Concepts and

Theories

According to Villanueva & Tiansay

Three- levels of Corporate

Acquisitions and Transfers
Assets- only Transfers
Transfer of the Business Enterprise
Equity transfer

Assets- only Transfers

the purchaser:
is only interested in the raw assets and
properties of the business
is not interested in the juridical entity of the

corporate owner of the assets

is not interested in the goodwill and other

factors relating to business enterprise

There is non-assumption of liabilities in

ASSETS-ONLY TRANSFERS

the transferee is not liable for the debts and

liabilities of he transferor , except where the
transferee expressly impliedly agrees to assume
such debts
No contractual privity

Business-Enterprise
Tranferers
The purchasers interest goes beyond the

assets or properties used in the companys

business
The primary interest is to obtain the earning

capability of the venture

The purchaser is not interested in obtaining

the juridical entity that owns the business

enterprise

Equity Transfers
The equity level of acquisition or transfer constitutes of

looking at the entirely of the business entrerpise as it is

owned and operated by the corporation.
The purchaser takes control and ownership of the

business by purchasing the controlling shareholdings of

the corporate owner.
The control of the business enterprise is therefore

indirect, since the corporate owner remains the direct

owner of the business, and what the purchaser has
actually purchased is the ability to elect the members of
the Board of Directors of the corporation which runs the
business.

The immediate subject matter of the contract

of the contract of sale are the controlling

shareholders in the corporation and the ability
to take control of the business enterprise.
separate juridical personality
Limited liability

Mergers and
Consolidations
Consolidation is the union of two or more

existing corporations to form a new

corporation called the consolidated
corporation.
Merger is the a union whereby one or more

existing corporations are absorbed by another

corporation which survives and continues the
combined business.

Rules on liability succession in the three-levels of

corporate acquisitions and transfers

a) Assets-only Transfer
the transferee shall not be liable for the

liabilities of the transferor, except where the

transferee expressly or impliedly agrees to
assume such debts or when it is effected in
fraud of creditors;

b) Transfer of the Business

Enterprise
where the transferee essentially continues the

business enterprise of the transferor, the

transferee shall be liable for the liabilities of the
transferor arising from the business enterprise
transferred; and

c) Equity Transfer
the transferee is not liable for the debts and

liabilities of the transferor, except where the

transferee expressly or impliedly agrees to
assume such debts.

Effects of Transfers on Employees

a) Assets-Only Transfers

the transferee is not bound to retain the employees

of the transferor
The transferee is not liable for any of the claims
against the transferor

b) Business-Enterprise Transfers

The transferee should be bound to retain the

services of the employees of the business that it has
acquired, although it is not liable for the violations
that the transferor had committed in the past and
for which the transferor remains solely liable.

Di ko talaga to gets sorry yung sa book

Employees have no equity claims on the Business
Enterprise
Piercing Doctrine
Clear break in operations

c) Equity Transfers

there is only change in the ownership or control of

the corporate employer
the employees remains with the corporate employer
in exactly the same manner as before the equity
transfer
therefore the purchaser does not assume any
personal liabilty to the employees

with the change of majority ownership of a

corporation, the relationship of the employeremployee in the business does not change, and
the corporate- employer, which has a juridical
personality separate and distinct from the new
set of stockholders, remains the same employer
to the employees of the business.

Liabilities to employees ?? Consider

as creditors? Sorry ewan ahhaha

Employee- employer relationship

Elements:

a) selection and engagement of the

employee;
b) the payment of wages;
c) the power of dismissal; and
d) the employers power to control the
employee with respect to the means and
method by-which the work is to be
accomplished.
The last which is the so-called control test
is the most important element
(Brotherhood Labor Unity Movement of the Phils. vs. Zamora, 147 SCRA 49 [1987]; Dy Ke Beng vs. International
Labor and Marine Union of the Phil., 90 SCRA 162 [1979]; Mafinco Trading Corp. vs. Ople, 70 SCRA 141 [1976];
Social Security System vs. Court of Appeals, 37 SCRA 579 [1971]).

Bibliography
Philippine Corporate Law, Cesar Lapuz

Villanueva & Teressa S. Villanueva- Tiansay,

Philippine Copyright 2013, Rex Printing
Company, Inc