKS AND RECORDS

1. Books/records to keep (Sec. 73)

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 2. Right to examine/inspect corporate books
Case: Puno v. Puno Enterprises, Inc., G.R. No. 177066, September 11, 2009
Gonzales v. Philippine National Bank, 122 SCRA 489 (1983)

3. Right to financial statements (Sec. 74)

K. MERGER AND CONSOLIDATION

1. Concept of merger and consolidation

2. Procedure and requisites (Secs. 75, 76, and 77)
Cases: PNB v. Andrada Electric, G.R. No. 142936, April 17, 2002
Bank of Commerce v. Radio Philippines Network, Inc. G.R. No. 195615, April 21, 2014

3. Effectivity, effects of merger or consolidation (Secs. 78 and 79)

Case: Spouses Ong v. BPI Family Savings Bank, Inc. G.R. No. 208638, January 24, 2018
Bank of PI v. Carlito Lee, G.R. No. 190144, August 1, 2012
Babst v. Court of Appeals, 350 SCRA 341 (2001)
Bank of PI v. BPI Employees Union, G.R. No. 164301, August 10, 2010

L. APPRAISAL RIGHT

1. When right may be exercise (Sec. 80)

Case: Cua Jr. v. Ocampo Tan, G.R. Nos. 181455-56, December 4, 2009

2. How right is exercised (Sec. 81)

Case: Turner v. Lorenzo Shipping Corporation, G.R. No. 157479, November 24, 2010

3. Effect of demand and termination of right (Sec. 82)

4. Cessation of right to payment (Sec. 83)
5. Responsibility for costs of appraisal (Sec. 84)
6. Notation on certificates; rights of transferee (Sec. 85)

M. NON-STOCK CORPORATIONS

1. Definition and purposes (Secs. 86 and 87)

Cases: Collector of Internal Revenue v. Club Filipino de Cebu, G.R. No. L-12719, May 31,
1962, 5 SCRA 321
Republic v. City of Parañaque, G.R. No. 191109, July 18, 2012
Manila International Airport Authority v. Court of Appeals, G.R. No. 155650, July 30,
2006

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 Commissioner of Internal Revenue v. St. Luke’s Medical Center, G.R. Nos. 195909 and
195960, September 26, 2012
Republic v. Sunlife Assurance Co. of Canada, G.R. No. 158085, October 14, 2005

2. Members’ right to vote (Sec. 88)

Cases: Lim v. Moldex Land, Inc, G.R. No. 206038, January 25, 2017
Tan v. Sycip, G.R. No. 153468, August 17, 2006
Ao-As v. Court of Appeals, G.R. No. 128464, June 20, 2006

3. Non-transferability of membership; exception (Sec. 89)

4. Membership termination (Sec. 90)

Cases: Valley Golf and Country Club, Inc. v. Caram, G.R. No. 158805, April 16, 2009
Arroyo, et al. v. Rosal Homeowners Association, Inc., G.R. No. 175155, October 22,
2012
Calatagan Golf Club, Inc. v. Sixto Clemente Jr., G.R. No. 165443, April 16, 2009

5. Election/term of trustees (Sec. 91)

6. Distribution of assets; rules and plan of distribution (Secs. 93 and 94)

N. CLOSE CORPORATIONS

1. Definition; requisites (Sec. 95)

Cases: San Juan Structural and Steel Fabricators, Inc. v. Court of Appeals, G.R. No. 129459,
September 29, 1998, 296 SCRA 631
Dulay Enterprises v. Court of Appeals, 225 SCRA 678
Bustos v. Millians Shoe, Inc., G.R. NO. 185024, April 24, 2017

2. Contents of articles of incorporation (Sec. 96)

3. Restriction on transfer of shares; breach of conditions (Secs. 97 and 98)
4. Stockholders’ agreements; board meetings; pre-emptive rights (Secs. 99, 100, and
101)
5. Amendment of articles of incorporation; deadlocks; withdrawal of stockholder or
dissolution (Secs. 102,103, and 104)

O. SPECIAL CORPORATIONS

1. Educational corporations; trustees (Secs. 105 and 106)

2. Religious corporations; corporation sole; religious societies (Secs. 107, 108, 114)

Cases: Roman Catholic Apostolic Administration of Davao, Inc. v. Land Registration

Commission, G.R. No. L-8451, December 20, 1957, 102 Phil. 506
United Church of Christ in the Phils. Inc. v. Bradford United Church of Christ, Inc., et
al., G.R. No. 171905, June 20, 2012

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 Republic v. Intermediate Appellate Court, G.R. No. L-75042, November 29, 1988, 168
SCRA 165
Iglesia Evangelica Metodista En Las Islas Filipinas, Inc., et al. v. Bishop Nathanael
Lazaro, et al., G.R. No. 184088, July 6, 2010

2.1 Articles of incorporation; submission (Secs. 109 and 110)

2.2 Acquisition/alienation of property (Sec. 111)
2.3 Filling of vacancies (Sec. 112)
2.4 Dissolution (Sec. 113)

3. One Person Corporations

3.1 Definition (Sec. 116)

3.2 Capital stock required; incorporation; bylaws (Secs. 117, 118 and 119)
3.3 Corporate name (Sec. 120)
3.4 Director, president, treasurer, corporate secretary, other officers (Secs. 121,
122 and 123)
3.5 Nominee/alternate; term; change (Secs. 124, 125 and 126)
3.6 Records to maintain (Secs. 127 and 128)
3.7 Reportorial requirements (Sec. 129)
3.8 Liability (Sec. 130)
3.9 Conversion (Secs. 131 and 132)

P. CORPORATE DISSOLUTION

1. Modes of dissolution (Sec. 133)

1.1. Voluntary (Secs. 134, 135, and 136)

1.2. Involuntary (Sec. 138)

1.2.1. Filing of verified complaint

1.2.2. Revocation of articles of incorporation
1.2.3. Quo warranto proceedings

Cases: Majority Stockholders of Ruby Industrial Corporation v. Lim, G.R. Nos. 165887
and 165929, June 6, 2011
Provident International Resources Corporation v. Venus, G.R. No. 167041, June
17, 2008

2. Corporate liquidation (Sec. 139)

Cases: Gelano v. Court of Appeals, G.R. No. L-39050, February 24, 1981, 103 SCRA 90
Clemente v. Court of Appeals, 242 SCRA 717
Benigno M. Viguilla v. Phil. College of Criminology, Inc., G.R. No. 200094, June 10,
2013

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 Metropolitan Bank and Trust Co., Inc. v. The Board of Trustees of Riverside Mills Corp.
Provident & Retirement Fund, G.R. No. 176959, September 8, 2010
Alabang Development Corporation v. Alabang Hills Village Association, G.R. No.
187456

Q. FOREIGN CORPORATIONS

1. Definition; rights (Sec. 140)

2. License application and issuance; requisites (Secs. 142, 143, 144, and 145)

Case: Philippine Deposit Insurance Corp. v. Citibank, N.A., G.R. No. 170290, April 11, 2012
Avon Insurance PLC v. Court of Appeals, G.R. No. 97645, August 29, 1997, 278 SCRA
312
Expertravel & Tours, Inc. v. Court of Appeals, G.R. No. 152392, May 26, 2005
Citibank, N.A. v. Chua, G.R. No. 102300, March 17, 1993

3. Meaning of “doing business” in the Philippines (Sec. 3(d), R.A. No. 7042)

Case: Mentholatum Co. v. Mangaliman, 72 Phil. 524

Columbia Pictures, Inc. v. Court of Appeals, G.R. No. 110318, August 28, 1996
Cargill, Inc. v. Intra Strata Assurance Corp., G.R. No. 168266, March 15, 2010
Steelcase, Inc. v. Design International Selections, Inc., G.R. No. 171995, April 18, 2012
Merrill Lynch Futures, Inc. v. Court of Appeals, 211 SCRA 824
Antam Consolidated, Inc. v. Court of Appeals, 143 SCRA 288
B. Van Zuiden Bros. Ltd. v. CTVL Manufacturing Industries, Inc., G.R. No. 147905,
May 28, 2007, 523 SCRA 233
Grotjahn GMBH & Co. v. Hon. Isnani, G.R. No. 109272, August 10, 1994, 235 SCRA
216
Aboitiz Shipping Corp. v. Insurance Company of North America, G.R. No. 168402,
August 6, 2008
Air Canada v. CIR, G.R. No. 169507, January 11, 2016

(See also SEC-OGC Opinion No. 17-03 (April 4, 2017) on the concept of doing
business as applied to online gaming operated by a foreign corporation
based in another jurisdiction)

4. Doing business without license (Sec. 150)

Case: Agilent Technologies Singapore (PTE) Ltd. v. Integrated Silicon Technology Phils. Corp.,
G.R. No. 154618, April 14, 2004
Lorenzo Shipping Corp. v. Chubb and Sons, Inc., G.R. No. 147724, June 4, 2004
Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation, G.R.
No. 152228, September 23, 2005
Home Insurance Co. v. Eastern Shipping, G.R. No. L-34382, July 1983
Top-Weld Manufacturing, Inc. v. ECED, SA, G.R. No L-44944, August 9, 1955, 138
SCRA 118
Subic Bay Metropolitan Authority v. Universal International Group of Taiwan, G.R.
No. 131680, September 14, 2000

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 Eriks PTE Ltd. v. Court of Appeals, G.R. No. 118843, February 6, 1997

5. Merger or consolidation involving foreign corporation licensed in the Philippines

(Sec. 149)

Foreign corporation licensed to do business in the Philippines may merge with a

domestic corporation, provided that the former can prove that there is a similar
authorizing law in its home jurisdiction. (SEC-OGC Opinion No. 18-18,
November 16, 2018)

6. Revocation of license (Secs. 151, 152, and 153)

6. Other provisions

R. INVESTIGATIONS, OFFENSES AND PENALTIES

1. Administrative sanctions (Secs. 157 and 158)

2. Offenses/Penalties

2.1 Unauthorized use of corporate name

2.2 Violation of disqualification provision
2.3 Violation of duty to maintain records, allow inspection
2.4 Willful certification of incomplete, inaccurate, false, or misleading
statements or reports
2.5 Independent auditor collusion
2.6 Corporate registration through fraud
2.7 Fraudulent conduct of business
2.8 Acting as intermediaries for graft and corrupt practices
2.9 Engaging intermediaries for graft and corrupt practices
2.10 Tolerating graft and corrupt practices
2.11 Retaliation against whistleblowers
2.12 Other violations

3. Liability of directors, trustees, officers, or other employees (Sec. 171)

Cases: ABS-CBN Corp. v. Gozon, G.R. No. 195956, March 11, 2015
Philex Gold Philippines v. Philex Bulawan Supervisors Union, G.R. No. 149758, April
25, 2005
Tan v. Timbal, G.R. No. 141926, July 14, 2004

4. Liability of aiders and abettors (Sec. 172)

S. MISCELLANEOUS PROVISIONS

1. Designation of governing boards (Sec. 174)

2. Stock ownership in corporations (Sec. 176)

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 Cases: Roy v. Herbosa, G.R. No. 207246, April 18, 2017
Narra Nickel Mining and Development Corp v. Redmont Consolidated Mines Corp,
G.R. No. 195580, April 21, 2014 and January 28, 2015

3. Reportorial requirements (Sec. 177)

4. Powers, functions, and jurisdiction of the SEC (Secs. 178 and 179)
5. Arbitration (Sec. 181)
6. Transfer of jurisdiction over party-list organizations (Sec. 182)

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