REGULATORY FRAMEWORK FOR BUSINESS TRANSACTION

LAW ON PARTNERSHIP
ELEMENTS OF A PARTNERSHIP CONTRACT
1. Agreement to contribute money/property/industry
2. Intention to divide profits
3. Lawful purpose

JURIDICAL PERSONALITY
1. Separate and distinct from partners
2. May own assets under its own name
3. May incur obligations and liabilities under its own name

EXISTENCE?
1. Sharing of profits –  (GR)
2. Sharing of gross returns – X
3. Co-possession/co-ownership – X
4. Non-partners to each other – X (GR); XPN: estoppel
a. Partnership liability – juridical person and partners (jointly and prorata/equally); (1) there must be an
actual partnership existing (2) all of partners consented
b. Personal liability – partners

CHARACTERISTICS
1. Consensual – no form necessary; XPN:
a. Immovables are contributed – (1) public instrument (2) inventory + signed by partners and attached;
contract is void if not followed
b. Capital > 3,000 – (1) public instrument (2) registered with SEC; still valid even if not followed

KINDS OF PARTNERSHIP
As to object
1. Universal
a. All profits () – only usufruct of the properties + all profits by industry or work become common
b. All present property – all the properties become common + profits of the contributed + profits from
other sources (if there is stipulation) + fruits of subsequently acquired (if there is stipulation)
2. Particular

As to liability to 3rd persons

1. General – jointly and prorata/equally
2. Limited (≥1 GP + ≥1 LP) – limited only up to the extent of his contribution

As to personality
1. De jure
2. De facto
3. By estoppel

As to life/existence
1. With a fixed term
2. Will

CAPITALIST VS. INDUSTRIAL

Capitalist Industrial
Contribution Money/property Service
Prohibition on business Same – X unless allowed Same – X unless allowed
Different –  unless not allowed Different – X unless allowed
Profits (1) PSA (2) capital contribution (1) PSA (2) just and equitable
Losses (1) LSA (2) PSA (3) capital contribution (1) LSA (2) exempt
PROPERTY RIGHTS
1. Right to specific partnership properties
2. Right to profits/surplus
3. Right to manage – acts of administration (ordinary course)
 GR: mutual agency
 XPN: appointed managing partner
a. Appointed in the articles – can only be removed with just and lawful cause
b. After execution – can be removed with or without just and lawful cause
 Common debtors – (1) receipt issued to partnership: only partnership debt is paid (2) collecting
partner issued receipt for his debt: proportionately
 Resolution of conflict – (1) majority (2) controlling interest

SOLIDARY LIABILITY
1. Wrongful/unlawful acts of partners in the ordinary course of business
2. Misappropriation of money/property

DISSOLUTION
1. Juridical person ceases to exist
2. Mutual agency ceases
a. Winding-up – binding
b. Continuation of previous transaction – binding
c. New business transactions
 Old creditors – need publication + special notice to be not binding; actual knowledge
 New creditors – need publication only to be not binding; constructive knowledge
3. Grounds for dissolution
a. Without violation of agreement
b. With violation of agreement – damages for aggrieved party
c. By judicial action/court order
d. By operation of law
e. Admission of partners
Newly admitted partner Source
Prior to admission Liable Capital contribution
Subsequent to admission Liable Up to personal assets
f. Limited partnership
 Civil interdiction, insolvency, and death of last general partner
 Civil interdiction, insolvency, and death of last partner

LIQUIDATION
Partners assets
1. Partners’ creditors
2. Partnership creditors
3. Partners’ capital/profits
Partnership assets
General partnership Limited partnership
1. Outside creditors 1. Outside creditors + liab to LPs
2. Inside creditors 2. LP compensation/s profits
3. Partners’ capital 3. LP capital contribution
4. Partners’ profits 4. Inside creditors (GP)
5. GP profits
6. GP capital contribution
REVISED CORPORATION CODE

ATTRIBUTES OF CORPORATION
1. Artificial being – juridical personality upon issuance of certificate of incorporation (SEC)
 GR: directors/trustees, SHs/members, and officers are not liable
 XPN: doctrine of piercing the veil
a. Traditional (JP → corporate insiders)
b. Reverse (CIs → JP)
2. By operation of law
 Private – must be incorporated by a virtue of general law (RCC)
 GOCC – special law
3. Right of succession
 Incorporated under RCC – GR: perpetual
 Incorporated under OCC – GR: deemed extended to perpetuity
4. Powers
 BODs
 Officers
 BOD + SHs/members
 Executive committee – 3 members

POWERS
1. Express
2. Implied
3. Incidental
4. Beyond 1, 2, & 3 – ultra vires act (voidable) vs. illegal acts (void)

INCORPORATION
1. Articles of incorporation (S12) + favorable recommendation (S11)
a. Corporate name
b. Principal office
c. Purpose/s – primary and secondary
d. Term
e. Incorporators
f. Capital structure
g. Arbitration agreement
2. By-laws
a. Pre-incorporation - incorporators
b. Subsequent to incorporation – SHs (majority)
c. Amendable
 Majority BOD + majority SHs (GR)
 BOD only – (1) delegation (2/3) (2) revocation (majority)

CERTIFICATE OF INCORPORATION (SEC)

1. Fails to commence w/in 5 years – automatically revoked
2. Continuous inoperation for 5 years – delinquency 2 years (lift) X → revoked

APPOINTMENT OF OFFICERS (law & by-laws)

1. President (law) – director
2. Secretary (law) – resident citizen
3. Treasurer (law) – resident
4. Compliance officer (law if VPI)

INCORPORATORS
1. 1 to 15
2. Natural/juridical
3. Must own/subscribe to 1 share
CAPITAL STRUCTURE (Doctrine of equality of shares)
1. Ordinary and preference shares
OS PS
Privilege X Preference as to assets/dividends
Voting power  GR: ; XPN: deprived
Board exam assumption:
GR: deprived; XPN:  III AM SAD (S6 a-h)
2. Treasury shares and redeemable shares
TS RS
Voting power X GR: ; XPN: deprived
Board exam assumption:
GR: deprived; XPN:  III AM SAD (S6 a-h)
Requirement: sufficient URE  X
3. Par and no-par
Par No-par
Fixed value  X
Limitation on issue price ≥ par ≥ P5
Corpo allowed? All Not allowed (S6)
 S6 – banks, trusts, insurance, pre-need, public utilities, building and loan association, and other
corporations authorized to obtain funds from public

SPECIFIC POWERS
1. Extend/shorten corporate term
2. Increase capital stock (25% & 25%)
3. Deny pre-emptive right (thru AOI)
4. Acquire own shares (S40 + sufficient URE)
5. Declare dividends
a. Stock – board approval + 2/3 SHs
b. Other than stock – BOD approval
6. Invest corporate funds
a. Primary – majority of BOD
b. Other than primary – majority of BOD + 2/3 SHs
7. Enter into management contracts – max 5 years
8. Sell assets
a. Ordinary course – BOD approval
b. All/substantially all – BOD + SHs approval
 GR: liabilities not assumed by buying corporation
 XPNs: (1) agreement (2) merger/consolidation (3) fraud/alter ego (piercing)
9. Enter into partnerships, JV, and other commercial agreement
SHAREHOLDERS’ RIGHTS
1. Proprietary
a. Right to dividends
b. Pre-emptive right
c. Appraisal right
 Shareholder must file a written demand within 30 days from the date the act was voted upon
 Shareholder must have voted against the corporate act
 The value to be paid to the shareholder must exclude any appreciation or depreciation brought
about by the corporate act
 Corporation must have sufficient unrestricted retained earnings
d. Right to transfer shares
 Delivery of stock certificate
 Endorsement
 Recorded in corporate books (stock and transfer books) – to be binding to third persons
e. Right to assets
f. Right to stock certificates
2. Management
a. Voting
b. Meeting
3. Remedial
a. Individual suit
 The person whose right was violated is the same person who will file the case
b. Representative suit
 Common right violated
 Can file several individual suit or can file one representative suit
c. Derivative suit
 Right belongs to the corporation itself
 The persons who are supposed to file the case in behalf of the corporation refuse or the
persons who are supposed to file the case in behalf of the corporation are the persons to be
sued
 Shareholder will file the case

MEETINGS
Meetings Directors Shareholders
Type Regular/special Regular/special
Frequency (R) Monthly Annual; anytime after April 15
Frequency (S) As the need arises As the need arises
Notice (R) 2 days 21 days
Notice (S) 2 days 1 week
Attendance (1) In-person (2) Remote (1) In-person (2) Remote (3)
Proxy (4) VTA
Venue Anywhere GR: principal office; XPN:
city/municipality
Quorum GR: majority of entire board; XPN: GR: majority of voting shares;
bylaws higher () lower (X) XPN: bylaws higher () lower ()

Proxy VTA
Formality Written, signed, and filed with Written, notarized, and filed with
corporate secretary corporate secretary + SEC
Right transferred Voting power Legal title
Duration GR: 1 meeting; XPN: continuing GR: ≤ 5 years; XPN: > 5 years co-
proxy mad 5 years terminus with loan agreement

OBLIGATIONS OF SHAREHOLDERS
1. Pay subscription – valid consideration:
a. Cash
 b. Tangible/intangible property
c. Shares of stock in another corporation
d. Labor and services – actually performed/rendered
e. Previously incurred indebtedness
f. Stock dividend

REMEDIES IF UNPAID
1. Judicial action
2. Thru dividends
3. Delinquency sale
Step 1: Due and payable? (1) subscription agreement (2) call (to fix the date) (3) insolvent (due and
demandable/no call) – 30 days to pay
Step 2: Delinquent shares
Step 3: Delinquency sale through public auctions – must pay full amount due (1) balance (2)
cost/expenses of sale (3) interest

DIRECTORS
1. Doctrine of centralized management (GR)
 XPN: close corporations – provision that SH manage the corporation is valid
 XPN: close corporations – deadlock in management; SEC is allowed to interfere by appointing a
provisional director
2. Business judgment rule (GR)
3. Directors are not personally liable (GR)
 XPN: (1) agreement (2) law (3) assented to patently unlawful act (4) guilty of gross negligence and
bad faith
4. # of directors – 1 to 15
 Vested with public interest – 20% independent directors
 Revised code of corporate governance – 20% or 2 independent directors; w/c higher
5. Term – 1 year

QUALIFICATIONS
1. Natural/juridical
2. Must be owner of at least 1 share
3. Additional (by-laws)

DISQUALIFICATIONS (w/in 5 years prior whether PH/foreign)

1. Criminal liability
a. Imprisonment exceeding 6 years
b. Violation or RCC/SEC
2. Administrative liability
a. Fraudulent act

FUNDAMENTAL ISSUES - DIRECTORS

1. Removal of directors – shareholders by 2/3 vote
2. Filling of vacancies
Shareholders Directors
Removal, expiration, and increase Other than REI + with quorum + did not refer to
SHs
Other than REI, w/o quorum
Other than REI, with quorum + referred to SHs
3. Compensation – GR: not entitled; XPNs: (1) reasonable per diem (2) by-laws or approved by SHs (3)
for other functions; max of 10% of NIBT-PY (except #3)
4. Self-dealing directors
 GR: voidable
 XPNs: valid (1) contract must be fair and reasonable (2) presence of director not required for
quorum and (3) vote of director not required for approval
  If not all of the 3 are met – voidable; XPN: fair and reasonable and ratified by SHs – valid
5. Interlocking directors
 GR: valid
 XPNs: voidable (1) fraud (2) substantial vs. nominal
 Rule on self-dealing directors applies
 Substantial >20%
X Y Status
20% 15% Perfectly valid
25% 30% Perfectly valid
25% 20% Voidable

DISSOLUTION
1. Ceases to exist as a corporate body
2. Retains limited capacity for the purpose of winding-up (3 years)
a. Realization
b. Settlement

GROUNDS FOR DISSOLUTION

1. Voluntary
2. Involuntary
a. By operation of law
b. SEC
c. Court

VOLUNTARY DISSOLUTION
1. No creditors are affected
2. Creditors are affected
No creditors are affected Creditors are affected
Filed Request Petition
Hearings No hearing Required
Approval Majority BOD + majority SHs Majority BOD + 2/3 SHs
Published Notice of meeting SEC order – deadline for filing
of objections
Certificate of dissolution  
3. Shortening corporate term
 No certificate of dissolution is required
CLASSIFICATION OF CORPORATION
According to Legal Status
1. De jure
2. De facto
a. Valid law
b. Attempt in good faith to incorporate
c. Exercise of powers
De jure De facto
Compliance Full Colorable (defective)
Juridical personality  
Attack on juridical personality X Direct (quo warranto)
3. Estoppel
4. Prescription
Estoppel Prescription
Basis Misrepresentation Passage of time (Roman
Catholic church)
Liability As general partners (jointly and As a corporation
prorata/equally)

According to # of Incorporators
1. Ordinary
2. One person corporation
Ordinary OPC
# of incorporators 2 to 15 1
Businesses prohibited X Sec 116
Who can form Natural Natural
Juridical Estate
Trusts entity
Term GR: perpetual Natural – GR: perpetual
Estate/trusts – co-terminus
with estate and trusts
AOI  
By-laws  X
Officers  President – Sole director/SH
Secretary – 3rd person
Treasurer – SSH/3rd person
Appointment of nominees X 
Incapacity – (1) temporary (2)
permanent

According to capital structure

1. Stock
2. Non-stock
Stock Non-stock
Capital Divided into shares Not divided into shares
Dividends Authorized Not authorized
Management Directors Trustees
Term of directors/trustees 1 year 3 years
# of directors/trustees 1 to 15 Can exceed 15
Ownership SHs Members
Purpose Profit Non-profit

According to # of Shareholders
1. Ordinary
2. Close
 Ordinary Close
# of shareholders No limit Max of 20
Restriction on share transfers None With restriction
(1) AOI
(2) By-laws
(3) Stock certificate
Public offering Allowed Prohibited
Management BOD GR: BOD
XPN: SHs
Deadlock X 
SEC

According to Nationality
1. Domestic
2. Foreign
 GR: incorporation test
a. PH laws – domestic
b. Foreign laws – foreign
 XPN: nationalized acts
a. GR: control test
b. XPN: grandfather rule in case of doubt

Foreign corporation doing business?

1. Appointment of resident agent
2. License to do business
a. Contract test
b. Substance/continuity test – failure? GR: cannot sue but can be sued; XPN: estoppel

SECURITIES REGULATION CODE

REGISTRATION
1. Exempts securities (S9)
2. Exempt sale transactions (S10)
3. Non-exempt securities – required to comply with the registration requirements of SEC

REGISTRATION REQUIREMENTS
1. Submission of registration statement and prospectus
2. Issuance of “permit-to-sell”

INSIDER TRADING
1. Purchase/sale of securities
2. Made by an insider
a. Direct insider
b. Indirect insider
3. While in possession of non-public material information
4. Related to the issuer corporation or the securities being issued

DIRECT INSIDER
1. Issuer corporation
2. Director/officer of the issuer corporation
3. Person with control over the issuer corporation
4. Person whose relationship/former relationship with corporation gives him access to NPMI
5. Government officer/employee with access to NPMI
TENDER OFFER RULE CONDITIONS
1. Acquisition of stocks
2. Target public corporation – listed, assets of 50 million, at least 200 SHs, with at least 100 shares each

TENDER OFFER RULE ACTS

1. Declaration
2. Tender offer
 Thresholds:
a. 15% – individually/group, one time/over 12 months: declaration
b. 35%/control – individually/group, one time/over 12 months: declaration + tender offer
c. Over 50% – regardless of interest: declaration + tender offer
LAW ON COOPERATIVES

COOPERATIVE
1. Powers
2. Purposes/objectives
3. Cooperative principles

SIMILARITIES WITH CORPORATION

1. Juridical personality – acquired through CDA’s issuance of certificate of registration (COR)
2. Limited liability

CREATION OF COOPERATIVE
1. Articles of cooperation
a. Name
b. Purposes
 Single-purpose – allowed to transform to multi-purpose (2 years)
 Multi-purpose
c. Area of operations + principal office
d. Term (50 years)
e. Names of organizers/cooperators (primary: 15 or more natural persons)
 Legal age
 Filipino citizen
 Must be working/residing in the area of operations
 Common bond of interest
f. Capital structure (par, max of 1,000)
 Ordinary
 Preference (≤ 25% of authorized)
2. By-laws
3. Bond of accountable officers
4. Economic survey
5. General statement structure + staffing plan
6. Sworn statement of the treasurer

MINIMUM PAID-UP CAPITAL

1. In general: 25% of subscribed capital or 15,000, w/c ↑
2. Multi-purpose: 25% of subscribed capital or 100,000/feasibility study requirement, w/c ↑

ACCORDING TO MEMBER
1. Primary (natural persons)
2. Secondary (juridical persons)
a. Federation – minimum paid-up capital: 1M or FS requirement, w/c ↑
b. Union – minimum paid-up capital: X
3. Tertiary (secondary-juridical persons)
a. Federation – minimum paid-up capital: 5M or FS requirement, w/c ↑
b. Union – minimum paid-up capital: X

MEMBERS
1. Regular – general assembly → meeting
2. Associate

TERMINATION OF MEMBERSHIP
1. Withdrawal
2. Death/insanity (primary coop)
3. Dissolution/insolvency (secondary/tertiary coop)
4. Majority vote of BODs
a. Failure to comply with its obligations in the coop
 b. Violation of rules and regulations and by-laws
c. Failure to patronize the products and or services of the coop for an unreasonable period of time
d. Guilty of any act or omission that is prejudicial to the interest and welfare of coop

GENERAL ASSEMBLY MEETING

Members Directors
Types Regular/special Regular/special
Frequency (R) Annually Monthly
Or anytime w/in 90 days EOFY
Quorum 25% of members entitled to vote Majority
Banking – ½ +1 MEV
Electric – 5% MEV

DIRECTORS
1. # of directors – 5 to 15
2. Term – 2 years
3. Qualifications
a. Regular member
b. Entitled to vote
4. Disqualifications/prohibitions
a. Other function within cooperative
b. Engaged in same line of business
c. Conflict of interest
5. Special issues
a. Officers
 Chairperson – BOD
 Vice chairperson – BOD
 Other officers – can be non-BOD
b. Executive committee
 Audit – elected by general assembly
 Election – elected by general assembly
 Conciliation/mediation
 Ethics
 Others
c. Filling of vacancy
 Members – expiration
 Directors – other than expiration + quorum
d. Compensation
 GR: not entitled
 XPNs:
(1) reasonable per diem – prohibition: incurred loss or dividend rate < official inflation rate
(2) beyond reasonable per diem – only after year 2
e. Disloyalty of director
 GR: liable – (1) damages (2) double the profits
 XPN: no liability – ratified by ¾ members
f. Self-dealing director – same with corporation; XPN ratification: ¾ MEV

CAPITAL + NET SURPLUS

1. Source of capital
a. Capital contribution
b. Loan and borrowings
c. Revolving capital
d. Gratuities
2. Use of capital
3. Allocation of net surplus – statutory funds
a. Reserve fund: Y1-Y5 50% minimum; Y6-Y10 10% min
 b. Education and training fund: 10% max
c. Community development fund: 3% min
d. Optional fund: 7% max

DISSOLUTION
1. Voluntary
a. Creditors not affected – majority + ¾ MEV; no need for hearing
b. Creditors affected – majority + ¾ MEV; hearing necessary
2. Involuntary
a. Court order
b. CDA
 Failed to operate w/in 2 years
 Subsequent inoperations w/in 2 years

LIQUIDATION
1. Realization
2. Settlement
FINANCIAL REHABILITATION AND INSOLVENCY ACT

TWO PARTIES
1. Debtors
a. Natural person
b. Sole proprietorship – registered with DTI
c. Partnership – registered with SEC
d. Corporation – registered with SEC
Not covered:
a. Banks – banking laws
b. Pre-need – pre-need code
c. Insurance – insurance code
d. National/local government agencies/units – presumed solvent
2. Creditors
a. Secured
b. Unsecured

INSOLVENCY
1. Actual – Assets < liabilities
2. Technical – Assets > liabilities but cannot make payment of the obligations as they fall due

PROCEEDINGS (NON-ADVERSARIAL)
1. Natural persons
a. Suspension of payments
b. Liquidation
2. Business organizations
a. Rehabilitation
b. Liquidation

SUSPENSION OF PAYMENTS – natural person + technical insolvent

1. Step 1. File petition
a. Proposed agreement (approval/disapproval)
b. Schedule of assets and liabilities
2. Step 2. Suspension order (3 months)
Covered:
a. Debtor – prevented from disposing/selling/transferring his properties except in the ordinary course
of business or practice of profession/industry; prohibited from making payments except for
legitimate expenses of business or practice of profession/industry
b. Unsecured creditors – prevented from enforcing their claims; cannot file claims in court; if claim is
already filed, the claim is suspended; enforcing judgment is suspended
Not covered:
a. Secured creditors – GR; XPN: if they participate in suspension of payment proceedings, they will be
bound
b. Sec. 96A (FRIA) – claims for personal, labor, maintenance, illness, and funeral of wife/children
incurred 60 days prior to the filing of petition
c. Sec. 18 (FRIA) – not affected by stay or suspension order: actions against surety of debtor, cases
pending appeal before the supreme court, criminal actions filed against the debtor or the
owners/officers of the debtor
3. Step 3. Approval of proposal
a. Meeting (minimum)
 3/5 of liabilities (PHP)
b. Approval (double majority)
 2/3 creditors (# of creditors)
 3/5 of liabilities (PHP)
REHABILITATION – business organizations + actual/technical insolvency
1. Court-supervised
a. Voluntary – initiated by debtor (owner/majority of the partners/majority BOD + 2/3 OCS)
b. Involuntary – initiated by creditors with at least 1M or 25% subscribed capital/capital contri, w/c 
2. Pre-negotiated
3. Out-of-court

COURT-SUPERVISED REHABILITATION
1. Step 1. Filing a petition
a. Rehabilitation plan
b. 3 names for rehabilitation receiver
2. Step 2. Commencement order + stay order (entire duration of rehabilitation proceedings)
Covered:
a. Debtor – prevented from disposing/selling/transferring his properties except in the ordinary course
of business or practice of profession/industry; prohibited from making payments except for
legitimate expenses of business or practice of profession/industry
b. Unsecured/secured creditors – prevented from enforcing their claims; cannot file claims in court; if
claim is already filed, the claim is suspended; enforcing judgment is suspended
Not covered:
a. Sec. 18 FRIA
3. Step 3. Court action
a. Confirm – cram down rule applies: the terms of rehabilitation plan will be binding against the
debtor and all the parties that may be affected by the rehabilitation plan including all creditors even
if the creditors participated in the proceedings or not and even if they oppose the filing of the
petition
b. Dismiss/convert to liquidation proceeding

PRE-NEGOTIATED REHABILITATION
 Pre-negotiated rehabilitation must be endorsed or approved by creditors holding at least:
a. Creditors holding more than 50% of the total secured claims
b. Creditors holding more than 50% of the total unsecured claims
c. 2/3 of the total liabilities of the debtor
 Once the court confirms, cram down rule applies

OUT-OF-COURT REHABILITATION
 Out-of-court and informal rehabilitation agreements must be approved by the debtor and
a. 85% of the total creditors
b. 67% of which must represent secured creditors
c. And 75% unsecured creditors
 Finalized terms of out-of-court rehabilitation agreement is published in a newspaper of general
circulation
 Once published, it will have the same effect as if there is a court-confirmed rehabilitation agreement;
cram down rule applies

LIQUIDATION – all debtors + actual insolvent

 Liquidation order
1. Declare debtor insolvent
2. Juridical persons  declare dissolved
3. Appointment of liquidator – to propose a liquidation plan  approved liquidation plan (Art. 2241-
2242 civil code)
 Covered:
1. Debtors
2. Unsecured creditors
3. Secured creditors
a. Waive
b. Maintain (temporary stay for 180 days)
INTELLECTUAL PROPERTY LAW

Patent Trademark Copyright

Technical solution of a problem in
any field of human activity
1. New (novel)
2. Inventive step
3. Industrially applicable
20 years from filing date of
application; non-extendable
Visible sign capable of
distinguishing goods/services of
an enterprise
✓ Registration
10 years from certificate of
registration; renewable indefinitely
Rights proceeding from
literary/artistic works
✓ Protected from the moment of
creation
GR: lifetime of creator/author + 50
years from death

File declaration of actual use *

1. Literal infringement – as is
. 2. Equivalent infringement –
modified
within 3 years from filing of
application, within 1 year from 5th
anniversary of registration, and
within 1 year from the date of
renewal
Trademark infringement Copyright infringement
1. Totality test – overall
impression; no longer applicable XPN: fair use doctrine
2. Test of dominancy – prevalent
features

*DURATION OF ECONOMIC RIGHTS

Work Term of protection
Literary and artistic works Life of the author + 50 years after his death
Derivative works
Joint authorship Life of the last surviving author + 50 years after his
death
Anonymous or pseudonymous works 50 years from date it is first lawfully published
If before expiration of period, identity is revealed or
no longer in doubt, the rule on literary and joint
authorship applies
Work of applied art 25 years from the date of making
Photographic works If unpublished – 50 years from making
Audiovisual works If published – 50 years from publication
Performances not incorporated in recordings 50 years from EOY in which performance took place
Sound recordings and performances incorporated 50 years from EOY in which recording took place
therein
EASE OF DOING BUSINESS ACT

PURPOSE
1. Efficient turnaround of the delivery of government services and the prevention of graft and corruption in
government
2. Reduce red tape
3. Expedite business and nonbusiness related transactions in government

COVERAGE
1. All government offices and agencies including LGU
2. GOCCs and other government instrumentalities, whether located in PH/abroad

REENGINEERING OF SYSTEMS AND PROCEDURES

 Streamlining of government services
 Cost compliance analysis
 Time and motion studies
 Whole of government approach

CITIZEN’S CHARTER
 Official document that communicates, in simple terms, the service standards or pledge of an
agency/service office of the frontline services being provided to its citizens
 Basis for establishing accountability
 Recognizing good performance to grant rewards and incentives

STANDARDIZED DEADLINES FOR GOVERNMENT TRANSACTIONS

Type of transaction Time to process
Simple transaction 3 working date of receipt
a. Only require ministerial actions on the part of
the public officer or employee
b. That which present only inconsequential
issues for the resolution by an officer or
employee of the government
Complex transaction 7 working days from the date of receipt
a. Necessitate evaluation in the resolution of
complicated issues
Highly technical application Whichever is shorter between
a. Requires the use of technical knowledge, a. 20 working days or
specialized skill, and/or training in the b. As determined by the government agency or
process and/or evaluation instrumentality concerned
b. Applications or requests involving activities
which pose danger to public health, public
safety, public morals, and public policy
If the application or request for license, clearance, The Sanggunian concerned shall be given a period
permit, certification, or authorization shall require the of 45 working days to act on the application or
approval of the local Sangguniang Bayan, S. request, which can be extended for another 20
Panlungsod, or the S. Panlalawigan as the case may working days.
be
If the local Sanggunian concerned has denied the
application or request, the reason for the denial, as
well as the remedial measures that maybe taken by
the applicant shall be cited by the concerned
Sanggunian.
If government office/agency fails to approve or disapprove – deemed approved

If fails to act on an application or request for renewal of a license, clearance, permit, certification, or
authorization subject for renewal – automatically extended
PROCEDURES IN LGU
a. A single or unified business application form shall be used in processing new applications
b. Business one stop shop (BOSS)
c. To automate business permitting and licensing system or set up an electronic BOSS
d. To lessen the transaction requirements, other local clearances shall be issued together with the
business permit
e. Business permits shall be valid for 1 year
f. Barangay clearances and permits related to doing business shall be applies, issued, and collected at
the city/municipality in accordance with the prescribed processing time: provided, that the share in the
collections shall be remitted to the respective barangay.

ANTI-CORRUPTION POLICY
 Zero-contact policy between business applicants and government employees

ANTI-RED TAPE AUTHORITY

 Responsible for enforcing EBDA
E-COMMERCE ACT

OBJECTIVES
1. To facilitate domestic and international dealing and the likes through the utilization of electronic, optical,
and similar medium, mode, instrumentality, and technology
2. To recognize the authenticity and reliability of electronic data messages or electronic documents
3. To promote universal use of Electronic transactions in the government and by the general public

ELECTRONIC DATA MESSAGE (EDM)

 Info shall not be denied validity or enforceability solely on the ground that it is in the form of EDM

ELECTRONIC DOCUMENTS (ED)

 Shall have the legal effect, validity or enforceability as any other document or legal writing
a. Law requires ED
- Maintain its integrity
- Remain complete and unaltered
- Reliable
b. Whether in the form of an obligation or the law simply provides consequences for the docs not
being presented or retained
c. Where the law requires that it be presented or retained in its original form, provided there exists:
- Reliable assurance
- Capable of being displayed

ELECTRONIC SIGNATURE (ES)

 Method is used to identify the party
 Reliable & appropriate for the purpose
 Necessary for the party sought to be bound
 Other party is authorized & enable to verify the ES and to make the decision to proceed

AUTHENTICATION
 ES shall be authenticated by the proof that a letter, character, number or other symbol in electronic
form representing the persons named by the appropriate methodology or security procedures with the
intention of authenticating or approving.
 EDM/ED shall be authenticated by proof that appropriate security procedure was adopted & employed
for:
a. Verifying the originator
b. Detecting error or alteration

BURDEN OF PROOF
 Bears on the person seeking to introduce an EDM/ED

ADMISSIBILITY AND WEIGHT OF EDM/ED

 Nothing shall deny EDM/ED in evidence:
a. On the sole ground that it is in electronic for
b. That it is not in the standard written form
 Following shall be given due regard:
a. Manner of generation, sortation, or communication
b. Manner in w/c its originator was identified
c. Whatnots

RETENTION
 Law requires that EDM/ED satisfy retention as the original form, provided:
a. Remains accessible so as to be usable for subsequent reference
b. Retained in the format in which it was generated
c. Enable the identification of its originator/addressee
 Mentioned above is satisfied by using services of a 3rd party
FORMATION OF VALIDITY
 May be expressed in EDM/ED
a. Offer
b. Acceptance
c. Other elements
 E-transactions made thru networking among banks
a. Deemed consummated upon actual dispensing of cash/debit/credit
b. Obligation of one bank, entity, or person shall be considered absolute and shall not be subjected to
the process of preference of credits

ATTRIBUTION
 EDM/ED is that of the originator if it was sent by the originator himself
 As between the originator and addressee
a. Deemed to be that of the originator if it was sent:
- By the person who had the authority to act on behalf of the originator
- By an info system programmed by, or on behalf of the originator
b. Deemed to be that of the addressee if it was sent
- Addressee properly applied a procedure previously agreed to by the originator
- Received by addressee as a result form the actions of a person whose relationship with the
originator or agent enabled that person to gain access
 Addressee is entitled to regard each EDM/ED as a separate EDM/ED and to act on that assumption.
XPNs:
a. Duplication of another EDM/ED
b. Addressee knew or should have known that the EDM/ED was a duplicate

ACKNOWLEDGMENT OF RECEIPT
 GR: No acknowledgement of receipt is necessary
 XPNs:
a. If the parties agree to it
b. Originator requested in the EDM/ED

MODES OF ACKNOWLEDGMENT WHEN REQUIRED

 Agreement must be followed
 No agreement
a. Any communication by the addressee
b. Any conduct of the addressee sufficient to indicate the receipt to the originator

TIME OF DISPATCH
 GR: When it enters an info system outside the control of the originator except unless otherwise agreed
upon

TIME OF RECEIPT
 Unless otherwise agreed upon:
 Upon entry in the designated info system
 Upon retrieval by the addressee
 Upon entry in the info system of the addressee

PLACE OF DISPATCH AND RECEIPT

Unless otherwise agreed upon, deemed to be:
 Dispatched – place where the originator has its place of business
 Received – at the place where the addressee has its place of business

FOR THE PURPOSE OF TAX SITUS

 O/A has more than one place of business
a. Closest relationship to the underlying transaction
 b. No underlying transaction – principal place of business
 O/A does not have a principal place of business – habitual residence
 Usual place of residence – in relation to body corporate, means place where it was incorporated

ELECTRONIC COMMERCE IN CARRIAGE OF GOODS

 EDM/ED is sufficient:
a. Law requires contract be in writing
b. If a right is granted to or an obligation is to be acquired by one person
c. When one or more EDM/ED are used to effect any action, no paper docs used to effect and such
action is valid unless the use of EDM/ED has been terminated and replaced by the use of paper
docs. A paper document issued in these circumstances shall contain statement of such termination.
d. If a rule of law is compulsory applicable to a contract

ELECTRONIC TRANSACTIONS IN GOVERNEMENT

 Government use of EDM/ED/ES – within 2 years from the date of the effectivity of this act
DATA PRIVACY ACT

PERSONS COVERED
1. Personal information controller – entity that instructs another person to perform collection, holding,
processing, use of personal information
2. Personal information processor – to whom processing of personal data is outsourced to

OUTSOURCING VS. DATA SHARING

Outsourcing Data sharing
Parties PIC + PIP PIC + PIC
Document Outsourcing agreement Data sharing agreement

PERSONS NOT COVERED

1. Agent of PIC
2. For personal, family, or household

PROCESSING
General Data Privacy Principles
1. Transparency
2. Legitimate purpose
3. Proportionality

PERSONAL DATA
Data Subject
1. Data subject rights (Sec 34)
2. Not covered (Sec 5)
a. Government officers/employees
b. Government contractors
c. Permits and licenses issued by government
d. Journalistic/artistic purposes
e. Research purposes
f. Necessary for banking and financial institutions
3. Personal data covered
Personal information Sensitive personal Privileged information
information
Nature General Specific Specific
(Identity) (Sec 3T) Marital
Race, ethnic origin, Attorney-client
marital status, age, Doctor-patient
color, philosophical, Priest-confessor
religious, and political
affiliations, health,
education,
genetic/sexual life,
proceedings for any
offense committed or
alleged to have been
committed, issued by
gov’t agencies peculiar
to an individual,
specifically established
by an EO or an act of
congress to be kept
classified
GR on processing Allowed Not allowed Not allowed
 Processing with Allowed Allowed Allowed
consent (2-way)
Processing without Sec 21 Sec 22 Sec 22
consent

ADDITIONAL OBLIGATIONS
1. Sending data breach notification
a. When: 72 hours
b. To whom: NPC + data subject
2. Registration of data processing systems
a. At least 250 employees – required
b. Less than 250 employees
- GR: not required;
- XPNs:
(1) Processing gives access to SPI of at least 1,000 individuals
(2) Processing is not occasional
(3) Processing poses risks