[ REPUBLIC ACT NO.

11232 ]  A corporation cannot act alone, it

requires an agent in order to perform an
AN ACT PROVIDING FOR THE REVISED
act
CORPORATION CODE OF THE PHILIPPINES
 COMPONENTS OF CORPORATION:
o Stockholders

SECTION 1: Title of the Code. o Board of Directors - vested with the

right to manage the corporation.
This Code shall be known as the “Revised
o Corporate Officers
Corporation Code of the Philippines”
 Unlike to the partnership, the partners
The Old Corporation Code is considered as has the right to manage the partnership as
B.P. (Batas Pambansa) Blg. 68. long as there is no agreement to the
contrary
 But in the case of the corporation, the one
SECTION 2: Corporation Defined who is given the right to manage the affairs
of the corporation is the Board of
A corporation is an artificial being created
Directors
by operation of law, having the right of
 So therefore, the corporation is an artificial
succession and the powers, attributes, and
being, if there is an act of the Board of
properties expressly authorized by law or
Directors, as long as the act of the Board
incidental to its existence.
of Directors is in line with the purpose of
Section 2 provides the definition at the same the corporation, that is considered as an
time the attributes of the corporation. act of the corporation

What is a corporation? 2. The corporation is created by operation of

law
It is an artificial being created by operation of
 In your corporation, a corporation can
lawhavomg the right of succession and the powers,
only be created if the law authorizes its
attributes and properties expressly authorized by law
creation
AND incidental to its existence. --- Hindi na OR yung
 If in case the law allows the probation of
ginamit.
the corporation
So basically under the definition, it provides  A consent coming from the state is
to you the following attributes of the corporation: manifested by the enactment of the
Revised Corporation Code
1. The corporation is an artificial being.
 Without that Revised Corporation Code
 So basically a corporation is not a natural
neither the Old Corporation Code, there
person.
is no corporation to exist under the
 It is an artificial being/artificial person so
jurisdiction of the state
that artificial person cannot act without
 So therefore, a corporation, since it is
an agent the same with your partnership.
created by the operation of law, it
 requires the consent of the state and
that consent is manifested by the
enactment of the Revised
Corporation Code
 Without the Revised Corporation Code,
there is no corporation to speak of
 So therefore, if in case the creation of
the corporation requires the consent of
the state, it is in the same manner that
the dissolution of the corporation
requires the consent of the state
 Unlike in your partnership, you can
create the partnership by the mere
agreement of the partners and the
dissolution of the partnership may be
dissolve through the agreement of the
partners
3. The corporation has the right
succession
 Under the OLD CORPORATION
CODE, the corporation exist for period
of 50 years subject to a renewal for
another 50 years
 Under the REVISED CORPORATION
CODE, a corporation now has a
perpetual existence – unlimited nayung
life ni corporation under the RCC
 So if there is a right of succession,
basically it embodies the Principle of
Perpetual Succession
 PRINCIPLE OF PERPETUAL
SUCCESSION – The corporation
remains to exist not withstanding the
fact that there is a debt, there is a
withdrawal, there is a resignation of any
of the components of the corporation –
Kung etoyung Board of Directors,
etosina Stockholders, not withstanding
the fact that there is already a
withdrawal of the Board of Directors
there is a resignation of any of the
Board of Directors, there is no change
of the corporate entity, there is no
change of the corporate status. The
corporation remains to exist
 Kahitnawalanalahatsina Board of
Directors, Stockholders at Corporate
Officers, the corporation remains to
exist
4. The corporation has the powers, attributes
and properties expressly authorized by
law AND incident to its existence.
 That is basically theTHEORY
OFSPECIAL AND LIMITED
CAPACITIES – The corporation can
of only act and only exercise the powers
that are granted to it by the law
 If the law provides these power, that
corporation can exercise the same. As
long as they can also exercise any other
powers as long as that exercise is in
relation to the exercise of the law of
the powers granted by the law
 If the law provides for the power that
can be exercised by the corporation, if
there is a power in relation to the
exercise of that power granted by the
law, that is otherwise known as the
incidental power of the law which is
incident to the existence of the
corporation or which is required to
exercise the general power of the
corporation
 So basically, under the 4th attribute,
there is the so called as the separate
 juridical personality of the corporation--Corporation A, and
corporation, the same with partnership the asset of that corporation is not
 SEPARATE JURIDICAL sufficient to pay all the corporate
PERSONALITY OF THE liabilities, walang magagawa jan si
CORPORATION -- Property of the creditor, "he cannot run after the
corporation is the property of Board of Directors, he cannot
corporation, the act of corporation is the proceed against the
act of corporation, the obligation of the Stockholders". WHY? Because of
corporation is the obligation of the the DOCTRINE OF SEPARATE
corporation PERSONALITY under your
 But however if that is the obligation of corporation law
the Board of Directors in his personal  DOCTRINE OF SEPARATE
capacity that is the property of the PERSONALITY
Stockholders that remains to be the o The act of the corporation remains
property of the Stockholders that with the corporation, the obligation
remains to be the obligation of the of the corporation remains with the
Board of Directors that remains to be corporation, and the properties of
the act of the Stockholders, while there the corporation remains with the
is a separate juridical personality corporation
between the corporation and the o EXAMPLE: If A is the creditor of the
components of the corporation corporation; B,C, and D are the
 So there is a separate juridical Board of Directors; E and F are the
personality, what is the difference of a Stockholders; and the asset of the
corporation and a partnership then? corporation is 2,000,000, the
o In a PARTNERSHIP, if there is a corporate obligation amounts to
contractual obligation and 10,000,000. Ang mahahabol lang ni
liability then the liability of the A ay 2,000,000. And the Board of
partners is considered PRO-RATA Directors and the Stockholders
(equally) and SUBSIDIARY cannot be held liable to the amount
o So in a case of partnership, may of 8,000,000 (10,000,000-
utang si partners, si partnership and 2,000,000).
the partnership asset is not sufficient o With regard to the property, neither
to pay all the corresponding the Board of Director nor he
obligations of the partnership, then, Stockholders can dispose the
the partners are liable pro-rata and property. It must be dispose
subsidiary according to the authority of the
o But however with respect to the corporation
CORPORATION, if this is your
 o So if in case, may utang si
Stockholder, yung utang ni
DOCTRINE OF PIERCING THE VEIL OF
Stockholder to a separate creditor, CORPORATE ENTITY
he cannot use the properties of the Corporation A
corporation in payment of that If there is a presence
obligation. WHY? because that is of the Doctrine of
Piercing the Veil of
the property of the corporation the Corporate Entity,
 As a contrary, there is the DOCTRINE that veil of corporate
Stockholders
fiction is pierced in V
OF PIERCING THE VEIL OF order to remove that E Board of Directors
I
CORPORATE ENTITY veil/division and now L
Corporate Officers
the liability is directly
o The corporate fiction may be pierced attached not only to the
or the veil of the corporate fiction Corporation A but as
well as to
may be pierced in order to attach the Stockholders, Board of
liability directly to the Stockholders Directors and
Corporate Officers
and the Board of Directors
o So basically if this is Corporation A
 When do you apply the Doctrine of
DOCTRINE OF SEPARATE PERSONALITY Piercing the Veil of Corporate Fiction?
Corporation A 1. It is applicable if the purpose of the
Creditor X corporation is to DEFEAT PUBLIC
Liability of Corporation CONVENIENCE
A, it remains to be the
liability of Corporation A  Example: Corporation A, the
X can only demand a Stockholders, the Board of
payment to the extent of
2,000,000 Directors, corporate officers they
Otherwise X has to wait created this Corporation A in order
in order for the Stockholders to evict the obligation, in order to
Corporation A to be
rehabilitated (kasi may Board of Directors
prevent the payment of the
corporate rehabilitation Corporate Officers
yan eh, if the corporation obligation, in order to evade the
suffering from losses)
responsibilities arising from the law.
So therefore, X can only
get 2,000,000 and X  So therefore that is for the purpose
cannot demand the of to defeat public convenience,
remaining 8,000,000 from
the Stockholders, Board and since the purpose is to defeat
of Directors and the
Corporate Officers
the public convenience, you
because of the Doctrine pierced now the corporate veil and
of Separate Personality
the liability is attached directly
attached to the Stockholders,
Board of Directors and Corporate
Officers. WHY? Because these 3
 components are considered as a Corporation B and Corporation B is
mere association of persons. used as a tool or as a vehicle to
2. Doctrine of Piercing the Veil is commit the commission of the
applicable if in case of FRAUD crime therefore you consider that
CASES Corporation B is an alter-ego of
 Example: Ang nagtayo pala ng Corporation A and therefore
Corporation A ay sina liabilities are directly attached to the
Stockholders, Board of Directors at both of Corporation A and
Corporate Officers para i-defraud si Corporation B
Creditor X (nagkaroon ng
BASTA TANDAAN NIYO:
investment scam). So the purpose
of corporation A is to invest.  As long as an act is violative of the right of
 X, Y and Z, they relied upon the the creditor, you can pierce the veil of the
Corporation A. They invested corporate entity in order to directly attached
money because this is an the liabilities to the Stockholders, Board of
investment scheme but it turned out Directors and Corporate Officers.
that the purpose of this investment  WHY? Because if the presence of the
is to defraud X, Y and Z. They just piercing of the veil of the corporate entity,
want to get the money of X,Y,Z, Stockholders, Board of Directors and
they want X,Y,Z to invest and after Corporate Officers they are considered as a
that they will get the money of X,Y,Z mere association of persons.
 So there is a Fraud Case and  So basically a corporation is not capable of
therefore you pierced the veil of making an intent.
corporate fiction and then you apply o A corporation cannot commit a crime
the liability to the Stockholders, because corporation is not capable of
Board of Directors and Corporate giving an intent.
Officers o So therefore if a corporation
3. ALTER-EGO CASES committed a crime, Stockholders,
 The corporation is used as an Board of Directors and Corporate
adjunct (meaning: connected or Officers are the ones who are liable
added to something, typically in an o But however under special laws, a
auxiliary way. tagalog: dagdag), as corporation may be held criminally
a conduit (meaning: a channel for liable. But the penalty to be imposed
conveying) or an alter-ego of the against the corporation is not
Stockholders, Board of Directors imprisonment (hindi naman
and Corporate Officers makukuklong si corporation DUH!!).
 OR if there is a Corporation B, The penalty to be imposed in case
Corporation A creates a the criminal liability under speacial
 laws is fine or the revocation of the established corporation, then
corporate franchise San Miguel can demand for
 Example: Trafficking, the payment of moral
corporation is used to damages.
commmit human trafficking.
So therefore under that
special law, on anti- human DIFFERENCE OF PARTNERSHIP AND
trafficking law, the corporation CORPORATION
may be held criminally liable
PARTNERSHIP CORPORATION
but the liability is limited to
Mere agreement
fines and revocation of the Created by Operation of law
of the parties
corporate franchise.
The number
o Under the Revised Corporation of person 2 or more Minimum of 1
composing
Code, a corporation cannot be held
Issuance of the
criminally liable
certificate of
 A corporation cannot suffer moral Commence Articles of
ment of the Corporation by
damages because the corporation has no Execution of
juridical the Securities
feelings. – It cannot suffers sleepless nights, partnership and Exchange
personality
contract Commission
it cannot suffers serious anxiety, and it (When does
(If no certificate of
it begin)
cannot suffers mental anguish because it is AOI, the
corporation does
not a natural person. not exist)
o BUT EXCEPTION TO THE RULE: If Who can Board of
All the partners
the corporation has a reputation, a manage Directors

well-established corporation, and that Stockholders,

Board of
corporation is defamed (meaning: to Directors, and
harm or diminish the reputation of)/is Pro-Rata and Corporate
Liabilities
Subsidiary Officers cannot
besmirch (meaning: to make dirty), be held liable for
WHAT IS THE RULE THEN? The the corporate
liability
corporation can ask for the payment No
of damages—moral damages Succession (Dissolution kasi Yes
pag namatay)
o GENERAL RULE: A corporation Dependent
cannot demand for the payment of upon the Perpetual
Term
agreement of (Unlimited life)
moral damages. WHY? Because the the parties
corporation has no feelings but Requires the
Mere agreement
Dissolution consent of the
exception to the rule (yung nakatype of the parties
state
sa taas madurr)
 Example: Siniraan mo si San
Miguel Corporation, a well-
SECTION 3: Classes of Corporations however if the 2nd requisite is missing,
meaning if in case that corporation is
Corporations formed or organized under
not allowed to distribute dividends,
this Code may be stock or nonstock
you consider that as a nonstock
corporations. Stock corporations are those
corporation
which have capital stock divided into shares and
o So basically 2 requisites before you
are authorized to distribute to the holders of
can identify if that corporation is a
such shares, dividends, or allotments of the
stock or nonstock corporation – Basta
surplus profits on the basis of the shares held.
kapag may isang hindi nasunod sa
All other corporations are nonstock
requisites, kahit pa may nasunod na
corporations.
isa, matic nang nonstock corporation
It highlights the definition of stock yon!!
corporation. Basically as the existence of stocks,  Other classifications of corporation
corporation is classified as stock corporation and  As for the NUMBER OF PERSONS
nonstock corporations. composing the corporation:

What is stock corporation? 1. Corporation Aggregate

- Consists of 2 or more
 2 requisites that are required in the case
2. Corporation Sole
of stock corporation:
- Basically it is a religious corporation
1. A corporation that issues capital stock
that is governed by an
divided into shares
archbishop/bishop
2. It authorizes the corporation to distribute
- Sole = nagiisa
dividends, shares, and allotments of the
 As to the LAWS of the corporation
surplus profit on the basis of the shares
1. Domestic Corporation
held by the Stockholders
- It is a corporation incorporated under
 On the other hand, if in case there’s an
the Philippine law
absence of any of the requisites then it is
- If you incorporate that under the
considered as a nonstock corporation.
Revised Corporation Code that is
What is a nonstock corporation? considered a Domestic Corporation
- Good example is the San Miguel
 Basically these are corporation that are
Corporation
establishes for the purposes of educational,
2. Foreign Corporation
for civic purposes, for religious purposes
- It is formed, organized, and existing
 But however, in some cases there are
under any other laws other than the
nonstock corporation that issued a capital
Philippine laws and whose laws
stock
allows the Filipino Citizens and the
o Merong mga nonstock corporation
Filipino Corporations who conduct
that they issue capital stock but
business in their own laws
 - Example: Merong corporation dito,
that corporation is formed or
organized or existing under
Singaporean law but at the same time
the law of the Singapore allows
Filipino corporation to establish
corporation under their laws and
jurisdiction. That is considered a
Foreign Corporation. – Because if in
case it does not allow the Filipino
citizen or Filipino corporation to
establish corporation in Singapore
therefore that corporation under the
law of the Singapore cannot be given
the right to establish corporation here
in the Philippines because there is a
Principle of Reciprocity – Under
your international arrangement we
have the Principle of Reciprocity,
before we allow Singaporean citizen
or Singaporean corporation to
establish corporation to exist
corporation under the Philippine law
dapat inaallow din tayo sa lugar nila
otherwise we can deprive them to do
so.
 As to the MANNER of creation
1. Corporation created by Special Law
- So if there’s a corporation created by
the Special Law that the law or the
checker that creates that corporation
governs the corporation
- Good example is Philippine
Statistic Authority (PSA)
2. Corporation created under General
Law
- If the corporation is created under the
Old Corporation Code or either the
Revised Corporation Code that is
considered as corporation created
under general law
- Good example is Coca-Cola
3. Corporation by Prescription
- By the lapse of time, that entity is now
considered a corporation
- By the lapse of time, it has acquired
all the rights and liabilities of a
corporation
- Good example is Roman Catholic
Church
 As to LEGAL STATUS
1. De Jure Corporation
- It has complied all the requisites of
the law
2. De Facto Corporation
- It exist in fact and it exist in law
- It has colourable compliance of all the
requirements of the law
 As to the CONTROL / RELATIONSHIP
1. Parent Corporation
- That corporation has a control over
another corporation whether directly
or indirectly or even through an
intermediary
2. Subsidiary Corporation
- That is a corporation more than 50%
of the voting stock is owned or
controlled directly or indirectly by
another corporation
- Example: Si Corporation A, eto si
Corporation B. Yung voting stock
more than 50% voting stock of
Corporation B is under the control,
whether directly or indirectly, of
Corporation A, that is a subsidiary
corporation
 3. Affiliated Corporation limit only the availment of the shares
- Kapag less than 50% (Opposite ng to the public
Subsidiary Corporation)
 As to the FUNCTION
1. Public Corporation SECTION 4: Corporations Created by Special

- It is formed or organized under a Laws or Charters

portion of the state Corporations created by special laws or

2. Private Corporation charters shall be governed primarily by the
- It is for private purposes provisions of the special law or charter creating
- Like Coca-Cola & San Miguel them or applicable to them, supplemented by the
3. Quasi-Public Corporation provisions of this Code, insofar as they are
- A corporation engaged in private applicable.
business but affected with public
The corporation, it’s either created by the
interest
Special Law or the General Law.
- Good example is Philippine
National Railway (PNR) -- It is  Corporation created by Special Law
actually operated by a private entity - It is governed by the charter or by the
but however it is affected with public law that creates that corporation
interest - Good example is Philippine
- Another good example is Meralco & Statistic Authority (PSA),
Maynilad Philippine Ports Authority (PPA)
4. Corporation Going Private  Corporation created by General Law
- There is a restriction as to the offering - Created under the Old Corporation
of the shares of the corporation Code or under the Revised
- Example: You are a Corporation and Corporation Code
This is Corporation A, You will issue
stocks, You will issue shares but I will
limit only the availment of the shares SECTION 5: Corporators and Incorporators,
to a following persons. Halimbawa Stockholders and Members
ito elerista(?), ditto ko lang sa kanila
Corporators are those who compose a
iissue yung shares
corporation, whether as stockholders or
5. Corporation Going Public
shareholders in a stock corporation or as
- There is NO restriction as to the
members in a nonstock corporation.
offering of the shares of the
Incorporators are those stockholders or
corporation
members mentioned in the articles of
- Example: You are a Corporation and
incorporation as originally forming and
This is Corporation A, You will issue
stocks, You will issue shares but I will
composing the corporation and who are as incorporators of that corporation
signatories thereof. unless you dissolved the corporation
and create another one corporation
 Who are the components of the
corporation?
1. Stockholders
TANDAAN!!
2. Board of Directors
3. Corporate Officers  One of the distinct features of the

 Who are the corporators then? corporation, if you purchase 1 share then

1. Stockholders you are considered as the owner of that

- Stock Corporation corporation

- Coca-Cola (Person composing it are  If you buy 1 share of Coca-Cola, you are

called Stockholders) considered as the owner of the Coca-Cola

2. Members until and unless there is a dissolution

- Nonstock Corporation  Pag may 1 share ka, pwede ka maelect as

- Gawad Kalinga Nonstock Board of Directors

Corporation Entity (Person

composing it are called Members)
 Who is an incorporator then?
- The one who originally formed and
composed the corporation
- The one who established the
corporation
- Under the corporation you have the
Articles of Incorporation (AOI), So
if in case under your AOI it is provided
there the name of the incorporators,
can you change that? NO! BAWAL!
Kase sila yung bumuo ng corporation
kaya hindi dapat sila mawala and that
is an Accomplished Path—that
cannot be change because they
remain to be the persons responsible
for the incorporation of that
corporation
- So if the AOI provides that the
incorporators are A,B,C,D,E and F,
you cannot change A,B,C,D,E and F