Corporation Law Reviewer

Section 1.
Title of the Code. - This Code shall be known as the "Revised Corporation Code
of the Philippines".
Section 2. 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 incidental to its existence.
Corporation as an artificial being
- the Corporation code has embodied the accepted concept of corporation as an artificial
being.
- A corporation was given by law with rights, powers, and liabilities usually accorded a
natural person.
Created by operation of law
- A corporation comes into being by authorities of the state.
Right of succession
- A private corporation may continue regardless of the death, insolvency, incapacity of any
of its directors, officers or employees and regardless of transfer of shares from one
stockholder or another.
Powers, attributes and properties
A corporation, being a mere creature of law, has such powers only as are expressly, or impliedly
conferred upon it by the Charter or act of incorporation.
Advantages of Corporation
 Limited liability: The shareholders are not generally liable for the debts and liabilities of
the corporation beyond their contributions to capital. However, lenders will usually
require personal guarantees by the shareholders on loans to the corporation.
The capacity to hold property, to contract, to sue and be sued as a legal unit or distinct
entity
Exemption of shareholders from individual liability
 Continuity and existence: The corporation continues in existence, even if its
shareholders die or sell their shares.
Continuity of existence in spite of death or change of members
 Centralized management: The shareholders elect the Board of Directors, who manage
the affairs of the corporation, including the election of officers.
Standardized method of organization, management and finance for the protection of
shareholders and creditors under statutory regulations.
 Feasibility of greater undertaking
The large group of members can cause more opportunity as there is also a lot of funds
for the company’s project and business transaction.
Sec. 3. Classes of corporations. –
Corporations formed or organized under this Code may be stock or non-stock corporations.
Corporations which have capital stock divided into shares and are authorized to distribute to the
holders of such shares dividends or allotments of the surplus profits on the basic of shares held
are stock corporation. All other corporations are non-stock corporation.
A stock corporation has authorized capital stock divided into shares of stock either with or
without par value. It's engaged in income-generating activities and authorized to declare
dividends. A non-stock corporation has no authorized capital stock.
Stock corporations are organized for profit to be enjoyed by stockholders. Non-
stock corporations are organized for purposes other than profit. The second difference is
distribution of profits. In stock corporations, profits are declared and they are distributed to
stockholders.
Public and Private Corporation
PUBLIC CORPORATIONS are those formed or organized for the government of a portion of
the state. Private corporations are those formed for some private purpose, benefit, aim, or end, as
distinguished from public corporations, which have for their purpose the general good and
welfare.
Public corporations in the Philippines are the governments of PROVINCES CITIES
MUNICIPALITIES and BARANGAYS. They are created by the State as its own device and
agency for the accomplishment of parts of its own public works.
"Public corporation" means an entity that is created by the state to carry out public missions and
services. In order to carry out these public missions and services, a public
corporation participates in activities or provides services that are also provided by
private enterprise.
-FOR GOVERNMENTAL PURPOSES OR POLITICAL
PRIVATE CORPORATION- a corporation that is not a public corporation : a corporation

organized for the profit of its members or in which the entire interest is not held by the state
-AIM OR GAIN OF PROFIT
Section 4. Domestic and foreign corporations
Domestic corporation is one incorporated under Philippine laws.
Foreign corporation is one formed, organized, or existing under any laws other than those of the
Philippines.
A "close" corporation is one the stock of which is held by only a few persons who make very
few purchases or sales so that there is no public market for this stock.
- Have limited stockholders
An "open" corporation is one the stock of which is constantly being bought and sold so that the
ownership varies from time to time.
- Accepting outsiders
Section 18 of RCC Corporate name
No corporate name may be allowed by the SEC if the proposed name is identical or deceptively
or confusingly similar to that of any existing corporation or to any other name already protected
by law or its patently deceptive, confusing or contrary to existing laws. When a change in the
corporate name is approved, the Commission shall issue an amended certificate of incorporation
under the amended name.

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Section 1.

PRIVATE CORPORATION- a corporation that is not a public corporation : a corporation

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