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Definition: Corporation is an artificial being created by operation of law, having the right of succession and the
powers, attributes and properties expressly authorized by law or incident to its existence. [Sec. 2. BP 68] ( See also
Section 2; Articles 44(3), 45, 46, and 1775, Civil Code. )

2. Tri-Level Existence of Corporation

(a) Aggregation of Assets and Resources

(b) Business Enterprise or Economic Unit

(c) Juridical Entity

Theory of Concession

A corporation being a creature of law owes its life to the state, its birth being purely dependent on its will.

Theory of corporate entity

A corporation is an association of individuals allowed to transact under an assumed name.

Creature of law


Art. XII Section 16. The Congress shall not, except by general law, provide for the formation, organization, or
regulation of private corporations. Government-owned or controlled corporations may be created or established by
special charters in the interest of the common good and subject to the test of economic viability.

Civil Code

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality
begins as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or member. (35a)

Art. 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating or
recognizing them.

Four Attributes of Corporation from Statutory Definition:

(a) A corporation is an artificial being

(b) Created by operation of law

(c) With right of succession

(d) Only has powers, attributes and properties expressly authorized by law or incident to its existence


an authorization granted by a government or company to an individual or group enabling them to carry out specified
commercial activities, for example acting as an agent for a company's products.

Sole Proprietorship - is a business structure owned by an individual who has full control/authority of its own and
owns all the assets, personally owes answers all liabilities or suffers all losses but enjoys all the profits to the
exclusion of others. A sole proprietorship must apply for a business name and be registered with the DTI-National
Capital Region (NCR). In the provinces, application may be filed with the DTI regional/provincial offices.

Partnership - Under the Civil Code of the Philippines, a partnership is treated as juridical person, having a separate
legal personality from that of its members. Partnerships may either be general partnerships, where the partners have
unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general
partners have unlimited liability and the limited partners have liability only up to the amount of their capital
contributions. It consists of two or more partners. A partnership with more than P3,000 capital must register with the
Securities and Exchange Commission (SEC).

Art. 1768. The partnership has a judicial personality separate and distinct from that of each of the partners, even in
case of failure to comply with the requirements of Article 1772, first paragraph. (n)

Art. 1772. Every contract of partnership having a capital of three thousand pesos or more, in money or property,
shall appear in a public instrument, which must be recorded in the Office of the Securities and Exchange
Art. 1775. Associations and societies, whose articles are kept secret among the members, and wherein any one of the
members may contract in his own name with third persons, shall have no juridical personality, and shall be governed
by the provisions relating to co-ownership. (1669)

Corporation - is composed of juridical persons established under the Corporation Code and regulated by the SEC
with a personality separate and distinct from that of its stockholders. The liability of the shareholders of a
corporation is limited to the amount of their share capital. It consists of at least five to 15 incorporators, each of
whom must hold at least one share and must be registered with the SEC. Minimum paid up capital is P5,000. A
corporation can either be stock or non-stock company regardless of nationality. Such company, if 60% Filipino-40%
foreign-owned, is considered a Filipino corporation; If more than 40% foreign-owned, it is considered a domestic
foreign-owned corporation.

Joint venture is defined as an association of persons or companies jointly undertaking some commercial enterprise;
generally all contribute assets and share risks. It requires a community of interest in the performance of the subject
matter, a right to direct and govern the policy in connection therewith, and duty, which may be altered by agreement
to share both in profit and losses. the acts of working together in a joint project.