Trixie B.

Hicalde
BSA 3-2

TITLE IX

 When a corporation has acquired another corporation, it should not be liable for the debts
incurred by the corporation unless the corporation who purchased has expressly agreed to
assume the debts, the transaction is a consolidation or merger of the corporations or the
corporation is a continuation of the corporation being sold.
 What is a merger? A merger is an agreement that unites two existing companies and
continues the combined business. Example of this is the BPI and BPI family savings bank
 What is a consolidation? A consolidation is the union of two or more existing companies
to form a new entity called the consolidated corporation
 Normally, in a merger, one company survives and continues the business while the other
dissolves and all of its assets, rights and liabilities are assumed by the former corporation.

 This plan of merger or consolidation must hold the stockholders’ or members’ approval
of atleast 2/3 of the outstanding stock corporation or 2/3 of the members of a non-stock
corporation. Any disagreement by a stockholder can exercise a right of appraisal.
 For merger and consolidation be able to be deemed as valid, this should be also approved
by the security and exchange commission.
 The merger shall only be valid upon the issuance of a certificate of merger by the SEC,
subject to its prior decision that the merger is not compliant with the corporation code or
existing laws.
 The merger will not be effective once it has been agreed by the stockholders. The
approval of the SEC is required, once they have issued a certificate of merger, it will be
in effect. The same goes with the consolidation
TITLE XII

 A closed corporation is an organization whose shares are owned by a select few persons
who are typically closely connected to the firm. Moreover, in this corporation,
restrictions are imposed, pre-emptive right is extended to all stock issuances and a
stockholder may withdraw and avail of his right of appraisal.
 The articles of incorporation of a closed corporation provides that the business of this
kind of corporation should be managed by its stockholders rather than its board of
directors. More so, the employees and specified officers are also elected or appointed by
the stockholders.
 There are corporations cited in the section 95 that cannot incorporate as a close
corporation. These are: mining or oil companies, stock exchanges, banks, insurance
companies, public utilities, educational institutions and corporations declared to be vested
with public interest.
 There is a validity of restriction when it comes to transferring of shares in this type of
corporation. These restriction should be written in the articles of incorporation, in the
bylaws and also in the certificate of stock of a corporation. Thos restriction should not
hold such heavy obligation than granting the existing stockholders or the corporation the
option to purchase shares of the transferring stockholder with such reasonable terms and
conditions stated.
 A close corporation has the right to refuse a transferee of stocks if they think he is not
qualified to be a stockholder
 The pre-emptive right of stockholders in close corporation shall extend to all stock to be
issued, including reissuance of treasury shares whether for money, property or personal
services or in payment of debts.
 Articles of incorporation can be amended if approved by atleast 2/3 of the outstanding
capital stock with or without voting rights.
 An independent person who is neither a member nor a creditor of the company or of any
subsidiary or associate of the corporation, and whose further credentials, if any, must be
decided by the Commission, shall be the provisional director.
 TITLE XIII

 Educational corporations are governed by special laws and by the general provision of
the Revised Corporation Code. The board of trustees in this type of corporation should
not exceed fifteen and should be atleast 5 unless otherwise provided by the articles of
incorporation. There are two composition of the board: non-stock educational corporation
and stock educational corporation.
 Religious corporation is a corporation incorporated by one or more person. These kind of
corporations are mostly a corporation sole. A corporation sole is a type of corporation
that is formed by only a one person. Complete opposite of a corporation aggregate.
 In order to become a corporation sole, the presiding elder of any religious corporation
should file an articles of incorporation that is consists of him desiring to be a sole
corporation, the religious laws in not inconsistent or forbidding him from becoming a
sole corporation and he must be responsible, within its territorial jurisdiction, for the
administration of temporalities and for the maintenance of the activities, possessions and
resources of its religious denomination, sect or church, defining such territorial
jurisdiction. This articles of incorporation must be verified first and should be
accompanied by necessary documents.
 For church, charitable, humanitarian or educational purposes, any company alone may
buy and hold real estate and personal property and may accept bequests or donations for
those purposes.
 A one person corporation is a corporation that has a single stockholder. Although, banks,
quasi-banks, preneed, trust insurance, public and publicly-listed companies, and non-
chartered government-owned and- controlled corporations can not incorporate as a one
person corporation.
 The same with a normal stock corporation, a one person corporation has no minimum
capital stock required to be authorized. Also, a one person corporation is not required to
present its by-laws.
 A one person corporation shall have a “opc” written after its name. Also, that single
stockholder should also be the director/president of the company.
TITLE XIV

 Under the Section 133, there are two methods of dissolution of a corporation. First is the
voluntary dissolution. Voluntary dissolution of a corporation are caused by the voting of
stockholders, judgement of SEC, amending the articles of incorporation to shorten the
corporate term, submitting a declaration of dissolution for approval and a merger or
consolidation. The other oone is the involuntary dissolution and this is caused by an
expiration of a corporate term, upon receipt of a lawful court order, failure to fomally
organize and commence its business within 5 years from the date of incorporation, and by
order of the SEC.
 Where the dissolution of a company is liable to prejudice the interests of any lender, the
Securities and Exchange Commission shall lodge a motion for dissolution. The petition
shall be signed by a majority of its board of directors or trustees or other officials in
charge of its affairs, confirmed by its chairman or secretary or by one of its directors or
trustees, and decided to set forth these grievances and demands against it and address its
dissolution by an affirmative vote of at least two-thirds of the outstanding stockholders.
 Through amending the articles of incorporation to shorten the corporate term according to
the rules of this Code, a voluntary dissolution can be effected. In compliance with this
code, a copy of the amended articles of incorporation shall be sent to the Securities and
Exchange Commission. After the expiry of the shortened term has been accepted by the
amended articles of incorporation, the company shall, as the case may be, be declared to
have been dissolved without further action, according to the rules of this Code of
Liquidation.
 The Securities and Exchange Commission may dissolve a company upon the issuance of
a confirmed lawsuit and after sufficient notice and hearing on the grounds given by
established laws, rules and regulations.
