BL CORPORATION REVIEWER
Declares the rights and liabilities of
REPULDA
SECTION 1
TITLE OF THE CODE
Batas Pambansa Blg 68 – May 1980
Revised Corporation Code – February 20, 2019
RA 11232
Why they revised this code?
- It aims to further ease the formation of
corporations and filing applications and
reports which have frustrated those
who deal with the bureaucracy.
- Para mapadali yung pagform ng mga
corporations kasi yung bureaucracy sya
yung nagpapatagal ng process kasi
madami pang kamay na dapat
pagdaanan so with this promulgation of
the revised corp code mas pinili nilang
pabilisin yun.
- It empowers the SEC to fully enforce
the new law. It also introduces new
rules that akllighn with the
development in technology and new
laws that came after the Old Corp Code.
Scope of the Code
The Corporation Code of the Philippines law is
an act which:
1. Provides for incorporation,
organization, and regulation of private
corporations, both stock and non-stock,
including educational and religious
corporation;
2. Defines their powers and provides for
their dissolution;
3. Fixes the duties and liabilities of
directors or trustees and other officers
thereof;
4.
stockholders and members;
5. Prescribes the conditions under which
corporations including foreighn
corporations may transact business;
6. Provides penalties for violations of the
Code; and
7. Repeals all laws and parts of laws in
conflict and inconsistent with the Code.
SECTION 2 CORPORATION DEFINED
- 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 incidental to its
existence.
- Explains that it refers only to private
corporations or to corporations
organized under the Corporation Code.
ATTRIBUTES OF CORPORATION
1. It is an artificial being
2. It is created by operation of law
3. It has the right of succession
4. It has only the powers, attributes and
properties expressly authorized by law
or incident to its existence.
Corporation as an artificial personality
Doctrinally, a corporation is a legal or juridical
person with a personality separate and apart
from its individual stockholders or members
and from any other legal entity to which it may
be connected.
As a consequence of this legal concept of a
corporation:
1. Liability for acts or contracts – As the
general rule is that obligations incurred
by a corporation acting through its
 authorized agents are its sole liabilities.
Similarly a stockholders ( or members)
or those of the legal entities to which it
may be connected and vice versa.
2. . Rights to acquire and possess property
– it may acquire and possess property
of all kinds. ( Art. 46 Civil Code)
Property conveyed to or acquired by
the corporation is in law the property of
the corporation itself as a distinct legal
entity ( Art. 44[3]) and not that of the
stockholders or members as such and
vice versa.
3. 3. All contracts entered into in its name
by its regular appointed officers and
agents are the contracts of the
corporation and not those of the
stockholders or members.
4. 4. A tax exemption granted to a
corporation cannot be extended to
include the dividends paid by such
corporation to its stockholders. ( Manila
Gas Corporation vs. Collector of Internal
Revenue, 71 Phil. 513 [ 19411].
5. 5. A corporation has no personality to
bring an action for and in behalf of its
stockholders or members for the
purpose of recovering property which
belongs to said stockholders or
members in their personal capacities.
( Sulo ng Bayan, Inc. vs G. Araneta Inc,
72 SCRA 347 [1976]
6. Likewise as an entity distinct from its
members or stockholder a corporation
remains unchanged and unaffected in
its identity by changes in its individual
membership.
Doctrine of piercing the veil of
corporate entity
The doctrine that a corporation is a
legal entity or a person in law, distinct
from the persons composing it or any
other corporation to which it may be
related, is merely a legal fiction for
purposes of convenience and to
promote the ends of justice. This fiction
therefore cannot be extended to a
point beyond its reason and policy
In other words the law will not
recognize separate corporate existence
when it is clearly established that it
used as a shield for wrong doing
This non – recognition is sometimes
referred to as the Doctrine of piercing
the veil of corporate entity or
disregarding the fiction of corporate
entity.
Corporation as a creation of law or by
operating of law
Special authority or grant by the State
required – a corporation is created by
law or by operation of law. They require
special authority or grant from the
state. This power is exercised by the
State through the legislative either by a
special incorporation law or charter
which directly creates the corporation
or by means of a general corporation
law under which individuals desiring to
be and act as corporation may
incorporate.
An exception to the rule that legislative
grant or authority is necessary for the
creation of a corporation obtains with
respect to corporations by prescription.
Right of succession of a corporation
- A corporation has a capacity of
continuous existence irrespective of the
death, withdrawal, insolvency, or
incapacity of the individual stockholders
or members and regardless of the
transfer of their interest or share of
stock.
Under the revised Corporation Code a
corporation shall have perpetual existence
 unless its articles of incorporation provides
otherwise.
Corporation created by special laws have
the right of succession for the term
provided in the laws creating them.
Power, attributes, and properties of a
corporation
- A corporation being purely a creation of
law may exercise only such powers as are
granted by the law of its creation. An
express grant however is not necessary. All
powers which are incidental or essential to
the corporation’s existence may also be
exercised.
SECTION 3
• Classes of Corporation – Corporations
formed or organized under this Code
may be stock or non – stock
corporations. Corporations which have
capital stock divided into shares and are
authorized to distribute to the holders
of such shares dividends, or allotments
of surplus profits on the basis of the
share held. All other corporations are
non – stock corporation.
Classification of corporations under the code
1. Stock Corporation – is the ordinary
business corporation created and
operated for the purpose of making a
profit which may be distributed in the
form of dividends to stockholders on
the basis of their invested capital.
2. Unlike stock corporation, non – stock
corporations do not issue stock and are
created not for profit but for the public
good and welfare.
• Non – stock corporation they are
primarily governed by title XI ( Sec. 87 –
95) of the code.
SECTION 4
Corporations created by Special Laws or
Charters – corporations created by special laws
or charters shall be governed primarily by the
provision of the special law or charter creating
them or applicable to them, supplemented by
the provisions of this Code, insofar as they are
applicable.
The enactment of special act creating a private
corporation is subject to the constitutional
limitation that such corporation shall be owned
or controlled by the government.
The reason for the restriction is obvious:
1. It is chiefly to prevent the granting of special
privileges to one body of men without giving all
others the right to obtain them in the same
conditions and
2. Perhaps it is partly to prevent bribery and
corruption of the legislature. (Clark on
Corporations p. 45)
SECTION 5
Corporators and Incorporators, Stockholders
and members – Corporators are those who
compose a corporation, whether as
stockholders or shareholders in a stock
corporation or as members in a nonstock
corporation. Incorporators are those
stockholders or members mentioned in the
articles of incorporation as originally forming
and composing the corporation and who are
signatories thereof.
COMPONENTS OF A CORPORATION
1. Corporators or those who compose the
corporation, whether stockholders or
members.
2. Incorporators or those corporators
mentioned in the articles of
incorporation as originally forming and
composing the corporation and who
 executed and signed the articles of
incorporation and acknowledge the
same before a notary public.

3. Stockholders or the owners of shares of

stock in a stock corporation. They are
the owners of the corporation. They are
also called shareholders.

4. Members or the corporators of a

corporation which has no capital

3 OTHER CLASSS

Promoters

Subscribers

Underwriters

SECTION 6

Classification of shares – The classification of

shares, their corresponding rights, privileges, or
restrictions, and their stated par value, if any,
must be indicated in the articles of
incorporation. Each share shall be equal in all
respects to every other share, except as
otherwise provided in the articles of
incorporation and in the certificate of stock.

The shares in stock corporations may be divided

into classes or series of shares, or both. No
share may be divided into classes or series of
shares, or both. No share may be deprived of
voting rights except those classified and issued
as “preferred” or “redeemable” shares, unless
otherwise provided in this code: Provided, that
there shall be always be a class or series of
shares with complete voting rights.