DOCTRINES/THEORIES

Right of Succession In partnership, if one partner dies, DISSOLVED

Trust Fund Doctrine stockholders are NOT LIABLE TO SEPARATE

PROPERTY
Stockholders are only liable up to the extent of their
UNPAID SUBSCRIPTION

Doctrine of Corporate Fiction Corporation have separate and distinct personality

Doctrine of Piercing the Veil of Separate and Distinct personality of the corporation
Corporate Fiction and stockholders will be disregarded.

Alter Ego Doctrine or Instrumentality Test to apply if Piercing of the entities would be
Rule necessary

Doctrine of Limited Capacity The 3 powers of Corporation

 Expressed
 Implied
 Inherent/Incidental

INTRAVIRES Act “within the power” If WITHIN the power

ULTRAVIRES Act “outside the power” If OUTSIDE the power

Doctrine of equality of shares All shares are presumed to be equal

Doctrine of individuality of subscription Certificate of Stock will not be issued unless fully
paid and according to SEC, it is considered one
whole indivisible contract.

Doctrine of Holdover Term of BOD is 1 year, once it laps, they will

continue to function as such until a new set of
BOD is elected. “Holdover their position”
Theory of original power BOD’s power is original and undelegated because
the SHs elected the BOD
Inherent power of amotion Inherent Power of amotion, We can remove the
BOD with or without valid grounds
Valid corporate Act Majority of the quorum, decision of the BOD/BOT
is valid
Business Judgment rule BOD’s are not liable
Interlocking Doctrine when one, some or all directors are the same
in 2 corporations

Theory of General Capacity Corporation can hold such power only if prohibited
or withheld by the law
Theory of Special Capacity
Special Fact Doctrine
Doctrine of corporate immunity or
Business judgment rule
Exploration of natural disaster
Voting Right for Treasury Shares
Corporate Liquidation
Definition and Rights
Powers, Functions, and Jurisdiction of
the Commission (A-P)
Corporations cannot exercise special powers except
those which are expressly or impliedly given by the
law
Director take advantage of any information
acquired by virtuous of his office to the
disadvantage of the corporation.
Is a judicially created doctrine that protects
directors from personal civil liability for the
decisions they make on behalf of a corporation.
If exceeds to 5 yrs. (power to enter in Management
Contract)
Treasury shares shall have no voting right as long as
such shares remain in the Treasury.
 Rules in Priority of Application of Asset
o Have to pay the corporate creditors.
o Distribute the remaining to the
stockholders.
o Settle other payments of the
corporation
Reciprocity Rule – If the foreign country allows
Philippine Corporation to operate therein, they
are also allowed to operate in the Philippines.
A. Exercise supervision and jurisdiction over all
corporations and persons acting on their
behalf.
B. Pursuant to Presidential Decree No. 902-A,
retain jurisdiction over pending cases
involving intra-corporate disputes submitted
for final resolution.
C. Impose sanctions for the violation of this
Code.
D. Promote corporate governance.
E. Issue opinions to clarify the application of
laws, rules and regulations.
F. Issue cease and desist orders ex parte to
prevent imminent fraud or injury to the public.
G. Hold corporations in direct and indirect
contempt.
H. Issue subpoena duces tecum and summon
witnesses.
I. In appropriate cases, order the examination,
search and seizure of documents, papers,
files and records, and books of accounts of
any entity or person.
J. Suspend or revoke the certificate of
 incorporation after proper notice and hearing.
K. Dissolve or impose sanctions on corporations,
upon final court order
L. Issue writs of execution and attachment.
M. Prescribe the number of independent
directors.
N. Impose or recommend new modes by which a
stockholder, member, director, or trustee may
attend meetings or cast their votes, as
technology may allow.
O. Formulate and enforce standards, guidelines,
policies, rules and regulations to carry out the
provisions of this Code.
P. Exercise such other powers provided by law
or those which may be necessary or incidental
to carrying out the powers expressly granted
to the Commission