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2.1.1.1 Nationality
GENERAL RULE: Corporation cannot be
considered a citizen as the term "citizen" is
understood in political law.
In political law, citizenship is membership
in body politic, which carries with it the
duty of allegiance to the State and the
exercise of political rights, like the right of
suffrage and right to hold public office, as
well as the duty to render military service
when required to by the State. In this
sense, the term citizenship is limited to
natural persons because by the very essence of
the duty of allegiance to the state and the exercise
of political rights, only natural persons are capable
of performing said acts.
a. Incorporation Test
NOTES: The norm that is expressed in the
Corporation Code is the Entity or Place of
Incorporation Test.
Section 123 of the Corporation Code
provides that a foreign corporation is one
formed, organized, or existing under any
laws other than those of the Philippines
and whose laws allow Filipino citizens and
corporations to do business in its own
country or state. As explained in one case,
the sovereignty by which a corporation
was created, under whose laws it was
organized, determines its national
character, and the fact that some of its
incorporators were residents and citizens
CONTROL TEST
The percentage of
Filipino equity in the
corporation is
computed by
attributing the
nationality of the
second or even
subsequent tier of
ownership to
determine the
nationality of the
corporate shareholder
No such
computation is
necessary and the
total shareholdings
in the subsidiary
may, in proper
cases, be
considered as
totally Filipino
owned even if some
of the shareholders
in the shareholder
corporation are not
It involves the
Filipinos. Under the
computation of
Control Test, a
Filipino ownership of a corporation shall be
corporation in which
considered a
corporation of partly
Filipino corporation
Filipino and partly
if the Filipino
foreign equity owns
ownership of its
capital stock. The
capital is at least
percentage of shares
60% and where the
held by the second
60-40 Filipino-alien
corporation in the first shareholding is not
is multiplied by the
in doubt
latter's own Filipino
equity, and the
product of these
percentages is
determined to be the
ultimate Filipino
ownership of the
subsidiary corporation
CASES:
a.) Gamboa vs. Teves , G.R No. 176579, June
8,2011 and October 9, 2012
CASES:
a.) Bache & Co., Inc. vs. Ruiz , G.R. No. L32409, February 27, 1971
Thus, the warrants authorized the search
for and seizure of records pertaining to all
business transactions of petitioners herein,
regardless of whether the transactions
were legal or illegal. The warrants
sanctioned the seizure of all records of the
petitioners and the aforementioned
corporations, whatever their nature, thus
openly contravening the explicit command
of our Bill of Rights that the things to be
seized be particularly described as well
as tending to defeat its major objective:
the elimination of general
warrants."cralaw virtua1aw library
While the term "all business transactions"
does not appear in Search Warrant No. 2M-70, the said warrant nevertheless tends
to defeat the major objective of the Bill of
Rights, i.e., the elimination of general
warrants, for the language used therein is
so all-embracing as to include all
conceivable records of petitioner
corporation, which, if seized, could
possibly render its business inoperative.
b.) Smith Bell & Co. vs. Natividad , G.R. No.
15574, September 17, 1912
While Smith, Bell & Co. Ltd., a corporation
having alien stockholders, is entitled to the
protection afforded by the due-process of
law and equal protection of the laws clause
of the Philippine Bill of Rights,
nevertheless, Act No. 2761 of the
Philippine Legislature, in denying to
corporations such as Smith, Bell &. Co.
Ltd., the right to register vessels in the
Philippines coastwise trade, does not
belong to that vicious species of class
legislation which must always be
condemned, but does fall within
authorized exceptions, notably, within the
purview of the police power, and so does