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 incidental to its existence (REVISED
CORPORATION CODE, Sec. 2).

Attributes of a Corporation
The attributes of a corporation are:
1. It is an artificial being;
2. It is created by operation of law;
3. It has the right of succession; and
4. It possesses the powers, attributes, and properties expressly authorized by law or incident to its
existence (REVISED CORPORATION CODE, Sec. 2).

HOW CORPORATIONS ARE CREATED

Constitutional Basis
The Congress shall not, except by general law, provide for the formation, organization, or regulation of
private corporations. Government-owned or controlled corporations may be created or established by
special charters in the interest of the common good and subject to the test of economic viability
(CONST. Art. XII, Sec. 16).

Public Corporations
A public corporation is one created by the State as the latter’s own agency or instrumentality to help it
in carrying out its governmental functions (Fernando v. COA, G.R. No. 237938, December 4, 2018).

Public Corporations may only be created through statute (La Bugal-B’Laan Tribal Association v. Ramos,
G.R. No. 127882, December 1, 2004).

Public Corporation may either be:

1. Municipal Corporation
– A government entity recognized, supported and utilized by the National Government as a part of its
government machinery and functions; a municipal government actually functions as an extension of the
national government and therefore, it is an instrumentality of the latter (Surigao Electric Co., Inc. v.
Municipality of Surigao, G.R. L-22766, August 30, 1968); or

2. Quasi-Corporations
– Quasi-Corporation is created by the State for a narrow or limited purpose. They are called thus
because they are not true corporations as they do not possess full corporate powers (Black’s Law
Dictionary, 4th ed.).
– Quasi-corporations are created by the State, either by law or by authority of law, for a specific
governmental purpose (Public Corporations, Ruperto G. Martin, 1985).

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;
(2)Other corporations,institutions and entities for public interest or purpose created by law; their
personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a
juridical personality, separate and distinct from that of each shareholder, partner or member.
 One of the distinctive features of a corporation is the right of succession that is also known as
“perpetual succession”. Perpetual succession is “that continuous existence which enables a corporation
to manage its affairs, and hold property without the necessity of perpetual conveyances, for purposes of
transmitting it (AQUINO, Corporation Law, supra at 55).