D owns 99% of the capital stock of QQQ Corporation.

D also owns 99% of RRR

Corporation. QQQ Corporation obtained a loan from WY Bank. On due date, QQQ
Corporation defaulted. RRR Corporation is financially healthy. RRR Corporation
cannot be automatically held liable for the loan of QQQ Corporation. QQQ
Corporation and RRR Corporation, although both are owned by D, are two
distinct corporations with separate juridical personalities.
Annie, Bonnie, Connie, Donna, Emma, and Fiona are holders of non-voting shares of
Ocean Six, Inc. Subsequently, the Board of Sea Shell, Inc. adopted a proposal for the
merger of the corporation Sea Shore, Inc. The corporate secretary then sent notice to
all holders of voting shares for a general stockholders’ meeting the purpose of voting
upon the proposal. Annie, Bonnie, Connie, Donna, Emma, and Fiona were not notified
and were not able to participate in the meeting where the merger was adopted. Given
the facts, the failure of the corporation to notify Annie, Bonnie, Connie, Donna, Emma,
and Fiona and their non-inclusion in the meeting where the merger was adopted are
not justified by the fact that they are not holders of voting shares, and that majority of
the stockholders approved the same. The absence of notice and non-inclusion of
Annie, Bonnie, Connie, Donna, Emma, and Fiona in the said meeting
invalidated the approval of the merger because even holders of non-voting
shares have the right to vote on the issue of merger and consolidation of
the company.
Ekswaysi Corporation issued 2% of its capital stock to Miloiki, which is however, a non-
voting share, and another 1%, which is a voting share. The corporation has a total
capital of P100 million and the corporation intends to sell P90 million of its assets to
Eybisi Corporation. Miloiki can vote on whether or not to approve the intended sale by
the corporation up to his total aggregate shares, which is 3%. Using the same facts,
if the Ekswaysi Corporation, instead of selling P90 million of its capital,
decided to invest just a mere P10 million of its capital with Eybisi
Corporation, Miloiki can also vote on whether or not to invest such minimal
amount of the capital up to his total share which shall be 3%.
Spartacus Corp. operates a call center that received orders for pizzas on behalf of
Junjae Corp. which operates a chain of pizza restaurants. The two companies have the
same set of corporate officers. After two years, Spartacus Corp. dismissed its call
agents for no apparent reason. The agents filed a collective suit for illegal dismissal
against both Spartacus Corp. and Junjae Corp. based on the doctrine of piercing the
veil of corporate fiction. Junjae Corp. set up the defense that the agents are in the
employ of Spartacus Corp., which is a separate juridical entity. Given the facts,
Junjae Corp.’s defense is appropriate. It is not shown that one company
completely dominates the finances, policies, and business practices of the
other.
Owned by foreigners and 60% owned by Filipinos, with Tachi as authorized
representative. CCC Corporation is a foreign corporation registered with the Philippine
Securities and Exchange Commission. KKK Corporation is a domestic corporation
(100%) Filipino-owned. Martha is a Filipino, 16 years of age and the daughter of Bailey.
All of them want to form a corporation. Given the facts, the natural persons
Simon, Bailey, Chloe, and Tachi, and the juridical persons, GGG Corporation,
CCC Corporation, and KKK Corporation, can all be incorporators and
subscribers. However, Martha, being a minor, cannot be an incorporator but
she can be a subscriber.
A, B, C, D, and E (who are all resident citizens), and F, a non-resident citizen, decided
to organize a corporation, X Corporation. They decided that the initial Authorized
Capital would be P100 million divided into 100,000,000 shares of stock. A subscribed
to 15,000,000 shares of stock, B subscribed to 1,000,000 shares of stock, C
subscribed to 1,000,000 shares of stock, D subscribed to 500,000 shares of stocks, E
subscribed to 200,000 shares of stock, and F subscribed to 10 shares of stock. Further,
Y Corporation agreed to an initial subscription of 8,000,000 shares of stock. In this
case: (1) Y Corporation can validly subscribe to the 8,000,000 shares of
stocks of X Corporation as there is no prohibition on artificial beings
subscribing to shares of stocks of an incorporating corporation; (2) F can
validly become one of the incorporators even if he subscribed to only 10
shares of stocks; (3) If A also owns 30% of Y Corporation, he is still allowed
to become a director of the board because there is no prohibition in the law,
as long as he owns at least 1 share; and (4) If X Corporation was not
incorporated, A, B, C, D, E, and F cannot go after Y Corporation for any
unpaid subscription because the subscription contract can be revoked by Y
Corporation due to non-incorporation of X Corporation.
N owned and controlled N Construction Company. Acting for the company, N
contracted the construction of a building. Without first installing a
protective net atop the sidewalks adjoining the construction site, the
company proceeded with the construction work. One day a heavy piece of
lumber fell from the building and smashed a taxicab which at that time had
gone off the road and onto the sidewalk in order to avoid traffic. The taxicab
passenger died as a result.
A. Assume that the company had no more account and property in its name.
If you were representing the heirs of the taxicab passenger, whom will you
sue for damages, and what theory will you adopt? Nelson will be sued,
piercing the veil of corporate fiction
B. you were representing N Construction Company, how would you defend
your client? What would be your theory? Doctrine of Unforeseen Event
X is a Filipino immigrant residing in Sacramento, California. Y is a Filipino residing in
Quezon City, Philippines. Z is a resident alien residing in Makati City. GGG Corporation
is a domestic corporation – 40% owned by foreigners and 60% owned by Filipinos,
with T as the authorized representative. CCC Corporation is a foreign corporation
registered with the Philippine Securities and Exchange Commission. KKK Corporation
is a domestic corporation 100% Filipino-owned. S is a Filipino, 16 years of age, and the
daughter of Y. All of them wanted to organize a corporation. Who are qualified to
become members of the board of directors of the corporation? Answer: X, Y, Z, and
T could be directors (subject to the residency requirement and any
nationality requirement under the law governing the business of the
corporation) but not GGG Corporation, CCC Corporation, and KKK
Corporation as they are not natural persons. However, the aforementioned
corporations could have their respective representatives nominated and
possibly elected as directors by the stockholders, provided that such
representative also owns at least one share of the corporation, as each
director is required under the RCC to own at least one share of the capital
stock of the corporation.
In the election of the directors of FEMELY Corporation, Ang, Beng, Ching, Dong, Eng,
Fong, and Gang were nominated. Ang, Beng, Ching, Dong, and Eng got the highest
number of votes and were proclaimed elected. Fong placed sixth with 20 votes lesser
than Eng who subsequently sold all his shares to Gang. Gang claims now that he
should sit in the Board because the transfer of Eng’s shares to him includes the
latter’s position in the Board. Fong opposed the position of Gang claiming that he
should be the one to sit in the Board vacated by Eng because he was the sixth placer
in the election. Eng asserts that he continues to be a director until his term expires
because what he sold was only his shares and not his position as director. In this
case, no one among Eng, Gang, and Fong can sit as the director because a
director needs to be elected and has to have at least one
Allan, an Australian, was elected President of Metro Grab Philippines, Inc., a
corporation organized under Philippine laws. Likewise, Bailey, a Filipino was elected
Secretary and Treasurer of the said corporation at the same time. Some stockholders
of the corporation questioned the legality of the election of Allan and Bailey. In this
case, there is nothing illegal with the election of Allan and Bailey because
their election did not violate any provision of the RCC. It is not secured na
dapat R-ang Pres & Sec-retary. A corporation has its own legal personality
separate and distinct from those of its stockholders, directors, or officers.
Hence, absent any evidence that they have exceeded their authority,
corporate officers are not personally liable for their official acts. In order for
the Court to hold the officer of the corporation personally liable alone for
the debts of the corporation and thus pierce the veil of corporate fiction, the
Court has required that the bad faith of the officer must first be established
clearly and convincingly.
X, the President of ZZZ Corporation, was authorized by the Board of Directors of ZZZ
Corporation to obtain a loan from YYYY Bank and to sign documents on behalf of the
corporation. X personally negotiated for the loan and got the loan at very low-interest
rates. Upon maturity of the loan, ZZZ Corporation was unable to pay. In this case, X
as the President of ZZZ Corporation, cannot be personally held liable for the
obligation of the corporation even though he signed all the loan documents,
because the loan was authorized by the Board.
Sparky Is a director in T Corp. who was elected to a one-year term on February 1,
2020. On April 11, 2020, Sparky resigned and was replaced by Snawtboy, who
assumed as the director on May 17, 2020. On Nov. 21, 2020, Snawtboy died. Simon
was then elected in his place. In this case, Simon shall serve as the director
only until February 1, 2021.
In the November 2020 stockholders meeting of Grinch Corporation, eight directors
were elected to the board. The directors assumed their posts in January 2021. Since
no stockholders meeting was held in November 2021, the eight directors served in a
hold-over capacity and thus continued discharging their powers. In June 2022, two of
Grinch Corporation’s directors, Director Geller and Director Cooper resigned from the
board. Relying o’ Section 28 of the Code, the remaining six directors elected two new
directors to fill in the vacancy caused by the resignation of Directors Geller and
Cooper. Stockholder Kripkey questioned the election of the new directors, initially,
through a letter-complaint addressed to the board, and later (when his letter-
complaint went unheeded), through a derivative suit filed with the court. He claimed
that the vacancy in the board should be filled up by the vote of the stockholders of
Grinch Corporation. Grinch Corporation’s directors defended the legality of their
action. Given the facts, the board of directors’ election of the two new
directors is not proper. The remaining directors cannot elect new directors
to fill in the two vacancies. The board of directors may fill up vacancy only if
the ground is not due to the expiration of term, removal, or increase in the
number of board seats. In this case, the term of the two directors expired
after one year. The hold-over period is not part of their term. The vacancies
should be filled up by election by the stockholders.
A, B, C, D, E, F, and G are duly elected directors for 2009, whose articles of
incorporation provide for seven directors. On October 1, 2009, directors A, B, C, D, and
E met to fill the two vacancies in the board brought about by the valid removal of F for
disloyalty to the corporation and the death of G. In said meeting, the remaining
directors voted for X to replace F, and Y, son of G, to replace his father. Both X and Y
are owners of at least one share of stock. In this case, only the election of Y as
director to replace G is valid. The election of X is not valid because the
board cannot elect a director to fill up the vacancy brought about by the
removal of F.
Sheldon is the owner of 75% of the shares in Big Bang Corporation. On one occasion,
Big Bang Corporation, represented by Sheldon as the President and General Manager,
entered into a contract to sell with Kripkey, involving a townhouse. For the failure of
Big Bang Corporation to build the townhouse, Kripkey filed a case of rescission and
damages against Sheldon and Big Bang Corporation. In this case, the action filed
against Sheldon will not prosper because Big Bang Corporation has a
separate and distinct personality from the former and that when Sheldon
entered into a contract with Kripkey, he was only acting on behalf of the
company. On the other hand, the action filed against Big Bang Corporation
will prosper because this is a matter pertaining to the company and the
company alone should be held liable unless Sheldon acted maliciously or in
bad faith.
The Board of Directors of XYZ Corp. unanimously passed a resolution approving the
taking of steps that in reality amounted to willful tax evasion. Upon discovering this,
the government filed tax evasion charges against all the company’s members of the
board of directors. The directors invoked the defense that they have no personal
liability, being mere directors of a fictional being. In this case, the directors are
not correct. The law makes directors of the corporation solidarily liable for
gross negligence and bad faith in the discharge of their duties; in this case,
they should be held liable for having unanimously passed a resolution
approving the taking of steps that amounted to willful tax evasion. It has
been held in a number of cases that personal liability of corporate directors,
trustees, or officers may validly attach when they assent to patently
unlawful acts of the corporation as in this case.
Leo, Shirley, Jade, Grace, and Claudine are all duly elected members of the Board of
Directors of Junjae Corporation. Chloe is the general manager. She entered into a
supply contract with an American firm, which contract was duly approved by the
board of directors. However, with the knowledge and consent of Chloe, no deliveries
were made to the American firm. As a result of the non-delivery of the promised
supplies, the American firm incurred damages. The American firm would like to file a
suit for damages. In this case:
A. The American firm cannot sue the members of the board of directors
individually for having approved the transaction. In approving the
transaction, the directors were not acting their personal capacities but
rather on behalf of Junjae Corporation exercising the powers of the
corporation and conducting its business.
B.The American firm can sue the corporation. The board approved the
supply contract and the General Manager entered into the contract, both of
them acting on behalf of the Junjae Corporation.
C.The american firm can sue Chloe, the general manager, personally,
because the non-delivery was with her knowledge and consent. Chloe can be
sued in her personal capacity because she knowingly consented to the
nondelivery of the promised supplies contrary to the contract that was duly
approved by the board of directors. Note that the illustration does not
indicate any circumstance that would excuse or favorably explain the action
of Chloe.

Pompom Corporation’s primary purpose is to manufacture cheer dance costumes, but

it wishes to invest in stocks of Creamo Corporation, which is engaged in the
manufacture of dairy products. The articles of incorporation of Pompom Corporation
do not expressly grant it the power to buy stocks of other corporations but more than
two-thirds of the stockholders of Pompom Corporation approved the investment in
Creamo Corporation. In this case, the approval made by the stockholders is not
sufficient to make the investment proper. Such investment in Creamo
Corporation is ultra vires act because it is not related to the primary
purpose of Pompom Corporation. If Pompom Corporation wishes to invest in
Creamo Corporation, Pompom Corporation should first amend its articles of
incorporation to include the power to buy stocks of other corporations and
then get the approval of two-thirds of its stockholders.
On June 1, 2020, AA obtained a loan of ₱100,000 from BB, payable not later than 20
December 2020. BB required AA to issue him a check for that amount to be dated 20
December 2020. Since he does not have any checking account, AA, with the
knowledge of BB, requested his friend, CC, President of SS Bank to accommodate him.
CC agreed, he signed a check for the aforesaid amount dated 20 December 2020,
drawn against SS Bank’s account with the ABC Commercial Bank. The bylaws of SS
Bank require that checks it issued under the signature of the President and the
Treasurer or the Vice President. Since the Treasurer was absent, CC requested the Vice
President to co-sign the check, which the latter reluctantly did. The check was
delivered to BB. The check was dishonored upon presentment on the due date for
insufficiency of funds. In this case, SS Bank is not liable for the check as an
accommodation party. The act of the corporation in accommodating a friend
of its President is ultra vires. Considering that both the President and Vice
President were signatories to the accommodation, they themselves can be
subject to the liabilities of accommodation parties to the instrument in their
personal capacity.

Assume that you and your friends have decided to form a corporation.
Explain to them: (1) who are qualified to become members of the board of
directors of the corporation; (2) who is qualified to act as Treasurer of the
corporation; and (3) who can be appointed Corporate Secretary.

ABC Corp. increased its capital stock from ₱10 million to ₱15 million and, in the
process, issued 1,000 new shares divided into Common Shares “B” and Common
Shares “C.” Tachi, a stockholder owning 500 shares, insists on buying the newly issued
shares through a right of pre-emption. The corporation claims, however, that its
bylaws deny Tachi any right of pre-emption. In this case, the corporation is not correct.
The bylaws cannot deny a shareholder his right of pre-emption. It is the articles of
incorporation, or an amendment thereto, which may remove or deny preemptive
rights. Unless such right is denied by the corporation’s articles of incorporation, or any
amendment there, or the issuance of additional shares falls under any of the
exceptions provided by Section 38 of the RCC, all stockholders of a stock corporation
shall enjoy preemptive right to subscribe to all issues or disposition of shares of any
class, in proportion to their respective shareholdings. This “right of first
refusal” or preemptive right, however, shall not extend to: (1) shares issued
in compliance with laws requiring stock offerings or minimum stock
ownership by the public; or (2) shares issued in good faith with the approval
of the stockholders representing two-thirds of the outstanding capital stock,
in exchange for property needed for corporate purposes or in payment of a
previously contracted debt.
Z Corporation amended its bylaws which now requires that every director of Z
Corporation must own at least 100 shares of stock in his name. In this case, the
amendment is void because the RCC only requires at least one share of
stock in the director’s name.
In a special meeting called for the purpose, two-thirds of the stockholders
representing the outstanding capital stock in X. Co. authorized the company’s board
of directors to amend its bylaws. By majority vote, the board then approved the
amendment. In this case, the amendment is valid because the stockholders
can delegate their right to amend the bylaws to the board.
In the meeting of the board of the “Med-Supply Corporation,” a medical company held
on October 15, 2020, directors A, B, C, D, and E were present among nine directors.
The meeting had for its agenda: (1) appointment of a new treasurer; and (2) approval
of the contract for the new medical supplies worth ₱500,000 from another
corporation. When voting took place, directors A, B, C, and D voted for the election of
Y as the new treasurer, and directors A, B, and C voted for the approval of the
contract for the aforementioned purchase. In this case, the approval of the
contract for the new medical supplies is valid. The election of Y as the new
treasurer, however, is void because, under Section 52 of the RCC, election of
officers requires the vote of a majority of all the members of the board. The
vote of only four out of the nine directors falls short of the required majority
vote.
On November 23, 2021, Alpha Hotel Corporation, as stockholder of Y Corporation, and
through its board of directors executed a Voting Trust Agreement transferring the
beneficial ownership of its shares in trust to BP, Inc. by reason of the loan obtained by
the former from the latter. In this case, by reason of the voting trust
agreement, BP, Inc. acquires legal title to the shares of Alpha Hotel
Corporation in Y Corporation although the beneficial title remains with Alpha
Hotel Corporation. BP, Inc. can vote as the owner of the shares and exercise
all the rights of Alpha Hotel Corporation in the stockholders’ meeting of Y
Corporation.
A provision in the bylaws of the corporation states that of the 15 members
of its Board of Directors, only 14 directors would be elected while the
remaining member would be the representative of an educational institution
located in the village of the homeowners. While the same is invalid, for 15
years it has not been questioned or challenged and has been implemented
by the members of the corporation, hence a deemed waiver of its invalidity.
Can it still be questioned?
Bailey subscribed to 100,000 shares of stock of PX Corporation, which has a par value
of ₱10 per share. He paid ₱250,000 and promised to pay the balance before
December 31, 2021. PX Corporation declared a cash dividend on October 15, 2021,
payable on December 1, 2021. In this case, Bailey is entitled to be paid each
cash dividend to the entire 100,000 shares subscribed, and not only to the
paid-up portion thereof. The legal character of being a “stockholder,” and
therefore the entitlement to all the rights of a stockholder, are determined
from the time of “subscription” and not from payment of the subscription.
Ronnie has in his name 1,000 shares of the capital stock of GIE Corporation as
evidenced by stock certificate. Ronnie delivered the stock certificates to Bobby who
now claims to be the real owner of the shares, having paid Ronnie’s subscription. GIE
Corporation refused to recognize and register Bobby’s ownership. GIE Corporation’s
refusal is justified because the certificate of stock was not duly indorsed by
Ronnie to Bobby and the transfer was not registered in the books of the
corporation.
Bailey subscribed to 100,000 shares of stock of PX Corporation, which has a par value
of ₱10 per share. He paid ₱250,000 and promised to pay the balance before
December 31, 2019. PX Corporation declared a cash dividend on October 15, 2019,
payable on December 1, 2019. Based on the facts, Bailey cannot compel PX
Corporation to issue to him on December 1, 2019, the stock certificate
corresponding to the ₱250,000 paid by him. No certificate of stock can be
issued to a subscriber until the full amount of his subscription together with
interest and expense, if any is due, has been paid. A subscription is one
entire and indivisible whole contract that cannot be divided into portions.
The stockholder is not entitled to a certificate of stock until he has remitted
the full amount of his subscription.
Boyito subscribed 10,000 shares in the capital stocks of Dogonghei Corporation and
paid 50% of the 10,000 shares. Boyito asked the corporate secretary to issue to him
the corresponding stock certificate representing 50% of what he already paid. The
corporate secretary of the corporation refused.⁷ In this case, the action of the
corporate secretary is correct because the RCC provides that no certificate
of stock shall be issued to a subscriber until the shares as subscribed have
been fully paid.
In one case, the Supreme Court stressed that shares of stock so issued are
personal property and may be transferred by delivery of the certificate or
certificates endorsed by the owner or his attorney-in-fact or other person
legally authorized to make the transfer.
Junjae Is a minority stockholder of CCC Corporation. Bailey is a member of the Board
of Directors of CCC Corporation and at the same time, he is the President. Junjae
believes that Bailey is mismanaging CCC Corporation. Hence, as a stockholder and on
behalf of the other stockholders, he wanted to sue Bailey.¹⁴ In such a case, a
derivative suit must be instituted on behalf of the corporation.
In the November 2020 stockholders meeting of Grinch Corporation, eight directors
were elected to the board. The directors assumed their posts in January 2021. Since
no stockholders meeting was held in November 2021, the eight directors served in a
hold-over capacity and thus continued discharging their powers. In June 2022, two of
Grinch Corporation’s directors, Director Geller and Director Cooper resigned from the
board. Relying o’ Section 28 of the RCC, the remaining six directors elected two new
directors to fill in the vacancy caused by the resignation of Directors Geller and
Cooper. Stockholder Kripkey questioned the election of the new directors, initially,
through a letter-complaint addressed to the board, and later (when his letter-
complaint went unheeded), through a derivative suit filed with the court. He claimed
that the vacancy in the board should be filled up by the vote of the stockholders of
Grinch Corporation’s directors defended the legality of their action, claiming as well
that stockholder Kripkey’s derivative suit was improper.¹⁵ In this case, the
derivative suit filed by stockholder Kripkey was improper. The Supreme
Court held in a case that in a derivative suit, the corporation, not the
individual stockholder, must be the aggrieved party and that the
stockholder is suing on behalf of the corporation. What stockholder is
asserting his individual right as a stockholder. The case partakes more of an
election contest under the rules on Intra-corporate controversy¹⁶
Dogonghei Realty Corporation (DRC), a local firm engaged in real estate development,
plans to sell one of its prime assets—a three-hectare land valued at about ₱100
million. For this purpose, the board of directors of DRC unanimously passed a
resolution approving the sale of the property for ₱75 million to Chukoi Real
Estate Corp. (CREC) a rival realty firm. The resolution also called for a
special stockholders’ meeting at which the proposed sale would be up for
ratification. Atty. Leo, a stockholder who owns only one share in DRC, wants
to stop the sale. He then commences a derivative suit for and on behalf of
the corporation, to enjoin the board of directors and the stockholders from
approving the sale.
When is there an ultra vires act on the part of: (1) the corporation, (2) the
board of directors; and (3) the corporate officers? Explain the effect of such
ultra vires act.
X owns 99% of AAA Hotel Corporation. He sold all his shares in AAA Hotel Corporation
to Y. As the new owner, Y wanted a reorganization of the hotel, which is to include
primarily the separation of all existing employees and the hiring of new employees.³⁵
In this case, the existing employees of AAA Hotel cannot be automatically
considered separated. Despite the change in shareholder, there is actually
no change in the juridical entity and therefore existing employees cannot
automatically be considered separated.
In a stockholders meeting, Shirley dissented from the corporate act converting
preferred voting shares to nonvoting shares. Thereafter, Shirley submitted her
certificates of stock for the notation that her shares are dissenting. The next day,
Shirley transferred her shares to Claudine to whom new certificates were issued. Now,
Claudine demands from the corporation the payment of the value of her shares. In
this case, Claudine can no longer exercise the right of appraisal. When
Shirley transferred his shares to Claudine and Claudine was issued new
stock certificates, the appraisal right of Shirley ceased, and Claudine
acquired all the rights of a regular stockholder. The transfer of shares from
Shirley to Claudine constitutes an abandonment of the appraisal right of
Shirley. All that Claudine acquired from the issuance of new stock
certificates was the rights of a regular stockholder.

What do you think is the main idea behind having appraisal right among the
provisions in the Revised Corporation Code? Can a stockholder who availed
of his appraisal right change his mind later on?

How do you convert a stock corporation to a nonstock corporation? If given

the opportunity, what nonstock corporation will you choose to convert your
stock corporation to?
A private university amended its bylaws to provide that members of its
board were to serve a term of office of only two years and that the officers,
who included the President were to be elected from among the members of
the Board of Trustees during their organizational meeting, which was held
during the election of the Board of Trustees every two years. Its former
President questions the amendment citing that Section 108 of the Revised
Corporation Code provides for a term of members of the board at five years.
Which shall prevail?
B. Think of some reasons why a stock corporation may want to convert to an
OPC and explain.
C. If you plan to put up a business and have the finances to do it, are you
going to put up an OPC, an ordinary stock corporation, or a nonstock
corporation? Explain.

AAA Corporation is a bank. The operations of AAA Corporation as a bank were not
doing well. So, to avert any bank run, AAA Corporation, with the approval of the
Monetary Board, sold all its assets and liabilities to BBB Banking Corporation which
includes all deposit accounts. In effect then, BBB Corporation will service all
deposits of all depositors of AAA Corporation. The sale of all assets and
liabilities of AAA Corporation to BBB Banking Corporation will not result in
the automatic dissolution or termination of the existence of AAA
Corporation. A decision to dissolve AAA Corporation or to terminate its
corporate existence would require separate approval by a majority of the
Board of Directors of AAA Corporation and its stockholders holding at least
two-thirds of the total outstanding capital stock, as well as the separate
approval by the Monetary Board.
The term of QQQ Corporation in accordance with its articles of incorporation ended on
January 30, 2020. The term was not extended. The corporation is dissolved
ipso facto.

What are the legal requirements in order that a corporation may be

dissolved?

QQQ Corporation is a foreign corporation that wants to operate a

representative office here in the Philippines. It appointed a Resident Agent
in compliance with the condition precedent to the issuance of a license to
transact business in the Philippines. After two years, QQQ Corporation
removed its Resident Agent and did not appoint anyone anymore. What do
you think is the implication of such act?

DR and HR, members in good standing of Club, Inc. alleged that they were
summarily stripped of their lawful membership, without due process of law
by the Club Inc.’s duly elected president, in conspiracy with the Club Inc.’s
vice president, and legal counsel. They filed a complaint with the SEC asking
it to declare as illegal their expulsion from Club, Inc. as it was allegedly
done in utter disregard of its bylaws. They also sought the annulment of the
amendments to the bylaws. Does the SEC have jurisdiction over the
complaint?