BUSINESS LAWS AND REGULATIONS
CORPORATION
Revised Corporation Code
● Feb 23, 2019
● RA No. 11232
Corporation
● juridical entity with legal personality
that is separate and distinct from
the stockholders (Doctrine of
Corporate Entity)
Attributes/Characteristics of
Corporations
1. Artificial being
2. Created by operation of law
3. Has the right of succession
4. Has powers, attributes, properties
*Above mentioned: Private Corp
BSP
● Public Corporation
Doctrine of Piercing the Veil of Corporate
Entity/Instrumentality/Alter Ego Doctrine
● disregarding the Doctrine of
Corporate Entity
● creditor can go after the guilty
stockholder
● creditor has the burden of proof (He
who alleges must prove)
● When do we disregard: Corporation
use as shield for FRAUD
Probative Factors of Identity which could
justify the application of Doctrine of
Piercing the Veil:
● Stock ownership by one or common
ownership of both corporation
● Identity of directors and officers
● Manner of keeping corporate books
and records
● Methods of conducting business
Different Classes of Corporation
1.Stock Corporation
● have CAPITAL STOCK to be
distributed to stockholders
● ordinary corporation
● created for the purpose of PROFIT,
which then is distributed to
STOCKHOLDERS in the form of
DIVIDENDS
● absence of capital stock and
distributed dividend: nonstock corp.
2.Non-Stock Corporation
● DOESN'T have a capital stock
● MEMBERS not stockholders
● created for PUBLIC GOOD
● Ex: St. Luke's Medical Center, Inc
Stock & Non-Stock Corporation
● Educational institutions
GOCCs Requisites
1. stock or nonstock
2. with functions relating to public
needs (governmental/proprietary)
3. Owned by gov't (directly or through
its instrumentalities) wholly or at
least 51% of its capital stock
Example of Non-GOCCs/Private Corp
● CIIF
● Radio Philippines Network, Inc
(RPN)
● Manila International Airport Authority
(MIAA)
Examples of GOCCs
● Land Bank of the Philippines
 ● Development Bank of the Philippines
(DBP)
● Philippine Crop Insurance
Corporation (PCIC)
● Philippine National Bank (PNB)
Other Classes of Corporation
1. Public Corporation
- for general good and welfare
2. Private Corporation
- private purpose
3. GOCCs
- owned by gov’t– wholly or
51% of its capital stock
4. Quasi-public Corporation
- private corporation with
public duties organized for
profit
5. De Jure Corporation
- strict or substantial
conformity with mandatory
statutory requirements
6. De Facto Corporation
- claiming in good faith to be a
corporation
7. Corporation by Estoppel
- Assume yo act as
corporation without authority
8. Corporation by Prescription
- has corporate power–
indefinite period without
interference from the gov't
9. Domestic Corporation
- incorporated in the
Philippines
10. Foreign Corporation
- organized outside the
Philippines where
Filipinos/corporations are
allowed to do business in its
own country
11. Open Corporation
- open to any person who
wishes to be a
stockholder/member
12. Close Corporation
- articles of incorporation
issues stock not exceeding
20– subject to 1 or more
specified restrictions on
transfer– shall not list in
stock exchange/make public
offering
13. Parent or Holding Corporation
- hold stock in another
corporation for the purpose
of control
14. Subsidiary Corporation
- more than 50% of voting
stock is controlled
15. Corporation Aggregate
- consisting more than 1
member
16. Corporation Sole
- only 1 member for purpose of
administering and managing
17. Ecclesiastical Corporation
- religious purposes
18. Lay Corporation
- purposes other than for
religion
19. Eleemosynary Corporation
- charitable purposes
20. Civil Corporation
- for business or profit
General Law vs Special Law
General Special
Private corporation Government
may be formed Corporation
Corporation code
Can the Congress create GOCCs
through Special Charters?
 ● Yes, if it meet the two conditions;
- Common Good
- Economic Viability
Components of Corporations
1. Corporators
- who compose a corporation–
as stockholder/member
2. Incorporators
- originally forming and
composing the corporation–
signatories
3. Stockholders (shareholders)
- owners in stock corporation
4. Members
- owners in nonstock
corporation
5. Board of Directors
- governing body in a stock
corporation
6. Board of Trustees
- governing body in nonstock
corporation
7. Corporate Officers
- president; director
- treasurer; may or may not
be a director
- secretary; resident & citizen
- corporation vested with
public interest– board shall
elect a compliance officer
8. Subscribers
- who agree to take and pay
original, unissued shares
9. Underwriter
- person – guarantees on a
firm commitment
- person/entity (investment
banker) – guarantee the sale
of newly issued securities
10. Promoter
- brings about the formation &
organization of corporations
Forming a new Domestic Corporation
● 2 or more persons, but NOT more
than 15
One Person Corporation (OPC)
● may have a single stockholder &
sole director
Doctrine of Equality Shares
● each share shall be equal (rights &
liabilities)
Who may classify shares?
1. Incorporators
- by stating in the articles of
corporation filed with the
SEC
2. Board of Directors and Stockholders
- by voting (majority or at least
⅔ of the outstanding capital
stock.
What are Voting Shares?
● shares with a right to vote
Right to Vote in a Stock Corporation
● inherent and incidental
● unissued stocks may not be voted
● neither stockholders/corporation can
vote shares that have never passed
to the ownership of stockholders
Right to Vote in a Nonstock Corporation
● voting rights attached to members
● each member are entitled to one
vote, UNLESS so limited,
broadened, or denied.
Non-voting Shares
● shares without a right to vote
Common Stock/Capital Stock/Ordinary
Shares
 ● class of stock– to vote on corporate
matters

Preferred Stock
● stock for certain preferences
● designed to induce persons to
subscribe for shares
● Forms;
- Preferred shares as to
ASSETS
- Preferred shares as to
DIVIDENDS

Reedemable Shares
● issued by corporation when
expressly provided in the articles of
incorporation
● may be purchased/taken