University of Cebu

Cebu City
SCHOOL OF LAW
COURSE SYLLABUS SY
2022-2023

I. COURSE NUMBER : LAW 223

II. COURSE TITLE : Corporation Law

III. COURSE DESCRIPTION : This is a comprehensive study of the Revised Corporation Code (RCC) or the amended law
governing private corporations. It studies the salient features of the RCC as compared to the old law and the major policy
changes introduced to align our corporation law with international best practices on corporate governance.

In particular, the course will tackle how corporations are set up, how they operate and do business during its existence and how
they fold up as a business enterprise.

IV. COURSE PREREQUISITE : LAW 113 (Agency, Trust & Partnership)

V. COURSE CREDIT : 4 units

VI. GENERAL OBJECTIVES :

a) To develop the ability of students to grasp basic corporate law doctrines and apply them in actual business settings;
b) To enable students to spot critical issues in the formation, operation and dissolution of stock and non stock corporations
and apply such skill in the cases assigned to them and actual corporate related concerns;
c) To heighten the students’ understanding of private corporations, the standards of good corporate governance and the
importance of corporations to the national economy;
d) To appreciate the operational framework of corporations and the business opportunities and risks in a corporate set up;
e) To develop the students’ analytical and critical thinking skills in dissecting current corporate concerns and the different legal
and ethical issues they engender;
VII. Teaching Method : Socratic Method, Lecture and other appropriate teaching methods such as the flipped classroom approach,
focused group discussions and other applicable methods.

VIII. Course Outline

Topics Proposed timelines Reference Materials and Cases

1. Introduction Preferred Textbook :

1.1 Revisit Partnership Revised Corporation Code Annotated by
A. Definition (Art. 1767) Hector De Leon (2022 Edition)
Week 1
B. Kinds of Partnership
C. Kinds of Partners - as to liability, contribution, mgmt. & Other Reference/s:
as to third persons
D. Principle of delectus personae Commentaries and Jurisprudence on
E. Dissolution, winding up and termination of partnership the Revised Corporation Code of the
F. Joint ventures Philippines by Aquino, et al. (2020 Edition) `

1.2 Different forms of business organizations (comparing Question and Answer on the
Revised Corporation Code by Divina (2020
corporations from other business organizations)
Edition)
2.0 The Revised Corporation Code (RA 123
2.1 Introduction

• Art. XII, Sec. 16 of the Constitution

• Scope of personal and corporate relationships
covered by the RCC
• Features of a Corporation
• Important Corporate law doctrines
• Significant policy changes introduced in the RCC
• Expanded powers of the Corporation

2.2 General Provisions of the Corporation Code (Secs. 1-9)
• 4 attributes of a corporation based on its statutory
definition (Sec.2)
- Corporate liability ( corporate tort, criminal
liability)
- Constitutional rights
- Entitlement to moral damages
• Main doctrine of separate juridical personality
• Various theories on Formation of a corporation
- Concession Theory (also known as the
Fiat Theory, Government Paternity Theory
vs the Genossenchaft Theory)
- Corporate Enterprise Theory
- Conflict between Concession Theory and
Corporate Enterprise Theory
• Doctrine of Piercing the Veil of Corporate Fiction
• Grounds to pierce the veil
1. Fraud piercing
2. Public convenience piercing
3. Alter-ego piercing
• Three Pronged Test in Alter-Ego Piercing – control
test, fraud test and harm test
• Probative factors to be considered in Alter Ego cases
• Two types of piercing cases
1. traditional piercing cases
2. reverse piercing – insider reverse piercing and
outsider reverse piercing
lllustrative Cases for 2.2
1) Pioneer Insurance Surety Corp. v.
Week 1
Morning Star Travel & Tours, Inc.,
GRN. 198436, July 8, 2015. [separate
personality]
2) Stradcom Corporation v. Orpilla
G.R.No. 206800, July 2, 2018
[Separate Juridical Personality]
3) Presidential Commission on Good
Government v. Gutierrez G.R. No.
189800, July 9, 2018 [Separate
Juridical Personality]
4) Professional Services Inc. v.Court of
Appeals, GRN. 126297, Feb. 2,
Week 2 2008)[corporate tort]
Luis Juan Virata and Uemmara
Philippines Corp.(now known as
Cavitex Infrastructure Corp.) et al. v.
Alejandro Ng Wee, et al. GR No.
220926, March 21, 2018 [piercing the
veil]
5) Maricalum Mining Corporation, v. Ely
Florentino, et al. G.R. No. 221813, July
23, 2018 [piercing the veil]
6) International Academy of Management
and Economics v. Litton and Co., Inc.,
GRN 191525, December 13, 2017
[reverse piercing]

2.3 Classification of Corporations (Sec2. 3 and 4)
A. According to the Corporation Code
- as to existence of stocks; special types of
corporations (OPC, educational corporation and
religious corporation); as to number of
incorporators; as to method of organization and
purpose [Public corporations, private corps.,
quasi-public corps]
- How about GOCCs? See Sec. 3 of the RCC and
Art. 44 of the Civil Code
B. Other Classifications of corporations
- As to legal right to corporate existence; as to
nationality;as to existence of delectus personae;
as to relationship of management and control
- As to other special purposes
- A corporation going public and going private
C. Composition/Components of a Corporation (Sec. 5)
D. Classification of Shares (Sec. 6)
7) Concept Builders Inc. v. NLRC, GRN
108734, May 29, 1996. [probative
factors in alter-ego cases]
Illustrative cases for No. 2.3
8) Republic v. City of Parañaque, GRN.
191109, July 18, 2012. [stock or non
stock]
9) Liban v. Gordon, GRN. 175352,July 15,
Week 3 2009; En Banc Resolution of the Court in
the same case of Liban issued on
January 18, 2011 G. R. No. 175352
[special corporation]
10) Boy Scouts of the Philippines v.
Commission on Audit, GRN 177131, Jun.
7, 2011[public corporation -created for
public interest]
11)Republic Planters Bank v. Agana,
GRN. 51765, Mar. 3, 1997.[redeemable
shares]
 • 3 basic policies on share classification
• Types of Shareholdings in a Stock Corporation
a) Preferred shares and their different
features (including those shares with
redeemable feature) vs. common shares
b) Par value vs. no par value share
c) Founder shares
d) Treasury shares
E. Policy changes introduced by RCC
3. Incorporation and Organization of Private
Corporations (Secs, 10 -21)
A. Changes in the Corporation Code
B. As to qualifications of incorporators; number of
subscribers, number of incorporators; number of
subscribers; nationality; residence (Sec. 10)
C. Corporate Term (Sec. 11)
D. Capital Stock of Corporations – authorized capital
stock, subscribed capital stock , paid up capital,
additional paid in capital (Sec. 12)
• Differentiating capital vs. capital stock
12)Bases Convention and Development
Authority v. Commissioner of Internal
Revenue GRN 205925,June 20, 2018
[Government Instrumentality vested
with corporate powers]
13)Ong Yong v. Tiu, et.al., GRN. 144476,
Apr 8, 2003. [trust fund doctrine]
14)Halley v. Printwell, Inc., G.R. No.
157549, May 30, 2011[trust fund
doctrine]
Illustrative Cases for No. 3
(Week 4
15) L.C. Big Mak Burger, Inc. v. Mc
Donald’s Corp. GR No. 233073,
February 14, 2018 [Corporate Name]
16)Care Best International, Inc. v. SEC
GRN. 215510, Mar. 16, 2015. [use of
aliases in the Articles of Incorporation]
17) Company Registration and Monitoring
Department and SEC En Banc v. Ching
Bee Trading Corporation, GRN
205291, Nov. 12, 2014[disapproval of
amendment of AOI
 E. Articles of Incorporation (Secs. 13-16)
• 3 fold nature of AOI; Contents of AOI;
Amendments of AOI
• Grounds for Disapproval of AOI or its
amendments
F. Corporate Name (Sec. 17)
G. Commencement of corporate existence (Sec. 18)
H. De Facto Corporations (Sec. 19)
I. Corporation by Estoppel (Sec. 20)
A. Differentiating de jure, de facto, and
corporation by estoppel
J. Non use of Corporate Charter and Continuous
Inoperation (Sec. 21)
4. Board of Directors/Trustees and Corporate Officers
(Secs. 22 – 34)
4.1 Control and Management of the Corporation (Secs. 22-
29)
A. Changes introduced by the RCC for Secs. 22 and 23
B. Corporate Law Principles
C. Qualifications and election of Directors/Trustees
D. Corporate Officers ( including Compliance Officer for
public interest company)
i. Foreigners as officers
E. Disqualifications of Directors and Trustees
F. Removal of Directors/ Trustees
G. Compensation of Directors or Trustees
18) Indian Chamber of Commerce Phils.,
Inc. v. Filipino Indian Chamber of
Commerce in the Philippines, Inc.,
GRN. 184008, August 3, 2016. [priority of
adoption rule]
19) Seventh Day Adventist Conference
Church of Southern Philippines, Inc. v.
Northeastern Mindanao Mission of
Seventh Day Adventist, Inc. GRN.
150416, July 21, 2006. [de facto
corporation]
24) Missionary Sisters of our Lady of
Fatima v. Alzona,GRN 224307, Aug. 6,
2018. [corporation by estoppel]
Illustrative cases for No. 4
Week 5
25) Valle Verde Country Club Inc. v. Africa,
GRN. 151969, Sept. 4, 2009 [holdover
principle]
26)Matling Industrial and Commercial
Corporation v. Coros, GRN 157802, Oc.
13, 2010. [corporate officers]
27) Bernas v. Cinco, G.R. Nos.
163356-57 & 163368-69, July 1, 2015.
[ removal of directors]
28)Francisco Eizmendi, Jr. et al. v.
Teodorico Fernandez GRN 215280,
September 5, 2019 [Reglementary Period
for Filing of Election Contest]
4.2 Fiduciary Duties of Directors, Trustees and Officers
A. 3 fold duties of directors, trustees and officers
B. RCC Treatment of the following :
• Self- Dealing Contracts
• Contracts between corporations with
interlocking directors
• Disloyalty of a director (corporate opportunity
doctrine
C. Executive Committee and Other Committees
29) Colegio Medicofarmaceutico de
Filipinas, Inc.v. Lily Lin, et al. GRN
212034, July 2, 2018 [Power of the
President to perform acts within his
usual duties]
30) Total Office Products and Services
(TOPROS), Inc. v. Chang, Jr., G.R.
Nos. 200070-71, [December 7, 2021]);
En banc by Justice Inting. [doctrine of
corporate opportunity]
5. Powers of a Corporation Illustrative cases for No. 5

5.1 Corporate Powers and Capacity – Very impt (Sec. 35) 31) University of Mindanao v. Bangko
Sentral ng Pilipinas, G.R. Nos.
• Express (power to enter into a partnership or 194964-65, January 11, 2016.
joint venture with natural or juridical persons [Corporate powers]
• Incidental
• Implied 32) Majority of Stockholders of Ruby
- Role of PCC Industrial Corporation v. Lim, GR No.
165887, June 6, 2011 [Power to Increase/
5.2 Extending or Shortening Corporate term(Sec. 36) Decrease Capital Stock or Incur, Create,
5.3 Increasing or decreasing capital stock; incurring bonded Increase Bonded Indebtedness ; pre-
indebtedness (Sec. 37) emptive rights]
5.4 Pre-emptive rights and the power to deny pre-emptive
rights (Sec. 38) 33) Y-I Leisure Phils. Inc. v. Yu, G.R. No.
• What is pre-emptive right? 207161, September 8, 2015. [Nell
• Purpose of pre-emptive right Doctrine]
• Issue vs disposition under Section 38
34)PLDT v. NTC, GRN 152685, Dec. 4,
5.5. Sale or disposition of Assets – (Corporate 2007 [stock dividends]
Reorganization or De facto merger)
35)Querubin, et al v. Comelec et. al., GRN
• Asset transfer – Nell Doctrine 218787, Dec. 8, 2015. [ ultra vires acts]
• Equity transfer
• Business transfer
5.6. Acquiring own shares - Sec. 40
5.7. Investing Corporate funds in another corporation or
business Sec. 41-
5.8. Declaring dividends -Sec. 42
• Cash dividends
• Stock dividends
5.9. Entering into a management contracts – Sec. 43
5.10. Ultra Vires Acts of a Corporation –
 Illustrative Cases for No. 6.
6. By-Laws of a Corporation- Secs. 45- 47
36) Villongco et al. v. Yabut, et al., GRN
- Changes introduced by the code 225024, February 5, 2018
A. Nature of by- laws [Determining the presence of a quorum]
B. Contents of by- laws
C. Amendments or repeals 37) Gokongwei , Jr., v. SEC, G.R. No.
D. Effectivity of by laws L-45911,April 11, 1979 [validity of by
laws]

38) The Orchard Golf and Country Club

Inc., et. al, v. Yu, GRN. 191033, Jan. 11,
2016 [ by laws]

Illustrative Cases for No. 7

7. Meetings – Secs. 48-58

A. Kinds of meetings of the Stockholders and Board of
Directors
B. Meetings of Stockholders
C. Meetings of Directors/Trustees
D. Right to vote of Secured Creditors and Administrators
(see Property Security Act )
• Right to vote for those granted security interest -
Sec. 54
• Voting for Joint Owners of Stocks – Sec. 55
39) Expert Travel & Tours Inc. vs. Courut
of Appeals, GRN. 152392, May 26, 2005
[ videoconferencing for BOD meeting]
40) Mallare vs. A & E Industrial Corp. G.R.
No. 233646, June 16, 2021 [determination
of a quorum in meeting]
 • Voting of treasury stocks
41) Trans Middle East (Phils.) Equities,
• Proxy
Inc. v. The Sandiganbayan (Fifth
- Voting trust
Division), G.R. Nos. 180350, 205186,
222919, 223237, July 6, 2022] [ voting
rights of sequestered shares]

42) Lim v. Moldex Land, Inc., GR No.

206038, January 25, 2017 [Validity of
Annual General Membership Meeting;
Appeal;Election]

Illustrative Cases for No. 8

8. Stocks and Stockholders – Secs. 59-72 43) Fong v. Duenas, GRN. 185592, June
15, 2015. [pre-incorporation subscription]
A. Subscription contract
B. Pre-incorporation subscription 44) Tee Ling Kiat v. Ayala Corporation
C. Consideration for stocks (substituted herein by its assignee and
D. Certificate of stock and transfer of shares successor-in-interest, Bienvenido Amora,
E. Issuance of Stock Certificate Jr.), G.R. No. 192530, March 07, 2018
F. Watered stocks [transfer of shares of stocks]
G. Payment of Balance of Subscription
H. Delinquency Sale 45) Rogelio Florete, Sr., the estate of the
I. Summary of Rights of Corporators late Teresita Menchavez, v. Marcelino
Florete, Jr. and Ma. Elena Muyco,G.R. No.
223321, April 2, 2018, [ transfer of shares
of stocks]
 46) Forest Hill Golf & Country Club v.
Vertex Sales and Trading, Inc., 202205,
March 6, 2013. [ transfer of shares of
stocks]

47) Guy v. Guy, GRN 189486, Sept. 5,

2012 [ street certificate]

48)Ago Realty & Development Corp. v.

Ago, G.R. Nos. 210906 & 211203,
October 16, 2019, [Derivative suit]

49) Metropolitan Bank & Trust Co. v.

Salazar Realty Corp., G.R. No. 218738,
[March 9, 2022])Nos. 180350, 205186,
222919, 223237, July 6, 2022

Illustrative cases for Nos. 9-11

9. Corporate Books and Records – Secs. 73 - 74

A. Changes introduced by the Code 50) Spouses Ong v. BPI Family Savings
B. Corporate books required to be kept Bank, Inc. G.R. No. 208638 January 24,
C. Right to financial statements 2018 [Effects of Merger or
Consolidation]

10. Merger and Consolidation – Secs. 75 - 79 51) Roque v. People of the Philippines,
GRN 211108, June 7, 2017 [ liability for
A. Changes introduced by the Code unjustified refusal to allow inspection]
B. Difference between merger from consolidation
C. Common Forms of Corporate combinations
D. De facto merger, upstream merger and spin-off
E. Types of Acquisitions
 F. Procedure for Merger and Consolidation
G. Effects of merger or consolidation
11 – Appraisal- Secs. 80-85
1. Instances of appraisal right ( including the right to
dissent when the corporation invest its funds for other
purposes]
2. How right is exercised
3. Effect of demand and Termination of Right
12. Non Stock Corporations – Secs. 86 -94
A. Changes introduced by the Code
B. Examples of non stock corporations
C. Purposes
D. Right to Vote
E. Non transferability and termination of Membership
13. Close Corporations – Secs. 95 - 104
A. Changes introduced by the Code
14. Special Corporation – Secs. 105- 132
A. Changes introduced by the Code
B. One Person Corporation
15. Dissolution – Secs. 133 – 139
A. Changes introduced by the Code
B. Methods of Dissolution
C. Liquidation
52)Bank of Commerce v. Radio Philippines
Network, Inc. et al, GRN 195615, April
21, 2014. [de facto merger]
53)) Turner vs. Lorenzo Shipping
Corporation, GRN. 157479, Nov. 24,
2010 [ appraisal right- valuation of the
shares of stocks.
Illustrative Cases for Nos. 12 -15
54) Medical Plaza Makati Condominium
Corporation v. Cullen, GRN 181416, GRN
181416, Nov. 11,2013
[ condominium corporation]
55) Francisco v. Del Castillo, G.R. No.
236726, [September 14, 2021]) En banc
[homeowner's association; jurisdiction of
SEC, HLURB]
56) (Forest Hills Golf and Country Club,
Inc. v. Kings Properties Corp., G.R. No.
212833 (Notice), [August 7, 2019])
57)Long and Almeria v. Basa et al, GRNs
134963-64, Sept. 27, 2001
[ religious corporations]
58) Delpher Trades Corp v. IAC, et al,
GRN 69295, Jan. 26, 1988 [transfer of
properties
59) Vesagas v. CA, GRN 142924, Dec. 5,
2001. [ methods of dissolution]

60) Consuela Metal Corporation v.

Planters Dev’t Bank, GRN 152580, June
26, 2008[ jurisdiction of SEC after
dissolution]

61) Tumagan v. Kairuz G.R. No. 198124,

September 12, 2018 [Intra-Corporate
Dispute]

62) Norma D. Cacho and North Star

International Travel, Inc. vs. Virginia D.
Balagtas, G.R. No. 202974, February 7,
2018 [Intra-Corporate Dispute]

63) Malcaba v. ProHealth Pharma

Philippines, Inc., G.R. No. 209085, June 6,
2018 [Intra-Corporate Dispute]

64) Demetrio Ellao v. Batangas I Electric

Cooperative, Inc. G.R. No. 209166, July 9,
2018, [Intra-Corporate Dispute within a
cooperative]

65) Ku v. RCBC Securities, Inc. G.R. No.

219491, October 17, 2018 [Jurisdiction
over Intra-Corporate Dispute]

66) Aguirre vs. FQB+7, GRN 170770, Jan.

9, 2013 [ dissolution]
16. Foreign Corporations – Secs. 140 - 153
A. Changes introduced by the Code
B. Concept of doing business
C. Foreign Corporations
D. Control test and grandfather rule
17. Investigations, Offenses and Penalties - Secs. 154-
172
18. Miscellaneous Provisions – Secs. 173- 188
Illustrative Cases for No. 16
66) Steelcase v. Design International
Selections Inc, GRN 171995, Apr. 18,
2012[doing business in the Philippines]
67) Wilson P. Gamboa v. Finance
Secretary Margarito Teves, et.al., GRN
176579, June 28, 2011 (control test)
68)Heirs of Wilson P. Gamboa v.
Finance Secretary Margarito B.
Teves, et al., G.R. No. 176579,
October 9, 2012 [ control test and
grandfather rule]
69) Narra Nickel Mining and Development
Corp. v. Redmont Consolidated Mines
GRN, 195580, Jan 28, 2015
[grandfather rule]
70)Roy III v. Herbosa, GRN 207946, Nov.
22, 2016 & April 18, 2017 [ grandfather
rule]
71) ABS-CBN Corporation v. NTC, GR No.
252119, August 25, 2020 [Dismissal of the
Petition for Certiorari and
Prohibition on the ground of mootness;
expiration of franchise]
72) SEC v. AZ 17/31,G.R. Nos. 239010 &
240888,July 6, 2022
73) Okada v. Tiger Resort Leisure &
Entertainment Inc., GRN 256470 (Notice)
Aug. 10, 2022
 IX. EVALUATIVE MEASURES : A combination of the following evaluation methods shall be done for the different content items
whenever applicable and deemed more effective:
a) Oral recitation
b) Written examination
c) Case studies
d) Reports
e) Panel discussion
f) Submission of case digests
X. COURSE REQUIREMENTS Class standing – 40% ( this comprises of quizzes, prelim exam, semifinal exam, written and oral
reports, and other projects) In particular the 40 % is further subdivided into the following :

1/2- prelim/semi final exam

3/8- graded recitation
1/8 - quizzes, projects, assignments

Midterm/Final Exam – 60%

The semestral grade is the result of the following : (Grade in the Midterm Period + Grade in the Finals divided by 2)
REFERENCES :
Preferred Textbook:
Commentaries and Jurisprudence on the Revised Corporation Code of the Philippines by Aquino, et al. (2020 Edition)
Other References:
Question and Answer on the Revised Corporation Code by Divina (2020 Edition)
The Revised Corporation Code of the Philippines (Its Theories and Applications) 2019 edition by Teresita Herbosa and Eric
Recalde
Hector de Leon entitled “The Corporation Code of the Philippines, Annotated, latest edition
Prescribed Reviewers: Books on Commercial Law by Cesar Villanueva and Sundiang (latest edition)
Useful website: Website of the Securities and Exchange Commission

Prepared by: Atty. Josh Carol T. Ventura and Atty. Sheryl Jaudines-Seno
Approved by: Dean Al-Shwaid de Leon
2021 Corporation Law Syllabus- dated January 25, 2021