03/20/21 Discussion Rundown

Cases discussed re: Corporate Name:

 La Salle Case
 Ang Tibay Case

Corporate Powers

 Section 32
o Interlocking Dorectorship
 Section 33
o Doctrine of Corporate Opportunity – means that if the director acquired
a business opportunity that should belong to the corporation, he must account
to the corporation for all the profits he obtained unless his act was ratified by
the stockholders representing at least two-thirds of the outstanding capital
stock.
 Section 35 (express powers)
o Powers of a corporation may be express, implied, or incidental/necessary
o Specialized powers specifically mentioned in the RCCP (36-43)
o The purposes of a corporation may also be considered its powers in relation to
which venture a corporation can engage into
 Section 36
 Section 38
o Distinguish with appraisal right
o Pre-emptive right: the right to purchase first the newly issued shares to prevent
diluting the stockholder’s shares
o There may be pre-emptive right in re: reissuance of treasury shares
 Section 39
o The Nell Doctrinestates the general rule that the transfer of all the assets of a
corporation to another shall not render the latter liable to the liabilities of the
transferor.
o EXPN:
 Where the purchaser expressly or impliedly agrees to assume such
debts;
 Where the transaction amounts to a consolidation or merger of the
corporations;
 Where the purchasing corporation is merely a continuation of the
selling corporation; and
 Where the transaction is entered into fraudulently in order to escape
liability for such debts.
o There is sale of all or substantially all of capital assets when:
 If the corporation would be rendered incapable of continuing the
business; or
 Accomplishing the purpose of which it was corporated
 Section 40
o Treasury shares
o Relate to: redeemable shares
  Exercise of redemption of redeemable shares (another situation in
addition to the three enumerated in Section 40)
 Section 42
o Dividends – portion/surplus profit/funds of the corporation set aside for
distribution to stockholders
o see requisites
o Declaration of dividends is discretionary; the BOD cannot be compelled to
declare dividends every year
 Section 44
o Void acts cannot be ratified
o Ultra vires acts may be ratified

Board of Directors and Trustees:

 Section 22
o Business Judgment Rule – the courts are barred from intruding into the business
judgments of the corporation, when the same are made in good faith; protects
the board from frivolous lawsuits for its corporate decisions made in good faith
and with honest judgement, which may involve taking risks in the interest of the
corporation.
o Inclusion of Independent Director
o Independent Director – is a person who apart from shareholdings and fees
received from any business or other relationship which could, or could
reasonable be received to materially interfere with the exercise of independent
judgment in carrying out the responsibilities as a director.
o Requisites:
 must be elected by the shareholders present or entitled to vote in
absentia during the election of directors
 shall be subject to rules and regulations governing their qualifications,
disqualifications, voting requirements, duration of term and term limit,
maximum number of board membership and other requirements that
the Commission will prescribed to strengthen their independence and
align with international best practices
 Section 23
o Voting methods
o See cumulative voting formula
o Difference in voting between stock and non-stock corporations
 Section 27
o Removal of directors and trustees
o See requisites
 Section 28
o Vacancies in the Board
o Emergency Board
 Section 31
o Self-dealing directors