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Corporation Law Notes
Corporation Law Notes
Under the Revised Corporation Code, there are three (3) special
corporations:
Definition of Terms:
Paid-Up Capital – the portion of the authorized capital stock which has been
subscribed and actually paid.
Capital - properties and assets of the corporation that are used for its
business or operations.
Components of a Corporation:
5. Corporate Officers – they are the officers who are identified as such in
the Articles of Incorporation or the By-laws of the corporation.
The same person may hold 2 or more positions concurrently, but not
president and secretary or as president and treasurer at the same time, unless
allowed by the RCC.
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1. What is a corporation?
a) Concession Theory
B} How created.
The issue price of no-par value shares may be fixed in the articles of
incorporation or by the board of directors pursuant to the authority conferred
by the articles of incorporation or by the by-laws, or if not so fixed, by the
stockholders representing the majority of the outstanding capital stock at a
meeting called for the purpose.
The capital represents the value of assets that form as corporate trust
fund, for operation and to answer liabilities to creditors of the corporation.
6. Components of Corporation –
i. Shareholders or members;
ii. Directors or trustees
iii. Officers
It is also the place where the corporation must hold its shareholders’
or members’ meetings;
For local tax purposes, the place of principal office determines the
LGU where it should register and principally pay its tax;
b. Third person who has dealings with the corporation may know
by perusal of the articles whether the transaction or dealing he has with the
corporation is within the authority of the corporation.
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b. Tenure
Directors shall be elected for a term of one (1) year from among
the holders of stocks registered in the corporation’s books, while
trustees shall be elected for a term of not exceeding three (3) years
from among the members of the corporation.
A director must have at least one (1) share registered under his
name in the corporation’s books.
Speed and cost, motivation and expertise are also issues for
consideration.
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Under this rule, the will of the majority of the board members
controls in corporate affairs, and contracts intra vires entered into by
the board of directors are binding on the corporation and courts will
not interfere unless such contracts are unconscionable and oppressive
as to amount to a wanton destruction of rights of the minority. Courts
cannot undertake to control the discretion of the board of directors
about administrative matters as to which they have legitimate powers
of action. Judges are not experts; they cannot replace their judgments
for the judgment of the directors on business matters.
(4) The law follows the plurality voting. The nominees who
receive the highest number of votes shall be elected as member of the
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i. Filling of Vacancies
the meeting authorizing the removal and this fact must be stated in the
agenda and notice of the said meeting.
m. Disloyalty
corporation. They must consider its best interest and take actions
that will benefit the corporation.
1. Executive Committee
2. Special Committees
13.Meetings
c. Kinds of meetings –
14.Certificate of Stocks
a. Subscription Contract
b. Pre-incorporation Subscription
g. Right to Disassociate
i. Delinquency Sale
Procedure: