When you say incorporators these are the original stock holders

or members in the case of a non-stock corporation and that the

names of the stockholders are mentioned in the articles of
incorporation, when you say incorporators because not all stock
holders will be listed in the articles of incorporation. Remember
that the articles of incorporation is the constitution of the
corporation. And that this piece of document is admitted to the
SEC, prior to the incorporation of the supposed said corporation.

Now, if you are part of the original group of stockholders at that

time, that articles of incorporation is submitted to the sec then
you are considered as an incorporator and incorporator is a
technical term. Meaning to say you cannot interchange it with
with the term incorporator or a stock holder.

Not all stock holders are incorporators and not all incorporators
can be stockholder at the present time when you stay
incorporators Again, these are stockholders whose names are
mentioned in the articles of incorporation as originally forming
and composing the corporation and who are signatories of, when
you say corporators, it will refer to a stock holder whose
name is not mentioned, or it's not written yet the articles of
incorporation, because again incorporator becomes a
stockholder of the corporation after the filing of the articles of
incorporation or after the registration of the corporation with the
sec. Now there are certain requirements imposed by law with
respect to an incorporator.

1.it should be a natural person.

2. must be of legal age, meaning he already reached the age of
majority. The age of majority in the Philippines take note is not
21 years old, but 18 years old. So if you are 18 years of age, you
can now be an incorporator.

Can 16 year old person purchase shares of stocks and therefore

become a stockholder of a certain corporation answer.

Yes. Again, the qualification imposed under title 2 Of the

corporation code applies only to an incorporator and not to a
stock holder. Who purchased shares after the incorporation or
registration of the corporation with the SPC.

So take note that these requirements apply only to

incorporators and not stockholders.

3. must own or subscribe for at least one share of stock of the

corporation.
4. and then the number of the minimum number of incorporators
not under the old corporation code.
But not more than 15.
5. The only requirement of the law is that majority of the
incorporators must reside in the Philippines.

So if there are five incorporators at these three incorporators

must reside in the Philippines. If you are given a problem for
example, A is a Japanese citizen, can he be an incorporator?

Yes, of course. As long as the other corporators forming

majority or at least three, no out of five of the incorporators
must reside in the Philippines.
Now the requirement imposed by law is residency and not
citizenship do not be connected. Because obviously there can be
a foreign national who is residing in the Philippines, in which
case, the requirement of the law is perfectly complied with,
because the requirement is not the citizenship, but residents of
the incorporators.

Under the old corporation code, a corporation can exist with the
maximum term of 50 years, from the date of incorporation,
unless it is sooner dissolved or extended for another 50 years or
unless you amend the articles of incorporation to shorten the
corporate term, in which case the corporation is necessarily
dissolved because it's corporate term has to be in reduced.

Under section 13 of the old corporation code, you will find there
25-25 threshold.

What do we mean when we say 25, 25 threshold amount under

the old corporation code, at least 25% of the authorized capital
stock as stated in the articles must be subscribed and at least
25% of the total subscription must be paid upon subscription,
the balance is to be payable on a date or dates fixed in the
contract of subscription without need of call or in the absence of
a fixed date or dates upon call for payment by the board of
directors.

When you say call, this is the term used when the board will
formally ask for payment of the balance of the subscription. This
25 25 threshold, under sections 13 means that at least 25% of
the authorized capital stock must be subscribed and out of
that subscription 25, again, must be paid.

If you will be asked, for example, a is a subscriberHe

subscribed for 100 shares. Now at least 25 of the 100 shares is
how many shares 25 shares. Now if a subscribed for 100 shares
out of ABC corporation, and then what a paid is only 20 of the
shares? Did he comply with section 13? Or is this subscription
contract with respect to a valid is, is a subscription contract with
ABC corporation valid.

The answer is yes, the word total subscription. What the law
requires under sections 1 Is not compliance of the 25-25
threshold in all subscription contract, but only with respect
to that total subscription.

Again, I will repeat the requirements under the old corporation

code with respect to the 25 25 threshold requirement applies
only to that total subscription, meaning the subscription of the
authorized capital stock of a corporation in the aggregate
subscription, not the individual subscription of each of the
stockholders, meaning to say that even if a particular stock
holder did not pay at least 25% of his individual subscription,
then that subscription will still be compliant with the law
because the law requires only that total subscription upon
incorporation.

After incorporation that 25 25 threshold requirement and

resections are no longer applies, no longer applies, but that is
under the old, we will discuss this again when we reached near
your vice corporation code. Okay.
There is no minimum authorized capital stock except as required
by special law.

So as a general rule, if there is no law, which requires for a

minimum authorized capital stock or the ACS, then that the
general rule will apply that there is no minimum you can register
for as little or as much authorized stock as long as the minimum
paid up capital is not less than 5,000.

If the Philippine government has a constitution we have the

1987 constitution. A corporation also has its own constitution. In
the form of an articles of incorporation and articles of
incorporation is the basic contract or the basic document in
the corporation law that defines the charter charter provides
for the basic power of the corporation.

It's the basic or the fundamental contract in the corporation code.

Sections 13 of the corporation code provides that the articles of
incorporation do not become binding as a charter of the
corporation unless they have been filed with the sec.

What are the contents of an articles of incorporation?

You have the name of the corporation, for example, ABC or
XYZ corporation or ABC incorporated as the case may be
depending upon what name was registered for the corporation.

You have to indicate the primary and secondary purpose of the

corporation and this will come handy on the importance of
stating the primary and secondary purpose of the corporation
will be appreciated later when it comes to the voting
requirements, in terms of investment of corporate funds to a
secondary purpose.

Now the place of principal office not As per se. And then
principal office may exact address, meaning to say a street
name. Barangay and the municipality where it is located or the
principal office is located when you say principal office, this is
the office, which is indicated in the articles of incorporation.

Do not confuse this term with the principal business or principal

place of business of the corporation.
By in class and principal office, this is the one which is
indicated in the articles of incorporation, but there are certain
corporations because of its economic expansion or it's a business
expansion. Although your principal office Nila is located in one
place. They have extended actually to another place. But the
question is, is the transfer of the principal business of the
corporation affect the principal office of the corporation?
The answer is no, the answer is no that principal office of the
corporation as stated in the articles will remain to be unaffected.

The place, which is indicated in the articles of incorporation will

remain, as its principal office. The fact that it may have moved
its business somewhere else, the therm of the corporation, which
will not be more than 50 under the old preparation code.
So for the sec to readily identify, if you have complied with
these requirements, then you have to state the names, the
citizenship, and the residences of the incorporators.
If a corporation is a stock corporation, then you have to state the
authorized or the amount of the authorized capital stock number
of shares.

The par value of stock corporations on the par value of each

share, if the value of share is stated that in the articles of
incorporation. The shares will be called as par value shares if not
it is no par value.

The name of the treasurer elected by the subscribers.

If the corporation engaged us in nationalized activity or industry
statement that no transfer of stock will be allowed. If you will
reduce the stock ownership or Filipinos or percentage below the
required legal minimum, you refer again to the 11 negative list,
to those businesses. Which are considered by law as a
nationalized activity. And therefore there are certain restrictions
when it comes to foreign ownership. It can be no foreign
ownership or 100% Philippine owned, just like a mass media or
it can be 25% allowed to be owned by the foreigners, depending
on the kind of the business activity.You just have to refer to the
11 negative list.

Now amendment of articles of incorporation I assure you that

you have to master the voting requirements under the
corporation code. The voting requirements under the corporation
code varies from the pipe of the matter being taken up.

So for the amendment of the articles of incorporation, the

required vote is majority vote of the board of directors and
the vote or written assent of the stock holders representing
at least two thirds of the outstanding capital stock. Take note
of the voting requirements.

Same goes with the non-stock corporation vote or written

assent of at least two thirds of the outstanding capital stack.

Now how do you amend an articles of incorporation No, you

have to submit to the sec, the the amended articles of
incorporation and you just have to highlight class, or you have to
underscore rather not underscore.

You have to underline the portion, which was actually changed

or amended in the articles of incorporation. That is how easy it
is.

When the sec is satisfied that the amendment should be allowed,

then the issue, the sec will issue a certificate of amended articles
of incorporation.

So when does the amendment take effect? It will take effect

upon approval by the sec. From the issuance of the certificate of
the filing of amended articles of incorporation or from the date
of the filing with the sec, if not acted upon within six months,
from the date of filing for a cost, not attributable to the court.

There are certain items which cannot be amended or replaced in

the articles of incorporation. Again, take note of these items,
which you cannot amend.
What are those?
The names of incorporators. You cannot amend the names of
the incorporators because it is an accomplished fact.

The issuance of the certificate of incorporation will give birth to

the corporation as a juridical entity.
Now a de facto corporation class is a corporation claiming in
good faith to be a corporation under the corporation code. Other
words, there is some defect requirements with the sec. Now it
falls short of the requirements of the law. It is result of an
attempt to incorporate under an existing law Coupled with the
exercise of corporate powers now a de facto corporation because
of an existing flaws in its incorporation, REMEDY is rule 66
QUO WARRANTO of the rules. It is only filed by the office of
the solicitor general.
We'll be a de facto corporation incurs the same obligation. And
have the same powers and rights as a corporation, unless
corporation is declared as such. It can incur obligation just like
a, the de jure or perfectly compliant corporation.

Memorize these four elements of the facto corporation.

1. valid law.
2. attempt that in good faith incorporate colorable compliance
3. assumption of corporate powers and
4. issuance of a certificate of incorporation

The Supreme court said that if you fail to file your bylaws on
time, a corporation can be considered as a corporation.

The bylaws under the corporation code can be filed within 30

days from that time of the issuance of the certificate of
incorporation OTHERWISE becomes defective, becomes a
corporation de facto or a de facto corporation. Now, if you fail
to file the bylaws within the prescribed period It does not not
ipso facto meaning the corps does not lose its powers.

If OSG does not file under rule 66 of the rules of court Then the
presumption is that corporation is a, the de jure corpo.

Partnership by estoppel
If a group of persons have misrepresented themselves to be
informing of a partnership, but in, and in fact there is no
registered partnership or there is no duly signed articles of
partnership. So that concept is also the same incorporation by
estoppel. Just take note that these persons who are shown to
act as a corporation, knowing it without authority to do so is
liable as general partners.

Third party who assumes an obligation to an ostensible

corporation cannot receive performance by alleging those
ostensible corporations, lack of personality.

So you have to compare between a de facto and a corporation by

Estoppel.

A de facto corporation exists in the law, but a corporation by

estoppel does not exist in the law.

A partnership by estoppel is not a partnership at all because, or

by reason of this misrepresent, the insurance, the partners, or the
supported partners are being held liable as general partners or as.
of a partnership by estoppel partnership as the exists only as a
concept for the purpose of fixing the liability of the purported
partnership, but there is no partnership created by estoppel only
for the purpose of fixing the liability of those who have
misrepresented themselves as partners. Same concept applies
under the law on corporation code a corporation by estoppel is
not a corporation. They are barred from denying their
misrepresentation that they are forming a corporation and
therefore they are liable as general.

Dealings among parties on a corporate basis is not required in a

de facto corporation. But it's required in a corporation by
estoppel.

The corporation has its own name. The corporation has a

personality separate and distinct from those of the stockholders
and the members. And it's not affected by the personal rights
obligations and transactions of the latter.

For example, the personal liability of the directors will not in

any way affect the liability of the corporation and vice versa,
the corporation can have the right to bring actions under this
name.

For example, ABC corporation versus X. because the

corporation has a separate jewelry, decal personality in the eyes
of the law a corporation is just like a human person with limited
powers under section 36.

Now the corporation can also acquire properties under its name
because again, the corporation has a personality separate and
distinct from the persons composing it.
Acquisition of jurisdiction
under rule 14, section 14, if I'm not mistaken, no rule 14.
Section 14 of the rules of court.

The court will acquire jurisdiction only upon compliance of the

service of someone's to the authorized or designated officers of
the corporation.

Right of Succession on its own. So as a general rule class and

corporation cannot commit a crime. a corporation may not be
punished under the advice or a revised penal code.

Now the exception to this general rule is that if the crime is

committed by the corporation, young director, or your corporate
officer or your precedent, employee or officer's responsible for
the offense.

For example,Falsification of public document the responsible

officer of the corporation is liable.

There is an exception to this general rule. If the crime is

committed by a corporation that the director responsible for
the offense or the director has actually signed a falsified
document can be imprisoned by the court.That is the
exception to the general rule. After the class, a corporation is
also liable criminally not if the penalty will involve the
imposition of a fine.
As a general rule corporation cannot ask damages, now in the
case of Filipinas broadcasting network versus algo medical and
educational centers.

The case, which the Supreme court and the issue in the Supreme
court is whether or not a corporation as an artificial being
can claim for the payment of moral damages.
Supreme court then defamation or libel a corporation can
recover moral damages under article 2 219 of the civil code
if It was a victim of defamation because it has reputation or
Goodwill.

The court is disregarding the separate personality of the

corporation from its members. Now this document means that
the court made this regard, the separate and distinct personality
of the corporation from its members and treat of the corporation
as a mere collection of individuals.

It is merely an equitable remedy and may be granted only in

case when the corporate fiction is used to the justify a wrong,
but tech fraud, defense wrong, or where the corporation is a
mirror alter ego or business conduit of a person.

Also not take note that the mere fact that the corporation owns
the shares of stock of another is not a sufficient reason justified
they're being treated as one entity.
no, except again, if the subsidiary is a mere instrumentality of
the parent corporation, these are the circumstances.
Justifying or rendering subsidiary as an instrumentality. And
therefore the court will Pierce the corporate veil. For example, if
the parent corporation owns all or most of the capital of the
subsidiary, the court can Pierce the corporate veil, meaning the,
say the court can treat the parent corporation and the subsidiary
corporation as one entity and therefore subject to liability.