BUSINESS LAWS AND REGULATIONS ● Methods of conducting business

CORPORATION
Different Classes of Corporation

Revised Corporation Code 1.Stock Corporation

● Feb 23, 2019 ● have CAPITAL STOCK to be
● RA No. 11232 distributed to stockholders
● ordinary corporation
Corporation ● created for the purpose of PROFIT,
● juridical entity with legal personality which then is distributed to
that is separate and distinct from STOCKHOLDERS in the form of
the stockholders (Doctrine of DIVIDENDS
Corporate Entity) ● absence of capital stock and
distributed dividend: nonstock corp.
Attributes/Characteristics of
Corporations
1. Artificial being 2.Non-Stock Corporation
2. Created by operation of law ● DOESN'T have a capital stock
3. Has the right of succession ● MEMBERS not stockholders
4. Has powers, attributes, properties ● created for PUBLIC GOOD
*Above mentioned: Private Corp ● Ex: St. Luke's Medical Center, Inc

BSP
● Public Corporation Stock & Non-Stock Corporation
● Educational institutions
Doctrine of Piercing the Veil of Corporate
Entity/Instrumentality/Alter Ego Doctrine GOCCs Requisites
● disregarding the Doctrine of 1. stock or nonstock
Corporate Entity 2. with functions relating to public
● creditor can go after the guilty needs (governmental/proprietary)
stockholder 3. Owned by gov't (directly or through
● creditor has the burden of proof (He its instrumentalities) wholly or at
who alleges must prove) least 51% of its capital stock
● When do we disregard: Corporation
use as shield for FRAUD Example of Non-GOCCs/Private Corp
● CIIF
Probative Factors of Identity which could ● Radio Philippines Network, Inc
justify the application of Doctrine of (RPN)
Piercing the Veil: ● Manila International Airport Authority
● Stock ownership by one or common (MIAA)
ownership of both corporation
● Identity of directors and officers Examples of GOCCs
● Manner of keeping corporate books ● Land Bank of the Philippines
and records
 ● Development Bank of the Philippines - open to any person who
(DBP) wishes to be a
● Philippine Crop Insurance stockholder/member
Corporation (PCIC) 12. Close Corporation
● Philippine National Bank (PNB) - articles of incorporation
issues stock not exceeding
Other Classes of Corporation 20– subject to 1 or more
specified restrictions on
1. Public Corporation transfer– shall not list in
- for general good and welfare stock exchange/make public
2. Private Corporation offering
- private purpose 13. Parent or Holding Corporation
3. GOCCs - hold stock in another
- owned by gov’t– wholly or corporation for the purpose
51% of its capital stock of control
4. Quasi-public Corporation 14. Subsidiary Corporation
- private corporation with - more than 50% of voting
public duties organized for stock is controlled
profit 15. Corporation Aggregate
5. De Jure Corporation - consisting more than 1
- strict or substantial member
conformity with mandatory 16. Corporation Sole
statutory requirements - only 1 member for purpose of
6. De Facto Corporation administering and managing
- claiming in good faith to be a 17. Ecclesiastical Corporation
corporation - religious purposes
7. Corporation by Estoppel 18. Lay Corporation
- Assume yo act as - purposes other than for
corporation without authority religion
8. Corporation by Prescription 19. Eleemosynary Corporation
- has corporate power– - charitable purposes
indefinite period without 20. Civil Corporation
interference from the gov't - for business or profit
9. Domestic Corporation
- incorporated in the General Law vs Special Law
Philippines
General Special
10. Foreign Corporation
- organized outside the Private corporation Government
Philippines where may be formed Corporation
Filipinos/corporations are
Corporation code
allowed to do business in its
own country
11. Open Corporation Can the Congress create GOCCs
through Special Charters?
 ● Yes, if it meet the two conditions; Forming a new Domestic Corporation
- Common Good ● 2 or more persons, but NOT more
- Economic Viability than 15

Components of Corporations One Person Corporation (OPC)

1. Corporators ● may have a single stockholder &
- who compose a corporation– sole director
as stockholder/member
2. Incorporators Doctrine of Equality Shares
- originally forming and ● each share shall be equal (rights &
composing the corporation– liabilities)
signatories
3. Stockholders (shareholders) Who may classify shares?
- owners in stock corporation 1. Incorporators
4. Members - by stating in the articles of
- owners in nonstock corporation filed with the
corporation SEC
5. Board of Directors 2. Board of Directors and Stockholders
- governing body in a stock - by voting (majority or at least
corporation ⅔ of the outstanding capital
6. Board of Trustees stock.
- governing body in nonstock
corporation What are Voting Shares?
7. Corporate Officers ● shares with a right to vote
- president; director
- treasurer; may or may not Right to Vote in a Stock Corporation
be a director ● inherent and incidental
- secretary; resident & citizen ● unissued stocks may not be voted
- corporation vested with ● neither stockholders/corporation can
public interest– board shall vote shares that have never passed
elect a compliance officer to the ownership of stockholders
8. Subscribers
- who agree to take and pay Right to Vote in a Nonstock Corporation
original, unissued shares ● voting rights attached to members
9. Underwriter ● each member are entitled to one
- person – guarantees on a vote, UNLESS so limited,
firm commitment broadened, or denied.
- person/entity (investment
banker) – guarantee the sale Non-voting Shares
of newly issued securities ● shares without a right to vote
10. Promoter
- brings about the formation & Common Stock/Capital Stock/Ordinary
organization of corporations 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