SPECIAL CORPORATIONS
What are the two (2) types of special corporation?
1. Educational corporation
2. Religious corporation
2.1 Corporation sole
2.2 Religious societies
What law governs educational corporations? (Sec. 106)
First. Special laws
Second. Corporation Code
How is the governing board of an educational institution instituted?
If stock education corporation: anywhere between 5 to 15
If non-stock educational corporation: divisible by 5 but not more than 15 (5, 10, 15)
Can they consist of 7 or 9 members?
Yes, if stock
What are the qualifications and disqualifications of the membership in the board?
If there is no provision in the special law therefor, the same qualifications and
disqualifications as those in a common stock and non-stock corporations are the
qualifications and disqualifications of board members in educational corporations (Sec. 106).
Moreover, by-laws may provide for additional qualifications and disqualifications of board
members.
Who manages educational corporations?
General rule: its Board of Directors which must consist of Filipino citizens (Art. XIV, Sec.
4[4], 1987 Constitution)
Exception: (a) religious order; (b) mission boards; and (c) charitable organizations
Should a church apply to be a religious corporation?
No, it may do so only for the administration of its temporalities or for the management of its
affairs, properties and estate in accordance with law (Sec. 110)
May a corporation be organized by less than 5 natural persons?
General rule: 5 to 15 natural persons (except [a] cooperatives and [b] corporations primarily
organized to hold equities in rural banks)
Exception: corporation sole which consists of only 1 person
May any person form or organize a corporation sole?
No, only the following persons may form or organize such corporation: (Sec. 110)
a. Chief archbishop;
b. Bishop;
c. Priest;
d. Minister;
e. Rabbi; or
f. Other presiding elder
Is a corporation sole required to file the articles of incorporation in the SEC?
Yes (Sec. 112, second par.)
Is it required to indicate its terms of execution?
No, because a corporation sole is supposed to exist in perpetuity. However, it does not mean
that it shall continue to exist forever, it merely means that it has the capacity of continuous
existence during a particular period until dissolved in accordance with law.
When will a corporation sole acquire juridical personality?
From and after filing with the SEC of its articles of incorporation along with other documents
required by Sec. 112. Hence, approval of SEC is not required.
Does a corporation sole have the same power, rights and privileges to acquire and
alienate properties just like any other corporations?
Yes, except the power to sell or mortgage real property which must first secured with a court
order to that effect in the absence of manner or method of holding or alienating properties as
provided for in the rules and regulations of the religious corporation concerned (Sec. 113)
Since a corporation sole is consist of only one person, will the registration of the
property in the name of the corporation sole vest unto the head thereof the ownership of
the property?
No, it will not vest unto the head, the head is acting merely as a guardian. Ownership
devolves upon the congregation or religious denomination (Roman Catholic Apostolic Adm.
of Davao, Inc. v. Land Registration Comm., et. al.)
Can the Pope enter and transact business as corporation sole in the Philippines?
Yes, it is of judicial notice that he is internationally recognized as the head of the Roman
Catholic Church
If there is a vacancy, who will fill-up the same?
The person authorized by the rules, regulations or discipline of the denomination shall
exercise all the powers and authority of the corporation sole during such vacancy and until
such vacancy has been filled-up
In case of vacancy in the Roman Catholic in the Philippines, can the Pope be the head
thereof even if he did not file with the SEC?
Yes, it is of judicial notice that he is internationally recognized as the head of the Roman
Catholic Church
May a corporation sole be dissolved by judicial decree?
General rule: No, by virtue of separation of Church and the State
Exception: Yes, by virtue of police power of the State, i.e. if the purpose of the corporation is
being carried out and used for illegal purpose
Upon dissolution, may a corporation sole continue to exist?
Yes, for the purpose of winding up its affairs (Sec. 115, last par.)
Are religious societies required to file articles of incorporation with the SEC?
No, the use of "may" in Sec. 116
Is it required to indicate its term of existence?
No, because it is likewise supposed to exist in perpetuity.
If it should exist n perpetuity, when does it end?
On a particular period or until dissolved in accordance with law
When will it acquire juridical personality?
Upon issuance of certificate of incorporation by SEC (Sec. 19). Only corporation sole may
come into existence without approval of SEC (Sec. 112).
How religious societies are dissolved?
The rules regarding dissolution shall govern because the rules under special corporations do
not provide for such rule
REMINDERS:
1. Roman Catholic Church has no nationality and that the framers of the Constitution did
not have in mind the religious corporations sole when they provided that 60 percent of
the capital thereof be owned by Filipino citizens (Roman Catholic v. LRC)
2. Alienable public land held by a possessor, personally or through his predecessors-in-
interest, openly, continuously and exclusively for 30 years is converted to private
property by mere lapse or completion of said period automatically (Director of Lands
v. CA)
3. Expiration of a corporate term will not apply to a religious corporation because it is
supposed to exist in perpetuity.
TRUE OR FALSE:
1. A corporation sole is possessed with the same power, rights and privileges, to own,
acquire and hold or convey properties like any other corporation.
2. The power and authority of a corporation sole to own dispose and alienate real
properties is the same as in any other corporation.
3. All educational corporations must have a governing board of only either 5, 10 or 15
members.
4. A religious society does not commence to have a juridical personality until the
issuance of the certificate of registration/incorporation by the SEC.
5. All religious corporations commence to exist and are vested with juridical personality
upon filing of the Articles of Incorporation with SEC.
6. An educational institution can have 9 members.
ANSWERS:
1. False, they have the same power rights and privileges, but when it comes to alienation
and acquisition, it must possess a court order, however when there is a regulated
method, a court order may be dispensed with.
2. False, they have the same power rights and privileges, but when it comes to alienation
and acquisition, it must possess a court order, however when there is a regulated
method, a court order may be dispensed with.
3. False, only educational institutions organized as non-stock corporations must have
such number of governing board. Those organized as stock corporation may be within
5 to 15.
4. True
5. False, corporation sole acquires its juridical personality from and after filing with the
SEC of its articles of incorporation along with other documents required by Sec. 112
6. Yes, in case of educational institution organized as stock corporation whose number
may be within 5 to 15.
Objective:
Can the court determine the rules in the corporation sole when there is no rule or discipline?
ANSWER:
Yes, but only in the absence of rules, regulations and discipline of the religious denomination
concerned with regard to the method of acquiring, holding, selling and mortgaging real estate
and personal property (Sec. 113).
