 Definition of 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, unless otherwise indicated, all sections cited herein
are from RA 11232, or the Revised Corporation Code]

 Artificial Being - A corporation is a juridical entity that exists apart from its stockholders. It has its
own set of rights and obligations as provided for by law. Technically, it has no physical existence
although it occupies a principal place of business.

 Doctrine of Corporate Entity - The doctrine that a corporation is a legal entity or a person in law
distinct from the persons composing it is merely a legal fiction for purposes of convenience and
to subserve the ends of justice.

o Corporate existence and juridical personality commences from the date the SEC issues a
certificate of incorporation under its official seal. [Sec. 18]

o Doctrine of Separate Juridical Personality - A corporation has a personality separate and

distinct from that of its stockholders and members and is not affected by the personal
rights, obligations, and transactions of the latter.

 Residence and Nationality - Place of Incorporation Test Under the incorporation theory, a
corporation is a national of the country under whose laws it is organized or incorporated.

 Constitutional Rights

o Corporations are entitled to due process and equal protection, but subject to the police
power of the state. insofar as their properties are concerned. [Smith, Bell & Co. v.
Natividad, 40 Phil. 144 (1920)]

o They are also entitled to protection against unreasonable searches and seizures. [Bache
& Co. v. Ruiz, 37 SCRA 823 (1971)]

o They are not, however, entitled to the privilege against self-incrimination. [Bataan
Shipyard & Engineering v. PCGG, 150 SCRA 181 (1987)]

 Criminal Liability - The corporation itself cannot be arrested and imprisoned; thus, it cannot be
penalized for a crime punishable by imprisonment. However, a corporation may be charged and
prosecuted for a crime if the imposable penalty is a fine. [Ching v. Secretary of Justice,¸G.R. No.
164317 (2006)]

Since a corporation as a person is a mere legal fiction, it cannot be proceeded against criminally
because it cannot commit a crime in which personal violence or malicious intent is required.
Criminal action is limited to the corporate agents guilty of an act amounting to a crime and
never against the corporation itself. [Time Inc. v. Reyes, G.R. No. L-28882 (1971)]

 Rights to recover moral damages - A corporation, being an artificial person, has no feelings,
emotions nor senses; therefore, it cannot experience physical suffering and mental anguish,
 which are bases for moral damages under Art. 2217 of Civil Code. [Manila Electric Co. v. Nordec
Philippines, 861 SCRA 515 (2018)].

o Nevertheless, a corporation can recover moral damages under Art 2219(7), if it was the
victim of defamation. [Filipinas Broadcasting Network v. Ago Medical and Educational
Center, G.R. No. 141994 (2005)]

 Doctrine of Piercing the Veil of Corporate Entity - A corporation will be looked upon as a legal
entity as a general rule, and until sufficient reason to the contrary appears but when the notion
of legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime,
the law will regard the corporation as an association of persons.

o Effect of Piercing the Corporate Veil The corporation will be considered as a mere
association of persons. Thus, the liability will directly attach to the stockholders or to the
other corporation. (China Banking v. DyneSem, G.R. No. 149237)

 Right of Succession - Since one of the attributes of a corporation is that it is an artificial being
with a distinct personality, the corporation’s existence is unaffected by a change in the
composition of stockholders. Its existence is limited only by the Articles of Incorporation (AOI),
may be subject to Quo Warranto proceedings (Rule 66 of the Rules of Court), and may be
shortened by dissolution (Title XIV).

 Creature of Enumerated Powers, Attributes, and Properties

o Doctrine of limited capacities as compared to the general Doctrine of General Capacities

- Under the Doctrine of Limited Capacity, a corporation can only exercise powers that
are express, implied, or incidental to its existence. Doctrine (Theory) of General
Capacity – a corporation is said to hold such powers as are not prohibited/withheld from
it by general law.

o Ultra vires Doctrine - Sec. 45. Ultra vires acts of corporations - No corporation under this
Code shall possess or exercise any corporate powers except 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.