REVISED CORPORATION CODE OF THE PHILIPPINES

 R.A. No. 11232 took effect on February 23, 2019

 repealed Corporation Code of the Philippines - Batas Pambansa Bilang 68

ATTRIBUTES OF A CORPORATION
1. ARTIFICIAL BEING - has a juridical personality, separate and distinct from the persons composing it
 Doctrine of Separate Juridical Personality or Corporate Entity Theory
 Instances that will result to Piercing the Veil of Corporate Entity: (DJ-PDA)
 used to:
a. defeat public convenience b. justify wrong c. protect fraud d. defend crime
 mere dummy and serves no business purpose and intended only as a blind, or alter-ego /
business conduit for the sole benefit of the stockholders
 Elements of Piercing the Veil of Corporate Entity
a. control (no separate mind, will or existence of its own) b. commit fraud or a wrong c. proximate
cause
 Factors for the application of Piercing the Veil of Corporate Entity
a. stock ownership by one or common ownership of both corporations b. identity of directors
and officers
c. manner of keeping corporate books and records d. methods of conducting business
 Equally Well-Settled - principle that the corporate mask may be removed or the corporate veil pierced
when the corporation is just an alter ego of a person or of another corporation.

2. CREATED BY OPERATION OF LAW - mere agreement of the persons composing it or intending to organize
it does not warrant the grant of its independent existence as a juridical entity. It is necessary for its creation to
comply with the requirements imposed by law.
 Commencement of Corporate Existence: issuance of Certificate of Incorporation or Registration
 Except:
a. Corporations by estoppel b. Those created by special laws c. Sole corporation (from the filing of
verified articles)

3. RIGHT OF SUCCESSION - death, incapacity or civil interdiction of one or more of its stockholder does not
result in its dissolution; corporation’s “strong” juridical personality

4. POWERS, ATTRIBUTES AND PROPERTIES EXPRESSLY AUTHORIZED BY LAW

 Doctrine of Limited Capacity - can exercise only such powers and can hold only such properties as
are granted to it by the enabling statutes
 Powers of a corporation:
 Express - expressly authorized by the RCC and other laws, and its AOI
 Implied - can be inferred from or necessary for the exercise of express powers
 Incidental - incidental to the existence of the corporation
 sale of all or substantially all of the corp’s property and assets - majority of BOD/T + ⅔
SH/M; dissenting have appraisal right; SEC approval not required
 any disposition of corporate funds/assets to the prejudice of creditors is null and void.
 Implied and Other Powers:
 increase or decrease capital stock (and bond indebtedness) - majority of BOD + ⅔ of
SH + approval by SEC; at least 25% has been subscribed + at least 25% has been paid
 deny pre-emptive right
 shares issued in compliance with law (minimum public stock ownership)
 shares issued in exchange for property needed for corporate purposes (⅔ SHs’
approval)
 shares issued in payment for previously contracted debt
 in case the right is denied in the AOI
  Pre-emptive right - preferential right of all SHs of a stock corp to subscribe to all issues
or disposition of shares of any class, in proportion to their respective shareholdings
 declare dividends - unrestricted RE + ⅔ SH (if stock div); a matter of consensus, not right
 acquire own shares
a. eliminate fractional shares b. collect or compromise an indebtedness c. pay dissenting or
withdrawing SHs
d. acquire treasury shares e. effect of decrease in capital stock f. redeemable shares
g. deadlock in management (close corp) note: a-e requires unrestricted RE | f-g exception
 invest corporate funds in another corp or business or for any other purposes
 for primary purpose - majority of BOD/T
 for purposes other than primary - majority of BOD/T + ⅔ SH; dissenting have appraisal
right
 enter into a management contract with another corporation - 5 years per term; majority of quorum
of BOD + majority SH/M (managed + managing) or ⅔ SH/M (managed) if there are interlocking
SHs or Ds
 interlocking SHs - own or control more than ⅓ of the total outstanding capital stock
(both managed and managing)
 interlocking Ds - majority of BOD (both managed and managing)
 Ultra Vires Acts - cannot be executed or performed by a corporation because they are not within its
powers;
 Not all ultra vires acts are illegal but all illegal acts are ultra vires.
 Not illegal - can be ratified by stockholders
Illegal - void and cannot be ratified