Corporation

• Corporations are created by a General Law for private corporations and by a Special Law for public corporations.
• A private 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.
• A corporation is an artificial being with separate and distinct personality.
• A corporation is created by operation of law and enjoys the right of succession.
• A corporation has the powers, attributes and properties expressly authorized by law or incident to its existence.
• Corporate liquidation is the process by which all the assets of the corporation are converted into liquid assets in order to facilitate the payment of obligations to creditors, and the remaining balance, if any, is to be distributed to the stockholders or members.
• Upon finding by final judgment that the corporation committed or aided in the commission of securities violations, smuggling, tax evasion, money laundering, or graft and corrupt practices, and its stockholders knew, it is dissolved and its assets are liquidated.
• A corporation comes into existence upon the issuance of the certificate of incorporation and only then will it acquire juridical personality.
• Upon finding by final judgment that the corporation procured its incorporation through fraud, it is dissolved and its assets are liquidated.
• Upon finding by final judgment that the corporation was created for the purpose of committing, concealing or aiding the commission of securities violations, smuggling, tax evasion, money laundering, or graft and corrupt practices, it is dissolved and its assets are liquidated.
• Upon finding by final judgment that the corporation repeatedly and knowingly tolerated the commission of graft and corrupt practices or other fraudulent or illegal acts by its directors, trustees, officers, or employees, it is dissolved and its assets are liquidated.
• A dissolved corporation continues to be a body corporate for 3 years from the time it is dissolved for the purpose of liquidation or winding up its corporate affairs.
• A corporation is a legal or juridical person with a personality separate and a part from its individual stockholders or members due to the corporation's separate juridical personality.
• A corporation is not liable for the acts or liabilities of its stockholders or members and vice versa due to the corporation's separate juridical personality.
• When the veil of corporate fiction is used as a shield to defeat public convenience, justify wrong, protect fraud, or defend a crime, this fiction shall be disregarded and the individuals composing it will be treated identical.
• The capital stock, properties and other assets of a corporation are regarded as equity in trust for the payment of corporate creditors according to the Trust Fund Doctrine.
• Disloyalty of a Director occurs when a director, by virtue of such office, acquires a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, the director must account for and refund to the latter all such profits, unless the act has been ratified by a vote of the stockholders owning or representing at least two thirds (2/3) of the outstanding capital stock.
• Doctrine of Apparent Authority states that if a corporation knowingly permits one of its officers, or any other agent, to act within the scope of an apparent authority, it holds him out to the public as possessing the power to do those acts, and thus, the corporation will, as against anyone who has in good faith dealt with it through such agent, be estopped from denying the agent's authority.
• Interlocking Directors occur when a director in one corporation is also a director in another corporation.
• Three-Fold Duties of Directors include Duty of obedience, Duty of diligence, and Duty of loyalty.
• Business Judgement Rule states that courts will not interfere in the decisions made by the BOD as regards the internal affairs of the corporation unless such contracts are so unconscionable and oppressive as to amount to a wanton destruction of rights of the minority.
• Stockholdings exceeding twenty percent (20%) of the outstanding capital stock shall be considered substantial for purposes of interlocking directors.
• Self-Dealing Directors, Trustees or Officers states that a contract of the corporation with one (1) or more of its directors, trustees, officers or their spouses and relatives within the fourth civil degree of consanguinity or affinity is voidable, at the option of such corporation, unless all the following conditions are present: the presence of such director or trustee in the board meeting in which the contract was approved was not necessary to constitute a quorum for such meeting, the vote of such director or trustee was not necessary for the approval of the contract, the contract is fair
• A contract between two (2) or more corporations having interlocking directors shall not be invalidated on that ground alone, except in cases of fraud, and provided the contract is fair and reasonable under the circumstances, provided that if the interest of the interlocking director in one (1) corporation is substantial and the interest in the other corporation or corporations is merely nominal, the contract shall be subject to the provisions on self-dealing directors insofar as the latter corporation or corporations are concerned.
• A wasting asset corporation or an entity engaged in the extraction of a natural resource can legally return shareholders during the lifetime of the corporation according to the Wasting Asset Doctrine.
• Non-voting shares are shares without right to vote.
• The doctrine of Equality of Shares states that if the articles of incorporation do not provide for any distinction of the shares of stock, all shares issued by the corporation are presumed to be equal and enjoy the same rights and privileges and are also subject to the same liabilities.
• Shares of stock can be classified as common shares, preferred shares, voting shares, non-voting shares, par value shares, and no par value shares.
• Voting shares are shares with a right to vote.
• Eleemosynary refers to a corporation established for charitable purposes or those supported by charity.
• Par value shares are shares with a value fixed in the articles of incorporation and the certificates of stock.
• Civil refers to a corporation established for business or profit.
• Over-issued stock is stock issued in excess of the authorized capital stock.
• Shares of stock are units into which the capital stock is divided.
• A share of stock certificate is written evidence of that right or interest.
• No par value shares are shares having no par value.
• Common shares are the basic class of stock ordinarily and usually issued without extraordinary rights and privileges, and the owners thereof are entitled to a pro rata share in the profits of the corporation and in its assets upon dissolution and likewise in the management of its affairs without preference or advantage whatsoever.
• Shares in escrow are shares subject to an agreement by virtue of which the share is deposited by the grantor or his agent with a third person to be kept by the escrow agent until the performance of a certain condition or the happening of a certain event contained in the agreement.
• Preferred shares are shares with a stated par value which entitle the holder thereof to certain preferences over the holders of common stock.
• A share of stock represents the interest of the holder thereof to participate in the management of the corporation, to share proportionally in the profits of the business and, upon liquidation, to obtain an aliquot part of corporate assets after all corporate debts have been paid.