Law 2 - Reviewer (Corporation)

Republic Act No.
11232
The Revised Corporation Code of the Phlippines
Title I – General Provisions Succession – the continuation of a
corporation’s legal status despite changes in
Sec. 1. Title of the Code – this code shall
ownership or management.
be known as the “Revised Corporation
Code of the Philippines” Powers of a Corporation
- Took effect on February 23, 2019 A corporation has no power except those
expressly conferred on it by the Corporation
Sec. 2. Corporation Defined – a
Code and those that are implied or incidental
corporation is an artificial being created
to its existence.
by operation of law, having the right of
succession and the powers, attributes, and Right of a Corporation
properties expressly authorized by law or
Property acquired by a corporation is the
incidental to its existence.
property of a corporation and not the
A corporation is a juridical entity vested property of stockholders or members.
with a legal personality separate and distinct
Sec. 3. Classes of Corporation –
from those acting for and in its behalf and,
corporations formed or organized under
in general, from the people comprising it.
this Code may be stock or nonstock
When the corporation is just an alter ego of a corporations. Stock corporations are
person or of another corporation, the those which have capital stock divided
corporate mask may be removed or the into shares and are authorized to
corporate veil pierced. distribute to the holders of such shares,
dividends, or allotments of the surplus
- The corporate veil will justifiable be
profits on the basis of the shares held. All
impaled only when it becomes a
other corporations are nonstock
shield for fraud, illegality committed
corporations.
against third persons.
Stock Corporations – corporations which
Characteristics of a Corporation:
have capital stock divided into shares and
1. It is an artificial being; are authorized to distribute to the holders of
2. Created by operation of law; such shares dividends or allotments of the
3. It has the right of succession; surplus profits on the basis of the shares held
4. It has the powers, attributes, and are stock corporations.
properties expressly authorized by
Non-stock Corporations – is one where no
law or incidental to its existence.
part of its income is distributable as
Elements of piercing the veil of dividends to its members, trustees, or
corporation fiction officers.
1. Control Other Classes of Corporations

2. Commit a fraud or a wrong
As to purpose:
3. Proximately
1. Public corporation
2. Private corporation
Republic Act No. 11232
3. Government-owned or controlled the special law or charter creating them
corporation or applicable to them, supplemented by
4. Quasi-public corporation the provisions of this Code, insofar as
they are applicable.
As to legal right to corporate existence
A corporation is created by operation of law.
1. De jure corporation
It acquires a judicial personality either by
2. De facto corporation
special law or general law.
3. Corporation by estoppel
4. Corporation by prescription General law under which a private
corporation may be formed or organized is
As to laws of incorporation
the Corporation Code.
1. Domestic corporation
Sec. 5. Corporators and Incorporators,
2. Foreign corporation
Stockholders and Members – corporators
As to whether they are open to the public are those who compose a corporation,
or not whether as stockholders or shareholders
in a tock corporation or as members in a
1. Open corporation nonstock corporation. Incorporators are
2. Close corporation those stockholders or members mentioned
As to relationship of management and in the articles of incorporation as
control originally forming and composing the
corporation and who are signatories
1. Parent or holding corporation thereof.
2. Subsidiary corporation
1. Corporators – those who compose a
As to the number of persons who compose corporation, whether as stockholders
them or as members.
1. Corporate aggregation 2. Incorporators – those stockholders
2. Corporation sole or members mentioned in the articles
of incorporations as originally
As to whether they are for religious forming and composing the
purposes or not corporation who are signatories
1. Ecclesiastical corporation thereof.
2. Lay corporation 3. Stockholders – the owner of shares
of stock in a stock corporation.
As to whether they are for charitable 4. Members – the corporators of a non-
purposes or not stock corporation.
1. Eleemosynary corporation 5. Board of Directors or Board of
2. Civil corporation Trustees – the board of directors is
the governing body in a stock
Sec. 4. Corporations created by special corporation, while the Board of
laws or charters – corporations created Trustees is the governing body of a
by special laws or charters shall be non-stock corporation.
governed primarily by the provisions of
Republic Act No. 11232
6. Corporate Officers – the president The shares in stock corporations may be
who shall be a director, a treasurer divided into classes or series of shares, or
who may or may not be a director, a both. No share may be deprived of voting
secretary who shall be a resident and rights except those classified and issued as
citizen of the Philippines, and such “preferred” or “redeemable” shares,
other officers as may be provided for unless otherwise provided into this Code.
in the by-laws. If the corporation is
Note: the preferred shares of stock may be
vested with public interests, the
issued only with a stated par value.
board shall also elect a compliance
officer.
7. Subscribers – persons who have
agreed to take and pay for original,
unissued shares of a corporation
formed or to be formed.
8. Underwriter – a person who
guarantees on a firm commitment
and/or declared best effort basis the
distribution and sale of securities of
any kind by another company.
9. Promoter – a person who brings
about or cause to bring about the
formation and organization of a
corporation.
Note: for the purpose of forming a new
domestic corporation under the Revised
Corporation Code, 2 or more persons but not
more than 15 may organize themselves and
form a corporation.
Only a One Person Corporation (OPC) may
have a single stockholder, as well as a sole
director.
Sec. 6. Classification of Shares – the
classification of shares, their
corresponding rights, privileges, or
restrictions, and their stated par value, if
any, must be indicated in the articles of
incorporation. Each share shall be equal
in all respects to every other share, except
as otherwise provided in the articles of
incorporation and in the certificate of
stock.

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Republic Act No.

1. Control Other Classes of Corporations

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