CORPORATION LAW OUTLINE Prof, Reinier Paul R. Yebra, LLB, LLM INTRODUCTION History & background of Philippine Corporate Law CONCEPT AND ATTRIBUTES OF A CORPORATION A. Statutory definition of a corporation (Section 2, Corporation Code") 'B. Attributes of a corporation 1. Artificial being Rts ere ny i. residence and nationality li. constitutional rights ill, criminal liability iy, right to recover moral damages ine of Pareetel ‘of Corporate Entity_ Corporation Law: Outline é Prof Reinier Paul R. Yebra, LLB, LLM & ry CASES: Feliciano vs. COA, January 14, 2008: Manila International Airport Authority y, CA, 20.Juily 2006; Magsaysay-Labrador vs. CA, 180 SCRA 266; Sulo ng Bayan vs. Araneta, 72 SCRA 247; Bataan Shipyard vs. PCGG, 150 SCRA 181; Luxuria Homes vs. CA, 302 SCRA 315; Concept Builders vs. NLRC, 257 SCRA 149; villarey Transit VS. Ferrer, 25 SCRA 845, Francisco Motors vs. CA, 309 SCRA 72; Lipa, et a. V5: Pacific Banking Corp., G.. NO. No. 442435, April 30, 2003; Times Transportation Company vs. Santos Sotelo, et, al., GR. NO. No. 163786. February 16, 2005; Yao, Sr. Vs. People, et al,, 19 June 2007; Hall vs. Piccio, 86 Phil 603; Seventh Day “Adventist vs. Northeastern Mindanao Mission, 21 July 2006; Lim Tong Lim vs. CA, 317 SCRA 728; International Express Travel and Tour Services ‘vs. CA, October 19, 2000; Filipinas Broadcasting Network, Inc. vs. Ago Medical and ‘Educational Center-Bicol Christian College of Medicine, GR. No. 141994, January 17, ee Coastal Pacific Trading, Inc. vs. Southern Rolling Mills Co., Inc. 497 SCRA 11, 28 July ission of articles of incorporation; contractual significance of the articles of Incorporation (Sec. 18 & 15, CC)_ Corporation Law: Outline é Prof Reinier Paul R. Yebra, LLB, LLM & ry CASES: Feliciano vs. COA, January 14, 2008: Manila International Airport Authority y, CA, 20.Juily 2006; Magsaysay-Labrador vs. CA, 180 SCRA 266; Sulo ng Bayan vs. Araneta, 72 SCRA 247; Bataan Shipyard vs. PCGG, 150 SCRA 181; Luxuria Homes vs. CA, 302 SCRA 315; Concept Builders vs. NLRC, 257 SCRA 149; villarey Transit VS. Ferrer, 25 SCRA 845, Francisco Motors vs. CA, 309 SCRA 72; Lipa, et a. V5: Pacific Banking Corp., G.. NO. No. 442435, April 30, 2003; Times Transportation Company vs. Santos Sotelo, et, al., GR. NO. No. 163786. February 16, 2005; Yao, Sr. Vs. People, et al,, 19 June 2007; Hall vs. Piccio, 86 Phil 603; Seventh Day “Adventist vs. Northeastern Mindanao Mission, 21 July 2006; Lim Tong Lim vs. CA, 317 SCRA 728; International Express Travel and Tour Services ‘vs. CA, October 19, 2000; Filipinas Broadcasting Network, Inc. vs. Ago Medical and ‘Educational Center-Bicol Christian College of Medicine, GR. No. 141994, January 17, ee Coastal Pacific Trading, Inc. vs. Southern Rolling Mills Co., Inc. 497 SCRA 11, 28 July ission of articles of incorporation; contractual significance of the articles of Incorporation (Sec. 18 & 15, CC)cS Corporation Law Outline Prof. Reinier Paul R. Yebra, LLB, LLM £. Amendment of the articles of incorporation (Sec. 16, CC) F. Effects of non-use of corporate charter (Sec. 22, CC) CASES: Lyceum of the Philippines vs. CA, 219 SCRA 612: Ang Maga Kaanib sa Iglesia ng Dios vs. Iglesia ng Dios Kay Kristo Jesus, December 12, 2001; Industrial Refractories Corporation of the Phils. vs. Refractories Corp. of the Phils., Oct. 3, 2002; JG Summit Holdings vs. CA, September 24, 2003; Young Auto Supply vs. CA, 223 SCRA 670; Republic Planters Bank vs. Agana, 269 SCRA 1; Castillo, et. al. vs. Balinghasay, et. al. G.R. No. 150976, October 18, 2004. IV. CONTROL AND MANAGEMENT OF A CORPORATION A. Levels of corporate control 8. Board of Directors/Trustees 1. general powers of the board (Sec. 23, CC) 2. business judgment rule 3. qualifications of the board members (Sec. 23 & 27, CC) “A, election of the board members (Sec. 24'& 26, CC); See cumulative 6 ient.in board meetings (Sec: 25, GC) 7. removal of board members (Sec. 28, CC)Corporation Law Outline Prof. Reinier Paul R. Yebra, LLB, LLM Cement vs. IAC, 220 SCRA 103; Santos vs. NLRC, 254 SCRA 673; Sps. David, et al vs. Construction Industry and Arbitration Commission, G.R. No. 159795, July 30, 2004; Malayang Samahan ng mga Manggagawa vs. Ramos, Aprii 20, 2001; Inter-Asia Investments Industries vs. CA, G.R. NO. 125778, June 10, 2003; Lapu-lapu Foundation, Inc. vs. CA, GR, NO. 126006, January 29, 2004; Hydro Resources Contractors Corporation vs. National Irrigation Administration, G.R. No. 160215 November 10, 2004; Monfort Hermanos Agricultural Development Corp. vs. Monfort, Ill, et.al., G.R. No. 152542, July 8, 2004; Mcleod vs. NLRC, et al., 23 Jonuary 2007; Carag vs. NLRC, 02 April 2007. VV. CORPORATE POWERS: ‘A. Doctrine of limited capacity; concept of ultra vires act (Sec. 45, CC) -B. Glasses of corporate powers (express, implied and incidental) c Say powers ‘of a corporation and the limitations on their exercise (Sec. amendment of articles of incorporation (Sec, 16, CC) ‘extension/shortening of corporate term (Sec. 37, CC) 3, increase or decrease of capital stock (Sec. 38, CC) ) eadon or bores of bonded indebtedness (Sec. 38, CC) Corn Prof.Corporation Law Outline Prof. Reinier Paul R. Yebra, LLB, LLM CASES: Loyola Grandvillas Homeowners Association vs (A, 276 SCRA 681; China Banking Corporation vs. CA, 270 ScRa 503, Vil. CORPORATE MEETINGS A. Kinds of corporate meetings 8. Requirements of a meeting C. Right to vote of stockholders 1. instances when voting right not available 2. mules on: oie delinquent shares; (Sec. 71, CC) escrow shares; unpaid shares; (Sec. 72, CC) sequestered shares; pledgor, mortgagor, or administrator of shares (Sec. 55, CC) shares jointly owned (Sec. 56, CC) mpangse 'D. Concept of proxy and voting trust agreement (Sec. 58 & 59, CC) £. Derivative suit; concept and requisites ’25; Republic.vs. Sandiganbayan, April 30, 2003; Republic Evangelista vs. Santos, 86 SCRA 387; Chua vs. Re November 19, 2004; Expert Travel & Tous, Inc. vs. NO. No. 152392, May 26, 2005.Corporation Law Outline Prof. Reinier Paul R. Yebra, LLB, LLM CASES: Nava vs. Peers Marketing, 74 SCRA 65; Lim Tay vs. CA, August 5, 1998; Rural Bank of Lipa vs. CA, Sept. 28, 2001; Ponce vs. Alsons Cement, Dec. 10, 2002; Ong Yong, etal. vs. Tiu, et al., GR. Nos. 144476 & 144629, April 8, 2003. 1X. CORPORATE BOOKS AND RECORDS ‘A. Books required to be kept by a corporation (Sec. 74, CC) B. Right to inspect corporate books 1. Basis and extent of the right of inspection 2, Limitations on the right of inspection 3. Remedies to enforce right of inspection ‘CASE: Gonzales vs. PNB, 122SCRA 489. idation (Seo. 77, CC) n (Sec. 80, CC) dst vs! CA, January 26, 2001. Xi. RIGHT OF APPRAISAL ‘A. Concept of appraisal right B. instances of appraisal right (Sec. 81, Sec. 77, Sec. 42, CC) ©. Requirements for a valid exercise of appraisal right (Sec. 82, CC) D. Effects of exercising appraisal right (Sec. 83, CC)Corporation Law Outline PPOf. Reinier Pau R. Yebra, LLB, 1144 A. Concept; disti 8. Permissive pr ©. Restrictions inguished from open corporations (Sec. 96, 97, 101, & 102, cc) visions in the articles of incorporation (Sec. 97, CC) ‘on transfer of shares (Sec. 98 & 99 Cc) CASES: Dulay Enterprises ys. CA, 225 SCRA 678; San Juan Structural Stee! Fabricators, 296 SCRA 632. (ca aan XIV. CORPORATE DISSOLUTION/LIQUIDATION ‘A. Methods of voluntary corporate dissolution and the requirements therefor 8. Concept of involuntary dissolution and the grounds therefor (Sec. 121, CC) C Corporate liquidation (Sec. 122, cc) D. Methods of liquidation or winding up E: Concept of Rehabilitation; Effects of appointment of management ‘committee or receiver CASES; Gelano vs. CA, 103 SCRA 90; Vesagas vs. CA, Dec. 5, 2002; Phil. Veterans vs. ‘Vega, June 28, 2001; Tan Tiong Bio vs. CIR, 4 SCRA 986; Rebollido vs. CA, 170 SCRA 800, Clarion Printing House, Inc. vs. NLRC, G.R. NO. No. 148372, June 27, 2005; Lingkod ‘Manggagawa sa Rubberworld vs. Rubberworld Phils, Ine. 29 January 2007; Garcia, et ol ASB, 20 September 2005; RCBC vs. IAC, 09‘Corporation Law Outline ‘Prof. Reinier Paul R. Yebra, LLB, LLM A. Powers and functions of the SEC 8. Cases transferred to the RTC CASES: Yujuico vs. Quiambao, 29 January 2006; Baviera vs. Paglinawan, 08 February 2007; SEC vs. Performance Foreign Exchange Corp., 20 July 2006.