ATRTRIBUTES OF CORPORATION
An analysis of the statutory definition of a
Revised Corporation Code of the PH
Republic Act 11232, or the Act Providing attributes:
for the Revised Corporation Code of the 1. A corporation is an artificial being
Philippines, was signed into law by
President Rodrigo R. Duterte on 21
February 2019. It amends a 38-year-old
Corporation Code in an effort to improve
the ease of doing business in the
Philippines.
SIGNIFICANT CHANGES:
●Removal of the minimum number of
incorporators.
●Removal of the fifty (50)-year corporate 2. Created by operation of law
term. This means that unless there is a
provision in the Articles of
Incorporation with regard to the term
of corporate existence, the corporation
will exist perpetually unless sooner
dissolved.
●Empowering the Securities and
Exchange Commission (SEC) to remove
disqualified members of the Board of
Directors or Trustees.
CORPORATION, defined
A 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. (Section 2 of RA
11232, otherwise known as the Revised
Corporation Code of the Philippines)
corporation reveals the following
Article 44(3) of the Civil Code
provides that, just like a partnership,
corporation has a legal personality
distinct and separate from the
persons and entities owning it. And as
such – it may acquire or dispose
properties, it may acquire or dispose
properties, incur or pay obligations,
sue and be sued.
A It means that private corporations
can only exist if the government,
through the Securities and Exchange
Commission, subject to clearances by
appropriate government agencies,
will approve its formation. Thus, its
existence cannot and will never be
dependent on the consent or
agreement of its incorporators.
3. With right of succession
It means that corporations will exist
for a period provided in its articles
and shall continue until its term
expres or dissolves earlier for some
causes or even extended in
accordance with the law. Hence, its
capacity of continuous existence
cannot be dissolved by the death,
incapacity, or insolvency of a member
or shareholder.
 4. Only has powers, attributes, and
properties expressly authorized by
law or incident to its existence
It means that a corporation has no
powers except for those which are
expressly conferred on it by the
Corporation Code, found in its
charter, and those that are implied by
or are incidental to its existence. It
exercises its powers through its Board
of Directors and/or its duly authorized
officers and agents
ULTRA VIRES DOCTRINE
Even if the act is lawful, moral and
not even contrary to public order or
policy, but such act is not within the
express, implied and incidental
powers of the corporations – such act
shall be void for being ultra vires.
CONCEPT OF SEPARATE PERSONALITY
The corporation’s obligations, incurred
through official acts of its representatives,
are its own. Therefore, a stockholder,
director, or representative does not
become a party to a contract just because
a corporation executed a contract through
that stockholder, director or
representative. Hence, a corporation’s
representatives are generally not bound
by the terms of the contract executed by
the corporation. They are not personally
liable for corporate obligations and
liabilities.
DOCTRINE OF PIERCING THE VEIL OF
CORRATE FICTION
Doctrine of piercing the veil of corporate
fiction states that while a corporation may
exist for any lawful purpose, the law will
regard it as a mere collection of individuals
or, in case of two corporations, merge
them into one, when the separate
corporate personality is used as a mere
cloak for fraud or illegality. The doctrine
applies only when such corporate
personality is used to defeat public
convenience, justify wrong, protect fraud,
or defend crime.
Effect: When corporate veil is pierced, the
separate legal personality of a corporation
may be disregarded. The corporation and
persons who are normally treated as
distinct from the corporation are treated
as one person.
THREE CASES OF PIERCING THE VEIL:
1. Fraud Cases – when a corporation is
used as a cloak to cover fraud, or to do
wrong;
2. Alter Ego Cases – when the corporate
entity is merely a farce since the
corporation is an alter ego, business
conduit or instrumentality of a person
or another corporation;
3. Equity cases – when piercing the
corporate fiction is necessary to
achieve justice or equity
REQUISITES
Piercing the veil of corporate fiction may
be allowed only if the following elements
concur:
(1) control — not mere stock control, but
complete domination — not only of
finances, but of policy and business
practice in respect to the transaction
attacked, must have been such that
the corporate entity as to this
transaction had at the time no
separate mind, will or existence of its
own;
(2) such control must have been used by
the defendant to commit a fraud or a
wrong to perpetuate the violation of
a statutory or other positive legal
duty, or a dishonest and an unjust act
in contravention of plaintiff's legal
right; and
(3) the said control and breach of duty
must have proximately caused the
injury or unjust loss complained of.
POWER TO CREATE A CORPORATION IS
LEGISLATIVE IN CHARACTER
It must be remembered that to organize a
corporation that could claim a juridical
personality of its own, is not a matter of
absolute right but a privilege which may
be enjoyed only under such terms as the
State may deemed necessary to impose.
In order words, before a corporation may
acquire juridical personality, the State must
give its consent either in the form of a special
law or a general enabling act, and the
procedure and conditions provided under the
law for the acquisition of such juridical
personality must be complied with.
CONSEQUENCES OF SEPARATE
PERSONALITY
Entitled to Due Process and Equal
Protection
The 14 amendment and so of the first
th
paragraph of theour Bill of Rights, are
universal in their application to all person
within the territorial jurisdiction, w/o
regard to any differences of race, color, or
nationality.  And certainly, the word
“persons” includes aliens and that private
corporations, likewise, are “persons”
within the scope of these guaranties. It
was further discussed that classifications
with the end view of providing diversity of
treatment may be made among
corporations, however – it must be based
on reasonable ground.  (Smith v.
Natividad)
Entitled to Unreasonable Searches and NOT ENTITLED to privilege against self
Seizures incrimination
Corporations are protected by the
constitutional guarantee against
unreasonable searches and seizures, but
that the officers of a corporation from OTHER CONSEQUENCES
which documents, papers and things were
seized have no cause of action to assail the ● The penalty of imprisonment cannot
legality of the seizures, regardless of the be imposed. However, the
amount of shares of stock or of the corporation may be dissolved for
interest of each of them in said violation of the provisions of the
corporation, and whatever the offices they Corporation Code.
hold therein may be, because the ● It can incur obligations and its
corporation has a personality distinct and obligations are not the obligations of
separate from those of said officers. The its stockholders, directors and
legality of a seizure can be contested only officers.
by the party whose rights have been ● It is liable for tort. It is liable when the
impaired thereby; and the objection to an act was committed by the officer or
unlawful search is purely personal and agent under express direction or
cannot be availed of by such officers of the authority from the stockholders or
corporation who interpose it for their members acting as a body or
personal interests. (Stonehill v. Diokno) generally from the directors as the
governing body
A corporation is but an association of ● It can claim for moral damages that
individuals under an assumed name and falls under item 7 of Article 2219 of
with a distinct legal entity. In organizing the Civil Code. This provision
itself as a collective body it waives no expressly authorizes the recovery of
constitutional immunities appropriate for moral damages in cases of libel,
such body. Its property cannot be taken slander or any other form of
without compensation; can only be defamation.
proceeded against by due process of law;
and is protected against unlawful
discrimination. (Bache & Co.)
PRACTICE OF PROFESSION
ARCHITECTURAL PROFESSIONAL
CORPORATION (RA9266)
Sec. 37. Limitation to the Registration of a
Firm, Company, Partnership, Corporation
or Association.
The practice of architecture is a
professional service, admission to which
shall be determined upon the basis of
individual personal qualifications.
However, a firm, company, partnership,
corporation or association may be
registered or licensed as such for the
practice of architecture under the
following conditions:
● Only Filipino citizens properly
registered and licensed as architects
under this Act may, among themselves,
or together with allied technical
professionals, form and obtain
registration as a firm, company,
partnership, association or corporation
for the practice of architecture;
● Registered and licensed architects shall
compose at least seventy-five percent
(75%) of the owners, shareholders,
members incorporators, directors,
executive officers, as the case may be;
● Individual members of such firm,
partnership association or corporation
shall be responsible for their individual
and collective acts as an entity and as
provided by law;
● Such firm, partnership, association or
corporation shall be registered with the
Securities and Exchange Commission
and Board
LIABILITY FOR TORTS No Criminal Suit can Lie Against a
A corporation is civilly liable in the same Corporation
manner as natural persons for torts, There is no provision in the law relating to
because generally speaking, the rules practice and procedure in criminal actions
governing the liability of a principal for a whereby a corporation, as such, may be
tort committed by an agent are the same proceeded against criminally and brought
whether the principal be a natural person into court. (West Coast v. Hurd)
or a corporation, and whether the servant
or agent be a natural or artificial person.
Following this, a corporation is liable
whenever a tortious act is committed by
an officer or agent under express direction
or authority from the stockholders or
members acting as a body, or, generally,
from the directors as the governing body.
(PNB v. CA)
CORPORATE CRIMINAL LIABILITY