Course Description and Syllabus

BUSINESS LAW AND REGULATIONS (BLR)

by Atty. Narciso G. Reyes, Jr., A.B., J.D., L.l.M.

This focuses on the fundamental concepts and principles regarding partnerships, corporations,
of the Corporation Code and the law on partnership, including the rights, obligations and
liabilities of persons comprising business organizations. Likewise, the study of Negotiable
Instruments Law will expose the learners to the requisites of negotiability and the requisites and
rights of holders in due course as well as provisions on checks and the Bouncing Checks Law
and Article 315 of the Revised Penal Code.

Course Objective

The student is expected to have a good understanding of the legal personality of corporations,
how they are formed, and their basic difference from single proprietorships, and partnerships.
The student must also be able to differentiate copyright, trademarks and trade names, and
patents, how they are acquired, and enforced.

Course Outline

CORPORATION CODE OF THE PHILIPPINES

I. Definitions and Classifications

(Primary Franchise v. Secondary Franchise; Partnership v. Corporation)
1.4.1 Corporation defined
1.4.2 Classes of Corporations
1.4.3 Corporators and Incorporators, Stockholders & Members Classification of Shares
Founders’ Shares
1.4.4 Redeemable Shares
1.4.5 Treasury Shares

II. Incorporation and Organization of Private Corporations

Number and Qualifications of Corporations
Corporate Term
Minimum Capital Stock Required of Stock Corporations
Amount of Capital Stock to be Subscribed & Paid for Incorporation
Contents of Articles of Incorporation
Amendment of Articles of Incorporation
Commencement of Corporate Existence
De Facto Corporations
Corporation by Estoppel

Nationality of Corporations
1. Place of Incorporation Test
- SEC Opinion No. 04-14, March 3, 2004
2. Control Test
 - SEC Opinion No. 07-20, November 20, 2007
3. Grandfather Rule
- Redmont Consolidated Mines Corporation v. McArthur Mining Corporation
- Narra Nickel Mining & Development Corp. v. Redmont Consolidated Mines Inc.,
G.R. No. 195580, 28 January 2015
4. Domiciliary Test

Nationalized Activities Reserved for Filipinos under the Constitution and Special Laws
- Executive Order No. 65, 11th Regular Foreign Investment Negative List

Doctrine of Separate Juridical Personality

1. Liability for acts or contracts
2. Right to bring actions
3. Right to acquire and possess property
4. Acquisition of jurisdiction
5. Changes in individual membership

Doctrine of Piercing the Corporate Veil

- WPM International Trading, Inc. v. Labayen, GR No. 182770, September 17, 2014

III. Board of Directors / Trustees / Officers

3.1 The Board of Directors or Trustees
3.2 Election of Directors or Trustees
3.3 Corporate Officers, Quorum
3.4 Disqualification of Directors, Trustees, or Officers
3.5 Removal of Directors or Trustees
3.6 Liability of Directors, Trustees, or Officers
3.7 Dealings of Directors, Trustees, or Officers with the Corporation
3.8 Disloyalty of a Director
3.9 Executive Committee

IV. Powers of Corporations

Corporate Powers and Capacity Power to Extend or Shorten Corporate Term
Power to Increase or Decrease Capital Stock
Incur, Create, or Increase Bonded Indebtedness
Power to Deny Pre-emptive Right
Sale or other Disposition of Assets Power to Acquire Own Shares
Power to Invest Corporate Funds in another Corporation or \ Business
Power to Declare Dividends
Power to Enter into Management Contract
Ultra Vires Acts of Corporations

V. By-Laws Adoption of By-Laws Contents of By-Laws Amendment to By-Laws

VI. Meetings

VII. Stocks and Stockholders Subscription Contract

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Pre-incorporation Subscription
Consideration of Stock and Transfer of Shares Rights of Unpaid Shares

VIII. Corporate Books and Records

IX. Merger and Consolidation
9.1 Plan of Merger or Consolidation
9.2 Stockholders’ or Members’ Approval
9.3 Articles of Merger or Consolidation
9.4 Effectivity of Merger or Consolidation
9.5 Effects of Merger or Consolidation

X. Appraisal Right
10.1 Instances of Appraisal Right
10.2 How Right is Exercised

XI. Non-stock Corporations

XII. Close Corporations
XIII. Special Corporations
XIV. Religious Corporations

Cases:

1. Heirs of Wilson P. Gamboa vs. Finance Secretary Margarito B. Teves, et al., G.R. No.
176579, October 9, 2012
2. Carandang v. Desierto, G.R. Nos. 148076 & 153161, January 12, 2011
3. Gokongwei, Jr. v. SEC, G.R. No. L-45911, April 11, 1979
4. Legaspi Towers 300, Inc. v. Amelia P. Muer, G.R. No. 170783, June 18, 2012

LAW ON PARTNERSHIP
Formation
Kinds
Obligations of Partner
Partners to Third Person
Dissolution
Liabilities of a limited partner

CREDIT TRANSACTIONS
Loan
Commodatum
Mutuum
Interest (simple, compound, legal)
Art. 1956 of the New Civil Code
BSp Circular No. 799, July 1, 2013
Nacar v. Gallery Frames, GR No. 189871, August 13, 2013
Deposit
Pledge

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Chattel Mortgage
Real Estate Mortgage

Antichresis

LAW ON SALES
Elements
Kinds
Contract to Sell v. Absolute Sale
Capacity of the Parties (relative, absolute)
Perfection
Transfer of Ownership
Double Sale (Art. 1544 of the New Civil Code)
Remedies of the Seller (Recto Law, Maceda Law, specific performance, rescission, foreclosure)
Equitable Mortgage

BOUNCING CHECKS LAW

(Batas Pambansa Bilang 22)

ARTICLE 315 OF THE REVISED PENAL CODE

PHILIPPINE COOPERATIVE CODE OF 2008 (Republic Act No. 9520)

Types
Capital
Membership
Tax treatment
Audit
Penal Provisions

FINANCIAL REHABILITATION AND INSOLVENCY ACT (Republic Act No. 7042)

Definition of “doing business” in the Philippines
Export Enterprise
Domestic Market Enterprise
Philippine nationals
Foreign investment in export enterprises
Foreign investment in domestic enterprises

PDIC LAW
Maximum deposit insurance coverage
Covered deposit types
Exclusions

BANKING LAWS

THE NEW CENTRAL BANK ACT (Republic Act No. 7653)

Bangko Sentral ng Pilipinas

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Monetary Board (Powers, functions)
How the BSP handles bank in distress (conservatorship, closure, receivership, liquidation)
How the BSP handles exchange crisis (legal tender power, rate of exchange)

GENERAL BANKING LAW OF 2000 (Republic Act No. 8791)

Definition and Classification
Distinction from Quasi-Banks and Trust Entities
Powers and Liabilities
Kinds of deposit
Diligence required
Grant of loans
Ratio of Net Worth to Total Risk Assets
Single Borrower’s Limit
Restrictions on Bank Exposure to Directors, Officers, Stockholders and their Related Interests

SECRECY OF BANK DEPOSITS

Prohibited acts
Deposits covered
Exceptions
Garnishment of deposits including foreign deposits

Notable cases:
- Intengan vs. Court of Appeals, G.R. No. 128996, February 15, 2002
- Ejercito vs. Sandiganbayan, G.R. Nos. 157294-95, November 30, 2006
- Mellon Bank, N.A. vs. Magsino, G.R. No. 71479, October 18, 1990
- Marquez vs. Desierto, G.R. No. 135882, June 27, 2001
- PCIB vs. Court of Appeals, G.R. No. 84526, January 28, 1991
- Salvacion vs. Central Bank of the Philippines, G.R. No. 94723, August 21, 1997

ANTI-MONEY LAUNDERING ACT (Republic Act No. 9160)

Covered institutions
Covered transactions
Suspicious transactions
When is money laundering committed?
Unlawful activities or predicate crimes
Anti-Money Laundering Council
Freezing of Monetary Instrument or Property
Authority to Inquire into Bank Deposits

INTELLECTUAL PROPERTY LAW (IPL)

Patent
Patentable inventions
Non-patentable inventions

Trademarks

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Non-registrable marks
Prior use
Tests to determine confusing similarity
Trade names

Copyright
Original Work
Derivative Work
Non-copyrightable works
Rights of copyright owner
Doctrine of fair use

Infringement
Unfair competition

SRC RULE 68

TRUTH IN LENDING ACT (Republic Act No. 3765)

EASE OF DOING BUSINESS ACT

GOVERNMENT PROCUREMENT LAW

INSURANCE LAW

LABOR STANDARDS

SOCIAL SECURITY LAW

DATA PRIVACY ACT

ELECTRONIC COMMERCE ACT