Study Guide:

What is a corporation?
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.
Classification of corporation
Private Corporation are those formed for some private purpose, benefit, aim, or end, as
distinguished from public corporations, which have for their purpose the general good and
welfare. Private corporations are divided into stock corporations and nonstock corporations.
Public Corporation are those formed or organized for the government of a portion of the state.
Stock Corporations which have capital stock divided into shares and are authorized to distribute
to the holders of such shares dividends or allotments of the surplus profits on the basis of the
shares held are stock corporations
Non-Stock Corporations which does not issue stock to its members and are created not to profit
but for the public good and welfare.

The true criterion, therefore, to determine whether a corporation is public or private is found in
the totality of the relation of the corporation to the State. If the corporation is created by the
State as the latter’s own agency or instrumentality to help it in carrying out its governmental
functions, then that corporation is considered public; otherwise, it is private.