How is a corporation defined under the labor code?

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.

What are the different classes of corporation?

Corporations formed or organized under the Corporation 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 the surplus profits on the basis of the shares held
are stock corporations. All other corporations are non-stock corporations.

What’s the difference between corporators and incorporators? What about

stockholders & Members?
Corporators are those who compose a corporation, whether as stockholders
or as members. Incorporators are those stockholders or members mentioned
in the articles of incorporation as originally forming and composing the
corporation and who are signatories thereof. Corporators in a stock
corporation are called stockholders or shareholders. Corporators in a non-
stock corporation are called members.

What are the instances where a non-voting share may still vote?
1. Amendment of the articles of incorporation;
2. Adoption and amendment of by-laws;
3. Sale, lease, exchange, mortgage, pledge or other disposition of all or
substantially all of the corporate property;
4. Incurring, creating or increasing bonded indebtedness;
5. Increase or decrease of capital stock;
6. Merger or consolidation of the corporation with another corporation
or other corporations;
7. Investment of corporate funds in another corporation or business in
accordance with this Code; and
8. Dissolution of the corporation.

What are founders shares?

Founders' shares classified as such in the articles of incorporation may be
given certain rights and privileges not enjoyed by the owners of other stocks,
provided that where the exclusive right to vote and be voted for in the
election of directors is granted, it must be for a limited period not to exceed
five (5) years subject to the approval of the Securities and Exchange
Commission. The five-year period shall commence from the date of the
aforesaid approval by the Securities and Exchange Commission.

What are redeemable shares?

Redeemable shares may be issued by the corporation when expressly so
provided in the articles of incorporation. They may be purchased or taken up
by the corporation upon the expiration of a fixed period, regardless of the
existence of unrestricted retained earnings in the books of the corporation,
and upon such other terms and conditions as may be stated in the articles of
incorporation, which terms and conditions must also be stated in the
certificate of stock representing said shares.

What are treasury shares?

Treasury shares are shares of stock which have been issued and fully paid
for, but subsequently reacquired by the issuing corporation by purchase,
redemption, donation or through some other lawful means. Such shares may
again be disposed of for a reasonable price fixed by the board of directors.

My friends & I want to incorporate our business, what requisites must we

satisfy?
Any number of natural persons not less than five (5) but not more than
fifteen (15), all of legal age and a majority of whom are residents of the
Philippines, may form a private corporation for any lawful purpose or
purposes. Each of the incorporators of s stock corporation must own or be a
subscriber to at least one (1) share of the capital stock of the corporation.

How long does a corporation exist?

A corporation shall exist for a period not exceeding fifty (50) years from the
date of incorporation unless sooner dissolved or unless said period is
extended. The corporate term as originally stated in the articles of
incorporation may be extended for periods not exceeding fifty (50) years in
any single instance by an amendment of the articles of incorporation, in
accordance with this Code; Provided, That no extension can be made earlier
than five (5) years prior to the original or subsequent expiry date(s) unless
there are justifiable reasons for an earlier extension as may be determined by
the Securities and Exchange Commission.

What must we state in Articles of Incorporation?

All corporations organized under this code shall file with the Securities and
Exchange Commission articles of incorporation in any of the official
 languages duly signed and acknowledged by all of the incorporators,
containing substantially the following matters, except as otherwise
prescribed by this Code or by special law:
1. The name of the corporation;
2. The specific purpose or purposes for which the corporation is being
incorporated. Where a corporation has more than one stated purpose,
the articles of incorporation shall state which is the primary purpose
and which is/are he secondary purpose or purposes: Provided, That a
non-stock corporation may not include a purpose which would change
or contradict its nature as such;
3. The place where the principal office of the corporation is to be
located, which must be within the Philippines;
4. The term for which the corporation is to exist;
5. The names, nationalities and residences of the incorporators;
6. The number of directors or trustees, which shall not be less than five
(5) nor more than fifteen (15);
7. The names, nationalities and residences of persons who shall act as
directors or trustees until the first regular directors or trustees are duly
elected and qualified in accordance with this Code;
8. If it be a stock corporation, the amount of its authorized capital stock
in lawful money of the Philippines, the number of shares into which it
is divided, and in case the share are par value shares, the par value of
each, the names, nationalities and residences of the original
subscribers, and the amount subscribed and paid by each on his
subscription, and if some or all of the shares are without par value,
such fact must be stated;
9. If it be a non-stock corporation, the amount of its capital, the names,
nationalities and residences of the contributors and the amount
contributed by each; and
10. Such other matters as are not inconsistent with law and which the
incorporators may deem necessary and convenient.
The Securities and Exchange Commission shall not accept the articles of
incorporation of any stock corporation unless accompanied by a
sworn statement of the Treasurer elected by the subscribers showing
that at least twenty-five (25%) percent of the authorized capital stock
of the corporation has been subscribed, and at least twenty-five (25%)
of the total subscription has been fully paid to him in actual cash
and/or in property the fair valuation of which is equal to at least
twenty-five (25%) percent of the said subscription, such paid-up
capital being not less than five thousand (P5,000.00) pesos.
My business name sounds like a popular brand name, can I use it?
No.Under the Corporation Code, no corporate name may be allowed by the
Securities and Exchange Commission if the proposed name is identical or
deceptively or confusingly similar to that of any existing corporation or to
any other name already protected by law or is patently deceptive, confusing
or contrary to existing laws. When a change in the corporate name is
approved, the Commission shall issue an amended certificate of
incorporation under the amended name.

My company was incorporated in 1997 but we haven’t started any business,

are we still a legal corporation?
If a corporation does not formally organize and commence the transaction of
its business or the construction of its works within two (2) years from the
date of its incorporation, its corporate powers cease and the corporation shall
be deemed dissolved. However, if a corporation has commenced the
transaction of its business but subsequently becomes continuously
inoperative for a period of at least five (5) years, the same shall be a ground
for the suspension or revocation of its corporate franchise or certificate of
incorporation. This provision shall not apply if the failure to organize,
commence the transaction of its businesses or the construction of its works,
or to continuously operate is due to causes beyond the control of the
corporation as may be determined by the Securities and Exchange
Commission.

How can I be a member of the board of director or trustees? How long do I

remain a member?
Every director must own at least one (1) share of the capital stock of the
corporation of which he is a director, which share shall stand in his name on
the books of the corporation. Any director who ceases to be the owner of at
least one (1) share of the capital stock of the corporation of which he is a
director shall thereby cease to be a director. Trustees of non-stock
corporations must be members thereof. a majority of the directors or trustees
of all corporations organized under this Code must be residents of the
Philippines.
A director or trustee shall hold office for one (1) year until their successors
are elected and qualified.

Do we need officer in our board?

Yes.Immediately after their election, the directors of a corporation must
formally organize by the election of a president, who shall be a director, a
treasurer who may or may not be a director, a secretary who shall be a
resident and citizen of the Philippines, and such other officers as may be
provided for in the by-laws. Any two (2) or more positions may be held
concurrently by the same person, except that no one shall act as president
and secretary or as president and treasurer at the same time.