Corporations

• What is the definition of a corporation according to the Revised Corporation Code of the Philippines?

  It 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.
• What does it mean that a corporation is an artificial being?

  It means that a corporation cannot be held criminally liable for imprisonment but may be fined for corporate crimes.
• Why is a corporation not entitled to moral damages?

  Because it cannot experience physical suffering or sentiments like wounded feelings or mental anguish.
• What is the doctrine of separate personality in relation to corporations?

  It means that a corporation has a personality separate and distinct from its stockholders and affiliated companies.
• What does the limited liability rule imply for stockholders?

  Stockholders are liable only up to the extent of their capital contribution regarding the corporation's liabilities.
• What is the trust fund doctrine in relation to corporate assets?

  It means that the assets of the corporation are considered a trust fund reserved for payment of liabilities to creditors.
• What are the exceptions to the doctrine of separate personality under the doctrine of piercing the veil of corporate fiction?

  • Fraud cases: When corporate fiction is used to commit fraud.
  • Alter ego cases: When the corporation is merely an instrumentality of the stockholders.
  • Defeat public convenience cases: When used for tax evasion or to justify a wrong.
  • Equity cases: In labor cases to promote social justice.
• How is a corporation created according to the Revised Corporation Code?

  A corporation is created by operation of law for private corporations or by enactment of special law for public corporations.
• What does the 1987 Constitution state about the creation of corporations?

  Only public corporations may be created by special law, while all private corporations must be created by operation of general corporation law.
• What is the concession theory in relation to corporations?

  It means that a corporation owes its existence to the law and the state, and its powers and liberties are fixed by its charter.
• What is the right of succession in the context of a corporation?

  It allows a corporation to continue existing despite the death of its founders, as heirs inherit the shares of their predecessors.
• What is the corporate term according to the Revised Corporation Code?

  A corporation shall have perpetual existence unless its articles of incorporation provide otherwise.
• What happens if a corporation's term has expired?

  The corporation may apply for revival of its corporate existence, along with all rights and privileges under its certificate of incorporation.
• What is required for the revival of a corporation's term?

  The application for revival must be approved by the Commission, and a certificate of revival will be issued.
• What are express powers of a corporation?

  Express powers are those expressly provided, enumerated, and granted by the Corporation Code or special law to a corporation.
• What is one of the express powers of a corporation?

  To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and deal with real and personal property.
• What are implied or necessary powers of a corporation?

  Implied powers are those inferred from or reasonably necessary for the exercise of the provided powers of the corporation.
• What are incidental or inherent powers of a corporation?

  Incidental powers are those that attach to a corporation at the moment of its creation without regard to its expressed powers.
• What are ultra vires acts or contracts?

  Ultra vires acts are acts committed outside the object for which a corporation is created as defined by the law of its organization.
• What is the status of ultra vires acts by the corporation?

  • Illegal per se: Null and void.
  • Failure to comply with voting formality: Null and void but may be barred by estoppel.
  • Outside primary and secondary purposes: Voidable on the part of the other party.
• What is the status of ultra vires acts by corporate officers?

  • Illegal per se: Null and void.
  • Unauthorized acts: Unenforceable but may become enforceable through:
  • Express or implied ratification by the corporation.
  • Doctrine of estoppel.
  • Doctrine of apparent authority of the corporate officers.
• What are the advantages of forming a corporation?

  • Continuity of existence.
  • Limited liability for investors.
  • Strong juridical personality.
  • Legal capacity to act as a distinct unit.
  • Centralized management.
  • Ease in transferability of shares.
  • Ease in raising funds.
• What are the disadvantages of forming a corporation?

  • High cost of formation.
  • Little voice of stockholders in management.
  • Weakened credit rating due to limited liability.
  • Subject to greater governmental regulation.
  • More taxes.
• What is a public corporation?

  A public corporation is created by special law for public purposes.
• What is a municipal corporation?

  A municipal corporation is a public corporation created by special law for the governance of a particular local territory.
• What is a government-owned and controlled corporation?

  It is a public corporation created by special law for public purposes but performing proprietary or commercial functions.
• What is a private corporation?

  A private corporation is created by operation of law for private interest.
• What is a civil corporation?

  A civil corporation is a private corporation created for profit or business.
• What is a quasi-public corporation?

  A quasi-public corporation is a private corporation owned by private individuals but performing an essential governmental function.
• What is a corporation by prescription?

  A corporation by prescription is created by lapse of time and obtains juridical personality without a franchise or filing articles of incorporation.
• What is the difference between a civil corporation and an eleemosynary corporation?

  A civil corporation is created for profit, while an eleemosynary corporation is created for charity.
• What is a corporation sole?

  A corporation sole is a religious corporation with a single corporator.
• What is a corporation aggregate?

  A corporation aggregate is a religious corporation governed by a Board of Trustees.
• What is the definition of a corporation according to the Revised Corporation Code of the Philippines?


  A corporation is an artificial being created by operation of law.
• What are the main attributes of a corporation?


  • Right to purchase, hold, and deal with properties
  • Ability to issue and sell stocks
  • Right to enter into mergers or consolidations
  • Authority to sue and be sued
  • Right of succession
  • Ability to adopt articles of incorporation and by-laws
• What powers does a corporation have regarding real and personal properties?


  A corporation can purchase, receive, hold, convey, sell, lease, pledge, mortgage, and deal with properties.
• What is the difference between stock and non-stock corporations?


  Stock corporations issue and sell stocks, while non-stock corporations admit members without issuing stocks.
• What is the right of succession in a corporation?


  It is the ability of a corporation to continue its existence despite changes in ownership or management.
• What are implied or necessary powers of a corporation?


  Implied or necessary powers are those inferred from or reasonably necessary for the exercise of the provided powers of the corporation.
• What are incidental or inherent powers of a corporation?


  They are powers that attach to a corporation at the moment of its creation without regard to its expressed powers.