Intro

• The inadequacy of both the sole proprietorship and partnership to raise the needed large amount of capital resulted in the development of the corporate form of an organization.
• Attributes like being able to trade stocks and shareholders being able to sell their interest, retire, or die without disrupting business activities allow corporations to be an enduring type of business.
• By incorporating, the organization communicates stability and permanence to its clients, vendors, and investors. Corporate form is not easily dissolved.
• RA. 11232 - The Revised Corporation Code of The Philippines


  Approved last Feb. 20, 2019 and repealed the Batas Pambansa Blg. 68 or the "The Corporation Code of the Philippines"
• Section 2 of the New Code defined CORPORATION as 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.
• Advantages of a Corporation

  1. Continuous existence.
  2. Transfer of ownership stocks can be transacted without the consent of other shareholders.
  3. Owners have limited liability.
  4. Financing is easier to obtain.
  5. Well adapted to large-scale business that requires large investment of capital.
  6. Efficiency and flexibility in its management because of its ability to hire the best managerial talent. Its management is centralized in the board of directors.
  7. The shareholders are not general agents of the business.
• Disadvantages of The Corporation

  1. Complicated & costly to organize
  2. Its credit is weakened by the limited liability of the shareholders.
  3. Subject to a greater degree of governmental control & supervision.
  4. The shareholders' voting rights have become theoretical due to the use of proxies and widespread ownership.
  5. The power struggle between majority & minority shareholders would usually result in the overruling of the minority in policy-making, etc.