Revised Corporation Code - RA 11232

• Section 1 Title of the Code – This code shall be known as the “revised corporation code of the Philippines”
• The present Revised Corporation code (R.A No. 11232), took effect on February 23, 2019.
• Section 2. Corporation Defined – A 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 incidental to its existence.
• Corporation is a juridical entity vested with a legal personality separate and distinct from those acting for and in its behalf and, in general from the people comprising it.
• Corporation has a personality separate and distinct from the persons composing it, as well as from any other legal entity to which it may be related
• Not every stockholder or officer can bind the corporation considering the existence of a corporate entity separate from those who compose it.
• The corporate veil will justifiable be impaled only when it becomes a shield for fraud, illegality or inequity committed against third persons.
• Characteristics of Corporation: It is artificial being; Created by Operation of Law; It has the right of succession; and It has powers, attributes, and properties expressly authorized by law or incidental to its existence.
• Government owned or controlled corporation refers to any agency or organized as stock or non-stock corporation, bested with functions relating to public needs whether governmental or proprietary in nature, and owned by the government directly through its instrumentalities either wholly, or, here applicable as in the case of stock corporation, to the extent of at least fifty-one percent of its capital stock.
• For an Entity to be considered as a GOCC, It must either be organized as a stock or non-stock corporation. Two requisites to be classified as Stock Corporation: (1) that is has capital stock divided into shares, and (2) that it is authorized to distribute dividends and allotments of surplus and profits to its stockholders.
• If only one out of two requisite is present, it cannot be properly classified as a stock corporation. As for a non-stock corporation, they must have members and must not distribute any part of their income to said members.
• Piercing the veil of corporate fiction It is basic in Corporation law that a Corporation is a juridical entity vested with a legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it.
• The corporate veil should not and cannot be pierces unless it is clearly established that the separate and distinct personality of the corporation was used to justify a wrong, protect fraud, or perpetrate a deception.
• Factors for the application of the doctrine of piercing the corporate veil: (1) Stock ownership by one or common ownership of both corporations; (2) Identity of directors and officers; (3) The manner of keeping corporate books and records; and (4) Methods of conducting the business.
• Elements of piercing the veil of the corporate fiction can only be allowed if the following elements concur:

  1.       Control – not mere stock control, but complete domination – not only of finances, but of policy and business practice

  2.       Such control must have been used by the defendant to commit a fraud or a wrong to perpetuate the violation

  3.       The said control and breach of duty must have proximately caused the injury or unjust complained of.
• In applying the “Instrumentality” or “alter ego” doctrine, the court are concerned with reality, not form, and with how the corporation operated and the individual defendant’s relationship to the operation,
• Succession (Artificial Succession) The continuation of a corporation's legal status despite changes in ownership or management.
• A Corporation has no power except those expressly conferred on it by the Corporation Code (or Special Laws) and those that are implied or incidental to its existence.
• A corporation exercises (1) Expressly (2) Implied (3) Incidental powers through its board of directors and/ or its duly authorized officers and agents
• Property acquired by a corporation is the property of a corporation and not the property of stockholder or members.
• Section 3. Classes of corporations - corporations formed or organizes under this code may be stock or non-stock corporations.
• Stock corporations are those which have capital stock divided into shares and are authorized to distribute to the holders of such shares, dividends, or allotment of surplus profits on the basis of the shares held.
• A Non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers.
• Public corporation is a Corporation organized for the government of a portion of the state for the general good and welfare.
• Private corporation is a Corporation formed for some private purpose, benefit or end.
• Government-owned or controlled corporation A corporation owned by the government directly or through its instrumentalities either wholly or, where applicable as in the case of stock corporation, to the extent of at least 51% of its capital stock.
• Quasi-Public Corporation is a private corporation which has accepted from the state the grant of franchise or contract involving the performance of public duties but which is organized for profit.
• De jure corporation is a corporation created in a strict or substantial conformity with the mandatory statutory requirements for incorporation and the right of which to exist as a corporation cannot be successfully attacked or questioned by any party even in a direct proceeding for that purpose by the state.
• De Facto corporation, The due incorporation of any corporation claiming in good faith to be a corporation under this code, and its right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such corporation may be a party.
• Corporation by estoppel, All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof.
• Corporation by prescription, one which has exercised corporate powers for an indefinite period without interference on the part of government
• Domestic corporation is a corporation incorporated under the laws of the Philippines.
• Foreign corporation A corporation formed, organized or existing under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state.
• Open corporation is a corporation which is open to any person who may wish to become a stockholder or member thereto.
• Close corporation is one whose articles of incorporation provide that: (1) All the corporation's issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons not exceeding 20; (2) All the issued stock of all classes shall be subject to one or classes ,ore specified restriction on transfer; and (3) The corporation shall not list in any stock exchange or make public offering of any of its stock of any classes.
• Parent or holding corporation is a corporation that hold stocks in another corporation for purposes of control
• Subsidiary Corporation A corporation more than 50% of the voting stock of which is controlled directly or indirectly by another corporation, which thereby becomes its parent corporation
• Corporation aggregate is a corporation consisting of more than one member.
• Corporation sole is a corporation consisting of only one member for the purpose of administering and managing, as a trustee, the affairs, property and temporalities of any religious denomination, sect or church.
• Ecclesiastical corporation is a corporation organized for religious purpose.