Professional Documents
Culture Documents
CORPORATION LAW
Course Outline
I. INTRODUCTION
Historical Background of Phillippine Corporate Law
II. CONCEPT AND ATTRIBUTES OF A CORPORATION
A. Statutory definition of a corporation (Section 2, CC)
B. Attributes of a corporation
1. Artificial being
a. Doctrine of Corporate Entity
(i) residence and nationality
(ii) constitutional rights
(iii) criminal liability
(iv) right to recover moral damages
b. Doctrine of Piercing the Veil of Corporate Entity
(i) alter ego principle and instrumentality rule
(ii) probative factors of identity
2. Creature of Law (See constitutional limitations on the creation
of a private corporation, Article 12, Section 16, Constitution; Concession theory)
3. Right of Succession
4. Creature of Enumerated Powers, Attributes and Properties
a. Doctrine of limited capacities as compared to the Doctrine of general capacities)
b. Ultra vires doctrine
Classification of Private Corporations
1. stock and non-stock
2. domestic and foreign
3. dejure and de facto (Sec. 20, CC)
(See: doctrine of corporation by estoppel [Sec. 21, CC])
4. holding, affiliate and subsidiary
5. open and close
CASES: Feliciano vs. COA, January 14, 2004; Manila International Airport Authority vs. CA, 20 July
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; Lipat, et al. vs. Pacific Banking Corp., GR No. 142435, April 30, 2003; Times
Transportation Company vs. Santos Sotelo, et. al., GR 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, G.R. No. 141994, January 17, 2005;
Coastal Pacific Trading, Inc. vs. Southern Rolling Mills Co., Inc. 497 SCRA 11, 28 July 2006
III. FORMATION AND ORGANIZATION OF A PRIVATE CORPORATION
A. Submission of articles of incorporation; contractual significance
B. Contents and form of the Articles of Incorporation (Sec. 14 & 15, CC)
1. corporate name
a. statutory limitations on the use of corporate name (Sec. 18, CC)
b. SEC guidelines on the use of corporate name
c. Doctrine of secondary meaning
d. Change of corporate name
2. purpose clause
3. principal office
4. term of existence
a. doctrine of relation
5. incorporators
6. directors and trustees
7. capitalization
8. shares of stock (Sec. 6, CC)
a. doctrine of equality of shares
b. classes of shares
(i) par and no par
(ii) voting and non-voting
(iii) common and preferred
(iv) redeemable, treasury and founder's shares
9. treasurer's affidavit
C. Grounds for rejection of the Articles of Incorporation (Sec. 17, CC)
D. Commencement of corporate existence (Sec. 19, CC)
E. 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 Mga 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
B. 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)
4. election of the board members (Sec. 24 & 26, CC); See cumulative voting procedure
5. term of office
6. quorum requirement in board meetings (Sec. 25, CC)
7. removal of board members (Sec. 28, CC)
8. vacancies in the board (Sec. 29, CC)
9. compensation of board members (Sec. 30, CC)
C. Corporate Officers
1. concept of corporate officers
2. validity and binding effect of acts of corporate officers
3. doctrine of apparent authority
D. Liability of directors, trustees and officers
1. instances when corporate officers/directors are held solidarily liable (Sec. 31, CC)
2. self-dealing directors/officers (Sec. 32, CC)
3. contracts involving inter-locking directors (Sec. 33, CC)
4. doctrine of corporate opportunity (Sec. 34, CC)
E. Executive committee (Sec. 33, CC)
CASES: Grace Christian Highschool vs. CA, 281 SCRA 133; Gokongwei vs. SEC, 89 SCRA 336;
Western Institute of Technology vs. Salas, 278 SCRA 216; Nacpil vs. International Broadcasting
Corp., March 21, 2002; People's Aircargo vs. CA, Oct. 7, 1998; Prime White 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, April 20, 2001; Inter-Asia Investments Industries vs. CA, GR 125778, June 10, 2003;
Lapu-lapu Foundation, Inc. vs. CA, GR 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, III, et.al., G.R. No. 152542, July 8, 2004;
McLeod vs. NLRC, et al., 23 January 2007; Carag vs. NLRC, 02 April 2007
V. CORPORATE POWERS
A. Doctrine of limited capacity; concept of ultra vires act (Sec. 45, CC)
B. Classes of corporate powers (express, implied and incidental)
C. Statutory powers of a corporation and the limitations on their exercise (Sec.
36, CC)
1. amendment of articles of incorporation (Sec. 16, CC)
2. extension/shortening of corporate term (Sec. 37, CC)
3. increase or decrease of capital stock (Sec. 38, CC)
4. incurrence, creation or increase of bonded indebtedness (Sec. 38, CC)
5. sale or disposition of assets (Sec. 40, CC)
6. acquisition of corporate shares (Sec. 41, CC) (See Trust Fund Doctrine)
7. investment of corporate funds (Sec. 42, CC)
8. declaration of dividends (Sec. 43, CC)
9. management contract (Sec. 44, CC)
10. adoption/amendment of By-laws
2. religious society
B. Educational Corporation
CASE: Iglesia Evangelica vs. Bishop Lazaro, 6 July 2010
XI. CORPORATE DISSOLUTION/LIQUIDATION
A. Methods of voluntary corporate dissolution and the requirements therefor
B. 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, GR No. 148372, June 27, 2005; Lingkod Manggagawa sa Rubberworld vs.
Rubberworld Phils., Inc. 29 January 2007; Garcia, et al vs. PAL, 29 August 2007; Sobrejuanite vs.
ASB, 30 September 2005; RCBC vs. IAC, 09 December 1999;
XV. FOREIGN CORPORATIONS
A. Concept of foreign corporation
B. Tests to determine nationality of a corporation
C. Concept of "doing business" and the license requirement therefor; See also Sec. 3(d), RA 7042
D. Effects of being issued a license
E. Revocation and withdrawal of license
CASES: Facilities Management vs. De la Osa, 89 SCRA 131; Home Insurance vs. Eastern Shipping
Lines, 123 SCRA 424; Mentholatum, Inc. vs. Mangaliman, 73 Phil 524; Eriks vs. CA, 267 SCRA 567;
MR Holdings vs. Sheriff Bajar, April 11, 2002; Hutchison Ports vs. SBMA, August 31, 2000; Antam
Consolidated vs. CA, 143 SCRA 288; Mentholatum vs. Mangaliman, 72 Phil 524; Merrill Lynch
Futures, Inc. vs. CA, 211 SCRA 824; Agilent Technologies Singapore vs. Integrated Silicon
Technology Philippines Corporation, G.R. No. 154618, April 14, 2004; Expertravel & Tours, Inc. vs.
Court of Appeals and Korean Airlines GR No. 152392, May 26, 2005; B. Van Zuiden vs. GTVL, 28
May 2007
XVI. SEC JURISDICTION
A. Powers and functions of the SEC
B. 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