CORPORATION

LAW

INTRODUCTION
Corporation Law whole body of laws,
principles and doctrines covering private
corporations in the Philippines
Interpretation: liberal construction to promote
and uplift development of trade relations and
which will encourage friendly commercial
intercourse among corporations (Home Insurance
Co. versus Eastern Shipping Lines, 123 SCRA 424)

BRIEF HISTORY OF PHILIPPINE

CORPORATE LAW

1) Sociedades Anonimas
2) Cuentas en Participacion
3) The Corporation Law (1906)
4) The Corporation Code (1980)

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.

THEORIES ON THE FORMATION

OF A CORPORATION
1) Theory of Concession
Tayag vs. Benguet Consolidated, Inc.
Torres vs. CA
2) Theory of Enterpise Entity
PSE vs. CA

ATTRIBUTES OF A
CORPORATION
1) Artificial Being
2) Creature of the Law
3) Right of Succession
4) Creature of Enumerated Powers,
Attributes and Properties

ARTICLE XII
OF THE 1987 CONSTITUTION
Sec. 16. The Congress shall not, except
by general law, provide for the formation,
organization, or regulation of private
corporations. Government-owned or
controlled corporations may be created or
established by special charters in the
interest of the common good and subject
to the test of economic viability.
Feliciano vs. COA

CORPORATION VS. OTHER

BUSINESS ENTITIES
1) Sole Proprietorship
2) Partnership
3) Business Trust
4) Joint Venture
5) Cooperative

CORPORATIONS CREATED
BY A SPECIAL LAW OR CHARTER
a. National Coal Co. v. Collector of
Internal Revenue
b. Marilao Water Consumers Association,
Inc. v. IAC

CLASSIFICATIONS OF
CORPORATIONS
1.Under the Corporation Code (Sec. 3)
2. Sole and Aggregate
3. Ecclesiastic and Lay
4. Eleemosynary
5. Domestic and Foreign
6. De jure and de facto corporations
6.1 Requisite of De Facto Corporation
6.2 Quo Warranto

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

CLASSIFICATIONS OF
CORPORATIONS

7. Close and Open Corporation

8. Parent, Subsidiary, and Affiliated
9. Private and Public
10. Corporation by Prescription and
Corporation by Estoppel

CLASSIFICATIONS OF
CORPORATIONS
Public Corporations those created for
political purposes connected with the public
good in the administration of the civil
government
Municipal corporation two-fold character
a)Public police power
b)Private proprietary, can sue & be sued,
can be liable for torts

CLASSIFICATIONS OF
CORPORATIONS
Public Corporations not based on the
ownership of the controlling interest
Many GOCCs private corporations
1)National Coal Co. vs CIR
2)Cervantes vs Auditor General (NAFCO)
3)Shipside, Inc. vs CA (BCDA for economic and
social development of Central Luzon)

CLASSIFICATIONS OF
CORPORATIONS
Domestic corporation incorporated under
the laws of the Philippines
Foreign corporation incorporated under the
laws of another country

CLASSIFICATIONS OF
CORPORATIONS
De jure corporation full and substantial
compliance with the requirements of an
existing law
De facto corporation has a bona fide attempt
to incorporate

CLASSIFICATIONS OF
CORPORATIONS
Corporation by estoppel a corporation
precluded from denying its corporate
existence
Corporation by prescription Roman Catholic
Church (thousand years)

CLASSIFICATIONS OF
CORPORATIONS
Parent Company has controlling interest
in one or more corporations
Subsidiary corporation in which the parent
corporation has controlling interest
Affiliate a corporation being controlled by a
holding company