The Revised Corporation Code

CORPORATION LAW
The Revised Corporation Code (Republic Act

No. 11232)
Atty. Julie Khristine C. Panganiban, CPA

SALIENT POINTS
OF RA NO.
OVERVIEW 11232
INTRODUCTION
LEARNING
OBJECTIVES
BR IEF HIS TORY DISCUSSION –

PA R T I
LEARNING OBJECTIVES
At the end of the Module, the students should be able to:
 Define a Corporation
 Identify and explain the attributes of a corporation
 Understand the principle of limited liability and the concept of legal entity
doctrine
 Identify and define the classes of corporations
 Familiarize with corporations created by special laws or charters
 Identify the Corporators and Incorporators, Stockholders and Members of a
corporation
 Familiarize with the classification of shares
BRIEF INTRODUCTION
In 2018, Congress passed Republic Act No. 11232

or the Revised Corporation Code of the
Philippines. This new law, which became effective
on February 23, 2019, replaced the old
Corporation Code, Batas Pambansa Blg. 68, which
took effect on May 1, 1980, and was the general
statute under which private corporations were
organized.
CORPORATION
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. (Sec. 2, RCC)
Note: Unless otherwise indicated, all sections of
law pertain to provisions of the RCC
ATTRIBUTES OF A
CORPORATION
ATTRIBUTES OF A CORPORATION
1. It is an artificial being
There are two kinds of persons under the
law - natural persons and artificial persons. A
corporation falls under the second kind. It has a
personality separate and distinct from the
stockholders or members and which commences
upon the issuance of its certificate of
incorporation.
Consequence of Having a Separate Personality
1. PROPERTY
It is entitled to own properties in its own name and its
properties are not the properties of its own stockholders,
directors and officers.
2. OBLIGATIONS
It can incur obligations and its obligations are not the obligations
of its stockholders, directors and officers.
3. RIGHTS
Rights belonging to the corporation cannot be invoked by the
SH, directors and officers even if the latter owns substantial
majority of the shares in that corporation and rights of SH,
directors and officers cannot be invoked by the corporation
Example:The constitutional rights of individuals against
unreasonable searches and seizure is persona to the SH. Likewise,
the tax exemption of the Corp cannot be used by its SH.
3. RIGHTS - CONSTITUTIONAL RIGHTS
Corporations are entitled to certain constitutional rights.
Example: Rights against unreasonable searches and seizure. It is considered a
person under the due process clause.
However, it is entitled to certain constitutional right not only because it

is artificial being but also because it s a mere creature of law.
Example : The right against self-incrimination particularly production of
corporate documents.
4. TORTS:
It is liable for tort. It is liable when the act was committed by officer or
agent under express directions or authority.
5. NATIONALITY
GR: Place of Incorporation Test
Exception:
i. Public Enemy- in times of war, nationality is determined by the
nationality of the controlling SH ( Control Test)
6. Investment Purposes: The Foreign Investment Act gives definition of
Philippine National.
 A Corp organized under the Phil laws of which 60% of the capital
stock outstanding and entitled to vote is owned and held by Filipino
Citizens.
 A corporation organized abroad and registered as doing business in
the Phils under the CCP of which 100% of the CS entitled to vote
belong to Filipinos.
DOCTRINE OF PIERCING THE VEIL OF CORPORATE
FICTION
This is the doctrine to the effect that the separate personality
of a corporation may be disregarded if such entity is used to defeat
public convenience, justify a wrong, protect fraud, or defend crime.
The doctrine that a corporation is a legal entity distinct from the

persons composing it. It is a theory introduced for the purposes of
convenience and to serve the end of justice. But when the veil of
corporate fiction is used as a shield to perpetuate fraud, to defeat public
convenience, justify wrong or defend a crime, this fiction shall be
disregarded and the individuals composing it will be treated identically.
This is a judicial function.

The Supreme Court summarized the application of piercing the corporate
veil in 3 areas:
a. Defeat public convenience as when the corporate fiction is used as a
vehicle for the evasion of existing obligation;
b. Fraud cases or when the corporate entity is used to justify a
wrong, protect fraud, or defend a crime; and
c. Alter ego cases, here a corporation is merely a farce since it is a
mere alter ego or business conduit of a person, or when the
corporation is so organized and controlled and its affairs are so
conducted as to make it an instrumentality, agency, conduit or adjunct
of another corporation.
Piercing the corporate veil based on the alter ego

theory requires the concurrence of three elements:
a) Control of the corporation by the stockholder or
parent corporation.
b) Fraud or fundamental unfairness imposed on the plaintiff;
and
c) Harm or damage caused to the plaintiff by the fraudulent
or unfair act of the corporation.
(G.R. No. 167530, Mar. 13, 2013)
2. It is created by operation of law.
A corporation does not come into existence by the

mere agreement of the parties. Persons desiring to
form a private corporation must comply with the
requirements of the law governing its creation.
3. It has the right of succession.

A corporation, as a rule, continue to exist for the
period for which it has been formed regardless of
the changes in the ownership of its stocks or in
its membership. Its existence is not affected by
the death, insolvency, or incapacity of
the individual stockholders or members.
4. It has the powers, attributes and

properties expressly authorized by law or
incident to its existence. (doctrine of limited
capacity)
No corporation shall possess or exercise any corporate
powers other than those conferred by this Code or
by its articles of incorporation and except such as are
necessary or incidental to the exercise of the powers
so conferred. (Sec. 44) The corporation’s capacity is
limited to such express, implied and incidental powers.
SIMILARITIES BETWEEN CORPORATION
AND A PARTNERSHIP
1. Both have a separate juridical personality.
2. Both are artificial persons, i.e. they have no
bodily existence, and can only act through agents.
3. Both are composed of a group of persons with the
exception of a corporation sole.
4. A partnership, except a general professional
partnership, is taxed as a corporation.
DISTINCTION BETWEEN
CORPORATION AND A PARTNERSHIP
1. Manner of creation
A corporation is created by operation of law, while a
partnership is created by mere agreement of the partners.
(Sec. 19, Art. 1767)
2. Number of organizers
A corporation is formed by 1 or more persons,
partnership, association or corporation singly or jointly
with others but not more than 15 in number. A partnership
may be formed by two or more persons.
DISTINCTION BETWEEN
3. Right of succession
A corporation has the right of succession, while a partnership
has no such right. (Sec. 2, Art. 1828)
4. Powers
A corporation can exercise only the powers expressly
authorized by law or incidents to its existence. A partnership
may exercise any power provided it is authorized by the
partners and it is not contrary to law, morals, good
customs, public order or public policy. (Sec. 2, Art. 1306)
DISTINCTION BETWEEN
5. Management
A corporation acts through its board of directors, while a
partnership acts through all the general partners each one of
whom is considered an agent of the partnership unless
otherwise agreed. (Sec. 23, Art. 1816)
6. Liability of members for debts
The stockholders or members are not liable for the
obligations of a corporation, while the general partners in
partnership are liable with their separate assets for partnership
debts. (Sec. 1, Art. 1816)
DISTINCTION BETWEEN
7. Commencement of existence
A corporation commences to have juridical
personality on the date if the issuance of its certificate
of incorporation. A partnership, on the other hand,
commences to have juridical personality upon the
execution of the partnership contract unless a different
date is agreed upon by the partners. (Sec. 19, Art. 1784)
DISTINCTION BETWEEN
8. Transferability of interest
In a corporation, a stockholder can transfer his shares
to another person without the consent of the other
stockholders. In a partnership, a partner cannot
transfer his interest to a third person without the
consent of the other partners (Sec. 60, Art. 1813) by
reason of the element of delectus personae which is
inherent in a partnership contract.
CLASSES OF
CORPORATION
CLASSES OF CORPORATION
As to whether shares of stock are issued or not

1. Stock Corporation – One that has capital stock divided into
shares and is authorized to distribute dividends or
allotments of the surplus profits on the basis of shares held.
(Sec. 3)
2. Non-stock Corp – One in which no part of the income
is distributable as dividends to its members, trustees
or officers. (Sec. 87)
As to the state or country under whose laws it was

created
1. Domestic corporation – one incorporated under
Philippine laws.
2. Foreign corporation – one formed, organized and
existing under any laws other than those of the
Philippines and whose laws allow Filipino citizens and
corporations to do business in its own country.
Tests to determine nationality of a Corporation:

a. INCORPORATION TEST
- The nationality of a corporation follows that of the country
under whose laws it was incorporated.
b. CONTROL TEST
- The nationality of a corporation follows that of the
stockholders owning the controlling interest.

Note: The Securities Exchange Commission
explained that in the implementing rules of the Foreign
Investment Act. (R.A. 7042) of a Philippine National, the
control test shall be applied for purposes of entitlement to
certain financial privileges. The Grandfather Rule will
be applied only if there are questions about
compliance with Filipino ownership requirements.
Grandfather Rule
This is a method by which the percentage of Filipino
equity in corporations engaged in nationalized and/or
partly nationalized areas of activities, provided for under
the Constitution and other nationalization laws, is accurately
computed, and the diminution of said equity prevented.
The presence of corporate stockholders with alien
stockholding would as a result diminish effective control of
Filipinos, if this is not applied.
As to whether its purpose is public or private

1. Public corporation – one that is organized
for the government or a portion of the State, like
provinces, cities, municipalities and
barangays.
2. Private corporation – one that is formed for
private purpose or end, like Jollibee Foods Corp.
As to whether its purpose is public or private
3. Government-owned or controlled corporations – these refer
to corporations created under a special law (Sec. 4) other
than those for the government of a portion of the State, and
those formed under Corporation Code where the
government owns at least a majority of its outstanding
voting capital stock. They may be performing
governmental or proprietary function.
4. Quasi-public corporations – those organized for profit which
are granted a franchise by the State to perform public
service, such as Meralco.
As to whether its purpose is religious or not

1. Ecclesiastical corporation – one that is formed for
a religious purpose.
2. Lay corporation – one that is formed for purpose
other than ecclesiastical or religious.
As to whether its purpose is charitable or not

1. Eleemosynary corporations – one that is
organized for public charity.
2. Civil corporation – one that is organized for
business profit.
As to their legal right to corporate existence
1. De jure – One that has been created in strict compliance
with all the legal requirements and whose right to
exist as a corporation cannot be successfully
attacked in a direct proceeding for that purpose by the
State.
2. De facto – One that is defectively created but there is an
exercise of corporate rights and franchise resulting from
an attempt in good faith to incorporate on the part of its
members. It has all the powers of a de jure corporation bit its
due existence can be attacked directly in a qou warranto
proceeding. Its due existence cannot be attacked collaterally
or as an incident to a proceeding.
For a de facto corporation to exist, the following

conditions must be present:
1. There must be valid law under which it is
incorporated.
2. There must be an attempt in good faith to incorporate
3. There must be an actualexercise of corporate powers
4. A certificate of incorporation is issued despite a
defect in its incorporation.
Some defects that will result in the creation of a de facto
corporation:
1. When majority of the incorporators are not residents of the
Philippines;
2. When the name of the corporation is similar to that of an
existing corporation or one that is protected by law; or
3. When the acknowledgement is defective.
*However, the following will preclude even the existence of

a de facto corporation: a) absence of articles of incorporation;
and b) failure to file the articles of incorporation.
Question:
A corporation was created by a special law. Later, the law
creating it was declared invalid. May such corporation claim to
be a de facto corporation?
Answer:
NO. The corporation is not a de facto corporation because the
requisites are absent.There is no valid law under which it was
organized and there would be no continuity of good faith.
As to their relation to another corporation/s

1. Parent or holding corporation – one which owns the
shares of another corporation and having the power,
directly or indirectly over the latter including the
election of the directors thereof.
2. Subsidiary corporation – one whose shares of stock
are owned by another corporation, called the parent
corporation, which has the power to elect its
directors.
As to whether its shares may be held by the public

or not
1. Close corporation – one whose shares are limited
to a few and restricted as to their transfer, and not
listed in any stock exchange.
2. Open corporation – One whose shares are open
to the public such as those whose shares are
listed in the stock exchanges.
Other classifications
1. Corporation by prescription – One which has
exercised corporate for such a length of time
without interference by the State, and which, by
fiction of law, is given the status of a corporation.
2. Corporation by estoppel – One which is in
reality not a corporation but is considered as
one with respect to those who are precluded by
their admission or conduct from denying its
existence.
Corporation by estoppel – Liability of persons assuming to
act as a corporation and those dealing with it (Sec. 21)
1. All persons who assume to act as a corporation knowing it
to be without authority to do shall be liable as general
partners for all debts, liabilities and damages incurred
arising as result thereof.
When any such ostensible corporation is sued on any
transaction entered by it as a corporation or on tort
committed by it as such, it shall not be allowed to use as a
defense its lack of corporate personality.
2. Any person who assumes an obligation to an ostensible
corporation as such, cannot resist performance thereof on the
ground that there was in fact no corporation.
COMPONENTS OF A
CORPORATION
COMPONENTS OF A CORPORATION
1. Corporators are those who compose a corporation,
whether as stockholders or shareholders in a stock
corporation or as a members in a nonstock
corporations.
2. Incorporators are those stockholders or members
mentioned in the articles of incorporation as originally
forming and composing the corporation and who are
signatories thereof. Under the RCC, corporations
and other juridical persons can now be
incorporators.
3. Stockholders – the corporators of a stock

corporation.
4. Members – the corporators of a non-stock
corporation.
Note: One’s name may be mentioned in the articles of
the corporation as a subscriber or member, but if he is
not a signatory thereto, he is a mere stockholder
or member, not an incorporator.
PROMOTER
A promoter is a person, natural or juridical who usually
discovers a prospective business and brings persons
interested to invest in it through the formation of a corporation.
Although the law does not require the services of a promoter
as a precondition to incorporation, a promoter facilitates the
creation of the corporation by negotiating contracts for its
initial operations including subscriptions to its
capital stock, incorporating the business, and helping
management start operations.
Promoters Liability on Contracts

A promoter is personally liable for contracts
made for the benefit of the proposed corporation.
If the incorporation of the corporation does not
materialize, the promoter remains personally liable.
If the corporation is formed, he remains liable until
the corporation ratifies or adopts such contracts, or
releases him from liability. The third person must also
agree to absolve him from liability.
CLASSES OF STOCKS
CAPITAL STOCKS
1. Authorized capital stock – this is the total amount of shares which a
corporation is allowed to issue if the shares have a par value. If the
shares do not have par value, the corporation does not have an
authorized capital stock but it has an authorized number of shares
which it may issue. Once issued, the corporation shall have a capital
stock but not an authorized capital stock.
2. Subscribed capital stock – this is the part of capital stock which is
subscribed, whether paid or unpaid.
3. Outstanding capital stock – this refers to the total shares of stock
issued to subscribers or stockholders, whether or not fully or partially paid
(as long as there is a binding subscription agreement), except treasury
shares. (Sec. 137)
CAPITAL STOCKS
4. Paid up capital stock – the part of the subscribed

capital stock and paid to the corporation.
5. Unissued capital stock – that part of the capital
stock which is not issued or subscribed.
LEGAL CAPITAL
It refers to the total par value of all issued par value shares or the
total cash or consideration received for all issued no par value shares.
STATED CAPITAL
It refers to the capital with which a corporation whose shares are
without par value commences its business and increased or diminished by
subsequent capital transactions.
CAPITAL
It refers to actual property of the corporation in money and
property
SHARE OF STOCK
A share of stock is one of the units into which the

capital stock of the corporation is divided. It
represents the intangible interest or right
which an owner has in the management, profits
and assets of the corporation. It is property,
subject to conversion.
STOCK CERTIFICATE
A stock certificate is the written acknowledgement

by the corporation of the stockholder’s
interest in the corporation and its property.
SHARE OF STOCK vs STOCK
CERTIFICATE
1. Share of stock represents the rights and interest of a stockholder in
the corporation. Stock certificate is the written evidence of such
right.
2. Share of stock is intangible personal property, while Stock
Certificate is tangible personal property.
3. Share of stock may be issued even if not fully paid, Except
shares without par value which are deemed fully paid and non-
assessable upon issuance. Stock certificate, as a rule, is issued only
upon the subscription is fully paid.
CLASSES OF SHARES OF STOCK
The classification of shares, their corresponding

rights, privileges, restrictions, and their stated par
value, if any, must be indicated in the articles of
incorporations.
Each share shall be equal in all respects to every

other share, except as otherwise provided in the
articles of incorporation and in the certificate of
stock.
1. Common stock – the ordinary stock of a corporation which entitles the
holder to a pro rata division of the dividends, without any preference or
advantage over any other stockholders.
2. Preferred Stock – one which entitles the holder to certain
preferences over other shareholders.
3. Par value stock – one the nominal value of which appears on the
stock certificate.
4. No par value stock – one without any nominal or par value appearing
on the stock certificate.
5. Redeemable shares – those which grant the issuing corporation the
power to redeem or purchase them after a certain period.
6. Founder’s shares – those that grant to the founders certain rights
and privileges not enjoyed by other shares.
7. Treasury shares – those which have been issued and fully

paid for, but subsequently required by the issuing
corporation by purchase, redemption, donation or
through some other lawful means. (Sec. 9)
8. Watered stock – those issued without consideration
or with no adequate consideration.
9. Voting shares – those entitled to vote in the meetings
of the corporation.
10.Non-voting shares – those without voting rights,
except in certain cases.
Preferred Shares’ Preferences

1. Preferred stocks as to asset – one which entitle the
holder to preference in the distribution of assets
common stock upon the liquidation of the
corporation
2. Preferred stocks as to dividends – One that
entitles the holder to preference in the distribution
of dividends over common stock.
Preferred Stocks as to Dividends:
1. Cumulative preferred stock – those which entitle the holder to
payment not only of current dividends but also those in arrears,
when dividends are declared, to the extent stipulated, before holders
of common shares are paid.
2. Non-cumulative preferred stock – those which entitle the holder
to payment of current dividends but not those arrears before holders
of common shares are paid.
3. Participating preferred stock – those which entitle the holder to
participate with the holders of common shares in the surplus profits
after the amount stipulated has been paid to the holders of
preferred shares.
4. Non-participating preferred stock – those which entitle the holders only
to the stipulated preferred dividend.
Rules on redeemable shares:
1. They may be issued by the corporation only of expressly
provided in the articles of incorporation. (Sec. 8)
2. They may be deprived of voting rights. (Sec. 6)
3. They may be purchased or taken or taken up by the
corporation upon the expiration of a fixed period, regardless
of the existence of unrestricted retained earnings in the
books of the corporation
4. The terms and conditions for their redemption
must be stated in the articles of incorporation and the
stock certificate representing the said shares. (Sec. 8)
Rules on founders’ shares:
1. Founders’ share must be classified as such in the articles of
incorporation.
2. They may be given rights and privileges not enjoyed by other
shares subject to the ff. limitations:
i. If the exclusive right to vote and be voted for in the election of
directors is granted, it must be for a limited period not
exceeding 5 years subject to the approval of the SEC.
ii. The five-year period begins from the date of the said approval.
(Sec. 7)
iii. Except if it violates “Anti-Dummy Law”; and “Foreign
Investments Act of 1991”; and other pertinent laws.
Badges of Dummy Status:

1. The foreign investor provides for all the funds for the
joint investment undertaken by a Filipino;
2. The foreign investor undertakes to provide practically
all the technological support for the joint venture
3. The foreign investor while being a minority SH, manage
the company and prepare all economic viability studies
4. FIA provides for the list of businesses where the foreign
ownership is prohibited or limited.
Rules on treasury shares:

1. They shall not have voting rights as long as they remain
in the Treasury. (Sec. 57)
2. Although they are part of thesubscribed stock, they
are not considered outstanding shares. (Sec. 137)
3. Being owned by the corporation, they are not entitled to
dividends.
4. They may again be disposed of for a reasonable price fixed by
the board of directors. (Sec. 9)
INCORPORATION AND
ORGANIZATION OF
PRIVATE CORPORATIONS
NUMBER AND QUALIFICATIONS OF
INCORPORATORS
 Any person, partnership, association or corporation, singly or jointly
with others but not more than fifteen (15) in number.
 Natural persons who are licensed to practice a profession, and
partnerships or associations organized for the purpose of
practicing a profession, shall not be allowed to organize as a
corporation unless otherwise provided under special laws.
 Incorporators who are natural persons must be of legal age.
 Each incorporator of a stock corporation must own or be a
subscriber to at least one (1) share of the capital stock.
 A corporation with a single stockholder is considered a One
Person Corporation as described in Title XIII, Chapter III of this
Code.
INCORPORATORS
Can all the stockholders in a corporation be foreigners?
Ans:
Yes, except in fully or partly nationalized corporations.
 Republic Act (RA) No. 11659 or "An Act Amending
Commonwealth Act No. 146 otherwise known as the
Public Service Act” as amended was signed by the President
on 21 March 2022. This measure allows up to 100% foreign
ownership of public services in the country.
INCORPORATORS
Where no foreigners are allowed:
 Mass Media, except recording
 Retail Trade enterprises with paid-up of less than US$2.5M
except restaurant within a hotel
 Private Security Agencies
 Small-scale mining
 Utilization of Natural Resources
 Cockpits
 Manufacture, repair, stockpiling and/or distribution of nuclear
weapons
CORPORATE TERM
 A corporation shall have perpetual existence unless its
articles of incorporation provides otherwise.
 Corporations with certificates of incorporation issued prior to
the effectivity of the Revised Code and which continue to exist
shall have perpetual existence, unless the corporation, upon a
vote of its stockholders representing a majority of its articles
of incorporation:
 Any change in the corporate right of dissenting stockholders
shall be in accordance with the provisions of this Code.
CORPORATE TERM
A corporate term for a specific period may be extended or
shortened by amending the articles of incorporation:
 No extension may be made earlier than three (3) years prior
to the original or subsequent expiry date(s) unless there are
justifiable reasons for an earlier extension as may be
determined by the Commission
 Such extension of the corporate term shall take effect only on
the day following the original or subsequent expiry date(s).
CORPORATE TERM
A corporation whose term has expired may apply for revival of
its corporate existence, together with all the rights and privileges
under its certificate of incorporation and subject to all of its
duties, debts and liabilities existing prior to its revival.
Upon approval by the Commission, the corporation shall be

deemed revived and a certificate of revival of corporate
existence shall be issued, giving it perpetual existence, unless its
application for revival provides otherwise.
CORPORATE TERM
No application for revival of certificate of incorporation of
banks, banking and quasi-banking institutions, preneed,
insurance and trust companies, non-stock savings and loan
associations (NSSLAs), pawnshops, corporations engaged in
money service business, and other financial intermediaries
shall be approved by the Commission unless accompanied
by a favorable recommendation of the appropriate
government agency
MINIMUM CAPITAL STOCK
Stock corporations shall not be required to

have minimum capital stock, except as
otherwise specially provided by special law.
WHAT SHOULD BE FILED WITH SEC?
1. Reservation of the Corporate Name

2. AOI and By-Laws. The BL can be filed as per Sec. 45
3. Certificate of Authority or Favorable
Recommendation from proper government agencies
as required under Sec. 16
CONTENTS OF THE ARTICLES OF
INCORPORATION
(a) The name of corporation;
(b) The specific purpose or purposes
(c) The place where the principal office
(d) The term for which the corporation is to exist, if the corporation has not elected perpetual
existence;
(e) The names, nationalities, and residence addresses of the incorporators;
(f) The number of directors or trustees which may be more than fifteen (15);
(g) The names, nationalities, and residence addresses of directors or trustees
(h) In stock ,, the amount of its ACS, number of shares into which it is divided, the par value of
each, names, nationalities, and subscribers, amount subscribed and paid by each on the subscription,
and a statement that some or all of the shares are without par value, if applicable;
(i) If it be a nonstock corporation, the amount of its capital, the names, nationalities, and residence
addresses of the contributors, and amount contributed by each; and
(j) Such other matters consistent with law and which the incorporators may deem necessary and
convenient.
AMENDMENT OF ARTICLES OF
INCORPORATION
A majority vote of the board and
 at least two-thirds (2/3) of the OCS,
 without prejudice to the appraisal right of dissenting
stockholders in accordance with the provisions of this
Code.
 The AOI of a nonstock corporation may be amended by
the vote or written assent of majority of the trustees
and at least two-thirds (2/3) of the members.
GROUNDS WHEN AOI MAY BE
DISAPPROVED
 The AOI or any amendment thereto is not substantially
in accordance with the form prescribed herein;
 The purpose(s) of the corporation are patently
unconstitutional, illegal, immoral or contrary to
government rules and regulations;
 The certification concerning the amount of capital stock
subscribed and/or paid is false; and
 The required % of Filipino ownership of the CS has not
been complied with.
CORPORATION NAME
Corporate name shall not be allowed by the Commission if:

1. It is not distinguishable from that already reserved or
2. Registered for the use of another corporation, or
3. If such name is already protected by law, rules and
regulations.
CORPORATION NAME
A name is not distinguishable even if it contains one or more
of the following:
1. The word "corporation", "company", incorporated",
"limited", "limited liability", or an abbreviation of one if
such words; and
2. Punctuations, articles, conjunctions, contractions,
prepositions, abbreviations, different tenses, spacing, or
number of the same word or phrase.
RE G IS T R ATIO N , IN C O R P O R AT IO N
A N D C O M M E N C E M E N T OF
CORP O R AT IO N EXIS T E N C E
• A person or group of persons desiring to incorporate shall submit the intended corporate name
to the Commission for verification.
• If the Commission finds that the name is distinguishable from a name already reserved or
registered for the use of another corporation, not protected by law and is not contrary to law,
rules and regulation, the name shall be reserved in favor of the incorporators.
• The incorporators shall then submit their articles of incorporation and bylaws to the
Commission.
• If the Commission finds that the submitted documents and information are fully
compliant with the requirements of this Code, other relevant laws, rules and regulations,
the Commission shall issue the certificate of incorporation.
• A private corporation organized under this Code commences its corporate existence and
juridical personality from the date the Commission issues the certificate of incorporation
EF F E C T S O F N ON -US E O F CO RP O R AT E
CH A RT E R A N D CO N T IN U O U S
IN O P E R AT IO N
• If a corporation does not formally organize and commence its
business within five (5) year from the date of its incorporation, its
certificate of incorporation shall be deemed revoked as of the day
following the end of the five (5)-year period.
• However, if a corporation has commence its business but subsequently
becomes inoperative for a period of at least five (5) consecutive years,
the Commission may, after due notice and hearing, place the
corporation under delinquent status.
EF F E C T S O F N ON -US E O F CO RP O R AT E
CH A RT E R A N D CO N T IN U O U S
IN O P E R AT IO N
• A delinquent corporation shall have a period of two (2) years to
resume operations and comply with all requirements that the
Commission shall prescribed. Upon the compliance by the
corporation, the Commission shall issue an order lifting the
delinquent status.
• Failure to comply shall cause the revocation of the corporation's
certificate of incorporation.
• The Commission shall give reasonable notice to, and coordinate
with the appropriate regulatory agency prior to the suspension or
revocation of the certificate of incorporation of companies under
their special regulatory jurisdiction.
-END-

The Revised Corporation Code

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The Revised Corporation Code

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CORPORATION LAW

The Revised Corporation Code (Republic Act

Atty. Julie Khristine C. Panganiban, CPA

BR IEF HIS TORY DISCUSSION –

In 2018, Congress passed Republic Act No. 11232

A corporation is an artificial being created by

However, it is entitled to certain constitutional right not only because it

The doctrine that a corporation is a legal entity distinct from the

This is a judicial function.

Piercing the corporate veil based on the alter ego

2. It is created by operation of law.

A corporation does not come into existence by the

3. It has the right of succession.

4. It has the powers, attributes and

As to whether shares of stock are issued or not

As to the state or country under whose laws it was

Tests to determine nationality of a Corporation:

Tests to determine nationality of a Corporation:

As to whether its purpose is public or private

As to whether its purpose is religious or not

As to whether its purpose is charitable or not

For a de facto corporation to exist, the following

*However, the following will preclude even the existence of

As to their relation to another corporation/s

As to whether its shares may be held by the public

3. Stockholders – the corporators of a stock

Promoters Liability on Contracts

4. Paid up capital stock – the part of the subscribed

A share of stock is one of the units into which the

A stock certificate is the written acknowledgement

The classification of shares, their corresponding

Each share shall be equal in all respects to every

7. Treasury shares – those which have been issued and fully

Preferred Shares’ Preferences

Badges of Dummy Status:

Rules on treasury shares:

Upon approval by the Commission, the corporation shall be

Stock corporations shall not be required to

1. Reservation of the Corporate Name

Corporate name shall not be allowed by the Commission if:

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