Corporation Law
Difference between a general and
Atty. Maria Zarah Villanueva-Castro
3B SY 2021-2022
February 23, 2022
1. How do we differentiate public
corporations from private
corporations?
2. Any specific difference as to nature?
3. How will you define a private
corporation?
4. What are the attributes of a private
corporation?
5. Is it a person?
6. What is the implication of the
corporation’s separate personality?
7. What is the legal proceeding in
claims? Party in interest is still the
corporation.
8. As a juridical person and entity for
purposes of contract, if there is a
case involving a contract that affects
the corporation, can the corporation
as a legal entity claim damages?
9. Attorney’s fees? Yes.
10. Instances of moral damages?
11. Is there an exception to this case?
12. Criminal action. What is the possible
legal action in a criminal case?
Officers can be held liable.
13. For tortious acts? Can they be held
liable? (Note: Acts of agent)
14. What are the possible areas of abuse
in the separate personality rule?
Corporate veil. What is abused is the
lack of physical existence.
15. What is the rule on succession?
Licenses will not be disturbed despite
change of membership.
16. Corporations are created by
operation of law. Elaborate.
17. Rules in making corporations
elaborated in the Constitution?
18.
specific law? Aabot sa articles of
incorporation pag specific law.
Uniformity rule under the
Constitution.
19. Requirements so that Congress can
be justified in the enactment of a
special law? Test of economic
viability, for the common good, and
owned by the government.
20. What do you understand by
economic viability? It can survive in
the market place because it can
generate REVENUE.
21. What is limited capacity?
22. How do we classify private
corporations? Stock v. Non-stock. In
the matter of distribution of
dividends.
23. How do we classify in terms of place
of incorporation?
24. Classification in terms of status?
25. For an entity to be a de jure
corporation, should it be able to
obtain a certificate of incorporation
in the SEC? De jure de facto should
have certificate of incorporation.
26. What’s the point of differentiating de
facto from de jure? No difference
from a voidable contract. Valid until
the State says so.
February 28, 2021
1. Who can challenge the status of a
corporation?
2. What is a corporation by estoppel?
3. What is the challenge of the lender if
you dealt with an entity that does not
exist?
4. Where will you give the summons?
5. If there is no corporation, who will
you sue? General partners.
CORPO MAMA Z RECIT QS 21-22 | MMFN
6. Can they use separate personality as
a defense? No.
7. Is the liability limited to the amount
contributed by the partner? No.
Limited liability rule will not hold.
8. Summarize the benefits of doctrine
of corporate entity.
9. Are corporations also entitled to the
protection afforded by the
Constitution to due process? (eg,
expropriation proceedings)
10. Taking of life? To what extent will
due process apply?
11. Protection against unreasonable
search and seizure?
12. Freedom to travel?
13. Guarantee against self-
incrimination?
14. Impact if the right against self-
incrimination is available to
corporations?
15. What is the doctrine of piercing the
veil of corporate fiction?
16. Is it always the stockholders?
17. Does piercing require judgment from
the court?
18. Consequences? Damages because
there is no due process.
19. What did the court achieve?
20. Are these entities dissolved because
of the court’s decision to pierce the
personality? No.
21. Can they continue doing business?
Yes.
22. Another worker filed a case against X.
Will Y be automatically impleaded?
No.
23. Were they not merged or
consolidated because of the record
of piercing? No.
24. Should the person also be impleaded
in the complaint? Yes, but a guilty
corporation who did the fraudulent
act may also be included. Court may
dispense with impleading the party if
it anticipated the acts (anticipated
itself to be a part of the fraudulent
act). Due process will not be an issue.
25. Can the sheriff decide if the
corporate will be pierced? President
was not served summons so the
decision is not res judicata as far as
he is concerned.
March 2, 2022
Revalida of Module 1 cases.
March 7, 2022
Classes of Corporation
1. Ordinary v. OPC
2. Stock v. Non-stock
3. Domestic v. Foreign
4. De jure v. de facto
De facto existence requires certificate of
incorporation: essential to the existence of a
de facto corporation. An organization not
registered with SEC is not even a corporation
de facto.
Corporation by estoppel: There is really no
entity here. This is just an assumed
corporation. May mga pretenders (lol inulit
ni mam yung joke). What is the solution we
have under the RCC? The solution is you sue
the pretenders. You sue those who led you
to believe that there was a corporation. They
are liable as general partners. They can be
sued beyond their capacities in the
corporation.
5. Open v. Close
6. Parent, subsidiary, and affiliate
Maricalum case
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-parent company-organized to own a
substantial portion of another company’s
voting shares of stock enough to control or
influence the latter’s management, policies,
or affairs trhu election of the latter’s board
of directors (reinvesting/trading insecurities)
-keywords that you should never forget are
investing and control
Lim Tong Lim v. Philippine Fishing Gear
-Corporation by estoppel
-hold the three personally, jointly, and
severally liable for the claim of the
respondent on the basis of the corporation
by estoppel
-benefitted-knowing it to be without valid
existence, accountable as general partners
-apply to the facts of the case!
Purificacion case
-peach sisters of laguna
Nationality of Corporations
1. Place of incorporation test-state
where the corporation is
incorporated is determinative of the
corporation’s citizenship
2. Control test-percentage of Filipino
ownership is at least 60%
(Gamboa/Herbosa rulings-voting
shares/beneficial owner)
3. Grandfather rule (Narra Nickel case)-
percentage of Filipino equity
engaged in nationalized/partly
nationalized areas of activities
provided for under the Constitution
and other nationalization laws is
computed in cases where corporate
shareholders are present, by
attributing the nationality of the
second of even subsequent tier of
ownership to determine the
nationality of the corporate
shareholder.
a. Direct and Indirect Interest-
determines the actual Filipino
ownership and control by
tracing both the direct and
indirect shareholdings in the
corporation which is subject
to the nationality rule
Purpose: to look into the
citizenship
Thus, to arrive at the actual
Filipino ownership and
control, both the direct and
indirct shareholdings in the
corporation are determined.
X Inc à Y Inc (69%) à Foreign
(53%) – 53x69=37%
FIL individuals (31%)à
Filipino (47%) à 47x69=32%
Filipino=63%
When resorted to: There
exists a doubt in the 60-40
ownership of the
corporation. It is only when
the control test is first
complied with that the
grandfather rule may be
applied. If the subject
corporation’s Filipino equity
falls below the threshold
60%, the corporation is
immediately
Dummy Status:
1) Funding
2) Support for technology is
funded by foreign
investors
3) Foreign investors manage
the company and prepare
CORPO MAMA Z RECIT QS 21-22 | MMFN
 all economic viability
studies
Herbosa case:
Gamboa decision, dispositive portion reads
“Capital” shares that are entitled to vote in
the election of the directors. In the present
case, it refers only to common shares and
not to the outstanding total capital stock.
SEC was directed to apply the meaning of
‘capital’ to the case by the constitution.
SEC-MC No. 8, Section 2:
All covered corporations shall observe the
constitutional and statutory ownership
requirement. Total number of voting and
outstanding shares, b is combination of
voting and non-voting shares if there are
non-voting shares.
Voting Control Test
March 9, 2022
1. Setting up of a company. Private
corporation highly appreciated by
businessman. Client setting up IT
company. What are the articles of
incorporation?
2. What is included in the AOI?
3. What are the limitations in the
selection of your corporate name?
4. What are the possible problems that
companies will encounter if they will
use the same company name?
5. How valuable is the corporate name?
The name should be distinguishable
from another corporation.
6. The name that was adopted has
generic or descriptive or
geographical terminology. Is this
prohibited under the RCC? No
monopoly of words that are generic,
descriptive, or geographic in
character like Batangas.
7. What is the doctrine of secondary
meaning?
8. Steps in changing the corporate
name?
9. How do you proceed with amending
the corporate name? Company name
is imbued with public interest. (eg.
Zuellig case. Filed a case to terminate
the contract because of the change
of name.)
“Ang basic naman niyan. Hindi siguro
nagcorpo yung lawyer ng Zuellig.” -
Mama Z
10. Purpose clause of AOI?
11. Should it be distinguished? No. Basta
nature of the corporation is not
contradicted.
12. What is the rule on principal’s office?
March 14, 2022
1. Why is the purpose important?
2. What’s the risk or the exposure of the
corporation here? Revocation of
franchise.
3. What is the existence of the
corporation?
4. What about old corporations?
5. How much time is allowed for
companies with a specific term to
notify the SEC? 2 years to notify but
this has already expired last February
23, 2021.
6. Do you still need to amend AOI to
reflect perpetual existence?
7. Allowed to extend?
8. What will justify early extension for
term?
9. What is the remedy if you have to
incorporate again?
10. Within what time can revival be
done? Wala sa law hahaha. Indefinite
period to revive. Mam thinks that at
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 some point it should stop, or at the
very least, 3 year period (to windup).
11. Who are incorporators?
12. Once you are an incorporator, you
will always be an incorporator?
Established fact which cannot be
changed.
13. Is there a minimum count of
incorporators?
14. If you intend to become an
incorporator, do you need to have
shares in the company that you will
incorporate as a stock corporation in
its capital? 1 share of capital stock.
15. Capital stock?
16. No money in bank? Papasa? Yes.
17. 2 months no money in bank. Can corp
still be a juridical entity?
18. Initial capital is needed for
corporations to be registered with
the SEC, exceptions? Special laws.
19. What do you mean by authorized
capital stock?
20. Kailangan ba magbigay na ng 1M for
this company? Law has dispensed
with subscription requirement.
21. What part of the capital is the paid up
portion?
22. Kinds of shares?
23. Silent as to voting right? Equality of
shares.
24. Preferred and redeemable shares?
25. Usual downside of preferred shares?
26. Does this automatically suggest that
they are non-voting?
27. Possible na isang class lang? Pero
walang voting? Bawal na walang
voting.
28. Nonvoting? GR is cannot vote.
29. Specific corporate acts in which non-
voting shares can legally participate
or vote? Section 6.
30. List exclusive? Yes.
31. Other matters? Stockholders with
voting rights.
32. Shares with par and no par value?
33. With par value. What is the basis of
computation of what you will
contribute to the corporation’s
capital?
34. What is the materiality of the par
value ascribed to these shares? 10
pesos depending on the number of
shares
35. Higher than 10? Yes. Fixed to sa
articles. Market price. 15 pesos.
Would it be alright for X to subscribe
at 15 pesos per share?
36. Can you legally subscribe at 15 pesos
per share? Yes, for the shares that
are worth 10 peso par value.
37. 10 peso? Minimum subscription
price (floor price). If lower, violation
of RCC. (watered shares->clear
violation of RCC and those people
who allowed it are accountable
under the law).
38. No par value shares? Shares which do
not have nominal value. (no specific
amount).
39. How will I know price of the shares
that I intend to subscribe?
40. Companies not allowed no par value?
41. What are founder’s shares?
42. Is this privilege automatic?
43. Even common shares which are
usually voting, cannot vote as well?
Exclusive right to vote is extended or
accorded.
44. Subject to anti-dummy law and other
pertinent laws. What do you mean by
this?
45. How does this limitation work?
46. You are an SEC lawyer. Pre-clears AOI
of prospective companies. What are
the possible defects of AOI that you
CORPO MAMA Z RECIT QS 21-22 | MMFN
 may flag so as to justify denial or
rejection?
47. When the corporation is issued a
certificate of incorporation, what is
the legal implication of that?
48. Cannot just add any name? There
should be AOI amendment.
49. If I proceed without going through
the SEC process, is this legal? At
most, we can just consider this as
branding.
50. What do you mean by outstanding
capital stock?
2/3 should be with reference to
OUTSTANDING SHARES.
STOCKHOLDERS REPRESENTING 2/3
OUTSTANDING SHARES.
51. If the entity that will amend AOI is a
non-stock corporation? 2/3 of
MEMBERS of CORP.
52. When is amendment considered
approved?
53. How much time is allowed for
organization to commence itself and
do its business?
54. What should be done for order of
delinquency to be lifted?
March 21, 2022
First hour: Revalida
1. A private corporation is a juridical
entity. Upon incorporation, SEC
approving its juridical existence, it
will now be allowed to exercise
corporate powers and act as a body
politick so as to enable it to
accomplish for the purpose that it
was incorporated. There are certain
acts that private corporations are
allowed to carry out. What is the
solution of the ROC so that the
corporation could still avail or
exercise these powers? Must
establish a board of directors or
trustees so that they can exercise
these powers.
2. What is the composition?
3. What if you have a corporate
stockholder, can you elect that as
your board member? No.
Stockholders corporations cannot sit
as members of the board. Only
natural persons can be elected as
board members (can make decisions
for the corporation).
4. All directors must be natural
persons? Yes.
5. Who has the power to choose those
people? Stockholders themselves or
members as the case may be.
6. Stockholders also have control over
the management or the company?
7. What are the other powers that are
entrusted to the board?
8. What are the qualifications to be
elected as board member?
9. Other qualifications? What about
residency?
There is a sole corporation.
Provisions of the RCC that apply to
corporate meetings may not find any
practical sense here. There is a
separate chapter for a one-person
corporation or a sole corporation.
10. Minimum count for trustees for one
person corporation? 2
directors/trustees.
11. What is an independent director?
12. Purpose of having an independent
director?
13. What are those companies that need
to have independent directors?
CORPO MAMA Z RECIT QS 21-22 | MMFN
 14. What is the count of independent
directors or trustees that the law
requires? 20% of the total number of
directors.
15. What is the degree of comfort that
our law and jurisprudence accords to
business decisions made my the
board?
16. What is the business judgment rule?
17. Who are disqualified from being
elected as board member?
March 23, 2022
1. Who are those companies that are
required to have independent
directors?
2. What are these specific companies?
3. What is the value to the corporation
of an independent director?
4. Possible ba that it’s the vote of the
independent director that becomes
the corporate act?
5. Who are those disqualified to be part
of the board?
6. Irrespective of the conviction? Yes.
7. Irrespective of the punishment? Yes.
8. Even if the conviction happened
outside the Philippines? Yes.
9. Are these violations time-bound?
Yes, 5 years.
10. What is the reason that we have
these statutory disqualifications
under the law? Nature of duties and
responsibilities of the board of
directors.
11. How are board directors chosen?
12. How do we call the board members
of a non-stock corporation? Board of
trustees (codal).
13. How are they chosen? Members of
the corp.
14. What is the process of selection?
Election.
15. Is this mandatory? Yes.
16. Attendance in stock corporation.
Pwede be matuloy yung meeting
where election will be held even if
attendees are just Ms. Balisong and
Mr. Arellano? yes. Presence of the
two will allow them to muster the
required quorum or shares, they can
proceed with the meeting. Ang count
po ng majority, presence, and vote, is
not per person, it’s on a PER SHARE
count.
17. In non-stock, what does ‘majority of
the members should be present’
mean? It shall refer to the majority of
the non-stock corporation.
18. How is it counted? Based on the
number of members (per tao).
19. How do we know how many
directors/trustees are to be elected?
The number that is stated in the AOI.
20. A,B,C,D,E,F,G are candidates. How
many of them will be elected to the
board? Only 5 will be elected to the
board.
21. Who among the 7 will win? Top 5 of
the most votes.
22. Is it necessary for a candidate to be
elected that he will get the majority
vote? Yes. Requirement is most
number of votes, not
minimum/majority.
23. Stock corporation. You are one of the
stockholders of X company and you
have a total of 10 voting shares. Can
you participate in election of board
members. There are 5 directors to be
elected. How many votes do you
have? Multiply shares by the number
of directors that you can elect.
24. Shares is 3846 shares and there are
12 directors to be elected.
25. Possible to give all of his 50 votes to
candidate E? Yes.
CORPO MAMA Z RECIT QS 21-22 | MMFN
 26. Can he split this into 2 candidates?
Yes.
27. Pwede bang 10 votes each for the
first 5 candidates? Yes.
28. Pwede bang lahat niya pagbigyan?
Yes. Only limitation of the law is total
votes cast should not exceed the
allowed number of votes.
29. What do you call this process?
Cumulative voting. This is a statutory
right.
30. What are the 3 general powers of the
board? Control of properties and
business; and exercise of corporate
powers.
31. What is the degree of authority
accorded to the decisions made by
the board? They should always act as
a collegial body. No one can act on its
behalf because that is going to be
ultra vires.
32. If the decision is unanimous, no issue.
But if divided on a particular subject,
how do we solve the division or
deadlock on a case like this? Proceed
with voting, resolution, then adopt.
33. What is the business judgment rule?
34. Exceptions to the business judgment
rule? Unless there is a breach of
trust/disloyalty to the corporation.
35. How will he be able to win the case
here? Prove applicability of the
exception.
36. The court acts as a collegial body.
What is the required attendance in
board meetings?
37. What is the prescribed quorum for
board meeting purposes?
March 28, 2022
1. Should the board act unanimously?
Not necessarily.
2. Differences of views on board
members, they vote on the matter.
So for purposes of meetings,
required attendance is needed so the
board will be able to act accordingly?
3. What vote is needed to adopt a
resolution? Majority.
4. How do we calculate the majority
here? Majority of those present.
(different to sa quorum)
5. How many of the 8 directors should
vote so they can adopt a resolution to
that effect?
6. Is there an exception which has a
different rule regarding votation?
Election of corporate officers (need
majority).
7. Directors entitled to receive
compensation?
8. Why is there a reason if there is a
prohibition against such? For them to
really work for the corporation, to
avoid abuse and enrich themselves
by the corporate powers.
9. If compensation is the rule, what will
most likely happen to the grant of
compensation? Seek the position just
for compensation. And they’re in a
capacity to abuse this authority. They
control the assets and properties of
the corporation.
10. What are the cases when
compensation can be granted to the
board? If it is in the by-laws and
stockholders agree to give to them,
representing majority.
11. How is per diem different from
reasonable compensation?
12. What is a reasonable compensation?
13. How about determination of
allowances?
14. Limitation that 10% cap does not
apply to per diem? Directors shall not
directly participate in determining
CORPO MAMA Z RECIT QS 21-22 | MMFN
 the amount for both per diem and
compensation.
15. Who will decide compensation of
board members then? Stockholders
who should decide the same.
Prudent for the corporation to just
adopt internal rules.
16. Who are the officers of the
corporation?
17. What is the qualification of the
president?
18. No residency and citizenship rule?
No.
19. What about the corporate secretary?
Both resident and citizen.
20. Does she need to be a lawyer?
21. When is a compliance officer
appointed?
22. What is the requirement for
treasurer? Stockholders? Board? No.
23. Who has the power to remove
corporate officers?
24. Are non-voting officers allowed to
participate?
25. Is there need to establish justifiable
ground?
26. Between board and officers, whose
decisions bind the corporation?
27. Who do we regard as corporate acts?
28. What is the difference between
officers and board members?
29. Exception to the board resolution
rule when it can be dispensed with?
Doctrine of apparent authority.
30. Upon which principle does this
operate? Estoppel.
31. What is the legal implication if there
is estoppel?
32. What cases are directors/trustees
personally liable?
OMFG nagrevalida na si mam.
March 30, 2022
Revalida: Module 2 cases
April 4, 2022
LECTURE AND REHASH!!
Instances of liability:
1) Patently unlawful act
2) Gross negligence or bad faith
3) Conflict of interest
4) Watered stocks
5) Stipulation-solidarily liable
6) Law
Basic requirements:
1) Must be alleged in the complaint that
he assented to such
2) Proof of bad faith
Liability for dismissal
Lim-owns lamber brokers
Malice or bad faith as corporate office was
not sufficiently proven to justify a ruling to
hold him solidarily liable with the
corporation.
Hauling business (DMI case)
April 6, 2022 (NO CLASS!!)
April 11, 2022
1. What is a subscription contract?
2. Can it be entered into before
incorporation?
3. What kind of stock? Unissued.
4. Define unissued stock.
5. Section 60-who are we dealing with
when it is pre-incorporation?
6. Consideration for stocks (61)
Study the rule on reclassification.
CORPO MAMA Z RECIT QS 21-22 | MMFN
April 20, 2022
1. Explain the doctrine of indivisibility of
subscription agreement.
2. Payment in installments? Allowed.
3. Are you allowed a grace period? Yes.
Provided that it is in a subscription
agreement.
4. Select subscribers? NO, IT SHOULD
be all.
5. Is the corporation allowed to impose
interest or charge interest?
6. Duty to pay interest should be
specified where? Subscription
contract.
7. When is it going to be a delinquent
stock?
8. Difference between due and
demandable and delinquent stock.
9. How did you apply the payment to
my shares? Payment would be
prorated to the obligation. Yung 50K
payment mo, magiging prorated,
applied to across 1000 shares.
Deemed up to 50 pesos paid palang
(note indivisibility of SC)
10. What do you think is the reason why
our lawmakers to take the
indivisibility route rather than by
simplifying the equation? Trust fund
doctrine.
11. Is this more beneficial to the
corporation?
12. Is it easier to collect if indivisible?
13. What gives the corporation the right
to do a delinquency sale of the very
shares? Why not collection or
application of cash dividends? The
fact that the shares that were
subscribed will also serve as security
for the payment of your subscription
(collateral). Corporation also has a
statutory lien on the subscribed
stock. Ang shares kasi mahirap na
collateral (unlike car, land).
Maraming variables ang shares.
Volatile ang pricing.
14. What are the procedural
requirements that we need to satisfy
so as to render the delinquency sale
legal and valid?
15. what happens during a delinquency
sale?
16. To whom will the shares be
awarded? Lower count of shares.
17. What is the next step that he could
expect from the corporation?
18. What is a stock certificate and what
are the formalities needed?
19. Is it a negotiable instrument?
20. What is a negotiable instrument?
Section 1, NIL. In a stock certificate,
there is no guaranty that your money
will return to you.
21. Can we say that in a way, it is
comparable to a negotiable
instrument (stock certificate)?
Intangible property so best proof is a
document.
May 11, 2022
1. As a stockholder or member of a
private corporation, you enjoy
certain statutory rights under the
RCC. What are these rights?
2. Common to both? Yes.
3. Are there rights that are not common
to these corporations?
4. Are there rights that are specific only
to stock or non-stock corporations?
Right to dividends. Not present in
non-stock corporations.
5. How often is the stockholders’
meeting? regular meetings held
annually. Special meetings,
depending on the call of person
authorized.
CORPO MAMA Z RECIT QS 21-22 | MMFN
6. When is notice of meeting supposed
to be sent?
7. What should be contained in the
notice of meeting?
8. Can corporation change notice?
9. Is notice something that can be
waived?
10. If there is no one, remedy?
11. Still need notice? Yes.
12. If the shares held by stockholder x
are all non-voting, still entitled to
notice of meeting?
13. What should be presented to the
stockholders/members during the
actual meeting? Section 49
14. Where is the proper venue of the
shareholder’s meeting ?
15. Who will precide during the
stockholders/membership meeting?
16. Required attendance/quorum?
17. Can you change the quorum count?
Greater (not lesser).
18. Does quorum include unissued
shares?
19. Are treasury shares outstanding
shares?
20. What about delinquent shares?
21. What about unpaid shares?
22. What about shares of a deceased
stockholder? Yes,
administrator/executor
23. Effect of absence of quorum? No
force and effect.
24. What about if he cannot attend
physically?
25. What is a proxy?
26. Instrument to be used?
27. Is there a deadline?
28. Can you appoint?
29. Can you appoint someone who is not
a stockholder as your proxy? Even if
he is not part of your corporation? As
long as he is of legal discretion?
30. Does Kelsey the 10-year old have
discretion?
31. Can you appoint a corporation as
your proxy? Yes
32. Can you designate a delinquent
stockholder as your proxy? Yes
33. Can 1 person be appointed for a lot
of people as proxy? Yes
34. What is duration of a proxy?
35. Is it revocable or irrevocable? If it is
coupled with interest (consideration)
36. Why are proxys as a rule revocable?
37. If you executed a proxy, are you still
the stockholder of record after the
proxy execution?
38. You can still be elected as director?
39. Continue to get the dividends?
40. Continue to receive notice of
meeting?
41. What is a voting trust agreement?
42. Does the stockholder remain to be
shareholder of record? Stockholder
needs to sacrifice title.
43. Who is qualified to be elected to the
board? Trustee, he is the one that
appears on record
44. Source? Stock and transfer book
45. Incumbent director. Effect of VTA to
the position? Wala na siya
46. Why would a stockholder do a voting
trust agreement? Practicality, better
judgment
47. Formalities that need to be followed
so the VTA can be enforceable and
valid?
48. How do we differentiate VTA from
proxy?
May 16, 2022
1. Remedies that are available to the
corporation? Individual and
representative suit
2. Example of individual suit?
CORPO MAMA Z RECIT QS 21-22 | MMFN
 3. What if 20 more shareholders were
similarly treated by Vaqui
corporation? Remedy applicable to
them if minority shareholders?
4. What is an intracorporate suit?
5. Tests to determine intra suit?
6. What if it’s between X stockholder
and one of the board members of
their corporation? Pwede ba siyang
pumasok sa relationship test?
7. Does it matter if the designated
proxy is a stockholder?
8. Issue between trustor and VTA? No,
trust is governed by the civil code
9. What is a derivative suit?
10. Why is there a remedy like this?
-revalida of cases-
May 23, 2022
1. How do we differentiate non-stock
from stock?
2. No violation on one purpose rule?
3. In terms of voting, how do we
differentiate?
4. Is it possible that some members
cannot vote?
5. What is the policy on cumulative
voting?
6. Proxy arrangement?
7. Why this rule on proxy? (benevolent
factor)
8. Membership, how are they
different?
9. What about board members? Term
of office? Election of officers?
10. Is it possible for non-stock corp
members to be liable for liabilities?
11. What are the shareholders’ rights
that are common to stockholders and
members of a non-stock
corporation? Right to meeting, right
to vote
12. What are inapplicable to non-stock
corporations? Right of appraisal, pre-
emptive right
13. What about VTA? Is this relevant to
non-stock corporations?
14. Does this mean that non-stock
corporations can no longer earn?
Yes, basta used for benevolent
purpose
15. Is this prohibition absolute?
16. What can we deduce from Section
139? Is it absolutely prohibited from
distributing or sharing the properties
of the non-stock organization to its
members?
17. Is it legally possible for non-stock
corporations to be converted into
stock corporations?
18. What is the proper procedure?
19. What is the violated rule? Rule of
distribution.
20. If you are the counsel of Vaqui
foundation, what will you advise
them for proper conversion of non-
stock to stock?
21. Why is there no violation of RCC if
stock to non-stock? It will just
become donations
22. What is a close corporation?
23. Those 3 restrictions must appear
where?
24. Usually, what entities are registered
as close corporations?
25. What are the companies that are not
allowed to register as close
corporations? Par 2, Sec 95, RCC
26. 90%. Close corp?
27. Who is in control in a close
corporation?
28. Even close corporations are required
to constitute a board. Can they opt to
not constitute a board anymore?
CORPO MAMA Z RECIT QS 21-22 | MMFN
“It’s not advisable to start relationships
during the bar review preparations.” (Mam
Zarah) HAHAHAH
29. Is there pre-emptive right in a close
corporation? What is the difference?
Where is it broader?
30. Is there an appraisal right in a close
corporation? How do we compare?
31. Ang close corporation ba may
officers din? Who elects the officers?
32. Can you elaborate on whose shares
are we talking about here, on the
restrictions?
33. Who is affected by these
restrictions? Stockholder and
transferee.
34. How does the RCC manage the
restriction in such a way that the
corporation will not abuse this
requirement?
35. Mayroon bang safeguards under the
RCC to ensure that the board will not
abuse the rule on restriction? Not
onerous than the right of first refusal.
“Pag magbabar kayo, ang baunan niyong
food is boiled eggs and saba. Malakas ang
katawan niyo, I’m telling you!” (Mam
Zarah)
36. There’s this type of corporation that
we call religious. It is categorized into
two: Sole and religious society. Can
you please distinguish the two? They
share a common goal (embody
religious objectives)
37. Who are those that can register as a
religious sole corporation?
38. Separate and distinct? No title to
own properties? No
39. Pwede bang magkaroon ng sariling
properties yung archbishop nay an?
Yes, separate personalities
40. What about liabilities? Who will be
responsible for the debts and
obligations of the church? Corp sole,
not individual
41. What is the advantage?
42. What is an OPC?
43. What is the risk involved if we are
flexible in allowing these businesses
to register as OPC?
44. What else can we offer to the sole
owner? Business does not die
together with the owner
45. Does the OPC have a president?
46. What should be the name of the
OPC?
May 25, 2022
-revalida of cases-
May 30, 2022
1. What is dissolution?
2. What are the 2 types of dissolution?
Distinguish.
3. What are the cases of voluntary
dissolution?
4. Is there a difference in the
procedural requirements?
5. Whose interest may be affected by
the intended dissolution?
6. What is the difference in summary if
creditors stand to be affected and if
no creditors will be affected?
7. What happens to the stockholders
after dissolution?
8. What happens to the debts of the
corporation?
9. What happens to the employees?
10. What happens to the name of the
corp?
11. What is the difference between
voluntary and involuntary
dissolution?
CORPO MAMA Z RECIT QS 21-22 | MMFN
12. Procedural and substantive
requirements to be met?
13. What are some of the valid reasons
of a private corporation?
14. Upon dissolution of corp, there’s this
period called winding up period.
What happens here?
15. Can the corporation itself do the
liquidation or winding up process?
Yes, BOM can be trustees
16. So can board still adopt resolution
allowing for the sale of assets?
17. What if there’s a need for a
corporation to file a collection case?
Corp can still do so but limited
capacity. Corp loses this after 3-year
period
18. Who is a trustee? One who is
conveyed with legal interest
19. Pag more than 3 years yung
liquidation process, hindi na aabot si
corporation. So the solution is
trusteeship. What if the corporation
is not inclined to appoint a trustee?
They can apply for receivership
20. Is winding up necessary irrespective
if the dissolution is involuntary or
voluntary?
21. What is a foreign corporation?
22. When do you say that a foreign corp
is doing business in the Philippines?
23. Explain substance and continuity test
24. Under the FIA, what are the specific
transactions that would partake
doing business?
25. What constitutes not doing business
in FIA?
26. What is the reason for the
dismissable nature of the case?
27. Does this mean that the transaction
or contract done in the PH is void?
28. Absence of license will only affect
what? Capacity to sue of the foreign
corporation.
29. Kung idedemanda si foreign
company nung kliyente, but no
license, can he be exempted?
30. Legal requirements in registering
under SEC? Section 142
31. What specific role ang resident
agent?
-revalida of cases-
June 8, 2022
1. Penalties
2. Can a third person be made
accountable also?
3. Jurisdiction of SEC prior to change?
4. What RTC? Where principal office is
located.
5. What is an intracorporate dispute
again?
6. How did the court apply this rule in
the case of Subic Bay?
7. What is the importance of
registration?
8. What is the overriding policy of the
SRC? What does it cover?
9. Examples of equity type of
securities?
10. Investment contract under the
Howey test?
11. What is a debt type of equity? Equity
is “speculative” because there is no
certainty that you will get a return of
investment.
12. How will you earn? Through interest.
13. Issuers are the ones that create the
securities. Kapag issuer, is it
necessarily a corporation? No. But
most are corporation? Pwede rin ba
ang government? Yes.
14. Bakit iha nagiissue ng securities? Para
saan? To fund/finance their project.
15. What do you need to file with SRC?
Registration statement.
CORPO MAMA Z RECIT QS 21-22 | MMFN
16. What is prohibited? The public sale of 31. What could happen to the
securities. application? It may reject, approve,
17. When do we say that the issuer is or revoke.
going public with the offering? 32. There are provisions under the SRC
18. What are the activities where we that not only protects the investors
could infer public offering of but also includes future investors,
securities? but also existing investors, but
19. Is the rule on registration absolute? specific to shareholders. What is the
No. There are exempt securities and tender offer process?
transactions.
20. Cases of exempt securities? June 15, 2022
21. Is this list closed? No. Concept of
securities continues to evolve. We -revalida of cases-
allow SEC to decide on a case-to-case
basis.
22. From the enumerated securities,
what are their common
denominators as to justify exemption
from the tedious registration
process? Public is still adequately
protected. Least likely for fraud to
occur.
23. What about exempt transactions?
Common denominator this time is
the character of offering and
circumstance attendant to sale.
24. Judicial sale, why is this an exempt
transaction? Directed by the court.
The fact that the borrowed defaulted
in payment of his debt so creditor is
forced to go after the securities.
25. What about conversion of shares?
26. Pre-incorporation, why limited?
27. What are private placements and
why is it exempt?
28. What about these qualified buyers
such that registration becomes
unnecessary?
29. Is this a closed list? No.
30. What is the safe thing to do if it is not
defined? The safe thing to do is to
inquire with the SEC for an advisory
opinion.

CORPO MAMA Z RECIT QS 21-22 | MMFN