Private Corporations

RA No 11232
Revised Corporation code of the Phil

Definition Corporation – Sec. 2

Attributes of Corporation:
 Artificial being
o Juridical person - Can acquire properties, incur obligations
o Doctrine of distinct and separate personality
(Doctrine of limited liability)
o Doctrine of piercing the veil of corporate entity – puwede arin managot yung
person of the corporation
 Separate personality is used to:
 Defeat public convenience
 Justify a wrong,
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 /
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 Cases of piercing the veil of corporate entity
 Fraud cases- when used to de fraud or unfairly defeat claims of 3 rd
person
o Ginagmit ng person of corporation ay ginagamit yung
assets of company to pay their liabilities
o Puwede singilin yung persons
 Alter ego cases- when the shareholders or members do not
respect the corporations separate legal personality. They will
invoke only the coporation’s legal personality when convenient to
them or facilities thei business objecting
o Assets of corporation is under the name of the person of
the corporations
o Puwede singilin yung persons
 Created by operation of law (Concession theory)
o (Concession theory) Only be formed by the grant of the state for it to be created
o Private Corps. Are created only under a general law which id the RCC. Sec. 4
o But GOCC can be created (Government owned and Controlled Corp.
o Having the rights of succession
o Powers attrinutes and properties are expressly authorized by law or incidental to
its existence
(Doctrine of limited capacity)
 Powers of Corporatin
 Express
 Implies
  Incidental
NOTE: Ultra veris act – beyond the powers above
o Classes of corporations – Sec. 3
 Stock vs. Non-stock
 Main distinction: authority to issue dividends (allowed: stock; not
allowed: nonstock)
 Special Corporations
 One person Corporations
 Educational Corporations
 Religious Corporations
o Corporation Sole
o Religious Corporation
 Aggregate Corp vs Corp Sole
o Many vs one
 Ecclesiastical vs. Lay
o Religious vs anything but religious
 Lay: Eleemosynary vs. Civil
o Charity vs. profit
 Domestic vs. Foreign
o Incorporated under Phil laws vs. not Phil laws
 De jure vs De facto
o Fact and in law vs. Fact but not in law
 Close vs. Open
o Limited people only vs. any
 Parent vs Subsidiary
o Main vs. controlled
 True vs Quasi-corp.
o From state vs. not from state
 Corp by prescription
 Exercise for long but the state didn’t deny
them
 Corp by estoppel
o Corporators vs. incorporators – Sec.5
 Members vs Original members and in articles of corporation
o Kinds of Shares - sec. 6~9
 Common shares
 Preferred shares – it may be deprived of a voting right
 Voting shares – right to vote
 Non-voting shares – AASIIIMD – not allowed to vote as a GENERAL RULE
 Par value shares
 Non-par value shares
 Founders’ shares
 Redeemable shares – doesn’t need unrestricted retained earnings
  Treasury shares - – doesn’t need unrestricted retained earnings
 Having the rights of succession
 Powers, attributes and properties are expressly authorized by law or incidental to its
existence

Number and Qualifications of Incorporators – Sec. 10

 Any – singly or jointly with others but not more than 15 except natural persons who are
licensed to practice a profession, and partnership or association organized for the purpose
of practicing a profession.
Corporate Term – Sec.11
o For newly established corporation
 Perpetual – general rule
o For existing corporation
 Majority of outstanding capital stock
o For expired corporation
 Puwede pa ma revive – perpetual term unless it wants a specific term
o For corporation with specific term
 Can be extended; by amendment of the articles of incorporation; there will
be a limitation – within 3 years of the expiry date
No minimum capital stock for the stock corporation – sec 12
Articles of incorporation – Sec. 13~16
 DEF: document drawn up by or on behalf of the incorporators of a proposed corporation for
approval by the SEC
 Form
 Contents
 Amendments = Maj ; 2/3
 Ground for disapproval

Corporate Name – Sec. 17 and 18

 Requirements:
o It can be distinguished from a name already reserved or registered
o Not protected by law
o Not contrary to law
 Commencement for corporate existence

De Facto Corp – Sec.19

 Requisites:
o Valid law upon which it may be incorporated
o Attempt in good faith to incorporate
o Assumption or exercise of corporate powers
 Corporation by estoppel – Sec.20
 Failure to formally organized and commence the transaction of business or construction of
work within 5 years from the date of incorporation – sec. 21
 Inoperative for a period of at least 5 consecutive years – sec. 21