COURSE OUTLINE

CORPORATION LAW

A. INTRODUCTION

1. Legislative and historical background of Philippine Corporate Law

B. DEFINITION AND ATTRIBUTES OF A CORPORATION

1. Statutory definition (Sec. 2)

2. Attributes

2.1. Artificial being

2.1.1 Doctrine of corporate entity (separate personality)

Cases: Stradcom Corporation v. Orpilla, G.R. No. 206800, July 2, 2018
Bustos v. Millians Shoe, Inc., G.R. No. 185024, April 4, 2017
Secosa, et al. v. Heirs of Erwin Suarez Francisco, G.R. No.
160039, June 29, 2004, 433 SCRA 273
PNB v. Aznar, G.R. No. 171805, May 30, 2011

2.1.1.1 Nationality

a. Incorporation test
b. Control test [Sec. 3(a), RA 7042, as amended]
c. Grandfather rule (less than 60% Filipino ownership)

Cases: Roy III v. Herbosa, et al., G.R. No. 207246, November

22, 2016
Gamboa v. Teves, G.R. No. 176579, June 28, 2011 and
October 9, 2012; See SEC Memorandum Circular
No. 8, s. 2013
Narra Nickel Mining and Development Corp. v.
Redmont Consolidated Mines Corp., G.R. No.
195580 April 21, 2014 and January 28, 2015

2.1.1.2 Constitutional rights

Cases: Bache & Co, Inc. v. Ruiz, G.R. No. L-32409, February
27, 1971
Stonehill v. Diokno, 20 SCRA 383 (1967)
Bataan Shipyard & Engineering Co. v. PCGG, G.R. No.
L-75885, May 27, 1987, 150 SCRA 181

2.1.1.3 Civil and criminal liability

Cases: Professional Services, Inc. v. Court of Appeals, G.R. No.
126297, February 11, 2008

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 Child Learning Center, Inc. v. Tagario, G.R. No.
150920, November 25, 2005
Espiritu Jr. v. Petron Corporation, G.R. No. 170891,
November 24, 2009
Gosiaco v. Ching, G.R. No. 173807, April 16, 2009
Ching v. Secretary of Justice, G.R. No. 164317,
February 6, 2006, 481 SCRA 626

2.1.1.4 Recovery of moral damages

Cases: Noelle Whessoe, Inc. v. Independent Testing Consultants,
Inc. G.R. No. 199851, November 7, 2018
Pen Development Corporation v. Martinez Leyba, Inc.,
G.R. No. 211845, August 9, 2017
Filipinas Broadcasting Network v. Ago Medical and
Educational Center, G.R. No. 141994, January 17,
2005, 448 SCRA 413
Manila Electric Co. v. TEAM Corporation, G.R. No.
131723, December 13, 2007, 540 SCRA 62
Crystal v. Bank of PI, G.R. No. 172428, November 28,
2008
UP v. Dizon, G.R. No. 171182, August 23, 2012
Jardine Davies v. CA, 333 SCRA 684

2.1.1.5 Practice of profession

A corporation cannot engage in the practice of a profession

Exception: RA No. 9266

Cases: Samahan ng Optometrists v. Acebedo International

Corp., 270 SCRA 298 (1997)
Alfafara v. Acebedo Optical Company, 381 SCRA 293
(2002)

2.1.2 Doctrine of piercing the veil of corporate fiction

2.1.2.1 Defeat public convenience

Sarona v. NLRC, et al., G.R. No. 185280, January 18, 2012

Enriquez Security Services, Inc. v. Cabotaje, G.R. No. 147993,
July 21, 2006, 496 SCRA 169

2.1.2.2 Fraud cases

Umali v. Court of Appeals, G.R. No. 89561, September 13, 1990
Mendoza and Yotoko v. Banco Real Development Bank, G.R. No.
140923, September 16, 2005

2.1.2.3 Alter ego cases

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 ABS-CBN Broadcasting Corporation v. Hilario, G.R. 193136,
July 10, 2019
International Academy of Management and Economic v. Litton
and Company, Inc., G.R. No. 191525, December 13, 2017
Zambrano, et al. v. Phil. Carpet Manufacturing Corporation, et
al., G.R. No. 224099, June 21, 2017
Maricalum Mining Corporation v. Florentino, et al., G.R. No.
221813, July 23, 2018
Heirs of Pajarillo v. Court of Appeals, G.R. Nos. 150056-57,
October 19, 2007
Tomas Lao Construction v. NLRC, G.R. No. 116781, September
5, 1997
Concept Builders, Inc. v. NLRC, G.R. No. 108734, May 29, 1996,
257 SCRA 149

2.1.2.4 Other cases

Francisco Motors v. Court of Appeals, G.R. No. 100812, June 25,
1999, 309 SCRA 72
Wensha Spa Center, Inc. v. Yung, G.R. No. 185122, August 16,
2010
Zaragoza v. Tan, G.R. No. 225544, December 4, 2017

2.2. Created by operation of law

2.2.1 Created by special law (Sec. 4)

Cases: Light Rail Transit Authority v. Quezon City, G.R. No. 221626,
October 9, 2019
Republic v. City of Parañaque, G.R. No. 191109, July 18, 2012
Boy Scouts of the Philippines v, COA, G.R. No. 177131, June 7,
2011
Veterans Federation of the Phils. V. Reyes, G.R. No. 155027,
February 28, 2006, 482 SCRA 526
Liban v. Gordon, G.R. No. 175352, January 18, 2011
Feliciano v. COA, G.R. No. 147402, January 14, 2004

2.2.2 Created under a general law (See Sec. 16, Article XII of the 1987
Constitution)

2.3. Right of succession

Case: SME Bank, Inc. v. De Guzman, G.R. Nos. 184517 and 186641, October 8,
2013.

2.4. Possess powers, attributes, and properties

2.4.1 Theory of special capacities

2.4.2 Theory of general capacities

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C. CLASSIFICATION AND CREATION OF CORPORATIONS

1. Stock and non-stock (Sec. 3)

1.1 Corporators, incorporators, stockholders, members (Sec. 5)

1.1.1 Number and qualification of incorporators (Sec. 10)

1.2 Classes of shares (Secs. 6, 7, 8, and 9)

Cases: Castillo v. Balinghasay, G.R. No. 150976, October 18, 2004

BCDA v. Commissioner of Internal Revenue, G.R. No. 205925, June 20, 2018

2. Public and private

3. De jure, de facto, and corporation by estoppel (Secs. 19 and 20)

Cases: Missionary Sisters of Our Lady of Fatima v. Alzona, G.R. No. 224307, August 6,
2018
Sawadjaan v. Court of Appeals, 459 SCRA 516 (2005)
Lim v. Philippine Fishing Gear Industries, Inc., G.R. No. 136448, November 3,
1999

4. Domestic and foreign

5. Parent, subsidiary, and affiliate

D. INCORPORATION AND ORGANIZATION OF A PRIVATE CORPORATION

1. Documentary requirements

1.1 Name verification

1.2 Contents and form of the Articles of Incorporation (Secs. 13 and 14)

1.2.1 Corporate name (Sec. 17)

Cases: De La Salle Montessori International of Malolos, Inc. v. De La Salle
Brothers, Inc. et al., G.R. No. 205548, February 7, 2018
L.C. Big Mak Burger, Inc. v. McDonald’s Corporation, G.R. No.
233073, February 14, 2018
Indian Chamber of Commerce Phils., Inc. v. Filipino Chamber of
Commerce in the Phil;ippines, G.R. No. 184008, August 3, 2016
GSIS Family Bank v. BPI Family Bank, G.R. No. 175278, September
23, 2015
Universal Mills Corporation v. Universal Textile Mills, Inc., 78
SCRA 62 (1977)
Ang Mga Kaanib sa Iglesia ng Diyos Kay Kristo Jesus, H.S.K., sa
Bansang Pilipinas, Inc. v. Iglesia ng Diyos Kay Cristo Jesus,
Haligi at Suhay sa Katotohanan, 372 SCRA 171 (2001)

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 Industrial Refractories Corporation of the Phils. V. Court of
Appeals, 390 SCRA 352 (2002)
Philips Export B.V. v. Court of Appeals, G.R. No. 96161, February
21, 1992

1.2.1.1 Doctrine of secondary meaning

Case: Lyceum of the Philippines, Inc., v. Court of Appeals, 219
SCRA 610 (1993)

1.2.2 Purpose clause

Case: Gala, et al. v. Ellice Agro-Industrial Corp., et al., G.R. No. 156819,
December 11, 2003, 418 SCRA 431

1.2.3 Principal office

Case: Young Auto Supply v. CA, G.R. No. 104175, June 25, 1993

1.2.4 Term of existence (Sec. 11)

1.2.5 Incorporators (Sec. 10)

Case: Care Best International, Inc. v. SEC, G.R. No. 215510, March 6, 2015

1.2.6 Directors/Trustees
1.2.7 Authorized capital stock/capital (Sec. 12)
1.2.8 Subscribed and Paid-up capital
Cases: Lanuza, et al. v. Court of Appeals, G.R. No. 131394, March 28, 2005
Halley v. Printwell, Inc., G.R. No. 157549, May 30, 2011
Jennifer M. Enano-Bote, et al. v. Jose Ch. Alvarez, et al., G.R. No.
223572, November 10, 2020

1.2.9 Arbitration agreement

1.2.10 Undertaking to change corporate name
1.2.11 Undertaking not to transfer stock or interest (for business reserved for
Filipinos)
1.2.12 Other matters

2. Amendment of articles of incorporation (Sec. 15)

Case: United Church of Christ in the Phils., Inc. v. Bradford United Church of Christ, Inc.,
et al., G.R. No. 171905, June 20, 2012

3. Grounds for disapproval of the articles of incorporation or its amendment/s

(Sec. 16)

Case: Company Registration and Monitoring Department v. Ching Bee Trading

Corporation, G.R. No. 205291, November 12, 2014

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 4. Registration, incorporation, and commencement of corporate existence (Sec. 18)
5. Non-use of corporate charter, continuous in-operation (Sec. 21)

E. CORPORATE MANAGEMENT AND CONTROL

1. Board of Directors/Trustees

1.1 Power, qualification, and term; independent directors; disqualification of

directors/trustees or officers (Secs. 22 and 26)

Case: Engineering Geoscience, Inc. v. Philippine Savings Bank, G.R. No. 187262,
January 10, 2019
Terp Construction Corporation v. Banco Filipino Savings and Mortgage Bank,
G.R. No. 221771, September 18, 2019
Agro Food Processing Corp v. Vitarich Corporation, G.R. No. 217454, January
11, 2021

1.2 Election of directors/trustees; report of election (Secs. 23 and 25)

Case: Lim v. Moldex Land, Inc., G.R. No. 206038, January 25, 2017

1.3 Removal of directors/trustees (Sec. 27)

Case: Bernas v. Cinco, et al., G.R. Nos. 163356-57, July 10, 2015

1.4 Filling up of vacancies in the board; emergency board (Sec. 28)

Case: Valle Verde Country Club, Inc. v. Africa, G.R. No. 151969, September 4, 2009

1.5 Compensation of directors/trustees (Sec. 29)

Case: Western Institute of Technology, Inc. v. Salas, G.R. No. 113032, August 21, 1997

2. Corporate officers (Sec. 24)

Cases: Loreche-Amit v. Cagayan De Oro Medical Center, Inc. et al., G.R. No. 216635,
June 03, 2019
Wesleyan University-Philippines v. Maglaya Sr., G.R. No. 212774, January 23,
2017
Renato Real v. Sangu Phils., Inc., G.R. No. 168757, June 19, 2011
Matling Industrial and Commercial Corp. v. Coros, G.R. No. 157802, October 13,
2010
Locsin v. Nissan Lease Phils. Inc., G.R. No. 185567, October 20, 2010
Gomez, v. PNOC Development and Management Corp., G.R. No. 174044,
November 27, 2009

3. Liability of directors, trustees, officers (Secs. 30 and 171)

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 3.1 Criminal liability
Case: ABS-CBN Corp. v. Gozon, G.R. No. 195956, March 11, 2015
Espiritu v. Petron Corporation, G.R. No. 170891, November 24, 2009

3.2 Solidary liability

Cases: Kho v. Magbanua, et al., G.R. No. 237246, July 29, 2019
Montealegre, et al. v. Spouses De Vera, G.R. No. 208920, July 10, 2019
Fryssinet Filipinas Corporation v. Lapuz, G.R. No. 226722, March 18, 2019
PCGG v. Gutierrez, G.R. No. 189800 July 9, 2018
Zaragoza v. Tan, G.R. No. 225544, December 4, 2017
Virata v. Ng Wee, et al., G.R. No. 220926, July 5, 2017
Lozada v. Mendoza, G.R. No. 196134, October 12, 2016
Arco Pulp and Paper Co., Inc. v. Lim, G.R. No. 206806, June 25, 2014
Magaling v. Ong, G.R. No. 173333, August 13, 2008
Garcia v. Social Security Commission, G.R. No. 170735, December 17, 2007

3.3 Derivative suits

Cases: Ago Realty and Development Corporation v. Ago, et al.., G.R. No. 210906,
October 16, 2019
BSP v. Campa Jr., G.R. No. 185979, March 16, 2016
Ang v. Spouses Ang, G.R. No. 201675, June 19, 2013
Yu v. Yukayguan, G.R. No. 177549, June 18, 2009
Majority Stockholders of Ruby Industrial Corp. v. Lim, G.R. Nos. 165887
and 165929, June 6, 2011
Bitong v. Court of Appeals, G.R. No. 123553 July 13, 1998

3.4 Self-dealing director/trustee/officer (Sec. 31)

Case: Prime White Cement Corporation v. Intermediate Appellate Court, G.R. No. L-
68555, March 19, 1993

3.5 Inter-locking directors (Sec. 32)

Case: DBP v. Court of Appeals, G.R. No. 126200, August 16, 2001

3.6 Disloyal director (Sec. 33) – Doctrine of corporate opportunity

Case: Ient v. Tullet Prebon (Phils.), Inc., G.R. No. 189158,
January 11, 2017
Gokongwei Jr. v. SEC, G.R. L-45911, April 11, 1979

4. Executive, Management, Special Committees (Sec. 34)

F. CORPORATE POWERS

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 1. Kinds of powers
1.1 Express
1.2 Implied
1.3 Incidental

2. Statutory powers

2.1 Corporate powers (Sec. 35)

2.2 Extend or shorten corporate term (Sec. 36)
2.3 Increase/decrease capital stock; incur, create or increase bonded indebtedness
(Sec. 37)
2.4 Deny pre-emptive right (Sec. 38)
2.5 Sell or dispose assets (Sec. 39)
Cases: Islamic Directorate of the Phils. v. Court of Appeals, 272 SCRA 454 (1997)
SME Bank, Inc. v. De Guzman, G.R. Nos. 185517 and 186641, October 8,
2013
Jiao v. NLRC, G.R. No. 182331, April 18, 2012

2.6 Acquire own shares (Sec. 40)

Case: Salido, Jr. v. Aramaywan Metals Development Corporation, G.R. No. 233857,
March 18, 2021

2.7 Invest corporate funds (Sec. 41)

2.8 Declare dividends (Sec. 42)
Case: Republic Planters Bank v. Agana, 269 SCRA 1 (1997)

2.9 Enter into management contract (Sec. 43)

2.10 Other powers (borrow funds, mortgage, act as surety/guarantor, practice
profession [Sec. 37, RA 9266])]

3. Ultra vires acts (Sec. 44)

Cases: University of Mindanao, Inc. v. BSP, G.R. No. 194964-65, January 11, 2016
Querubin, et al. v. COMELEC, et al., G.R. No. 218787, December 8, 2015
Land Bank of the Phils. v. Cacayuran, G.R. No. 191667, April 17, 2013

G. BY-LAWS

1. Concept of by-laws

Cases: Loyola Grand Villas Homeowners Association, Inc. v. Court of Appeals, 276 SCRA
681 (1997)
China Banking Corporation v. Court of Appeals, 270 SCRA 503 (1997)
Gokongwei Jr. v. SEC, 89 SCRA 336 (1979)

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 2. Adoption of by-laws; procedure; requisites of valid by-laws (Sec. 45)
Cases: Grace Christian High School v. Court of Appeals, 281 SCRA 133 (1997)
PMI Colleges v. NLRC, 277 SCRA 462 (1997)
Salafranca v. Philamlife (Pamplona), 300 SCRA 469 (1998)

3. Contents of by-laws (Sec. 46)

Case: Barba v. Liceo De Cagayan, G.R. No. 193857, November 28, 2012

4. Amendment to by-laws (Sec. 47)

H. MEETINGS

1. Kinds of meetings (Sec. 48)

1.1. Regular/special meetings of stockholders/members (Sec. 49)

Case: Bernas v. Cinco, et al., G.R. Nos. 163356-57, July 10, 2015

1.2. Regular/special meetings of directors/trustees (Sec. 52)

Case: Expertravel & Tours, Inc. v. Court of Appeals, G.R. No. 152393, May 26, 2005

2. Place and time of meetings (Sec. 50)

3. Quorum (Secs. 51 and 52)
4. Presiding officer (Sec. 53)
5. Voting right of stockholders

5.1. Secured creditors, administrators (Sec. 54)

Case: Tan v. Sycip, G.R. No. 153468, August 17, 2006

5.2. Jointly-owned shares (Sec. 55)

5.3. Treasury shares (Sec. 57)
5.4. Delinquent shares (Sec. 70)
5.5. Unpaid non-delinquent shares (Sec. 71)
5.6. Sequestered shares
Case: Republic v. Sandiganbayan, G.R. No. 107789, April 30, 2003
Republic v. Cocofed, G.R. Nos. 147062-64, December 14, 2001

6. Voting, proxies (Sec. 57)

7. Voting trusts (Sec. 58)

I. STOCK SUBSCRIPTION

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 1. Subscription contract; Trust fund doctrine (Sec. 59)
Cases: Lao v. Lao, G.R. No. 170585, October 6, 2008
Castillo v. Balinghasay, G.R. No. 150976, October 18, 2004
CIR v. First Express Pawnshop Co., Inc., G.R. Nos. 172045-46, June 16, 2009
Phil. Trust Co. v. Rivera, 44 Phil. 469 (1923)
Halley v. Printwell, Inc. G.R. No. 157549, May 30, 2011
Ong Yong v. Tiu, G.R. Nos. 144476 and 144626, April 8, 2003
Nava v. Peers Marketing, 74 SCRA 65

2. Pre-incorporation subscription (Sec. 60)

Case: Fong v. Dueñas, G.R. No. 185592, June 15, 2015

3. Consideration for stocks (Sec. 61)

4. Certificate of stock; issuance (Secs. 62 and 63)
Case: Ponce v. Alsons Cement Corporation, G.R. No. 139802, December 10, 2002
Andaya v. Rural Bank of Cabadbaran, G.R. No. 188769, August 3, 2016
Interport Resources Corporation v. Securities Specialist Inc., G.R. No. 154069,
June 6, 2016
Borgoña-Insigne v. Abra Valley Colleges, G.R. No. 204089, July 29, 2015

5. Watered stock (Sec. 64)

6. Interest, unpaid subscription (Secs. 65 and 66)
7. Delinquency sale; when sale may be questioned (Secs. 67 and 68)
8. Judicial recovery of unpaid subscription (Sec. 69)
9. Replacement of lost or destroyed certificates (Sec. 72)

J. CORPORATE BOOKS AND RECORDS

1. Books/records to keep (Sec. 73)

2. Right to examine/inspect corporate books
Case: Cua, Jr. v. Tan, G.R. Nos. 181455 and 182008, December 4, 2009
Puno v. Puno Enterprises, Inc., G.R. No. 177066, September 11, 2009
Gonzales v. Philippine National Bank, 122 SCRA 489 (1983)

3. Right to financial statements (Sec. 74)

K. MERGER AND CONSOLIDATION

1. Concept of merger and consolidation

2. Procedure and requisites (Secs. 75, 76, and 77)
Cases: PNB v. Andrada Electric, G.R. No. 142936, April 17, 2002

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 Bank of Commerce v. Radio Philippines Network, Inc. G.R. No. 195615, April 21,
2014

3. Effectivity, effects of merger or consolidation (Secs. 78 and 79)

Case: Spouses Ong v. BPI Family Savings Bank, Inc. G.R. No. 208638, January 24, 2018
Bank of PI v. Carlito Lee, G.R. No. 190144, August 1, 2012
Babst v. Court of Appeals, 350 SCRA 341 (2001)
Bank of PI v. BPI Employees Union, G.R. No. 164301, August 10, 2010

L. APPRAISAL RIGHT

1. When right may be exercise (Sec. 80)

Case: Cua Jr. v. Ocampo Tan, G.R. Nos. 181455-56, December 4, 2009

2. How right is exercised (Sec. 81)

Case: Turner v. Lorenzo Shipping Corporation, G.R. No. 157479, November 24, 2010

3. Effect of demand and termination of right (Sec. 82)

4. Cessation of right to payment (Sec. 83)
5. Responsibility for costs of appraisal (Sec. 84)
6. Notation on certificates; rights of transferee (Sec. 85)

M. NON-STOCK CORPORATIONS

1. Definition and purposes (Secs. 86 and 87)

Cases: La Sallian Educational Innovators Foundation, Inc. v. Commissioner of Internal

Revenue, G.R. No. 202792, February 27, 2019
Collector of Internal Revenue v. Club Filipino de Cebu, G.R. No. L-12719, May
31, 1962, 5 SCRA 321
Republic v. City of Parañaque, G.R. No. 191109, July 18, 2012
Manila International Airport Authority v. Court of Appeals, G.R. No. 155650, July
30, 2006
Commissioner of Internal Revenue v. St. Luke’s Medical Center, G.R. Nos. 195909
and 195960, September 26, 2012
Republic v. Sunlife Assurance Co. of Canada, G.R. No. 158085, October 14, 2005

2. Members’ right to vote (Sec. 88)

Cases: Lim v. Moldex Land, Inc, G.R. No. 206038, January 25, 2017
Tan v. Sycip, G.R. No. 153468, August 17, 2006
Ao-As v. Court of Appeals, G.R. No. 128464, June 20, 2006

3. Non-transferability of membership; exception (Sec. 89)

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 4. Membership termination (Sec. 90)

Cases: Valley Golf and Country Club, Inc. v. Caram, G.R. No. 158805, April 16, 2009
Arroyo, et al. v. Rosal Homeowners Association, Inc., G.R. No. 175155, October 22,
2012
Calatagan Golf Club, Inc. v. Sixto Clemente Jr., G.R. No. 165443, April 16, 2009

5. Election/term of trustees (Sec. 91)

6. Distribution of assets; rules and plan of distribution (Secs. 93 and 94)

N. CLOSE CORPORATIONS

1. Definition; requisites (Sec. 95)

Cases: San Juan Structural and Steel Fabricators, Inc. v. Court of Appeals, G.R. No.
129459, September 29, 1998, 296 SCRA 631
Dulay Enterprises v. Court of Appeals, 225 SCRA 678
Bustos v. Millians Shoe, Inc., G.R. NO. 185024, April 24, 2017

2. Contents of articles of incorporation (Sec. 96)

3. Restriction on transfer of shares; breach of conditions (Secs. 97 and 98)
4. Stockholders’ agreements; board meetings; pre-emptive rights (Secs. 99, 100, and
101)
5. Amendment of articles of incorporation; deadlocks; withdrawal of stockholder or
dissolution (Secs. 102,103, and 104)

O. SPECIAL CORPORATIONS

1. Educational corporations; trustees (Secs. 105 and 106)

2. Religious corporations; corporation sole; religious societies (Secs. 107, 108, 114)

Cases: Roman Catholic Apostolic Administration of Davao, Inc. v. Land Registration

Commission, G.R. No. L-8451, December 20, 1957, 102 Phil. 506
United Church of Christ in the Phils. Inc. v. Bradford United Church of Christ, Inc.,
et al., G.R. No. 171905, June 20, 2012
Republic v. Intermediate Appellate Court, G.R. No. L-75042, November 29, 1988,
168 SCRA 165
Iglesia Evangelica Metodista En Las Islas Filipinas, Inc., et al. v. Bishop Nathanael
Lazaro, et al., G.R. No. 184088, July 6, 2010

2.1 Articles of incorporation; submission (Secs. 109 and 110)

2.2 Acquisition/alienation of property (Sec. 111)
2.3 Filling of vacancies (Sec. 112)
2.4 Dissolution (Sec. 113)

3. One Person Corporations

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 3.1 Definition (Sec. 116)
3.2 Capital stock required; incorporation; bylaws (Secs. 117, 118 and 119)
3.3 Corporate name (Sec. 120)
3.4 Director, president, treasurer, corporate secretary, other officers (Secs. 121,
122 and 123)
3.5 Nominee/alternate; term; change (Secs. 124, 125 and 126)
3.6 Records to maintain (Secs. 127 and 128)
3.7 Reportorial requirements (Sec. 129)
3.8 Liability (Sec. 130)
3.9 Conversion (Secs. 131 and 132)

P. CORPORATE DISSOLUTION

1. Modes of dissolution (Sec. 133)

1.1. Voluntary (Secs. 134, 135, and 136)

1.2. Involuntary (Sec. 138)

1.2.1. Filing of verified complaint

1.2.2. Revocation of articles of incorporation
1.2.3. Quo warranto proceedings

Cases: Majority Stockholders of Ruby Industrial Corporation v. Lim, G.R. Nos.

165887 and 165929, June 6, 2011
Provident International Resources Corporation v. Venus, G.R. No. 167041,
June 17, 2008

2. Corporate liquidation (Sec. 139)

Cases: Gelano v. Court of Appeals, G.R. No. L-39050, February 24, 1981, 103 SCRA 90
Clemente v. Court of Appeals, 242 SCRA 717
Benigno M. Viguilla v. Phil. College of Criminology, Inc., G.R. No. 200094, June
10, 2013
Metropolitan Bank and Trust Co., Inc. v. The Board of Trustees of Riverside Mills
Corp. Provident & Retirement Fund, G.R. No. 176959, September 8, 2010
Alabang Development Corporation v. Alabang Hills Village Association, G.R. No.
187456
Aguirre v. FQB+7, Inc. G.R. No. 170770, January 9, 2013

Q. FOREIGN CORPORATIONS

1. Definition; rights (Sec. 140)

2. License application and issuance; requisites (Secs. 142, 143, 144, and 145)

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 Case: Philippine Deposit Insurance Corp. v. Citibank, N.A., G.R. No. 170290, April 11,
2012
Avon Insurance PLC v. Court of Appeals, G.R. No. 97645, August 29, 1997, 278
SCRA 312
Expertravel & Tours, Inc. v. Court of Appeals, G.R. No. 152392, May 26, 2005
Citibank, N.A. v. Chua, G.R. No. 102300, March 17, 1993

3. Meaning of “doing business” in the Philippines (Sec. 3(d), R.A. No. 7042)

Case: Commissioner of Internal Revenue v. Interpublic Group of Companies, Inc.,

G.R. No. 207039, August 14, 2019
Air Canada v. CIR, G.R. No. 169507, January 11, 2016
Mentholatum Co. v. Mangaliman, 72 Phil. 524
Columbia Pictures, Inc. v. Court of Appeals, G.R. No. 110318, August 28, 1996
Cargill, Inc. v. Intra Strata Assurance Corp., G.R. No. 168266, March 15, 2010
Steelcase, Inc. v. Design International Selections, Inc., G.R. No. 171995, April 18,
2012
Merrill Lynch Futures, Inc. v. Court of Appeals, 211 SCRA 824
Antam Consolidated, Inc. v. Court of Appeals, 143 SCRA 288
B. Van Zuiden Bros. Ltd. v. CTVL Manufacturing Industries, Inc., G.R. No. 147905,
May 28, 2007, 523 SCRA 233
Grotjahn GMBH & Co. v. Hon. Isnani, G.R. No. 109272, August 10, 1994, 235
SCRA 216
Aboitiz Shipping Corp. v. Insurance Company of North America, G.R. No. 168402,
August 6, 2008

(See also SEC-OGC Opinion No. 17-03 (April 4, 2017) on the concept of doing
business as applied to online gaming operated by a foreign corporation based in
another jurisdiction)

4. Doing business without license (Sec. 150)

Case: Agilent Technologies Singapore (PTE) Ltd. v. Integrated Silicon Technology Phils.
Corp., G.R. No. 154618, April 14, 2004
Lorenzo Shipping Corp. v. Chubb and Sons, Inc., G.R. No. 147724, June 4, 2004
Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation,
G.R. No. 152228, September 23, 2005
Home Insurance Co. v. Eastern Shipping, G.R. No. L-34382, July 1983
Top-Weld Manufacturing, Inc. v. ECED, SA, G.R. No L-44944, August 9, 1955, 138
SCRA 118
Eriks PTE Ltd. v. Court of Appeals, G.R. No. 118843, February 6, 1997

5. Merger or consolidation involving foreign corporation licensed in the Philippines

(Sec. 149)

Foreign corporation licensed to do business in the Philippines may merge with a

domestic corporation, provided that the former can prove that there is a similar
authorizing law in its home jurisdiction. (SEC-OGC Opinion No. 18-18, November
16, 2018)

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 6. Revocation of license (Secs. 151, 152, and 153)
6. Other provisions

R. INVESTIGATIONS, OFFENSES AND PENALTIES

1. Administrative sanctions (Secs. 157 and 158)

2. Offenses/Penalties

2.1 Unauthorized use of corporate name

2.2 Violation of disqualification provision
2.3 Violation of duty to maintain records, allow inspection
2.4 Willful certification of incomplete, inaccurate, false, or misleading
statements or reports
2.5 Independent auditor collusion
2.6 Corporate registration through fraud
2.7 Fraudulent conduct of business
2.8 Acting as intermediaries for graft and corrupt practices
2.9 Engaging intermediaries for graft and corrupt practices
2.10 Tolerating graft and corrupt practices
2.11 Retaliation against whistleblowers
2.12 Other violations

3. Liability of directors, trustees, officers, or other employees (Sec. 171)

Cases: ABS-CBN Corp. v. Gozon, G.R. No. 195956, March 11, 2015
Philex Gold Philippines v. Philex Bulawan Supervisors Union, G.R. No. 149758,
April 25, 2005
Tan v. Timbal, G.R. No. 141926, July 14, 2004

4. Liability of aiders and abettors (Sec. 172)

S. MISCELLANEOUS PROVISIONS

1. Designation of governing boards (Sec. 174)

2. Stock ownership in corporations (Sec. 176)

Cases: Roy v. Herbosa, G.R. No. 207246, April 18, 2017

Narra Nickel Mining and Development Corp v. Redmont Consolidated Mines
Corp, G.R. No. 195580, April 21, 2014 and January 28, 2015

3. Reportorial requirements (Sec. 177)

4. Powers, functions, and jurisdiction of the SEC (Secs. 178 and 179)
5. Arbitration (Sec. 181)
6. Transfer of jurisdiction over party-list organizations (Sec. 182)

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