CORPORATION

LAW
 INTRODUCTION

Corporation Law whole body of laws,

principles and doctrines covering private
corporations in the Philippines

Interpretation: liberal construction to promote

and uplift development of trade relations and
which will encourage friendly commercial
intercourse among corporations (Home Insurance
Co. versus Eastern Shipping Lines, 123 SCRA 424)
BRIEF HISTORY OF PHILIPPINE
CORPORATE LAW

1) Sociedades Anonimas
2) Cuentas en Participacion
3) The Corporation Law (1906)
4) The Corporation Code (1980)
 CORPORATION, DEFINED

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 incident to its
existence.
 THEORIES ON THE FORMATION
OF A CORPORATION
1) Theory of Concession
Tayag vs. Benguet Consolidated, Inc.
Torres vs. CA

2) Theory of Enterpise Entity

PSE vs. CA
 ATTRIBUTES OF A
CORPORATION

1) Artificial Being
2) Creature of the Law
3) Right of Succession
4) Creature of Enumerated Powers,
Attributes and Properties
 ARTICLE XII
OF THE 1987 CONSTITUTION

Sec. 16. 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.

Feliciano vs. COA

CORPORATION VS. OTHER
BUSINESS ENTITIES
1) Sole Proprietorship
2) Partnership
3) Business Trust
4) Joint Venture
5) Cooperative
 CORPORATIONS CREATED
BY A SPECIAL LAW OR CHARTER

a. National Coal Co. v. Collector of

Internal Revenue
b. Marilao Water Consumers Association,
Inc. v. IAC
 CLASSIFICATIONS OF
CORPORATIONS

1.Under the Corporation Code (Sec. 3)

2. Sole and Aggregate
3. Ecclesiastic and Lay
4. Eleemosynary
5. Domestic and Foreign
6. De jure and de facto corporations
6.1 Requisite of De Facto Corporation
6.2 Quo Warranto
Case:

a. Sawadjaan v. Court of Appeals, G.R. No.

141735, June 8, 2005
 CLASSIFICATIONS OF
CORPORATIONS

7. Close and Open Corporation

8. Parent, Subsidiary, and Affiliated
9. Private and Public
10. Corporation by Prescription and
Corporation by Estoppel
 CLASSIFICATIONS OF
CORPORATIONS

Public Corporations those created for

political purposes connected with the public
good in the administration of the civil
government

Municipal corporation two-fold character

a)Public police power
b)Private proprietary, can sue & be sued,
can be liable for torts
 CLASSIFICATIONS OF
CORPORATIONS

Public Corporations not based on the

ownership of the controlling interest

Many GOCCs private corporations

1)National Coal Co. vs CIR
2)Cervantes vs Auditor General (NAFCO)
3)Shipside, Inc. vs CA (BCDA for economic and
social development of Central Luzon)
 CLASSIFICATIONS OF
CORPORATIONS

Domestic corporation incorporated under

the laws of the Philippines

Foreign corporation incorporated under the

laws of another country
 CLASSIFICATIONS OF
CORPORATIONS

De jure corporation full and substantial

compliance with the requirements of an
existing law

De facto corporation has a bona fide attempt

to incorporate
 CLASSIFICATIONS OF
CORPORATIONS

Corporation by estoppel a corporation

precluded from denying its corporate
existence

Corporation by prescription Roman Catholic

Church (thousand years)
 CLASSIFICATIONS OF
CORPORATIONS

Parent Company has controlling interest

in one or more corporations

Subsidiary corporation in which the parent

corporation has controlling interest

Affiliate a corporation being controlled by a

holding company