LAW ON CORPORATIONS DEFINITION AND ATTRIBUTES DEFINITION: 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. ATTRIBUTES: 1. ARTIFICIAL BEING – it has a
juridical personality, separate and distinct from the persons composing it. CORPORATE ENTITY THEORY
As a legal entity, the corporation is possessed with a juridical personality separate and distinct from the
individual stockholders or members and is not affected by the personal rights, obligations or transactions
of the latter. PIERCING THE VEIL OF CORPORATE ENTITY: The applicability of the corporate entity theory
is confined to legitimate transactions and is subject to equitable limitations to prevent its being used as a
cloak or cover for fraud or illegality, or to work injustice. When the notion of legal entity is used to defeat
public convenience, justify wrong, protect fraud, defend crime, the law will regard the corporation as a
mere association of persons, or in the case of two corporations, merge them into one, the one being
merely regarded as part or instrumentality of the other. The same is true where a corporation is a mere
dummy and serves no business purpose and is intended only as a blind, or an alter-ego or business
conduit for the sole benefit of the stockholders. In cases where the doctrine of piercing the veil of
corporate fiction, the concept of a separate juridical personality shall be set aside. 2. CREATED BY
OPERATION OF LAW – the formal requirement of the State’s consent through compliance with the
requirements imposed by law is necessary for its creation such that the mere agreement of the persons
composing it or intending to organize it does not warrant the grant of its independent existence as a
juridical entity. COMMENCEMENT OF CORPORATE EXISTENCE: is at the time of the issuance of the
Certificate of Incorporation or Registration. It is only from this time that it acquires juridical personality
and legal existence, EXCEPT: a. Corporations by Estoppel; b. Those created by special laws; c. Sole
Corporation – which is reckoned from the filing of verified articles. 3. RIGHT OF SUCCESSION – unlike in a
partnership, the death, incapacity or civil interdiction of one or more of its stockholder does not result in
its dissolution; this is otherwise referred to as the corporation’s “strong” juridical personality. 4.
POWERS, ATTRIBUTES AND PROPERTIES EXPRESSLY AUTDHORIZED BY LAW – it can exercise only such
powers and can hold only such properties as are granted to it by the enabling statutes unlike natural
persons who can do anything as they please. Powers of a corporation: a. Express Powers – those
expressly authorized by the Corporation Code and other laws, and its Articles of Incorporation. b.
Implied Powers – Those that can be inferred from or necessary for the exercise of EXPRESS powers; c.
Incidental Powers – those that are incidental to the existence of the corporation. Under the Corporation
Code, a Corporation has power and capacity: a. To sue and be sued in its corporate name; b. Of
succession by its corporate name for the period of time stated in the articles of incorporation and the
certificate of incorporation; c. To adopt and use a corporate seal; d. To amend its articles of incorporation
in accordance with the provisions of this Code; e. To adopt by-laws, not contrary to law, morals, or public
policy, and to amend or repeal the same in accordance with this Code; f. In case of stock corporations, to
issue or sell stocks to subscribers and to sell stocks to subscribers and to sell treasury stocks in
accordance with the provisions of this Code; and to admit members to the corporation if it be a non-
stock corporation; g. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and
otherwise deal with such real and personal property, including securities and bonds of other
corporations, as the transaction of the lawful business of the corporation may reasonably and
necessarily require, subject to the limitations prescribed by law and the Constitution; h. To enter into
merger or consolidation with other corporations as provided in this Code (now, a corporation can also
enter into a partnership and joint venture); i. To make reasonable donations, including those for the
public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, that no
corporation, domestic or foreign (now only foreign), shall give donations in aid of any political party or
candidate or for purposes of partisan political activity; j. To establish pension, retirement, and other
plans for the benefit of its directors, trustees, officers and employees; and k. Implied Powers: To exercise
such other powers as may be essential or necessary to carry out its purpose or purposes as stated in the
articles of incorporation. ULTRA VIRES ACTS are those which cannot be executed or performed by a
corporation because they are not within its express, inherent, or implied powers as defined by its Articles
of Incorporation.