Corporation Law Notes

CORPORATION LAW
1. Definition of corporation;
2. Classes of corporations; define each;
3.Corporators & incorporators;
4. Stockholders & members;
5. Trustees & directors;
6. Classification of shares;
7. Par value; no par value shares;
8. Number & qualifications of incorporators;
9. One Person Corporation;
10. Corporate Term;
11. Authorized capital Stock; stock; Certificate of stock; subscribed capital stock; paid up capital stock;
capital
12. Contents of Articles of Incorporation;
14. Form of Articles of Incorporation;
15. Amendments of Articles of Incorporation;
16. Attributes of a corporation; explain each;
17. Piercing the Veil of Corporate Fiction
18. Founders’ shares; redeemable shares; treasury shares;
1. Sec. 2. 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. (2)
2. Classes of corporations. — Corporations formed or organized under this Code may be stock or
non-stock corporations. Corporations which have capital stock divided into shares and are
authorized to distribute to the holders of such shares dividends or allotments of the surplus
profits on the basis of the shares held are stock corporations. All other corporations are non-
stock corporations. (3a)*
3. Sec. 5. Corporators and incorporators, stockholders and members. — Corporators are those
who compose a corporation, whether as stockholders or members. Incorporators are those
stockholders or members mentioned in the articles of incorporation as originally forming and
composing the corporation and who are signatories thereof. Corporators in a stock corporation
are called stockholders or shareholders. Corporators in a non-stock corporation are called
members. (4a)
Golden notes corpo – page 180
March 1, 2021
“Separate and distinct personality” as an artificial being

It means:
Corporation can own property but since it is separate and distinct personality though it can own
and possess property, yet the property of corporation is not property of the stock holder or
members, directors, or trustees.
Doctrine of Separate and Distinct personality
Constitutional Rights of Corporation

1. Due process of law
2. Equal protection of law
3. Prohibition against unlawful seizure or search
The rights of corporation are LIMITED because it is an artificial being
Other rights
Corporation can incur obligation
But they are not obligation of the persons part of the corporation.
TORTs
Can corporation be held liable for Torts? YES
If it is committed by governing bodies of corporation
Nationality
Is the nationality of Corporation also the nationality of the persons within the corporation?
Grandfather doctrine
Control test doctrine
Property  separate and distinct property. Corp can own property but that property is not property of
the members, stockholders, director, officers, etc.
A corp can incur obligation but such obligation is not the obligation of the members, stockholder,
director, or officers
Constitutional Rights  LIMITED because Corp is an artificial being.
TORTS  Solidary Liability
ARTIFICIAL BEINGS
Whenever corporation files action it needs resolution which authorizes a person to file action on behalf
of the Corporation.
Resolution must be attached
Essence of Resolution  it is the authority
CRIMINAL LIABILITY
Corporation can only act through its board (or during meetings) in filling a case
Can corporation incur criminal liability? NO
Why? Because it is incapable of intent. Lack of intent.
Anti-money laundering law
Moral damages?
Moral damages for corporation
Divided into shared
Authorized capital stock – amount specified in the articles of Incorporation
Subscribed - Portion of authorized capital stock
Outstanding – totality of the stock subscribed and issued to stockholder or owners

Capital- the entire property or assets of the corporation.
Doctrine of piercing the corporate veil
March 11, 2021
Stockholder may have no certificate of stock
ACTS THAT MAKE CORPORATION AS ONE
1. defraud the creditors,

2. defeat public convenience
3. cover a crime
CAR - Ceritificate Authorization
Define non stock and stock (Sec 3)
Trustee – member of a board of non-stock corporation
Director – member of a board of stock corporation
WHY CORPORATION HAS A NAME
It is important for identity purposes.
- It is identified through its name. One of the procedures for processes in the registration of a
corporation for the sec is that there must be a submission of name.
- Necessary for its existence
- For transaction of business
1. One of the attributes of corporation
2. Necessary to its existence
3. Essential and important for its identity
4. Can sue and be sued
Sec 12 memorandum 2008
PRINCIPAL PLACE
Principal Place ---it Is where meetings are held and where records are being kept
Mandatory that meetings must be held at the principal place of corporation
Meetings of the Board  ANYWHERE
Section 52
AMENDMENTS  meetings of the corporations and stockholder must be held in the city or municipality
where the place of principal place is located
LGU for corresponding taxes
PURPOSE CLAUSE –
The purpose clause determines whether the acts performed by the corporation are authorized or
beyond its powers. Acts beyond the corporation’s powers are called ultra vires acts
On the day of the issuance of certificate of corporation
STEPS IN CREATION OF CORPORATIONS
1. Submission of name to the SEC for verification

2. Submission of Proposed by-laws and articles and then verification
3. Submission of the signed and notarized articles of incorporation and by-laws
4.
Main contract- It is a contract between and among the members or stockholders
Essence: That no stockholder or member will violate the agreement
Process of Incorporation
1. Submission of names for verification by the SEC
2. Submission of Articles of Incorporations and by laws for verification
3. Submission of the signed and notarized articles of incorporation and by-laws
4. The issuance of the certificate of Incorporation and copies of by laws and articles of
incorporation attached to it.

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CORPORATION LAW

2. Classes of corporations; define each;

3.Corporators & incorporators;

4. Stockholders & members;

5. Trustees & directors;

7. Par value; no par value shares;

8. Number & qualifications of incorporators;

9. One Person Corporation;

10. Corporate Term;

12. Contents of Articles of Incorporation;

14. Form of Articles of Incorporation;

15. Amendments of Articles of Incorporation;

16. Attributes of a corporation; explain each;

17. Piercing the Veil of Corporate Fiction

18. Founders’ shares; redeemable shares; treasury shares;

1. Sec. 2. Corporation defined. — A corporation is an artificial being created by operation of law,

Golden notes corpo – page 180

“Separate and distinct personality” as an artificial being

Doctrine of Separate and Distinct personality

Constitutional Rights of Corporation

The rights of corporation are LIMITED because it is an artificial being

Corporation can incur obligation

Can corporation be held liable for Torts? YES

If it is committed by governing bodies of corporation

Control test doctrine

Constitutional Rights  LIMITED because Corp is an artificial being.

TORTS  Solidary Liability

Resolution must be attached

Essence of Resolution  it is the authority

Can corporation incur criminal liability? NO

Why? Because it is incapable of intent. Lack of intent.

Anti-money laundering law

Moral damages for corporation

Divided into shared

Authorized capital stock – amount specified in the articles of Incorporation

Subscribed - Portion of authorized capital stock

Outstanding – totality of the stock subscribed and issued to stockholder or owners

Doctrine of piercing the corporate veil

March 11, 2021

Stockholder may have no certificate of stock

ACTS THAT MAKE CORPORATION AS ONE

1. defraud the creditors,

CAR - Ceritificate Authorization

Define non stock and stock (Sec 3)

Trustee – member of a board of non-stock corporation

Director – member of a board of stock corporation

WHY CORPORATION HAS A NAME

It is important for identity purposes.

Mandatory that meetings must be held at the principal place of corporation

Meetings of the Board  ANYWHERE

LGU for corresponding taxes

On the day of the issuance of certificate of corporation

STEPS IN CREATION OF CORPORATIONS

1. Submission of name to the SEC for verification

Main contract- It is a contract between and among the members or stockholders

Essence: That no stockholder or member will violate the agreement

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