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NATURE OF CORPORATIONS
1.
a.
Corporate Attributes
Theories in the formation of a corporation
Tayag vs. Benguet Consolidated, 26 SCRA 242 (1968)
Ang Pue & Co. vs. Secretary, 5 SCRA 645 (1962)
1. Theory of Concession
2. Theory of Enterprise Entity
b.
c.
d.
e.
f.
2.
Classification Of Corporations
a.
b.
As to place of incorporation
- Domestic
- Foreign (Section 123 of the Corporation Code)
c.
d.
As to purpose of incorporation
- Municipal
- Religious (Sections 109 and 116 of the Corporation Code)
- Educational (Sections 106 to 108 of the Corporation Code)
(Section 25, BP 232)
- Charitable, Scientific or Vocational
- Business Corporation
e.
f.
g.
As to number of members
- Aggregate Corporation
- Corporation Sole (Sec. 110 to 115 of the Corporation Code)
Roman Catholic Administrator vs. LRC, 102 PHIL 597 (1957)
Republic vs. Villanueva, 114 SCRA 875 (1982)
As to existence of shares (Secs. 3 and 5 of the Corporation Code)
- Stock
- Non-Stock (Sections 87 and 88 of the Corporation Code)
CIR vs. Club Filipino, 5 SCRA 321 (1962)
As to relationship of management and control
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- Holding company
- Affiliate company
- Parent and subsidiary company
h.
B.
Close Corporations
- Definition (Section 96 of the Corporation Code)
- Articles of Incorporation Requirements
(Section 97 of the Corporation Code)
- Pre-emptive Rights (Section 102 of the Corporation Code)
- Amendment (Section 103 of the Corporation Code)
- Restriction on Transfer of Shares
(Sections 98 and 99 of the Corporation Code)
- Agreements by Stockholder
(Section 100 of the Corporation Code)
- No Necessity of Board (Section 101 of the Corporation Code)
Dulay Enterprises, Inc. vs. CA (G.R. No. 91889 [1993])
- Deadlocks (Section 104 of the Corporation Code)
- Withdrawal and Dissolution (Section 105 of the Corporation Code)
Financing Corp vs. Teodoro, 93 PHIL 678
FORMATION OF CORPORATIONS
1.
a.
Promoters
b.
Subscription Contracts
(Sections 60 and 72 of the Corporation Code)
Trillana vs. Quezon College, 93 PHIL 383
1.
2.
3.
2.
a.
b.
Purchase Agreement
Bayla vs. Silang Traffic, Co., 73 PHIL 557 (1942)
Pre-Incorporation Subscription
(Sec. 61 of the Corporation Code)
- Offer Theory
- Contract Theory
Release from subscription obligation
Velasco vs. Poizat, 37 PHIL 802
PNB vs. Bitulok Sawmill, Inc., 23 SCRA 1366
Formalities in Organizing
Generally
Government of the PI vs. Manila Railroad, 103 PHIL 757 (1929)
Rural Bank of Salinas vs. CA, 210 SCRA 510 (1992)
Articles of Incorporation
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c.
C.
2.
Defective Incorporation
1. De jure
2. De facto (Section 20 of the Corporation Code)
i. Rationale for the doctrine
Tayko vs. Capistrano, 53 PHIL 866 (1928)
ii. Requisites
Fernandez vs. Cuerva, 21 SCRA 1095 (1967)
Hall vs. Piccio, 86 PHIL 603 (1950)
Benguet Consolidated vs. Pineda, 98 PHIL 711 (1956)
3. Corporation by estoppel (Sec 21 of the Corporation Code)
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D.
4.
Due Process
McConnel vs. CA, 1 SCRA 723 91961)
Emilio Cano Enterprises vs. CIR, 13 SCRA 291 (1965)
NAMARCO vs. Associated Finance Co. Inc., 19 SCRA 962
Jacinto vs. CA, 198 SCRA 211 (1992)
Arcilla vs. CA, 215 SCRA 120 (1986)
AC Ransom Labor Union vs. NLRC, 142 SCRA 269
Lim vs. NLRC, 171 SCRA 328 (1989)
De Guzman vs. NLRC, 211 SCRA 723 (1992)
5.
Anti-Trust Issues
Garcia vs. Executive Secretary (G.R. No. 132451 [1999])
Standard Oil Co. vs. US, 221 U.S. 1 (1910)
CORPORATE POWERS
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1.
a.
b.
2.
3.
4.
5.
6.
7.
8.
9.
2.
10.
11.
3.
c.
Cases
Pirovano vs. De la Rama Streamship, 96 PHIL 335 (1954)
Luneta Motors vs. AD Santos, 5 SCRA 809 (1962)
Republic vs. Acoje Mining, 3 SCRA 361 (1963)
Crisologo-Jose vs. CA, 177 SCRA 594 (1989)
Harden vs. Benguet Consolidated, 58 PHIL 1140 (1948)
d.
For Torts
PNB vs. CA, 83 SCRA 237 (1978)
Criminal Liability
People vs. Tan Boon Kong, 54 PHIL 607 (1930)
Sia vs. People, 121 SCRA 655 (1983)
Moral Damages
ABS-CBN vs. CA (G.R. No. 128690 [January 1999])
Filipinas Broadcasting vs. AMEC-BCCM (GR No. 141994 [2005])
II.
FINANCIAL STRUCTURE
A.
DEBT SECURITIES
Generally - Lirag Textile Mills, Inc., vs. SSS (GR No. L-33205 [1987])
B.
1.
2.
EQUITY SECURITIES
Generally - Garcia vs. Lim Chu Sing, 59 PHIL 562
1.
Issuance of Shares
a.
Certificate of Stock (Section 63 of the Corporation Code)
b.
Pre-Emptive Rights (Section 39 of the Corporation Code)
c.
Consideration (Section 62 of the Corporation Code)
National Exchange vs. Dexter, 51 PHIL 601
1. Par Value
2. No Par Value
d.
Payment of the Balance of the Subscription
(Sections 66 and 67 of the Corporation Code)
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e.
f.
g.
2.
C.
D.
2.
3.
4.
Ownership of Securities
Transfer of Securities
MANAGEMENT STRUCTURE
A.
CORPORATE GOVERNANCE
1.
Powers of the Board or Trustees
(Section 23 of the Corporation Code)
Gamboa vs. Victoriano, 90 SCRA 40 (1979)
Gokongwei vs. SEC, 89 SCRA 336, (1979)
a.
Must act as a body
(Section 25 of the Corporation Code)
Islamic Directorate vs. CA, GR No. 117897 [14 May 1997]
Ramirez vs. Orientalist, 38 PHIL 634 (1918)
Board of liquidators vs. Kalaw, 20 SCRA 987 (1967)
Acuna vs. Batac Producers, 20 SCRA 562 (1967)
Harden vs. Benguet Consolidated, 58 PHIL 1140 (1948)
b.
Executive Committee
(Section 35 of the Corporation Code)
B.
ROLE OF SHAREHOLDERS
Right to Vote and Attend Meetings (Section 89 of the Corporation Code)
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D.
5.
6.
Officers
(Section 25 of the Corporation Code)
Ongkingco vs. NLRC, 270 SCRA 613 [1997]
Tabang vs. NLRC, 266 SCRA 462 [1997]
Gurrea vs. Lezama, 103 PHIL 553 (1958)
PSBA vs. Leano, 127 SCRA 778 (1984)
Pearson & George vs. NLRC, 67 SCAD 698, 30 Jan 1996 (113928)
Reahs Corporation vs. NLRC, GR No. 117473 [14 April 1997]
Duties of Directors and Officers
a. Duty of Obedience
b. Duty of Diligence; Business Judgement Rule
(Section 31 of the Corporation Code)
Smith vs. Van Gorkom, 488 A.2nd 858 (1985)
Montelibano vs. Bacold-Murica, 5 SCRA 36 (1962)
Board of Liquidators vs. Kalaw, 20 SCRA 987 (1967)
c. Duty of Loyalty; Doctrine of Corporate Opportunity
(Section 31 and 34 of the Corporation Code)
d. Corporate Dealings
(Section 32 of the Corporation Code)
Mead vs. McCullough, 21 PHIL 95 (1911)
Prime White Cement vs. IAC, 220 SCRA 103 (1993)
e. Contracts between corporations with interlocking directors
(Section 33 of the Corporation Code)
IV.
FUNDAMENTAL CHANGES
A.
CHARTER AMENDMENTS
a. Articles of Incorporation (Section 16 of the Corporation Code)
b. By Laws (Section 48 of the Corporation Code)
B.
COMBINATIONS
a.Concept of Merger and Consolidation
PNB vs. Andrada Electric (GR No. 142936 [2002])
b. Procedure
- Plan of Merger or Consolidation
(Section 76 of the Corporation Code)
- Stockholders or Members Approval
(Section 77 of the Corporation Code)
- Articles of Merger or Consolidation
(Section 78 of the Corporation Code)
- Approval by the SEC
(Section 79 of the Corporation Code)
c. Effects of Merger or Consolidation
(Section 80 of the Corporation Code)
Associated Bank vs. CA (GR No. 123793 [1998])
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Filipinas Port Services, Inc. vs. NLRC (GR No. 97237 [1991])
C.
REHABILITATION
PVB Employees Union-N.U.B.E. vs. Vega (G.R. No. 105364 [2001])
PAL vs. Spouses Sadic (GR No. 146698 [2002])
RCBC vs. IAC (GR No. 74851 [1999])
D.
DISSOLUTION
a. Dissolution (Section 177 of the Corporation Code)
1. Voluntary
- No creditors are affected
(Section 188 of the Corporation Code)
- Creditors are affected
(Section 119 of the Corporation Code)
2. Involuntary Dissolution
(Section 121 of the Corporation Code, Section 6)
(Section 2 of Rule 66 of the Rules of Court)
Quo-Warranto
Republic vs. Bisaya Land Transportation, 81 SCRA 9
Government vs. Philippine Sugar Estate, 38 PHIL 15
Republic vs. Security Credit, 19 SCRA 58
3. Expiration of Term (Section 122 of the Corporation Code)
4. Shortening of Corporate Term
(Sec. 120 of the Corporation Code)
5. Non-Use of Corporate Charter and Continuous Inoperation
(Section 22 of the Corporation Code)
b. Liquidation of Corporate Assets
(Section 122 of the Corporation Code)
Buenaflor vs. Camarines Sur Industry, 108 SCRA 472
National Abaca vs. Pore, 2 SCRA 989
Tan Tiong Bio vs. CIR, 100 PHIL 86
Gelano vs CA, 103 SCRA 90
c. Methods of Liquidation
Board of Liquidators vs. Kalaw, 20 SCRA 987
China Banking vs. Michelin, 58 PHIL 261
Republic vs. Marsman, 44 SCRA 418
Alhambra Sugar vs. SEC, 24 SCRA 269
d.
V.
e.
Right to Proportionate Share of Remaining Assets upon Dissolution
Foreign Corporation
a. Definition (Section 123 of the Corporation Code)
Avon Insurance PLC vs. CA (GR No. 97642 [1997])
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