corporat reviewer sec. 1-9 college book

7/25/2019 Corporat Reviewer Sec. 1-9 College Book

1/10

PRIVATE CORPORATIONS

CORPORATION CODE OF THE PHILIPPINES

GENERAL PROVISIONS

SECTION 1: TITLE OF THE CODE

- HISTORICAL BACKGROUND OF THE CORPORATION

CODE

PURPOSE OF THE NEW CORPORATION CODE OF THE

PHILIPPINES:

To establs! a "e# $o"$e%t o& b's"ess $o(%o(ato"s

so t!at t!e) a(e "ot *e(el) e"ttes establs!e+ &o(

%(,ate a" b't e.e$t,e %a(t"e(s o& t!e Nato"al

Go,e("*e"t " s%(ea+" t!e be"e/ts o& $a%tals*

&o( t!e so$al a"+ e$o"o*$ +e,elo%*e"t o& t!e

"ato"0

SCOPE OF THE CODE

THE CORPORATION CODE PROVIDES:

Fo( t!e "$o(%o(ato" o(a"2ato" a"+(e'lato" o& %(,ate $o(%o(ato"s bot!

sto$3 a"+ "o"-sto$3 a"+ e+'$ato"al a"+

(elo's $o(%o(ato"s4

De/"es t!e( %o#e(s a"+ %(o,+es &o( t!e(

+ssol'to"4

F5es +'tes a"+ labltes o& t!e( +(e$to(s

o( t('stees a"+ ot!e( o6$e(s t!e(eo&4

De$la(es t!e (!ts a"+ labltes o&

sto$3!ol+e(s o( *e*be(s4

P(es$(bes &o( t!e $o"+to"s '"+e( #!$!

$o(%o(ato"s "$l'+" &o(e" o"es *a)

t(a"sa$t b's"ess P(o,+es %e"altes &o( ,olato"s o& t!e

Co+e4 a"+

Re%eal all la#s a"+ %a(ts o& la#s " $o"7$t

a"+ "$o"sste"t #t! t!e $o+e

SEC01 DEFINITION OF CORPORATION

- A $o(%o(ato" s a" a(t/$al be" $(eate+ b)

o%e(ato" o& la# !a," t!e (!t o& s'$$esso" a"+

%o#e(s att(b'tes a"+ %(o%e(tes e5%(essl)a't!o(2e+ b) la# o( "$+e"t to t e5ste"$e0

ATTRIBUTES OF A CORPORATION

It s a" a(t/$al be"4

C(eate+ b) o%e(ato" o& la#

It !as t!e (!t o& s'$$esso"4 a"+

It !as o"l) t!e %o#e(s att(b'tes a"+

%(o%e(tes e5%(essl) a't!o(2e+ b) la# o(

"$+e"t to ts e5ste"$e0

CORPORATION AS AN ARTIFICIAL PERSONALIT8

- It !as a leal o( 9'(+$al %e(so"alt) $o*%letel)

se%a(ate a"+ +st"$t &(o* ts "+,+'al *e*be(s o(

sto$3!ol+e(s0 It s t(eate+ as a %e(so" b) la#0 T!e

sto$3!ol+e(s o( *e*be(s $o*%ose t!e $o(%o(ato"

b't t!e) a(e "ot t!e $o(%o(ato"0

Aat!a Castlle9o


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CONSE;UENCE OF THE LEGAL CONCEPT OF CORPORATION

s +ebts0 T!e) $a" lose "o

*o(e t!a" t!e( ",est*e"t o" t!e

$o(%o(ato"0


3/10

(1)$here a corporation f%nction! for the &ene"t of a

single person 'ho ha! co(pete contro over

the f%nd! and the !aid per!on i! the sole owner

thereof0 I" s'$! a $ase t!e $o(%o(ato" s t(eate+

as a *e(e alte( eo o& t!e $o"t(oll" "+,+'alt!'s ts %(o%e(tes *a) be se2e+ " a" a$to"

aa"st t!e latte(0

(2)$here the corporation i! a (ere

instrumentalityof the individ%a !tochoder!*

the atter (%!t individ%a# an!'er for corporate

o&igation!0 To !ol+ t!e sto$3!ol+e(s lable s to

&ollo# t!e %'(%ose o& t!e $(eato" o& a

$o(%o(ato">s leal %e(so"alt)0

(3)$here a do(e!tic or Phiippine corporation are

controlled by aliens


4/10

T!e e"e(al la# t!at o,e("s t!e $(eato"

o& %(,ate $o(%o(ato"s s B0P0


5/10

No0 o&

"$o(%o(ato(s

a) be o(a"2e+ b)

? %e(so"s

Re@'(es at least /,e

"$o(%o(ato"s


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ADVANTAGES OF A BUSINESS CORPORATION

- Has leal $a%a$t) to a$t as a leal '"t- Has $o"t"'t) o& e5ste"$e $a'se o& "o"-

+e%e"+e"$e o" t!e l,es o& t!ose #!o $o*%ose t

- C(e+t s st(e"t!e"e+ b) $o"t"'t) o& e5ste"$e- a"ae*e"t s $e"t(al2e+ " t!e boa(+ o& +(e$to(s- C(eato" o(a"2ato" *a"ae*e"t a"+ +ssol'to"

a(e sta"+a(+2e+ '"+e( t!e e"e(al "$o(%o(ato" la#- Feasble a"t$ /"a"$al e"te(%(se &(o* *a")

"+,+'als to ",est t!e( se%a(ate &'"+s " t!e

e"te(%(se- S!a(e!ol+e(s !a,e LIITED lablt)


7/10

- As to "'*be( o& %e(so"s #!o $o*%ose t!e*:


8/10

o( +e &a$to be$a'se t s so +e&e$t,el)

&o(*e+ b't s $o"s+e(e+ a $o(%o(ato" "

(elato" to t!ose o"l) #!o b) (easo" o&

t!e( a$ts o( a+*sso"s a(e %(e$l'+e+

&(o* asse(t" t!at t s "ot a $o(%o(ato"0- As to #!et!e( t!e) a(e %'bl$ o( %(,ate %'(%ose:


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INCORPORATION OF A PRIVATE CORPORATION B8 A

SPECIAL ACT0

- Se$to" a't!o(2es t!e $(eato" o& %(,ate

$o(%o(ato"s b) s%e$al la#s o( $!a(te(s0 T!e

e"a$t*e"t o& a s%e$al a$t $(eat" a %(,ate

$o(%o(ato" s s'b9e$t to t!e $o"stt'to"al l*tato"

t!at s'$! $o(%o(ato" s!all be o#"e+ o( $o"t(olle+

b) o,e("*e"t o( a") s'b+,so" o( "st('*e"talt)

t!e(eo&0 T!e (easo" &o( t!s (est($to" s ob,o's:10 It s $!e7) to %(e,e"t t!e (a"t" o& s%e$al

%(,lees to o"e bo+) o& *e" #t!o't ," all

ot!e(s t!e (!t to obta" t!e* " t!e sa*e

$o"+to"s4 a"+

?0 Pe(!a%s t s %a(tl) to %(e,e"t b(be() a"+$o(('%to" o& t!e leslat'(e0 A $o(%o(ato"

$(eate+ b) a s%e$al la# o( $!a(te( s %(*a(l)

o,e("e+ b) s'$! la# a"+ s'%%leto(l) b) t!e

%(o,so"s o& t!e Co+e "so&a( as t!e) a(e

a%%l$able et!e( be$a'se t!e) a(e "ot

"$o"sste"t #t! o( a(e e5%(essl) *a+e

a%%l$able b) t!e s%e$al la#0

SEC0 0CORPORATORS AND INCORPORATORS

STOCK-HOLDERS AND EBERS0 --- CORPORATORS

ARE THOSE WHO COPOSE A CORPORATION

WHETHER AS STOCK-HOLDERS OR AS EBERS0

INCORPORATORS ARE THOSE STOCKHOLDERS OR

EBERS ENTIONED IN THE ARTICLES OF

INCORPORATION AS ORIGINALL8 FORING AND

COPOSING THE CORPORATION AND WHO ARE

SIGNATORIES THEREOF0

CORPORATORS IN A STOCK CORPORATION

ARE CALLED STOCKHOLDERS OR SHAREHOLDERS0

CORPORATORS IN A NON-STOCK CORPORATION ARE

CALLED EBERS0

COPONENTS OF A CORPORATION0

10 Co(%o(ato(s o( t!ose #!o $o*%ose t!e

$o(%o(ato" #!et!e( sto$3!ol+e(s o(

*e*be(s0 He"$e t!e te(* "$l'+es

"$o(%o(ato(s sto$3!ol+e(s o( *e*be(s4?0 I"$o(%o(ato(s o( t!ose $o(%o(ato(s

*e"to"e+ " t!e a(t$les o& "$o(%o(ato"

as o("all) &o(*" a"+ $o*%os" t!e

$o(%o(ato" a"+ #!o e5e$'te+ a"+ s"e+

t!e a(t$les o& "$o(%o(ato" as s'$!0 So all

"$o(%o(ato(s a(e $o(%o(ato(s b't

$o(%o(ato( s "ot "e$essa(l) a"+

"$o(%o(ato(0 T!e %("$%al &'"$to" o& t!e

"$o(%o(ato( s to "$o(%o(ate t!e

$o(%o(ato" a"+ to e"able t to be$o*e a

bo+) %olt$ a"+ $o(%o(ate '"+e( t!e la#40 Sto$3!ol+e(s o( t!e o#"e(s o& s!a(es o&

sto$3 " a sto$3 $o(%o(ato"0 T!e) a(e t!e

o#"e(s o& t!e $o(%o(ato"0 T!e) a(e also

$alle+ s!a(e!ol+e(s0 T!e) a(e t!e

$o(%o(ato(s " a sto$3 $o(%o(ato"0

Sto$3!ol+e(s *a) be "at'(al o( 9'(+$al

%e(so"s b't o"l) "at'(al %e(so"s $a" be

"$o(%o(ato(s4 a"+

Aat!a Castlle9o


10/10

0 e*be(s o( $o(%o(ato(s o& a $o(%o(ato"

#!$! !as "o $a%tal sto$30 U"+e( t!e ol+

('le t!e) "$l'+e $o(%o(ato(s o& a sto$3

$o(%o(ato" #!o +o "ot o#" $a%tal sto$30

I" ot!e( #o(+s a sto$3 $o(%o(ato" *a) be$o*%ose+ o& sto$3!ol+e(s a"+ *e*be(s

t!e latte( (e&e((" to "$o(%o(ato(s #!o +o

"ot o#" s!a(es o& sto$30 It s "ot (e@'(e+

t!at a" "$o(%o(ato( be a s'bs$(be( &o(

sto$3 as lo" as t!e *"*'* (e@'(e*e"t

a(e $o*%le+ #t!0 T!e Co+e el*"ate+

t!s ('le0 All "$o(%o(ato(s " a sto$3

$o(%o(ato" *'st "o# o#" o( at least be a

s'bs$(be( to at least o"e s!a(e o& t!e

$a%tal sto$3 o& s'$! $o(%o(ato"0

THREE OTHER CLASSES0

- T!e(e a(e t!(ee ot!e( $lasses o& %e(so"s #!o %la)

*%o(ta"t (oles " t!e &o(*ato" a"+ o(a"2ato" o&

a $o(%o(ato" "a*el):10 P(o*ote(s o( %e(so"s #!o b(" abo't o( $a'se

to b(" abo't t!e &o(*ato" a"+ o(a"2ato" o&

a $o(%o(ato" b) b("" toet!e( t!e

"$o(%o(ato(s o( t!e %e(so"s "te(este+ " t!e

e"te(%(se %(o$'(" s'bs$(%to"s o( $a%tal &o(

t!e $o(%o(ato" a"+ sett" " *oto" t!e

*a$!"e() #!$! lea+s to t!e "$o(%o(ato" o& t!e

$o(%o(ato" tsel&0 T!e) la) t!e (o'"+#o(3 &o(

$o(%o(ate e5ste"$e4?0 S'bs$(be(s o( %e(so"s #!o !a,e a(ee+ to ta3e

a"+ %a) &o( o("al '"ss'e+ s!a(es o& a

$o(%o(ato" &o(*e+ o( to be &o(*e+0 So

s'bs$(be(s *a) "ot be sto$3!ol+e(s0 T!e)

be$o*e sto$3!ol+e(s &(o* t!e t*e t!e(

s'bs$(%to"s a(e a$$e%te+ b) t!e $o(%o(ato"4

a"+0 U"+e(#(te( o( a %e(so" 's'all) a"+ ",est*e"t

ba"3e( #!o:

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