Corporation, definition: Within the context of Philippine law, a "corporation" is treated as 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
[Sec. 2, Corporation Code .

Corporation, classes: Corporations !ay be classified as follows" [a Stoc# corporations $ [% authorized to distribute profits capital stoc# divided into shares& and [2

[b 'on$stoc# corporations $ organized not for profit Corporation, kinds by method of creation: [a by special law or charter [b by being organized under the corporation code Corporation, how organized: Philippine corporate entities are organized as follows" [a Number of incorporators: (ncorporators are re)uired to be not less than five [* but not !ore than fifteen [%* . [b Residency requirement: +a,ority of the incorporators are re)uired to be residents of the Philippines. [c Qualifications: -ll incorporators" [% !ust be natural persons [2 !ust be of legal age - corporation or a partnership cannot be incorporators of a Philippine corporate entity. .he only way a corporation or a partnership !ay beco!e stoc#holder of a Philippine corporation is by ac)uiring a stoc# thereof but only after it shall have been duly incorporated.

[d Subscription requirement: -ll incorporators !ust subscribe to at least one /%0 share of stoc# of the corporation being organized. Corporation, minimum subscription: .he law re)uires that the total capital stoc# to be subscribed at the ti!e of incorporation should at least be twenty five percent [2*1 of the authorized capital stoc# of the corporation being organized. Corporation, minimum paid-up capital: .he paid$up capital of a Philippine corporation !ust not be less than PhP*,222.22. .hus, it is re)uired that at least twenty five percent [2*1 of the subscribed capital stoc# should be fully paid up but the a!ount of which should not be less than said PhP*,222.22. Corporation, incorporation documents: .he following incorporation docu!ents are re)uired" [a -rticles of (ncorporation& [b 3y$laws& [c .reasurer4s -ffidavit which should state co!pliance with the authorized subscribed and paid$up capital stoc# re)uire!ents. [d 3an# Certificate that the paid$up capital portion of the authorized capital stoc# has been deposited with the issuing ban#. .here are 5express lane5 for!s available at the Securities and 6xchange Co!!ission [S6C for certain specified corporate business organizations. Corporation, where filed: .he incorporation docu!ents should be filed with the Securities and 6xchange Co!!ission [S6C of the Philippines. Corporation, what should be stated: [a the na!e of the corporation which !ust not be identical or deceptively or confusingly si!ilar to any existing corporation& [b the purpose of the corporation&

[c principal office of the corporation& [d the ter! or life of the corporation which should not exceed fifty [*2 years. .his corporate lifeti!e !ay, however, be extended for another fifty [*2 years but the extension !ust not be effected earlier than five [* years before the expiration of its ter!. Corporation, limitation on foreign equity holdings: .he e)uity re)uire!ents should be strictly observed and followed in certain areas of business where the constitution and the laws of the Philippines i!pose li!itation on foreign holdings. 7enerally, however, foreigners !ay invest as !uch as one hundred percent [%221 e)uity in areas not covered by the 'egative 8ist under the 9oreign (nvest!ents -ct. .he following provisions thereof !ay serve as guide" List A : Includes those reserved to Philippine nationals by the Constitution of the Philippines. [a exploitation of natural resources [%221 do!estic e)uity [b operation of public utilities [:21 do!estic e)uity [c !ass !edia [%221 do!estic e)uity [d educational institution [;21 do!estic e)uity [e labor recruit!ent [:*1 do!. e)uity [f retail trade [%221 do!. e)uity [g rural ban#ing [%221 do!. e)uity List B : Includes those regulated by law. [a defense$related activities [b !anufacture and distribution of dangerous drugs [c nightclubs, bathhouse and si!ilar activities [d s!all and !ediu!$sized do!estic !ar#et enterprises with paid$in e)uity capital of less than <S=*22,222.22

[e export enterprises utilizing new !aterials fro! depleting natural resources with paid$in e)uity of less than <S=*22,222.22 Corporation, when corporate existence commences: .he corporate life or existence of a Philippine corporation co!!ences fro! the ti!e a Certificate of (ncorporation is issued in its favor by the Securities and 6xchange Co!!ission [S6C . Corporation, effect of non-use: [a - corporation is dee!ed dissolved if the corporate charter granted in its favor expires by non$use for a period of at least two [2 years fro! issuance thereof. [b - corporation is dee!ed suspended or its franchise revo#ed if it has been duly organized but it failed to operate for a period of five [* years. Corporation, its organization: - Philippine corporation is organized by electing !e!bers to its 3oard of >irectors, by electing the corporate officers thereof and?or by setting up an 6xecutive Co!!ittee. Board of Directors, qualifications: .he !e!bers of the 3oard of a Philippine corporation !ust possess the following )ualifications" [% owner or holder of at least one [% share of capital stoc#& [2 !a,ority of the !e!bers !ust be residents of the Philippines& [@ they !ust be elected by the owners?holders of at least the !a,ority of the outstanding capital stoc#. Board of Directors, corporate acts: 9or validity and legality of the corporate acts of the 3oard of >irectors, a !eeting should be fully convened and the sa!e !ust be attended by at least a !a,ority of its !e!bers. -ny and all corporate acts !ust be duly approved by a !a,ority of the !e!bers of the 3oard except when otherwise provided by Philippine laws or by the 3y$laws of the corporation. Board of Directors, self-dealing rule: - self$dealing transaction of a !e!ber of the 3oard of >irectors beco!es voidable except under the following circu!stances"

[% When the presence of such director in the 3oard !eeting is not necessary to constitute a )uoru!& [2 When his vote is not necessary for the approval of the contract or transaction [@ When the ter!s of the contract are fair and reasonable and had been previously approved by the 3oard of >irectors. Corporate fficers, general rule:

-s a general rule, the corporate officers of a Philippine corporation consist of the President who is re)uired to be a !e!ber of the 3oard of >irectors& the Corporate .reasurer& and the Corporate Secretary who is re)uired to be both a resident and a citizen of the Philippines. Ather corporate officers !ay be designated under the 3y$laws of the corporation without getting afoul with the law. .he only li!itation i!posed by law on corporate officers is that no person can be the President and the Corporate Secretary at the sa!e ti!e or the President and Corporate .reasurer at the sa!e ti!e. Corporate fficers, personal liability for damages:

- corporate officer of a Philippine corporation beco!es personally liable for certain corporate acts under the following circu!stances" [% When he willfully and #nowingly votes or assents to patently unlawful acts& [2 When he is guilty of gross negligence or bad faith in the conduct of the corporate affairs& or [@ When he ac)uires personal or pecuniary interest which is in conflict with his duty as such officer. !tockholders, limited liability: .he liability of stoc#holders in Philippine corporations is li!ited only to the extent of their capital contribution thereto. Ather properties, holdings or assets of stoc#holders are not within the reach of corporate creditors. .o discourage abuse of this privilege, the Securities and 6xchange Co!!ission [S6C i!poses certain reportorial re)uire!ents which should be co!plied with on a regular basis. !tockholders, kinds of meetings:

.he #inds of !eetings involving the stoc#holders of a Philippine corporation are as follows" [% Begular !eeting which is the e)uivalent of the annual stoc#holders4 !eeting re)uired to be duly provided under the 3y$laws& [2 Special !eeting which !ay be called anyti!e as !ay be necessary !tockholders" meeting, requisites for #alidity: (n order to be valid, the stoc#holders4 !eeting should co!ply with the following re)uisites" [% - notice of such !eeting !ust be served to the stoc#holders [2 - )uoru!, [i.e., !a,ority of the outstanding capital stoc# of the corporation !ust be fully established. [@ -ny and all acts of the stoc#holders in a !eeting duly called and constituted, are dee!ed valid if approved by a !a,ority of the outstanding capital stoc# or at least two$thirds [2?@ vote in certain cases specified under the law. Corporation, dissolution: -s a general rule, the corporate existence of a Philippine corporation !ay last up to fifty [*2 years, renewable for another fifty [*2 years. Cowever, such lifeti!e !ay be shortened by a vote of 2?@ of the outstanding capital stoc# thereof through the process called dissolution.