CORPORATION

REVIEW

_ ____

Atty. Mayol

1-19-2013
CORPORATION CODE OF THE PHILIPPINES: May 1, 1980.
Before that was the Corporation Law patterned from the US: 1950.
Before that Sociedad Anonima during Spanish time.
Purpose:

Profits
As an effective partner of the government for the economic and social development of the
country.

ATTRIBUTES OF A CORPORATION
1.
2.

3.

4.

Artificial being: separate juridical personality from the corporate officers

Created by operation of law:

(different from partnership):

The state takes an active part in the formation of a corporation. Consent of the state is
needed and this is expressed through the SEC. (different from partnership because it is
formed by mere consent).
Right of succession

Continuity of the existence of the corporation independent of the persons composing it.

Max corporate term is 50 years. The arrival of the term or period will put an end to the
corporation also.

Different from partnership: death of one ground for dissolution

Death of the board: corp still exists

Exercises corporate powers expressly given or incidental

CLASSIFICATIONS OF CORPORATIONS:
1.

2.

3.

PUBLIC

Instrumentality of the state to carry out public functions

How to know?
o Created by the state to carry out public or governmental functions

Ex. city of Cebu

Private

Serves private interests

A. Stock corporations
o Authorized capital stock is divided into several shares

B. Non-stock corporations
o All other corporations which are not stock
o No part of the income incidental to it will be distributed to the organizers
Government owned corporations

Still private even if government owned. Because they are for revenue purposes.

CREATION

Congress: legislation
o
Forms a public corporation
General incorporation code: corporation code of the Philippines

For private corporations

Sec. 5 INCORPORATORS: persons who conceived the idea of a corporation, the name appears in the AOI
and signed it.

Not less than 5 not more than 15.

CORPORATORS:

Component of the corporation

There are more corporators than incorporators
Incorporators are also corporators.
Broad enough to encompass all who are connected to the corporation.

STOCKHOLDERS

A person who owns a share of stock in a stock corporation.

MEMBERS

Corporators of non-stock corporations

Nobody can be a stock holder of a non-stock corporation

F O R M A T IO N

OF A CORPORATION

I. Qualification of incorporator

Sec. 10
o
o
o
o
o
o

Must be a natural person

Must be of legal age (at least 18)
Must own at least 1 share of capital stock - registered in his own name
Not less than 5 but not more than 15
Majority of whom are residents of the Philippines
Example:

A: Russia
D: Vatican
G: Belgium

B: Norway
E: Japan
H: Monaco

C: Germany
F: Finland
I:

Out of the 9, 5 live in Cebu. They can form a corporation. Because only the
residence is considered. Citizenship does not matter.

5 Filipinos who reside in Hawaii, they came back to Cebu: they cannot form a
corporation here because they are not residents of the Philippines.

Note: citizenship is never a factor.

II. ARTICLES OF INCORPORATION

Substantial compliance is required by law

Contents:
o
Name of the corporation

Names not allowed:

Names must not be identical, deceptively or confusingly similar to that of

any existing corporation including internationally known foreign
corporation though not used in the Philippines.
o
Identical

Deceptively or confusingly similar

Examples:

UTMI: United textile Mills Corp & UMC: United

Mills Corp.= cannot be.

Xerox and Zerox = cannot be

Name already protected by law.
Name which is contrary to law, morals, or public policy.
o