Cimatu – Corporation Law
COMPARATIVE REVIEWER OF
CORPORATION CODE (B.P. 68) & REVISED
CORPORATION CODE (R.A. 11232)
Caveat Lector:
Concepts and principles in the Corporation Code are
generally reflected and remain the same in the Revised
Corporation Code. Be that as it may, due to the
enactment of a new law, certain topics may need to be
elucidated which cannot be tackled by the author since
new topics may be best complemented and explained
with SEC IRR’s.
Legend:
@ : Atty. Amado Tayag’s comments
# : Author’s comments
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I. GENERAL PROVISIONS
PRELIMINARY CONSIDERATIONS
History of Philippine Corporate Law
The Philippines’ first general law on corporations
was the Corporation Law which was then repealed by
Batas Pambansa Blg. 68, otherwise known as the recently
defunct Corporation Code.
Prior to such enactment of a general law with
regard to corporations, such entities are not recognized.
The closest form of organization which comes close to
this artificial being under Spanish rule is cuentas y
participacion which closely resembles joint stock
companies.
The current general law on corporations is
Republic Act No. 11232, otherwise known as the Revised
Corporation Code which was signed into law by
President Rodrigo Duterte.
Source of Power, Rights, Duties, and Obligations
Section 16, Article XII of the 1987 Constitution
– while the Revised Corporation Code prescribes for the
B. A. Y. A. G. Notes – Beginners And Young Amateurs Guide to Corporation Law
mechanics regarding the “formation, organization, or
regulation” of private corporations, it is a mere delegation
by the 1987 Constitution to the Congress the same way it
commands for the legislation of a progressive taxation
law.
Purpose/s of Corporate Law (B.P. Blg. 68 and R.A.
11232)
PRINCIPAL PURPOSES – laws which applies to
business and commercial organizations likewise applies to
corporations.
 Definitive – defines the areas within which the parties
are free to allocate risk, control, and profit as they
wish.
Such includes but is not limited to rights, powers,
obligations, and duties of the corporation and its
composition.
 Statutory – prescribing allocation of elements in
absence of agreements.
 # & @: Economic Policy – the main purpose as to
why the Revised Corporation Code was enacted was
for the ease of doing business here in the Philippines
that seeks to support small and medium enterprises
(SME’s) and attract Foreign Direct Investments
(FDI’s) apart from Foreign Portfolio Investments
(FPI’s) that are easily liquidated and drastically affects
the economic standing of the State.
Supplemental Purposes – as proposed and observed by
the author (Aquino)
 Constitutive –
1. The law seeks to define, limit, and fix the powers
of directors and officers;
2. Declare rights and liabilities of shareholders and
members; and
3. Prescribe conditions wherein corporations may
only conduct legal business.
 Cimatu – Corporation Law
 Regulatory – the law seeks to regulate the:
1. Relations between and among stockholders,
directors, officers, and creditors;
2. Mechanisms between such members or groups
in the corporation, such as mediation or
arbitration.

 Social and Economic Policy – the author observed

that the legislator (Ferdinand Marcos) had the view that
the Corporation Code was enacted with the public
interest in mind, in order that the formation of
corporations and doing business thereof will promote
the social and economic development.

Application of the Revised Corporation Code (with

reference to the Corporation Code)

GR: The Corporation Code applies to all types of private

corporations with regard to regulations.

XPNs: Banks which are governed by the General

Banking Law and New Central Bank Act; Insurance
companies are governed by the Insurance Commission by
virtue of the Insurance Code, etc.

An artificial being added in the Revised Corporation

Code are pre-need companies which is governed by the
Pre-Need Code in conjunction with the Corporate Law.

Pre-need companies are establishments registered with

the Insurance Commission that offers plans or contracts
for the benefit of the planholders for the performance of
a future service or payment of a money on a latter date.

Theories/Bases of Corporation Law

 Concession Theory -
CORPORATION DEFINED ——

B. A. Y. A. G. Notes – Beginners And Young Amateurs Guide to Corporation Law