PART BLAW

A corporation has a personality separate and distinct from that of its stockholders and members and is not affected by the personal rights, obligations, and transactions of the latter.

A corporation will be looked upon as a legal entity as a general rule, and until sufficient reason to the contrary appears but when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as an association of persons.

Nagsusubmit ng mga requirements sa SEC, sila yung gumagawa ng corporation.

No minimum capital requirement Under the Old Corporation Code (CC), at least 25% of the authorized capital stock as stated in the AOI must be subscribed at the time of incorporation, and at least 25% of the total subscription must be paid upon subscription.

Any contract for the acquisition of unissued stock in an existing corporation or a corporation still to be formed shall be deemed a subscription contract. This is notwithstanding the fact that the parties may refer to it as a purchase or some other contract.

A subscription contract is indivisible. Consequently, where stocks were subscribed and part of the subscription contract price was not paid, the whole subscription shall be considered delinquent, and not only the shares which correspond to the amount not paid.

- Dati kasi hanggang 50 years lang ang corporation pero antagal tagal non kaya ngayon para di na mahirapan ang corporation kasi minsan meron talagang mga corporation na nakakalimutan so biglang ipapasara ng SEC kasi nagexpire na yung corporate term. Pero ngayon under revised corporation code lahat ng corporation are considered perpetual term.

Corporations with an expired term upon the effectivity of the RCC, may apply with the SEC for revival of its corporate existence.

Are units into which the capital stock is divided. A share of stock represents the interest of the holder thereof to participate in the management of the corporation, to share proportionally in the profits of the business, and, upon liquidation, to obtain an aliquot part of corporate assets after all corporate debts have been paid.

The shares in stock corporations may be divided into classes or series of shares, or both. The rights, privileges, or restrictions, and the stated par value of the class or series of shares must be indicated in the Articles of Incorporation.

Each share shall be EQUAL in ALL respects to every other share, except as otherwise provided in the Articles of Incorporation and stated in the certificate of stock.

Mga kita ng corporation

Incase lang na magtatapos ang corporation, una kayong mabibigyan pero pwede naman combination ng both liquidation at distribution, una kayo mabibigyan sa kita sa corporation or sa liquidation din ng corporation.

Those which, after getting their fixed dividend preference, share with common stocks the rest of the dividends.

Those which, after getting their fixed dividend preference, have no more right to share in the remaining dividends with the common stocks.

A common stock represents the residual ownership interest in the corporation. It is a basic class of stock ordinarily and usually issued without extraordinary rights or privileges and entitles the shareholder to a pro rata division of profits.” The owners thereof are entitled to management (via exclusive right to vote) of the corporation and to equal pro-rata division of profits

Shares classified as such in the AOI, which are given certain rights and privileges not enjoyed by the owners of other stocks. These may be given special preference in voting rights and dividend payments. Where exclusive right to vote and be voted for in the election of directors is granted, such right must be for a limited period not to exceed 5 years, subject to approval by SEC The 5-year period shall commence from date of approval by SEC. Founder’s shares given the exclusive right to vote and be voted for are not allowed to exercise that right in violation of the AntiDummy Law and the Foreign Investment Act.

Are shares which may be purchased by the corporation from the holders of such shares upon the expiration of a fixed period, regardless of the existence of unrestricted retained earnings in the books of the corporation.

Are shares 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 BOD.

These are shares with a stated or fixed value set out in the Articles of Incorporation, which remains the same regardless of the profitability of the corporation. This gives rise to financial stability, and is the reason why banks, trust corporations, insurance companies and building and loan associations must always be organized with par value shares. Par value is minimum issue price of such share in the Articles of Incorporation which must be stated in the certificate.

These are shares without a stated value in the AOI. They are without nominal value. They may be issued for the amount stipulated in the AOI, or fixed by the Board.

€� paggawa na ng isang corporation, documentary requirements needed for submission at the SEC before one can issue a certificate of incorporation.

Persons who, acting alone or with others, take initiative in founding and organizing the business or enterprise of the issuer and receives consideration therefor

Are those types of contracts entered into in behalf of a corporation which is in the process of organization and incorporation, and such fact is acknowledged as an essential ingredient in the process of perfection

A corporation is NOT bound by the contract. A corporation, until organized, has no life and no legal existence. It could not have had an agent [the promoter] who could legally bind it.

Is any contract for the acquisition of unissued stock in an existing corporation, or corporation still to be formed. Notwithstanding the fact that the parties refer to the contract as a purchase or some other contract, it shall be deemed a subscription as long as it involves the acquisition of unissued stock in an existing corporation or a corporation still to be formed

A subscription contract is indivisible. Consequently, where stocks were subscribed and part of the subscription contract price was not paid, the whole subscription shall be considered delinquent, and not only the shares which correspond to the amount not paid.

Meaning yung existence is forever na existing.

Corporations with an expired term upon the effectivity of the RCC, may apply with the SEC for revival of its corporate existence.

A type of promoter’s contract for the acquisition of unissued stock in a corporation still to be formed. Subscription for shares of stock of a corporation still to be formed shall be irrevocable for a period of at least six (6) months from the date of subscription,

A basic contract document, defining the charter of the corporation, and serves as the basis by which to judge whether it exists for legal purposes.

Under the RCC, incorporators undertake to change the name of the corporation immediately upon receipt of notice from SEC that another corporation, partnership, or person has acquired a prior right to its use, that the name has been declared not distinguishable from a name already registered or reserved for the use of another corporation, or that it is contrary to law, public morals, good customs or public policy

A corporation can only have one (1) primary purpose. However, it can have several secondary purposes.

A corporation shall now have perpetual existence unless its AOI provides otherwise

The right to withdraw from the corporation and demand payment of the fair value of the shares after dissenting from certain corporate acts involving fundamental changes in corporate structure.

An option or privilege of an existing stockholder to subscribe to a proportionate part of shares subsequently issued by the corporation before the same can be disposed of in favor of others.

Preservation of the existing proportional rights of the stockholders. Purpose of Pre-emptive Right The purpose is to enable the shareholder to retain his proportionate control in the corporation and to retain his equity in the surplus

Obligates a stockholder who may wish to sell or assign his shares to first offer the shares to the corporation or to the other existing stockholders under terms and conditions which are reasonable.

A suit brought by the shareholder in his own name against the corporation when a wrong is directly inflicted against him.

A suit brought by the stockholder in behalf of himself and all other stockholders similarly situated when a suit brought by the shareholder in his own name against the corporation when a wrong is directly inflicted against him or a wrong is committed against a group of stockholders.

A suit brought by a stockholder for and on behalf of the corporation for its protection from the wrongful acts committed by the directors/trustees of the corporation, when the stockholder finds that he has no redress because the directors/trustees are the ones vested by law to decide whether or not to sue.

A corporation absorbs the other and remains in existence while the others are dissolved. Mergers may be horizontal (between competing firms), vertical (if a corporation acquires another which uses or distributes its products) or conglomerate (neither competing nor related in the chain of production or distribution).

A new corporation is created, and consolidating corporations are extinguished.