Corporation Law Syllabus

Part I: General Provisions

A.

Corporation, defined (Sec. 2)

7.
8.
9.
10.

Close and Open Corporation

Parent, Subsidiary, and Affiliated
Private and Public
Corporation by Prescription and
Corporation by Estoppel

g.
3.
a.

ASJ Corporation v. Sps. Evangelista, GR

NO. 158086, February 14, 2008

Entitlement to constitutional rights

Due process

Cases:
C. Nationality of corporations
a. Tayag v. Benguet Consolidated, 26 SCRA
242
b. Torres v. Court of Appeals, 278 SCRA 793
c. Philippine Stock Exchange, Inc. v. Court of
Appeals, 281 SCRA 232
1.

Art. XII Section 16, 1987 Philippine

Constitution

1.
2.

Control test
Grandfather rule

Case:
Wilson Gamboa v. Sec. Margarito Teves, GR NO.
176579, June 28, 2011

Case:
Albert v. University Publishing, Inc. G.R. No.
10118, June 16, 1965)
b. Equal protection of the law
c. Protection against unreasonable searches
and seizure
4.

Case:
Feliciano v. COA, GR No. 147402, January 14,
2004
2.
3.
4.

Attributes of a Corporation
Similarities and Distinctions between
Contract of Partnership and Corporations
Corporations Created by Special Laws or
Charter

D. Corporations created by special laws (Sec.

4)
E. Corporators and incorporators,
stockholders and members (Sec. 5)
F. Corporate juridical personality
1.

Doctrine of separate juridical personality

(or Doctrine of Corporate Entity

Entitlement to Moral Damages

Cases:
a. ABS-CBN v. Court of Appeals, GR NO.
128690, January 21, 1999
b. Coastal Pacific Trading, Inc. v. Sothern
Rolling Mills, Co., Inc., July 28, 2006
5.

Libel

Case:
Case:

Cases:
a.
b.

National Coal Co. v. Collector of Internal

Revenue, 46 Phil. 583
Marilao Water Consumers Association, Inc.
v. IAC, 201 SCRA 437

a.

Cease v. CA, GR NO. 33172, October 18,

1979

2.

Doctrine of piercing the corporate veil

a.
b.

Grounds for application of doctrine

Test in determining applicability

Filipinas Broadcasting v. Ago Medical Center,

GR No. 141994, January 17, 2005
6. Liability for torts
PNB v. CA, GR NO. 27155, May 18, 1978

B. Classification of corporations
Cases:
1.
2.
3.
4.
5.
6.

Under the Corporation Code (Sec. 3)

Sole and Aggregate
Ecclesiastic and Lay
Eleemosynary and Civil
Domestic and Foreign
De jure and de facto corporations

6.1. Requisite of De Facto Corporation

6.2. Quo Warranto

a.
b.
c.
d.
e.

Case:
Sawadjaan v. Court of Appeals, G.R. No.
141735, June 8, 2005

f.

7.
CIR v. Norton and Harrison Company,
G.R. No. 17618, August 31, 1964
McLeod v. NLRC, GR No. 146667,
January 23, 2007
De Asis and Co. v. Court of Appeals, GR
No. L-61549, May 27, 1985
Martinez v. Court of Appeals, GR NO.
131673, September 10, 2004
Solidbank Corporation v. Mindanao
Ferroalloy Corporation,, GR No. 153535,
July 28, 2005
Yamamoto v. Nishino Leather
Industries, Inc., GR No. 150283, April
16, 2008

Doctrine of Corporate Negligence

Case:
Professional Services Inc., v. Court of Appeals,
G.R. No. 126297, Feb. 2, 2010
8.

Liability for crime

G. Classification of Shares (Sec. 6)

1.
2.
3.
4.
5.

Par value or no par value

Voting or non-voting
Common or preferred
Promotion share
Share in escrow

6.
7.
8.
9.

Convertible stock
Founders share (Sec. 7)
Redeemable share (Sec. 8)
Treasury share (Sec. 9)

5.

Filipino ownership requirement based on

specific constitutional and legal grounds

1.

Fiduciary duties

D. Corporate term (Sec. 11)

B. Election of directors or trustees (Sec. 24)

Part II: Incorporation and Organization of

Private Corporations

1.

1.

Methods of voting

A.

Number and qualifications of incorporators

(Sec. 10)

Cases:

a.
b.

Straight voting
Cumulative voting

2.

In a non-stock corporation

1.
2.
3.
4.
5.
6.
7.

Capital stock (distinguish from capital)

Authorized capital stock
Subscribed capital stock
Outstanding capital stock
Paid-up capital stock
Unissued capital stock
Legal capital (distinguish from capital
stock)
Par value
Certificate of stock

8.
9.

Case:
Kukan International Corp. v. Reyes, G.R No.
182729, Sept. 29, 2010
B. Theory on Multiple Corporate Personalities
C. Minimum capital stock and subscription
requirements

Doctrine of Relation (Relating Back

Doctrine)

a. Alhambra Cigar & Cigarette Manufacturing

Company, Inc. v. SEC, GR No. L-23606, July
29, 1968
b. PNB v. CA, GR No. 63201, May 27, 1992

Case:
E.

Articles of incorporation (Sec. 14)

1.
2.
3.

Contents
Non-amendable items
Doctrine of substantial compliance

F. Ground for rejection (Sec. 17)

G. Corporate name (Sec. 18)
H. Commencement of corporate existence
(Sec. 19)
1.
2.
3.

Genossenschaft Theory
Theory on concession
Theory of Corporate Enterprise or
Economic Unit

1.

Incorporation and organization

I.

De facto corporation (Sec. 20)

a.

Promoter

1.

Differences between de jure, de facto and

corporation by estoppels

a.1) Liability of promoter

a.2b) Liability of corporation for promoters
contracts
2.

Subscription contract

Cases:
b.
c.
3.
4.

Jaka Investments Corp. v. CIR, GR No.

147629, July 28, 2010
Ong Yong v. Tiu, GR No. 144476, April 8,
2003
Pre-incorporation subscription agreements
Consideration for stocks

C. Corporate officers, quorum (Sec. 25)

Matling Industrial and Commercial Coorp. V.

Coros, G.R. No. 157802, October 13, 2010
D. Report of election (Sec. 26)
E. Disqualification of directors, trustees or
officers (Sec. 27)
F. Removal of directors or trustees (Sec. 28)
G. Vacancies in the office of director or trustee
(Sec. 29)
Case:
a. Valle Verde Country Club, Inc. v. Africa, G.R.
No. 151969, September 4, 2009
b. Tan v. Sycip, G.R. No. 153468, August 17,
2006
H. Compensation of directors (Sec. 30)
I. Liability of directors, trustees or officers
(Sec. 31)

Case:
1.
Seventh Day Adventist Conference Church of
Southern Philippines, Inc. v. Northeastern
Mindanao Mission of Seventh Day Adventist,
Inc. GR No. 150416, July 21, 2006
J.
K.

Corporation by estoppel (Sec. 21)

Non-use of corporate charter (Sec. 22)

Part III: Board of

Directors/Trustees/Officers
A.

The Board of Directors of Trustees (Sec. 23)

Corporate opportunity doctrine

J.

Dealings of directors, trustees or officers

with the corporation (Sec. 32)
K. Contracts between corporations with
interlocking directors (Sec. 33)
L. Disloyalty of a director (Sec. 34)
M. Executive committee (Sec. 35)
N. Business Judgment Rule
Case:
Saber v. Court of Appeals, G.R. No. 132981,
August 31, 2004

(ii) Consequences of ultra vires acts

Part IV: Powers of Corporations

Cases:

A.

Classification of powers

a.

1.
2.
3.

Express powers
Implied powers
Incidental or inherent powers

b.

Zomer Development Company, Inc. v.

International Exchange Bank, GR No.
150694, March 13, 2009
Republic v. Acoje Mining, Inc. GR No. L18062, February 28, 1963

Cases:

(iii) Ratification

a.

j) Doctrine of apparent authority

b.

Cebu Bionic Builders Supply, Inc. v. DBP,

GR No. 154366, November 17, 2010
Shipside Incorporated v. CA, GR No.
143377, February 20, 2001

B. Corporate powers and capacity (Sec. 36)

1. General powers, theory of general capacity
2. Specific powers, theory of specific capacity
a) Power to extend or shorten corporate term
(Sec. 37)
a.1) Appraisal right of dissenting
stockholders
b) Power to increase or decrease capital stock
or incur, create, increase bonded indebtedness
(Sec. 38)
b.1) Limitation
b.2) Necessity
c) Power to deny pre-emptive rights (Sec. 39)
c.1) As to treasury shares
d) Power to sell or dispose of corporate assets
(Sec. 40)
d.1) Appraisal right of dissenting
stockholder
e) Power to acquire own shares (Sec. 41)
e.1) Conditions for the exercise of the
power
e.2) Trust fund doctrine
f) Power to invest corporate funds in another
corporation or business (Sec. 42)
g) Power to declare dividends (Sec. 43)
g.1) Concept of dividends
(distinguished from profits)
g.2) Classes of dividends
g.3) Unrestricted retained earnings
h) Power to enter into management contract
(Sec. 44)
i) Ultra vires acts (Sec. 45)
(i) Applicability of ultra vires doctrine

Case:
a. Westmont Bank v. Inland Construction and
Development Corp., GR No. 123650, March 23,
2009
b. BPI Family Savings Bank v. First Metro
Investment Corp, GR No. 132390, May 21,
2004
k) Doctrine of individuality of subscription
l) Doctrine of equality of shares
m) Trust fund doctrine

C. Quorum (Sec. 52)

1. Requisites for a valid
meeting of stockholders
2. Specific number of votes
required by law

D. Regular and special meetings of

directors or trustees (Sec. 53)
1. Business judgment rule
2. Solidary liabilities for damages
E. Who shall preside (Sec. 54)
F. Pledgors, mortgagors and
administrators (Sec. 55)
G. Voting in case of joint ownership
(Sec. 56)
H. Voting right for treasury shares (Sec.
57)

Part V By Laws

I. Proxies (Sec. 58)

A. Adoption of by-laws (Sec. 46)

a) Requisites of valid by-laws
b) Binding effects
c) Contents (Sec. 47)
d) Amendments (Sec. 48)

K. Voting trust (Sec. 59)

Case:
a. PMI Colleges v. NLRC, GR NO.
121466, August 15, 1997

Case:
a. Lee vs. Court of Appeals, G.R. No.
14441, Dec. 17, 1996
Title VII Stocks and Stockholders
A. Rights of stockholders in general

Part VI Meetings

B. Derivative suit

A. Kinds (Sec. 49-51)

1. Necessity of meetings

C. Liabilities of stockholders
D. Subscription contract (Sec. 60)

B. Place and time of meeting of

stockholders or members (Sec. 51)

E. Pre-incorporation subscription (Sec.

61)

Case:
a. Expertravel & Tours, Inc. v. Court of Appeals,
G.R. No. 152392, May 26, 2005

F. Certificate of stock
1. Nature of the certificate

2. Uncertificated shares
3. Negotiability
4. Requirements for valid transfer of stocks
5. Issuance
6. Full payment
7. Payment pro-rata
8. Stock and transfer book
9. Lost or destroyed certificates
10. Situs of the shares of stock

A. Merger and consolidation (Sec. 76)

Part XII Distribution of Assets in NonStock Corporations

B. Approval required (Sec. 77)

A. Rules of distribution (Sec. 94)
C. Articles of merger or consolidation
(Sec. 78)

B. Plan of distribution of assets (Sec.

95)

D. Effectivity (Sec. 79)

E. Effects (Sec. 80)

Part XIII Close Corporations

G. Consideration for stocks (Sec. 62)

H. Certificate of stock and transfer of
shares (Sec. 63)

Part X Appraisal Right

A. Definition and applicability of Title

(Sec. 96)

A. Instances of appraisal right (Sec. 81)

B. Articles of incorporation (Sec. 97)

I. Issuance of stock certificate (Sec. 64)

B. How right is exercised (Sec. 82)
J. Liability of directors for watered
stocks (Sec. 65)

C. Effect of demand and termination of

right (Sec. 83)

K. Interest on unpaid subscription (Sec.

66)

C. Validity of restrictions on transfer of

shares (Sec. 98)
D. Effects of issuance or transfer of stock in
breach of qualifying conditions (Sec. 99)

D. When right to payment ceases (Sec.

84)

E. Agreements by stockholders (Sec.

L. Payment of balance (Sec. 67)

100)
E. Who bears costs of appraisal (Sec.

M. Delinquency sale (Sec. 68)

85)

N. When sale may be questioned (Sec.

F. Notation on certificates; rights of

transferee (Sec. 86)

69)

F. When board meeting is unnecessary

or improperly held (Sec. 101)

O. Court action to recover unpaid

subscription (Sec. 70)
Part XI Non-Stock Corporations

G. Pre-emptive right in close

corporations (Sec. 102)
H. Amendment of articles of
incorporation (Sec. 103)

P. Effect of delinquency (Sec. 71)

A. Definition (Sec. 87)

I. Deadlocks (Sec. 104)

B. Purposes (Sec. 88)

J. Withdrawal of stockholder or
dissolution of corporation (Sec. 105)

Q. Rights of unpaid shares (Sec. 72)

R. Lost or destroyed certificates (Sec.
72)

C. Members right to vote (Sec. 89)

Part VIII Corporate Books and

Records (Sec. 74-74)

D. Non-transferability of membership
(Sec. 90)
E. Termination of membership (Sec. 91)

A. Contents

Part XIV Special Corporations

A. Educational Corporations
1. Incorporation (Sec. 106)
2. Pre-requisites to incorporation (Sec.
107)
3. Board of trustees (Sec. 108)

F. Election and term of trustees (Sec.

B Who may make valid entries

92)

B. RELIGIOUS CORPORATIONS
G. Place of meetings (Sec. 93)

Part IX Merger and Consolidation

1. Classes of religious corporations (Sec. 109)

2. Corporation sole (Sec. 110)

3. Articles of incorporation (Sec. 111)

D. Dissolution by shortening corporate term

(Sec. 120)

4. Submission of the articles of incorporation

(Sec. 112)
5. Acquisition and alienation of property (Sec.
113)
6. Filling of vacancies (Sec. 114)
7. Dissolution (Sec. 115)
8. Religious societies (Sec. 116)

E. Involuntary dissolution (Sec. 121)

F. Resident agent; service of process (Sec. 128)

G. Law applicable (Sec. 129)

Part XV Dissolution
A. Methods of dissolution (Sec. 117)
B. Voluntary dissolution where no creditors are
affected (Sec. 118)
C. Voluntary dissolution where creditors are
affected (Sec. 119)

H. Amended license (Sec. 131)

F. Corporate liquidation (Sec. 122)
Part XVI Foreign Corporations
A. Definition and rights of foreign corporations
(Sec. 123)
B. Application to existing foreign corporations
(Sec. 124)
C. Application for a license (Sec. 125)
D. Issuance of a license (Sec. 126)
E. Who may be a resident agent (Sec. 127)

I. Merger or consolidation involving a foreign

corporation licensed in the
Philippines (Sec. 132)
J. Doing business without a license (Sec. 133)
K. Revocation of license (Sec. 134)
L. Issuance of certificate of revocation (Sec.
135)
M. Withdrawal of foreign corporations (Sec.
136)