Title I : General Provisions SUCCESSION - continuation of a

Sec 1. Title of the Code corporation’s legal status despite

changes in ownership or management.
The revised corporation Code of the
Philippines.
4. Power, Attributes, and Properties
- February 23, 2019
Expressly Authorized by Law or
incidental to its existence.
Sec 2. Corporation Defined
A corporations is (1) an ARTIFICIAL
Government- Owned or Controlled
PERSON (2) CREATED BY OPERATION OF
Corporation (GOCC)
LAW, (3) having the RIGHTS TO
Requisites:
SUCCESSION and (4) the POWERS,
1. Stock or Non- Stock Corporation
ATTRIBUTES, and PROPERTIES expressly
2. Vested with functions relating to
authorized by law or incidental to its
public needs
existence.
3. Directly government own or
having AT LEAST 51% of its capital
Characteristics:
stock.
1. Artificial Person
- is not a real person but is
PIERCING THE VEIL OF CORPORATE
regarded and treated as
FICTION/ INSTRUMENTALITY / ALTER EGO
such.
DOCTRINE
- Have properties separate
- Doctrine that questions the
from the properties of its
separate entity of the corporation.
members
- The juridical personality of the
- Can sue and be sued
corporation is the “veil” or the
2. Created by Operation of Law
protection its members are under
- Not perfected by mere
in regards to its liabilities.
agreement
- And as such, if the purpose or the
- Existence must be
manner at which the business is
authorized by Law
being conducted is unlawful,
3. Has the Rights to Succession
deceiving or is being used to
- Continuous existence
protect fraud or any wrongful
- Death, insolvency, and the
purpose, the persons leading the
act of a member does not
operations and the entity will be
dissolve the corporation.
regarded as a single person.
- Interest in the corporation
Hence, them being personally
can easily be transferred
liable for any obligations bound to
without causing
the corporation.
dissolution
 - Peirce the separate existence of a 3. As to Purpose
corporation and sue directly the a. Public corporation- for
corporators. public good and welfare
- Exception to the SEPARATE ENTITY b. Private Corporation- for
DOCTRINE private purpose e.g profit
c. GOCC
Elements: ALL MUST BE PRESENT d. Quasi- Public
1. Control- COMPLETE DOMINATION Corporation- for public
2. Control must have been used to good and profit
Commit Fraud or a wrong - Private org but its
3. Proximate Cause of the injury or functions are
unjust loss complained of. related to the
public
* The piercing of the corporate veil MUST * Franchise - grant from congress
BE DONE WITH CAUTION 4. As to Legal Right To Corporate
* The wrongdoing MUST NOT BE Existence
PRESUMED, it must be CLEARLY AND a. De Jure Corporation- 100%
CONVINCINGLY ESTABLISHED. complied with the
requirements for
Powers of a Corporation incorporation.
1. Those that are EXPRESSED by law b. De Facto Corporation-
2. Those that are IMPLIED or substantial compliance
INCIDENTAL to its existence. - wishes to have
100% compliance
Sec 3. Classes of Corporations but is questioned
1. Stock Corporation by the SOLICITOR
- Have capital stocks GENERAL (lawyer of
divided into shares the PH)
- Authorized to distribute - QUO WARRANTO :
shares or dividends WHAT IS THE RIGHT
- Profit oriented corporation (direct proceeding)
2. Non- Stock Corporation c. Corporation by Estoppel
- Incidental income are not d. Corporation by
distributed to members Prescription- e.g ROMAN
but are used in CATHOLIC CHURCH
furtherance of its purpose (established before the the
- Purpose of public good government of the PH was
and welfare established)
- Not for Profit Orgs.
 5. As to Laws of Incorporation SPECIAL LAW/ CHARTER - a law created
a. Domestic Corporation specifically for the incorporation of a
- General rule: the special corporation.
nationality of a
corporation is - Private corporations
based on its - Controlled or owned by
location. government
b. Foreign Corporation - GOCC
6. As to whether they are open to
the public or not Twin Conditions:
a. Open Corporation 1. Common Good
b. Close Corporation 2. Economic Viability
7. As to relationship of
management and Control Sec 5. Components of a Corporation
a. Parent or Holding 1. Corporators
Corporation - Those who compose the
b. Subsidiary Corporation corporation
8. As to Number of Persons who 2. Incorporators
Compose them - Signatories for the
a. Corporation Aggregate incorporation
b. Corporation Sole - - Original corporators
religious purpose e.g - May be: natural persons,
CARDINAL of the roman partnerships, corporations
catholic church or associations
9. As to whether they are for 3. Stockholders
Religious Purposes or Not - Owners of shares/stocks
a. Ecclesiastical Corporation 4. Members
b. Lay Corporation - Corporators of a
10. As to whether they are for non-stock corporation
charitable purposes or not 5. BOD (SC) or BOT (NSC)
a. Eleemosynary Corporation 6. Corporate Officers
b. Civil Corporation - President, treasurer,
secretary etc.
Sec 4. Corporations Created by - Can only be called as so if
Special Laws or Charters he is named in the AOI
7. Subscribers

GENERAL LAW- general guidelines of - Agreed to purchase

ordinary corporation original unissued shares

before or after
incorporation.
 8. Underwriter Voting:
- Guarantees the sale of STOCK CORPORATION - PER SHARE
newly issued securities NON-STOCK CORPORATION - PER HEAD
9. Promoter
- Bringing in incorporators Instances where NVS can Vote: ACIDRIP
- Procuring subscriptions 1. Amendment and Adoption
- Setting in motion the - Articles of incorporation or
corporation By- laws
- Takes the entrepreneurial 2. Capital stock
initiative in funding and - Increase or decrease
organizing the business. 3. Indebtedness
- Incur, create or increase
Sec 6. Classifications of Shares 4. Dissolution
5. Restructuring
DOCTRINE OF EQUALITY OF SHARES - Merger or consolidation
- Unless provided by in the articles 6. Investment
of incorporation and stated in the - To other corporations
certificate of stocks, shares shall 7. Property Disposition
be equal in all respects. - Substantial Sale, Lease,
Exchange, Mortgage,
Share Classifiers: Pledge or Other disposition
1. Incorporators of corporate Assets
- Set up before
incorporation ● COMMON STOCK
2. BOD - Capital Stock/ Ordinary
- May amend what was shares
stated in the bylaws by a - Have complete voting
majority vote of the BOD rights
and at least ⅔ of the ● PREFERRED STOCK
stockholders holding the - Have certain preferences
outstanding capital stock. over common stock.
Preferred stock:
VOTING SHARES - shares with a right to > As to Asset
vote. > As to Dividends
● REDEEMABLE SHARES
NON VOTING SHARES - shares w/out a - May be purchased or
right to vote. E.g preferred & redeemable taken up by the
shares. corporation upon
expiration of a fixed term.
 ● PAR VALUE SHARES - Exclusive right to vote or be voted
- Value is fixed in the bylaws must not exceed 5 years from the
and certificate of stock DATE OF INCORPORATION.
● NO PAR VALUE SHARES - After 5 years, the shares become
Limitations: ordinary.
1. Issued for at least P5.00
2. Fully paid and Sec 8. Redeemable Shares
non-assessable Limitations:
3. Issued as capital and can’t 1. Must be EXPRESSLY provided in the
be distributed as dividend articles of incorporation.
4. Can’t be issued as 2. TERMS AND CONDITIONS must be
Preference shares stated in AOI and certificate of
5. Can’t be issued by stock.
corporations authorized to 3. May be DEPRIVED OF VOTING
obtain or access funds RIGHT in the AOI
from the public. 4. REDEMPTION can’t be done if it will
6. Must be states in the lead to the INSOLVENCY of the
bylaws corporation.
● PROMOTIONAL SHARE Kinds:
- Share issued to promoters 1. Compulsory
● SHARE IN ESCROW 2. Optional
- Share deposited by the
grantor to a third person to RETAINED EARNINGS - accumulated
be kept until a certain income after dividends have been
condition is met. distributed.
● FRACTIONAL SHARE
- Less than one full share * Redeemed shares can’t be reissued
● OVER- ISSUED SHARE unless stated otherwise in the AOI.
- Shares issued in excess of
the authorized capital TRUST FUND DOCTRINE
stock. - Stock corporations must have a
- Null and void fund that creditors can look for in
● CONVERTIBLE SHARE the satisfaction of their claims.
- Convertible at any time - Corporate assets are held as trust
from one class to another funds for creditors
- Stockholders have the fiduciary
Sec 7. Founders’ Shares duty to manage the assets
- May be given certain rights and properly.
privileges not enjoyed by the
owners of other stocks.
 - The corporate assets must not be
used for whims and caprices of its
members.

Allowed distribution of Corporate Capital:

1. Amendment of AOI
2. Purchase of redeemable shares
3. Dissolution

Sec 9. Treasury Shares

- Shares of stock which have been
issued and fully paid for, but
subsequently reacquired by the
issuing corporation by purchase,
redemption, donation, or thru
other legal means.

Rights denied:
1. Voting rights
2. Right to dividends

WATERED STOCKS - issued for less than

the par or issued price thereof.