1. A.

Joint venture is an association of persons or companies jointly undertaking

some commercial enterprises; generally, all contribute assets and shares risks
which require a community of interest in the performance of the subject matter.

B.Yes, a partnership may create a corporation provided incorporate their

business through filing of articles of incorporation to the SEC

2.

In determining the nationality of a corporation, there are two tests. One is

the Control Test and the other is the Grandfather Rule. The Control test provides
that shares belonging to corporations at least 60 % of the capital of which is
owned by Filipino citizens.

On the other hand, the Grandfather rule determines the actual Filipino
ownership and control in a corporation by tracing both the direct and indirect
shareholdings of the corporation. The use of the Grandfather rule is to
supplement the Control test in implementing the wisdom of “Filipinization”
provision of the constitution.

The Grandfather rule applies only when the 60-40 Filipino ownership is in
doubt or where there is reason to believe that there is non-compliance with the
provisions of the Constitution on the nationality restriction.

3.

a. May X corporations recovers moral damages based on the allegations in the

complaint.

X corporations cannot recover moral damages. As provided in the

Revised Corporation Code, a corporation is an artificial being created by
operation of law, as an artificial being, a corporation cannot experience physical
sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral shock
or social humiliation which are the basis of moral damages. Thus, X corporation
cannot recover moral damages.

b. May A corporations recovers moral damages.

 A corporation may recover moral damages. The Supreme Court ruled in
the case of Mambulao Lumber Co. v.PNB that a corporation may have a good
reputation which, if besmirched may also be a ground for the award of moral
damages. In the case, Ms. Sunshine, President of A corporation claimed that the
A corporation have suffered besmirched reputation or goodwill. Therefore, A
corporation may claim moral damages based on besmirched reputation or good
will.

4.

a. No, a corporation cannot claim to be a de facto corporation. There was

no valid law which under which the corporation was incorporated since the law
was declared invalid. Further, there was no evidence that the corporation
exercise its corporate power after the incorporation.

b. The requisites for a de facto corporation are the following:

i) There must exist a valid law under which the corporation was incorporated

ii) There was an attempt in good faith to incorporate

iii) Use of corporate powers

5. Concession theory provides that a corporation is conceived as artificial

being through a foreign power recognizing its existence as an artificial being. On
the other hand, Genossenchaft theory provides that a corporation is an artificial
being and has a legal entity by virtue of a group as a social and legal entity
without the need of state recognition.

6.

As an in-house counsel of NT venture, I will suggest to my clients, First;

to include the word incorporated or corporation in their corporate name as it is
specifically provided under the corporation code. Second; to consider the
purpose of the purpose of the corporation, is it a non-stock or stock corporation.
If it’s a stock corporation, the capital must be divided to shares with the
corresponding par value. And lastly, I will settle the specific location of the
principal office of the corporation.

7.

No. Manny Villar alone cannot create a corporation under BP 68. The old
corporation code provides that the incorporators shall be a minimum of 5.
However, under the Revised Corporation Code, the requirement as to the
minimum requirement of incorporators has been removed. Thus, Manny Villar as
sole incorporator may create One Person Corporation.

8.

Limited liability rule provides that the shareholders of a corporation have a

separate and distinct legal personality from the corporation. Thus, the
shareholders may not be held liable for the indebtedness incurred by the
corporation. The Limited liability rule is not applicable to partnership since the law
creating a partnership does not vest the partnership a separate personality from
the partner. Thus, the creditor of the partnership may collect the remaining
liability of the partnership from the partners after exhausting the assets of the
partnership.

9. Yes, a corporation may be created for 100 years under BP 68 and The
Revised Corporation Code. Under BP 68, corporation may have 50 years of
existence renewable for another 50 years. In the Revised Corporation Code, the
law presumes that the corporation has perpetual existence except as provided in
the articles of incorporation.

10. False, Stock corporations are not required to have a minimum capital stock,
except when provided by special law.

11. True, to be a corporator one must be a shareholders or a member of a

corporation.

12. False, incorporators are those whose individual who organized that
corporation and their names appeared in the articles of incorporation and signed
therewith as incorporators.

13 False, No share may be deprived of voting rights except those classified and
issued as "preferred" or "redeemable" shares.
 14. False, banks, trust, insurance and pre-need companies, public utilities,
building and loan associations and other corporations authorized to obtain or
access funds from the public shall not be permitted to issue no-par value stock.

15. True, any person, partnership, association or corporation may form a

corporation.

16. False, incorporators of domestic corporation need not to be resident of the

Philippines provided that each incorporator must own at least 1 share of the
capital stock.

2. A. Joint venture is an association of persons or companies jointly undertaking

some commercial enterprises; generally, all contribute assets and shares risks
which require a community of interest in the performance of the subject matter.

B.Yes, a partnership may create a corporation provided incorporate their

business through filing of articles of incorporation to the SEC

2.

In determining the nationality of a corporation, there are two tests. One is

the Control Test and the other is the Grandfather Rule. The Control test provides
that shares belonging to corporations at least 60 % of the capital of which is
owned by Filipino citizens.

On the other hand, the Grandfather rule determines the actual Filipino
ownership and control in a corporation by tracing both the direct and indirect
shareholdings of the corporation. The use of the Grandfather rule is to
supplement the Control test in implementing the wisdom of “Filipinization”
provision of the constitution.

The Grandfather rule applies only when the 60-40 Filipino ownership is in
doubt or where there is reason to believe that there is non-compliance with the
provisions of the Constitution on the nationality restriction.

3.
a. May X corporations recovers moral damages based on the allegations in the
complaint.

X corporations cannot recover moral damages. As provided in the

Revised Corporation Code, a corporation is an artificial being created by
operation of law, as an artificial being, a corporation cannot experience physical
sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral shock
or social humiliation which are the basis of moral damages. Thus, X corporation
cannot recover moral damages.

b. May A corporations recovers moral damages.

A corporation may recover moral damages. The Supreme Court ruled in

the case of Mambulao Lumber Co. v.PNB that a corporation may have a good
reputation which, if besmirched may also be a ground for the award of moral
damages. In the case, Ms. Sunshine, President of A corporation claimed that the
A corporation have suffered besmirched reputation or goodwill. Therefore, A
corporation may claim moral damages based on besmirched reputation or good
will.

4.

a. No, a corporation cannot claim to be a de facto corporation. There was

no valid law which under which the corporation was incorporated since the law
was declared invalid. Further, there was no evidence that the corporation
exercise its corporate power after the incorporation.

b. The requisites for a de facto corporation are the following:

i) There must exist a valid law under which the corporation was incorporated

ii) There was an attempt in good faith to incorporate

iii) Use of corporate powers

5. Concession theory provides that a corporation is conceived as artificial

being through a foreign power recognizing its existence as an artificial being. On
the other hand, Genossenchaft theory provides that a corporation is an artificial
being and has a legal entity by virtue of a group as a social and legal entity
without the need of state recognition.

6.

As an in-house counsel of NT venture, I will suggest to my clients, First;

to include the word incorporated or corporation in their corporate name as it is
specifically provided under the corporation code. Second; to consider the
purpose of the purpose of the corporation, is it a non-stock or stock corporation.
If it’s a stock corporation, the capital must be divided to shares with the
corresponding par value. And lastly, I will settle the specific location of the
principal office of the corporation.

7.

No. Manny Villar alone cannot create a corporation under BP 68. The old
corporation code provides that the incorporators shall be a minimum of 5.
However, under the Revised Corporation Code, the requirement as to the
minimum requirement of incorporators has been removed. Thus, Manny Villar as
sole incorporator may create One Person Corporation.

8.

Limited liability rule provides that the shareholders of a corporation have a

separate and distinct legal personality from the corporation. Thus, the
shareholders may not be held liable for the indebtedness incurred by the
corporation. The Limited liability rule is not applicable to partnership since the law
creating a partnership does not vest the partnership a separate personality from
the partner. Thus, the creditor of the partnership may collect the remaining
liability of the partnership from the partners after exhausting the assets of the
partnership.

9. Yes, a corporation may be created for 100 years under BP 68 and The
Revised Corporation Code. Under BP 68, corporation may have 50 years of
existence renewable for another 50 years. In the Revised Corporation Code, the
law presumes that the corporation has perpetual existence except as provided in
the articles of incorporation.
10. False, Stock corporations are not required to have a minimum capital stock,
except when provided by special law.

11. True, to be a corporator one must be a shareholders or a member of a

corporation.

12. False, incorporators are those whose individual who organized that
corporation and their names appeared in the articles of incorporation and signed
therewith as incorporators.

13 False, No share may be deprived of voting rights except those classified and
issued as "preferred" or "redeemable" shares.

14. False, banks, trust, insurance and pre-need companies, public utilities,
building and loan associations and other corporations authorized to obtain or
access funds from the public shall not be permitted to issue no-par value stock.

15. True, any person, partnership, association or corporation may form a

corporation.

16. False, incorporators of domestic corporation need not to be resident of the

Philippines provided that each incorporator must own at least 1 share of the
capital stock.