e-em sn HOM Provides Title f crporaton or ae char INCORPORATION AND whe ime as provided in the ar°Ptoy ORGANIZATION OF PRIVATE ie reer he cw corporate creo, the ga of CORPORATIONS 5-93 Ce pot 6 wee” Ys oration voted i18 REASUFY shang, uot Sy 8 kd ren” Can the oper sec. 10, Number and quattlions of im i shares were acquis coc eas than Ave (5) but hormone nee ree ee The wea ‘quired = byw, W of legal age and a majority of whom are 7. The roper share. May the corporag., ‘a, bem a private , cpt PIP se f Seeieenn san 8A, ihe corporation, surrender, ‘must own oF be a subscriber to at least one (1) management 1 “Gnd demands the return of share of the capital stock of the corporation. ya by him Cat he gy aJon of 2 corporation. steps in the rP mT epsin the creation and or, rom (See 10. nc 2) bncorpornt® snd commenceme ) Formalorganization and Ntofbuy, operations (oe ee 2 promotion of corporations: vermotion” issaid tobe not legal by @ apotary HEMI Pending igor fas e wrer's affidavi ee ree Ee the aptly ” wba en it showing at shares ns net eat 258 a at been paid ea anh 4 tothe ca The em neta lal bata, ‘eporeny te corporation grat isefully summing up in a single word, a ry, In case the cor ess term veuliar to the bt nb, (@) In rPoration ie ge Pee epee ree ene ng” canal aurea hic companys ene oon ofthe appropri : St Faw to py, RR Benne aR gre Seat general atthe Instance and ee pies of ieorporation ion accra asa ar reg of one or more so-called “PYOMOUET.” (ag ‘Sec. 17, last par); The ac oe elcaon of eee fa Farmen fhe ligand pcan fs eS peaking they are not 8 any sense the agents ogg; ame” FS as they are en of te 4) The issuance by the Securities an corporation Before i comes into enitnce ee 18 an TI on ofthe etc a rpernscs San JOPEPSD) There cannot be an agency unless ther after verification and examination are found hee principal (eSee 19) Upon incorporation, the practice is for the board y esto pasa resolution ratifying the contracts enter directors to pass a n complied with in organizing specificbusiness and to endow ae the neorporators with the promoters In sch cue, BAe tha carey tn rede sions they become agents of the corporation. which it was created. (3) Acorporation, however, may be formed and organ ized by the incorporators themselves without getting the rs: number and qualifications. services of so-called promoters. od “Section 10 provides that the incorporators must not be than five but not more than fifteen, all of legal age, and vhom are residents of the Philipines. = These five must These fre or mare pore mstven $0 Tit 398 A830 Pon ex Goverment Act No. 720 provides > rate to ny road bank: acca re of Se parative, Ht may wendy ate 8, dane GEC Opinion, Oce ea inconporator 03 Tn may subscribe t0 the gf7 In any 2 op ce Se. 36171) cy 2A re tac, — The ANCOTPORALOTS ald contract, the sete cect porter ca ot incorporation, under Se rm dy the ororatas Betray syst be ako Gr oath Theres thereby th; publi pratrs must Be qualified to ent = ent shat he ove of reuiring the acknowledgment ean Pie ply of any ftw mare pe foul aot artes ane fo assure that the signa abner aregeaine. oe 1 Fletcher 14) a woman may be an incorporator without Concent ofher husband since under cise any legitimate py fig corporation Furthermore thea eed of obtaining the Ine “iter spouse may exe vpuines or activity without the consent oft cxcupation bos Sree jet tothe right of the husband to “object ony on ‘aha, serious, and moral grounds.” (Art. 73, Family Code) (3) Residents of the Philippines. — A majority of the incorporators must be residents of the Philippines the rest may be persons who are neither residents nor citizens of the Philippines, However, enemy aliens cannot become incorporators for subjects of one country cannot lavwully contact with the subjets of the county with which itis at wat. The residence requirement is ie (4) Citizens te Pilppines: and legal provisions, ct es ioe ten tere be owed ty Fi 2 be dered fest Foe face ur sear pn tants Whe ot uns Of OF SUDSErbES a ea, Fae arth cpial eae per et cone (1) 5 ‘of the corporation” = ora ferment of minum number sien eporstore mandatary br ean umber of incorporaors is mandatory ans eonaen ‘apo! be legally formed by less than the prescibed mam Sreept in the case of a corporation sole. (see Sec, 110) In ccm iprtc apn ah xt ere BY pedal laws any the gral oes beffel code” Gee 06) CC — _aver dh corte ea, sig 00 ey 1») shade ty the ‘fall the shares int ¢ ai », ha (corporate term of exigent the epi se 5-416), unlra ag en x he congrats oe ecu My by porate fife nd. Hence ty ete #80 more Soe 5 Beet “m tieaal be ome a Cigar Vo SEC sp Petia of lguidation ppolateterm.—Acorporat (aia -24SCRA 2 wl ‘sec. 11.601 A‘ fon shay fe expiration of the term for whith tenn S822) exit for a period nat exceading TY (50) yeay, Th peated does NOL however, era ; psmATION the compass fF a fers presented ht the bythe Secures and yey Be lr ie saad fa corporation when ition sion. f zation CS. and on tis representation en Saas if Fa ree eh guar eaUremets bfore F eat wh contact with Z ian ain ond oe orraaa vents, they are estopped fom d The corporation law co F moc eontacts ey envi 1 tains various iF themen st requirements f nic coe ofX Co. a8 against Y but not ay 8 on conditions which must becomplen gyre fp i allowed to question or challenge the yaa™ sons desiring tobe so may become shot eae at 2Z Nett amor formation of X & Coin an action so ier aganat ee former Troll the associates participated OF consented oy sepepatin a8 them, the doctrine Of estoppel wi ny appl Tf the group of persons (would-be corporation) does ret qualify sa corporation, whether de jure, de fata or by esp thee sno corporation and the stockholders are indivi body corporate The rts have established between mandatory ord a tendons yee ae ‘The rule i that as to provisions ofthe saute which are mandatory, non-compliance wil prevent the cretion of se jive corporation but as to those provisions which ae merely firectory, a departure will not have this consequence. (ee Fisher, the Phil. Law of Stock Corporations, p. 11) Strict compliance even with the mandatory provisions which are ally liable. ‘conditions precedent to corporate existence isnot required. yi ‘The law requires only substantial compliance (see Sec. 14, a 1, See. 15, par. 1, Sec. 17[) Of course, what constitutes Sec. 22(Effects of non-use of char.) aoe S ‘tameta corporstion. ae psn: + suet be detrnined — Ifa corporation does i ‘organize Mandatory conditions may be either conditions prec tor conditions subsequent. directory provisions provisions prescribe formalities for ncorpore,as directory i i regard seen ature © comply wi ay, sie ~ salt valid neorporet incon lained. spaonsproceaantoxa! on pets ote mS ny pcre a prevent the legal existence of coppin, Framples ar: =n rg oft ates of NCOPOFAON With 1 Fe pe Commission a: required by sites ee ony @) ets constituting commencement gnc cet ee a ind ane: Coin ry I py ee eta rhe minimum mamber of V6 (5) incorpy.” fu ac Beare vars linet the i on, PI was sablshed sch as btn fea ram and required by Section 10° ig) The legal requieements under Section 13 hat 5, ste chorzed capital stock must be Subscribed ang 3! thereof paid. sions subsequent explained. conditions to be order tha ation may (0) Under Section 22, the two required acts of organ, franchise or certificate of incorporation but tion and’ of its business operations are cu and hearing, in such case are required as provided to comply with which wil rit (supra) I the non-use of charter or continuous oka Rae eet beyond ici uno te ots | Exchange Commission, the eects mentioned shall not place. (Sec. 2.) in the automatic cessation of corporate powers and the d-sTUDY GUIDE a y xpi * Foon peer ih noe ‘Ale shares ate admugGther Wh A,B and i Aang) ahares i ema ae it give te meaning of he follow, pails of incorporation; 2 defacto corporation: de jure corporation: and collateral attack. 1 Une Sano ved ial to a i Sap mun re a eae the aap smote comple wih nig 2 Ca ee stock ofthe corporations only agg, et Saal 4 Discussions ain what are the requisites in the ater gy she porpose oF purposes FOF Which a corpo formed? 0 2 May individuals organize a corporation snere cement ike in the formation ofa gener ership? Explain. How shall the 25% subscription requiremy F se computed where the capital stock consists ony : par value shares? consist “4. What are the essentials for the existence of, ecto corporation? existence :; Il, Problems in or state briefly the rule or reason for your answers. 1. Acorporation was continuously inoperative tine yee MRAM sot 2 Two