Corporation is an artificial being created by operation of

law, having the right of succession and the powers attributes

and properties expressly authorized by law or incident to its
existence.

Now taking from the definition provided for by section 2, there

are four attributes of a corporation. Now there are four attributes
of a corporation, which is based from the definition as provided
for under section 2. What are those?
1. Corporation is an artificial being. When you say that a
corporation is an artificial unlike natural persons who can
breathe, see, who can smell, who can touch. A corporation has
been given by law its own personality, although it cannot exist
as a natural person. Corporation has the powers, attributes and
properties, which are allowed by law only. Now it is an
artificial being in the sense that a corporation exists only in the
eyes of the law.
It is a mere creation of the law. It exists in the legal fiction
only.
2. Created by operation of law unlike a partnership, which, a
partnership is created by the agreement of the partners being
consent.

So only a law create a corporation because it is created by

operation of law.

3. Has a right of succession, that means that the corporation has

a continuity that death of a stock holder does not dissolve the
corporation because it has the attribute of the right of
succession.
4.Powers, attributes and properties expressly authorized by
law or incident to its existence because a corporation is an
artificial BEING Only the powers attributes and properties
granted by law can be exercised because for example, unlike in
natural person a natural person can enter into a contract of
marriage.

For example, we can enter into a contract of marriage, but you

will take note that under section 36 of the corporation, which
lists the enumeration of the express powers of the corporation.
The corporation has not been authorized to enter into a marriage
for the simple reason that under section 1 of the family code
marriage as a special contract is only between a man and
woman.

And a corporation has no gender because it is a mere artificial

being created by operation of law. Only those powers, which
are expressly enumerated or provided by law can be
exercised by the corporation as an offshoot of it be in an
artificial being. Now, if a certain power has not been expressly
granted to the corporation or that power does not exist,
incidentally then it cannot be exercised by the corporation. If
you want to know if a certain, a particular act can be done by a
corporation, you have to refer to the express power of the
corporation, which must be contained in the law.

That is what you mean that the corporation has power, attributes
and properties expressly authorized by law or incident to its
existence.
Now a primary franchise is the franchise to exist as a
corporation.

In other words it is the license to exist as a juridical

personality, or it is issued by the securities and exchange
commission or the SEC once a corporation or a body is granted
its juridical personality or his primary franchise that it can exist
as a corporation. In other words, without a primary franchise, no
juridical personality can be had.

On the other hand class, a secondary franchise are certain rights

and privileges conferred upon existing corporations. So if a
corporation may not exist without a primary franchise, but it can
exist as secondary franchise franchise refers to a license of an
existing corporation to transact a specialized business.

The corporation may not enter into a mining activities without

license from the mines and geosciences bureau or the MGB
from the DENR.

A corporation cannot engage itself into the business of banking

without permission or license from the bank or central ng
Pilipinas.

Now that license to be issued by the MGB or the BSP as the

case may be is what you call a secondary franchise. A
secondary franchise is accorded only one existing
corporation. In other words to corporations with primary
franchise, that is the distinction between the two.
Now the fact that the corporation will not retain its secondary
franchise does not mean that it is DISSOLVE. Just because a
corporation will not be able to retain its secondary franchise
does not mean that it will lose its juridical personality or its
existence. It can remain to exist as a corporation, but it may not
engage in a specialized business.

Partnership is a consensual contract. That means that

partnership can be created by agreement of the parties or the
partners.

By agreement of the partners with the execution of the articles

of partnership partnership is created.

On the other hand, again, taking from the definition provided for
under a corporation is created by law or by operation of law.

This is the trick in the comparison between a partnership and a

corporation.

Well, now you have to connect the manner of creation with the
manner of how a corporation is dissolve. Now if a corporation is
created by operation of law, take a look at the manner of the
dissolution.

Since corporation is created only by law. Only the state,

only the government can dissolve it.

A partnership is created by mere agreement. Now the mode of

dissolution of a partnership is also by agreement of all the
partners or by will of any of the partners so that you will, you
will be able to remember it.

If partnership is created by mere agreement of the partners,

it can also be dissolved by will have one of the partners or by
agreement of all the partners. On the other hand, if a
corporation is created by operation of law, only the state can
dissolve it.

A partnership can be created by a minimum of two persons.

Whereas a corporation must have at least five incorporators
or under the revised corporation code one person corporation,
which means that a corporation can be formed only by a single
person.

From the moment of the execution of the contract of partnership

or what we call articles of partnership. Whereas It corporation
acquires juridical personality only from the date of issuance of
the certificate of incorporation from the sec. The juridical
personality of a corporation will commence to exist only
from the date of issuance of the certificate of incorporation
or COI certificate of incorporation by the sec now do not
commit the mistake that partnership will commence to exist only
as a juridical personality or legal person from the time that the
sec approves the articles of partnership, although but in so far as
juridical personality. In so far as its juridical personality is
concerned, it had existed from the time of the execution or
the signing of the articles of partnership.
In corporation the articles of incorporation is submitted to sec
together by other reportorial requirements or other requirements.
Now, after submission to the sec of this requirements, the sec
will determine if the applicant have complied with the
requirements of the sec, now, if there is sufficiency in the
requirements, the SEC will issue the COI.

If the sec will issue its certificate of incorporation, that

means that the corporation can now exist as a juridical
personality.

A partnership may exercise any power authorized by the

partners provided it is not contrary to law, morals, customs
public order or public policy.

The provision under the law on obligation and contracts the

principle of freedom to stipulate the parties may stipulate in such
terms clause says as they made them convenient, as long as such
term is not contrary to law. Morals, good costumes, public
policy or public order. So the partnership can exercise
practically any powers that the partners made deem fit. As long
as again, there's is not contrary to law. On the other hand the
corporation is limited by the enumeration of the powers
grant By the corporation code or their device corporation
code. If you will go over the provisions of the civil go, you will
not see the limitation of powers that a partnership can exercise.

Why? Because again, the partners are allowed by law to

perform any action. As long as there is no law prohibitive act.
On the other hand, a in a partnership, only those enumerated
under article 36 of the corporation code can be exercised by the
corporation.

Now, how do you manage a partnership?

A partnership is managed of course, by the managing partner, or

if there is no appointment of the managing partner, either in the
articles of incorporation or by vote or appointment of all the
partners, then every partner is an agent or a manager of the
partnership. On the other hand, a corporation is governed by
its board of directors or its board of trustees.

If a corporation is a stock corporation that is governed by the

board of directors. Well, a board of trustees is a third more
appropriate to a non-stock corporation.

Now the stock holders will hold an annual meeting for the
election of the board of directors.

The board of directors will manage the day-to-day affair of the

corporation, but they will elect the president, the secretary.

Effect of mismanagement, a partner as such can Sue a co partner

who mis-manages the partnership while in a corporation suit
against a member of the board of directors or trustee who
mis-managers, the corporation must be in the name of
corporation.

Now, if you want to Sue a particular member of the board of

directors or the board of trustees, then the complaint must be
filed in the name of the corporation what we call as a derivative
suit. Meaning to say that the rights of the corporation was
violated, which is why a stock holder in filed a complaint in the
name of the corporation, corporation being an artificial being
can Sue under its name.

Okay. So a partnership has no right of succession. In which case,

if a partner dies. Then the partnership is essentially, or by
operation of law, it is dissolved or by express provision of law it
is dissolved because a partnership has no right of succession
unless of course, articles of partnership will provide for a
contrary stipulation.

Corporation has a right of succession the death of stock

holder will not dissolve the corporation. Extent of liability to
third persons, the partners are personally liable and subsidiarity
liable except limited partners. We're actually just investors.

On the other hand, stock holder are liable only up to the extent
of their investment which is a kin to a limited partner in a
partnership.

Creditors corporation may not go after the personal assets of the

stockholders. Because again, there is limited liability with
respect to the stockholders, the stockholders can only be held
liable up to the extent or the amount of their investment in
the corporation.

Let us talk about the transferability of interest.

A partner cannot transfer his interest in the partnership

without the consent of all other existing partners. This is the
principle of the delectus personae. Before a person is admitted
in a partnership the application for the admission of
partnership must be approved by all the partners because
admission of a partner to a partnership on the basis of trust and
confidence, you cannot join a partnership If the partners do not
trust you, you can only be admitted on the basis of trust and
confidence of all the partners.

On the other hand, when you purchase shares of stocks in a

corporation, no exists trust and confidence between and among
the stockholders.

So in other words, class, the stock holder can just transfer or

it can just sell his shares without the prior consent of other
stock holders.

Now a partnership can exist for any period of time it can be a

partnership for a specific period of time or a partnership.

A corporation exists practically in perpetuity or in perpetual

existence. The corporation can now exist in perpetuity or
existed forever. It can exist forever unless of course the articles
of incorporation would provide for a specific corporate term.

When it comes to the name of a partnership.

If a partnership is considered as a limited partnership, then it

must add the term LTD. which will signify that the partnership
is a limited partnership.
In a corporation, it can adapt any corporate name as long as the
name is not identical or deceptively similar to any registered
firm name or corporate name or it is contrary to law.

You have to reserve the, the name of the proposed corporation.

In relation to state, a corporation can be public corporation or a

private corporation.

Now what is a public corporation?

A public corporation is formed organized for the government of

the portion of the state. For example, barangay municipality,
city, or province for political purposes, connected with the
public good in the administration of the civil government.

You are pertaining to barangay, municipality, city, or the

province or provincial government but it is considered as a
public corporation because it is organized for the purpose of
governing a portion of the state or of the government.

Now a private corporation is a corporation which is formed or

organized for some private purpose benefit or end it may either
be a stock or non stock.

A private corporation, it is incorporated under the corporation

code.

That is a public corporation, but if it is a private corporation,

meaning it is organized for the some private purpose benefit or
end, you have to register with the sec, you have an invoking the
general law or the corporation. In relation to government owned
or controlled corporation. Whether a corporation is considered
as a GOCC or a government owned or controlled corporation
shares of stocks must be owned by the government the share
the, the shareholding of the government must be at least
51% of the capital stock at least majority or 51% share of the
capital stock, if the government directly or indirectly owns the
shares of stocks of at least majority, or at least 51% of the
capital stock, then it is considered as a government owned or
controlled corporation this is a corporation with special charter.

Quasi Public is not a public and not a private corporation. Public

corporation is organized for the purpose of governing a
particular portion of the state. A private corporation is what
organized for a private benefit or private purpose.

Now quasi a public corporation class is between a public and a

private corporation usually at the school districts, water
districts.

They are organized, registered with the sec and they are
organized incorporated invoking the corporation code, but they
are considered by law as quasi because of the, kind of the
business that they are engaged in because their business is
imbued with public interest. The business is common good or
the good of the public.

Corporation by estoppel, all persons who assume to act as a

corporation, knowing it to be without also right to do so shall be
liable as general partners for all debts, liabilities, and damages
incurred or arising as a result.

Now we have to compare between the de jure and the facto

corporation. When you see de jure all the requirements
imposed by the law to form a corporation has been complied
with.

If it is a de facto corporation or not, it exists actually for all

practical purposes. It exists as a corporation. However, de facto
it has no legal rights to corporate existence because of some
defect or floss in insert agreement.

Now in the de jure corporation, it cannot be successfully attack,

not even a direct proceeding by the state.

On the de facto other hand, de facto the corporation can be

attack collateral for the existence of the fact, the corporation can
be collaterally attack in any private suit.

Corporation by prescription

Roman Catholic church is considered as a corporation by

prescription meaning because of the lapse of so many years the
law have accorded it its own juridical personality.

The Roman Catholic church is a corporation by prescription

with acknowledge juridical personality in as much as this
institution have antedated, but almost a thousand years in
Europe, existence since ancient times
Classes of corporation as to existence of, stock corporation and
non-stock corporation.

Stock corporation, capital stock divided into shares

authorize to distribute shares, dividends, and allotments of
the surplus profits.

It is organized for profit and the governing body is usually the

board of directors .

Non stock is prohibited in distribution of income because it

has no stock. Not organized for profit and the governing body is
usually the board of trustees.

You now have here as to relationship of management and

control holding company.

Just say chairman or president of red cross is Senator Gordon as

a Senator. Because red cross is not part of the government, but
also not private corporation. Particularly, red cross is created by
virtue of Republic Act 95.
It's not instrumentality of the state at indeed in sharp private
corporation.Philippine national red cross is a class of its own. It
is not a private corporation nor it is a public corporation in
nature, because it is what it is regulated by international
humanitarian law and it's treated as an auxiliary of state.