Reviewer in Corporation (Section 1 to 35)

Batas Pambansa Blg. 68 : Corporation Code of the Philippines

Corporation is an artificial being created by operation of law, having the right of
succession and the powers, attributes and properties expressly provided by law or
incident to its existence. (Section 2)
4 attributes of a corporation
1. An Artificial Being
- A juridical person capable of having rights and obligations with a personality
separate and distinct from its members of stockholders.
2. Created by operation of law
- The state must give its consent either special or general laws.
3. Has the right of succession
- Its continued existence during the term stated in its articles of incorp.
cannot be affected by any change in the members or stockholders
- Nor is it affected by any change in the members or stockholders
4. Has the powers, attributes and properties expressly authorized by law or
incident to its existence
- It can exercise only such powers as the law may choose to grant it, either
expressly or impliedly
Advantages of the Corporate Organizations
1. Separate juridical personality
2. Limited liability to investors
3. Free transferability of units of ownership
4. Centralized Management all corporate powers are exercised by the board of
directors
Theories on the formation of a corporation
1. Concession theory or fiat theory Corporation was conceived as an artificial
person owing existence through creation by a foreign power. It has w/o
existence until it has received the imprimatur of the state acting according to
law, through the SEC.
2. Theory of corporate enterprise or economic unit corporation is more of an
aggregation of persons doing business.
3. Genossenschaft theory treats a corporation as the reality of the group as a
social and legal entity, independent of State recognition and concession
Partnership

Corporation

Extent of Liability
Partners are personally liable for the Stockholders
cannot
be
made
to
debts of the partnership
personally answer to corporate creditors
Creation
Mere agreement of the parties w/c can Derives its juridical personality from the
be composed of just 2 persons
certificate issued by the SEC, w/ a
minimum of 5 incorporators
Management
All the owners in a partnership actively Management is centralized in the BOD w/c
participate in management
has exclusive power to bind the corp.
Nature of Relationship
Mutual trust and confidence
Has more stability, enjoys the right of

sucession
Powers
Expressly granted

As long as the parties agreed to it

2 kinds of franchise
1. Corporate or primary/general franchise grant given to exist as a corporation
2. Special or secondary franchise certain rights and privileges conferred upon
existing as a corporation
Classification of corporation
1. Stock Corporation one which have capital stock divided into shares and are
authorized to distribute to the holders of such shares dividends or allotment or
the surplus profits on the basis of the shares held.
2. Non-Stock Corporation one which do not issue shares and are created not for
profit but for public good and welfare and where no part of its income is
distributable as dividends to its members, trustees or officers.