PUBLIC

CORPORATION
• A Public Corporation is a corporation created by
the State as the latter’s own agency or
instrumentality to help it in carrying out its
governmental functions.
 Public Corporation and
Government Own or Control
Corporation
 PUBLIC CORPORATION
AS TO PURPOSE
1. Created for political purposes connected
with the public good in the
Administration of the civil government.
2. Formed and organized by the State and
may thereby exercise state powers such
as police power, taxation and eminent
domain.
3. Organized for the government or a
portion of the state.
GOVERNMENT OWN OR CONTROL
CORPORATION
Any agency organized as a stock or a non-stock
corporation, vested with functions relating to public
needs whether governmental or propriety in nature
and owned by the government directly or through its
instrumentalities either wholly, or, where applicable
in the case of stock corporation to the extent of
atleast fifty-one (51) percent of its capital stock.
Agencies of the state for limited purposes to take
charge of some public or state work, then than
community work.
 As to manner of creation

May be created or established by Congress

through
1. Special charters in the interest of the
common good; and
May only be created through status 2. Subject to the test of economic viability

Congress may createGOCCs either by

3. Special charters specific to each GOCC; or
4. One special enabling charter, applicable to
a class of GOCCs, which is applicable only
to local water districts
 AS TO PERSONALITY
Political subdivision of the Republic of Separate and distinct from the government.
the Philippines
Note: The Republic, like any individual, may
form a corporation with personality and
Note: When the law vests in a existence distinct from its own. The separate
government instrumentality corporate personality allows a GOCC to hold and
powers. The instrumentality does not possess properties in its own name and, thus,
become a corporation unless the permit greater independence and flexibility in
government instrumentality is its own operations
organized as a stock or non-stock The mere fact that the Government happens
corporation. It remains a government to te majority stockholder doea not make it a
instrumentality exercising not only public corporation.
governmental but also corporate
powers.
 CLASSIFICATION OF
PUBLIC CORPORATION
Public corporations may be classified into:
1. Municipal corporations- a body politic and corporate
constituted by the incorporation of inhabitants for
purposes of local government. It is established by law
partly as an agency of the state to assist in the civil
governmentof the country, but chiefly to regulate and
administer the local or internal affairs of the city, town or
district which is corporated.
2. Quasi- corporations- municipal organizations created as agencies
of the State for narrow and limited purposes but which merely
resemble corporations. They are not true corporations as they do
not possess the full range of corporate powers but are recognized
by status or immemorial usage, as person or aggregate
corporations.
Note: Quasi-corporation is distinct from quasi-public corporation.
Quasi- public corporations which are not strictly public, in the
sense of being organized for governmental purposes, but whose
operations contribute to the comfort convenience, or welfare of
the general public, such as telephone, gas ,water, electric lights,
and irrigation companies ; also known as “public service
corporations”
ELEMENTS OF A
MUNICIPAL
CORPORATION
A municipal corporation must have: (INIT)
1. Legal creation or Incorporation- the law creating or authorizing
the creation or incorporation of a municipal corporation.
2. A corporate Name- the name by which the corporation shall be
known;
3. Inhabitants- the people residing in the territory of the
corporation; and
4. Territory- the land mass where the inhabitants reside, together
with the internal and external waters, and the airspace above
the land and water.
- Municipal corporations may exist by prescription where it is
shown:
1. That the community has claimed and exercised corporate
functions,
2. With the knowledge and acquiescence of the legislative,
and
3. Without interruption or objection for period long enough
to afford title with prescription.
DUAL NATURE OF
MUNICIPAL
CORPORATIONS
Every local Government unit shall exercise powers
1. As a political subdivision of the national government, and
a. A municipal corporation has a governmental function
where it acts as an agent of the State for the government
of the territory and the inhabitants within the municipal
limits. It exercises by delegation , a part of the
sovereigntyof the state, including the use of legislative,
executive and judicial powers.
2. As an corporate entity representing the inhabitants of its territory,

a. A municipal corporation also has a private/ proprietary function

where it acts in a similar category as a business corporation,
performing functions not strictly governmental or political, those
exercised for the special benefit and advantage of the community