1.

Definition of 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 incidental to its existence.

a. Juridical personality

i. Corporate Name

ii. (Intellectual Property Code)

iii. Trademarks/ tradenames-certain name of a certain brand

-Liable for infringement

iv. Patent-novel inventions

v. Copyright- written works or works of art

A name is not distinguishable even if it contains one or more of the following

 b. Perpetual succession

ii. Corporate Term (New) SEC 11

If a majority of its stockholders or members want to adapt to their old term, they can opt to.

If they want to change to a new term, 2/3 of the stockholders must agree

c. Acquisition of property, contract obligations and bringing of suits

Power to sue- incidental to it is the power to be sued

Power to acquire property- incidental to it is the power to destroy

d. Receipt and enjoyment in common privilege and immunities

2. Juridical Personality

-corporation is separate from the persons behind it

3. Limited Liability

-applies to all juridical persons including partnership and corporations

4. Piercing the veil of corporate existence/ Instrumentality/ Alter Ego Doctrine

-The only person to pierce the veil is the courts

a. Grounds- THERE IS BAD FAITH

b. Forms

i. Defeats public convenience

-This form of piercing the corporate veil is applicable when the corporate
structure or actions of the corporation harm the interests of the general public
or third parties. For example, if a corporation is causing environmental damage
that affects a community, a court may pierce the corporate veil to hold the
individuals behind the corporation responsible for the harm
 Fraud Cases

-If the corporate structure is being used to perpetrate a fraud or engage in

illegal activities, courts may pierce the corporate veil to hold the individuals
responsible for the fraud

-In cases involving fraud, the corporate veil may be pierced to hold individuals
accountable for fraudulent activities conducted through the corporate entity.
This is typically done to prevent individuals from using the corporate structure
as a shield to escape liability for their fraudulent actions

ii. Alter ego cases

- Alter ego cases involve situations where the corporate entity is essentially an
extension of its owners or shareholders, and the corporate form is being used
to avoid legal obligations or responsibilities. If it can be shown that the
corporate entity is merely a "alter ego" of its owners, a court may pierce the
corporate veil to hold the individuals personally liable for the corporation's
obligations

c. Effects

-Courts will look at the persons behind the corporation as a group or as an association

-The owners or shareholders of the corporation lose their limited liability protection and
may be required to pay for the corporation’s debts or damages from their own assets.

-The corporation may lose its tax benefits, such as deductions, exemptions, or credits,
and may be subject to double taxation.

-The corporation may lose its legal rights and privileges, such as contracts, licenses, or
patents, and may be subject to lawsuits or penalties.

-The corporation may lose its reputation and goodwill, and may face difficulties in
attracting investors, customers, or partners.

5. Nationality of a Corporation

-Required like media, agricultural corporations should be 100% Filipino

-Some are 60% Filipino and 40% others

6. Test in determining Nationality

a. Incorporation/Domiciliary Test-Corporations na gusto mo engage ug business here in

the Philippines so mag incorporate pa sila utro diri (foreign corporations)

-It is determined by the place of incorporation regardless of the nationality of its

stockholders
 -it is determined by the principal place of business of the corporation

b. Control Test- applied when required by law like in media and agricultural corps

- It is determined by the nationality of the controlling stockholders or members. It is

applied in times of war

c. Grandfather Rule- Applies only when there is Corporate Layering

-Based on the number of natural persons

- Nationality is attributed to the percentage of equity in the corporation used in

nationalized or partly nationalized area.

Should be applied when:

-the corporation’s Filipino equity falls below the constitutional threshold of 60% or;

-there exists a “doubt” as to the Filipino to Foreign equity

7. Kinds of Corporations

a. Domestic

b. Foreign

c. Public

-LGUs or barangays, cities, municipalities, provinces

d. Private

-revised corp code

e. Government-owned and controlled (GSIS) (SSS)

-respective charters ang balaod na e follow

f. De jure
-naay SEC certificate

g. De facto
-Basically, walay corporation

h. Estoppel

-when it appears to thirds persons, for purposes of liability, corporation mo

 i. Prescription

-wala nani siya

j. Shell

-Something hollow; nothing is in the inside.

-naay corporation from the outside, pero there is nothing in the inside

A shell corporation is a company that has no physical presence, no office, no employees,

no operations, and no assets. It is usually created for the purpose of hiding the identity of
the owners, avoiding taxes, or engaging in illicit activities. A shell corporation may have a
bank account, a financial transaction, or a real estate property, but it does not trade any
products or services. A shell corporation is required to register with the SEC, even if it is
just on paper

k. Shelf

-aparador

- naka comply pero wala pa nag conduct sa iyang business it does not have any
liabilities or debts. A shelf corporation is also required to register with the SEC and
maintain all the state records and fees.

Relative Provisions under Republic Act No. 11232 or The REVISED Corporation Code:

1.

1.

1. Sec. 2 - 4

2. Sec. 11

3. Sec. 17

4. Sec. 19 - 20

5. Sec. 140 - 153

Section 8 and Section 40 of the Revised Corporation Code states that the Trust Fund Doctrine provides
that subscriptions to the capital stock of a corporation constitute a fund to which the creditors have a
right to look for satisfaction of their claims. Section 40 however, also states that a corporation has the
power to acquire own shares to pay dissenting or withdrawing stockholders entitled to payment for
their shares under the provisions of this Code, but only when the corporation has unrestricted retained
earnings in its book to cover the payment.

Given that Dingdom Films Corp. failed to pay the remaining amount they owe to Mannix Delitos, it is
evident that their assets are not enough to cover the corporation’s debts. As provided in the same
section (Section 40 of the Revised Corporation Code), the trust fund doctrine backstops the requirement
of unrestricted retained earnings to fund the payment of the shares of the withdrawing stockholders as
the stock, property, and other assets of a corporation are regarded as equity in trust for the payment of
corporate creditors, who are preferred in the distribution of corporate assets.

Since Angeline Roxine is a significant creditor of the corporation, she is therefore preferred over Mannix
Delitos and the trust fund doctrine does indeed prioritize her claims.