DOMESTIC CORPORATION – is one
that is organized under the
laws of the Philippines.
FOREIGN CORPORATION – is one
that is organized under the
laws outside the country.
A corporation has a juridical
personality separate and
distinct from that of its
stockholders, shareholders and
members.
Property conveyed to or acquired by
the corporations becomes the
property of the corporation as
a distinct legal entity.
UNDER THE RULES OF COURT:
service of summons may be
made on its president, general
manager, corporate secretary,
treasurer or in-house council.
STIPULATIONS:
o Since it’s a mere legal fiction,
the corporation cannot be held
liable for a crime committed by
its officers because it does not
have the essential of element
malice; in such case it would be
responsible officers who would
be criminally liable.
o A corporation would be liable
for the acts of its Board of
Directors if the latter
performed the acts and
accordance with powers
granted to them under RCC,
the articles of incorporation,
and bylaws of corporation, and
the laws and regulations
governing the operations of
the corporation.
o The corporation will also be
liable for the acts of the
officers of the latter acted
pursuant to resolutions
approved by its Board of
Directors.
ACCORDING TO LEADING CASES
DECIDED BY THE SUPREME
COURT:
A corporation, as a juridical
person, is entitled to
constitutional guarantees of due
process, equal protection of the
law and protection against
unreasonable searches and
seizures, but it cannot invoke the
right against self-incrimination.
A corporation is not entitled to
moral damages because it has no
feelings, no emotions and no
senses.
EXCEPTION:
When the corporation has a
reputation that is debased,
 resulting in its humiliation in the
business realm in which case it
can validly complain for libel or
any other form of defamation,
and thus claim for moral damages
under item 7 of Article 2219 of
the Civil Code.
CLASSES OF CORPORATIONS:
(UNDER SECTION 3 OF THE RCC)
- Corporations organized may
be stock or nonstock
STOCK CORPORATION – whose
capital stock is divided into shares
and which is authorized to distribute
to shareholder’s dividend or
allotments of the surplus profits on
the basis of the shares held
NONSTOCK CORPORATION – that
does not issue stocks nor distribute
dividends to their members.
COMPONENTS OF CORPORATION:
o Corporators who compose a
corporation, whether as
stockholders or shareholders in
a stock corporate or as
members in a nonstock
corporation;
o Incorporators who are
mentioned in the articles of
incorporation as originally
forming and composing the
corporation, having signed the
articles of incorporation
(Section 5) and acknowledged
the same before a notary
public; these natural persons
have no powers beyond those
vested in them by the RCC
o Stockholders who are the
owners of shares of stock in a
stock corporation;
o Members who are the
corporators of a nonstock
corporation;
o Promoter who, acting alone or
with others, takes initiative in
founding and organizing the
business or enterprise of the
issuer and receives
consideration
o Subscriber who has agreed to
take and pay for original,
unissued shares of a
corporation formed or to be
formed
CLASSIFICATION OF SHARES
INDICATED IN THE ARTICLES OF
INCOPORATION
 Classification of shares
 Corresponding rights
 Privileges or Restrictions
 Stated Par Value
EXCEPTIONS: in the distribution of corporate assets
in case of liquidation or such other
Except when otherwise provided in
preferences.
the articles of incorporation and the
certification of stock, each share shall NOTE: PAR VALUE SHARES HAVE A
be equal in all respects to every other VALUE FIXED IN THE CERTIFICATES OF
share, this is referred to as the THE STOCK AND THE ARTICLES OF
doctrine of equality of shares. INCORPORATION. ON THE OTHER
Further, the shares in stock HAND, NO-PAR VALUE SHARES DO
corporations may be divided into NOT HAVE PAR VALUE BUT ARE
classes or series of shares or both. ISSUED FOR A CONSIDERATION OF
ATLEAST 5PESOS PER SHARE. THEY
COMMON SHARES – basic class of
CANNOT BE ISSUED AS PREFERRED
stocks ordinarily and usually issued
STOCK.
without extraordinary rights and
privileges. Owners of common shares
are entitled to a pro rata share in the
profits of the corporation and its
assets upon dissolution.
PREFERRED SHARES – issued with par
value and may be given preference in
the distribution in the dividends and