08 UST Golden Notes - Corporation.pdf - CORPORATION LAW CORPORATION LAW Q What are the distinctions partnership and corporation between A See Appendix D

08 UST Golden Notes - Corporation.pdf - CORPORATION LAW...

This preview shows page 1 - 2 out of 64 pages.

C ORPORATION L AW U N I V E R S I T Y O F S A N T O T O M A S F a c u l t a d d e D e r e c h o C i v i l A CADEMICS C HAIR : L ESTER J AY A LAN E. F LORES II V ICE C HAIRS F OR A CADEMICS : K AREN J OY G. S ABUGO & J OHN H ENRY C. M ENDOZA V ICE C HAIR FOR A DMINISTRATION AND F INANCE : J EANELLE C. L EE V ICE C HAIRS FOR L AY O UT A ND D ESIGN : E ARL L OUIE M. M ASACAYAN & T HEENA C. M ARTINEZ CORPORATION LAW Q: What are the distinctions between partnership and corporation? A: See Appendix D A. CORPORATION DEFINED Q: What is a corporation? A: An artificial being created by operation of law having the right of succession, and the powers, attributes and properties expressly authorized by law and incident to its existence. (Sec. 2) Q: May a corporation enter into a contract of partnership? A: GR : Corporations have no power to enter into partnership. Reason : Public policy. In a partnership, the corporation would be bound by the acts of the persons who are not its duly appointed and authorized agents and officers, which would be entirely inconsistent with the policy of the law that the corporation shall manage its own affairs separately and exclusively. XPN : The SEC allowed corporations to enter into partnerships with other corporations and individuals provided: 1. The authority to enter into partnership relation is expressly conferred by the Charter or the AOI and the nature of the business venture to be undertaken by the partnership is in line with the business authorized by the charter or the AOI. (SEC Opinions, Feb. 29, 1980, Dec. 1, 1993, and Feb. 23, 1994.) 2. The partnership must be a limited partnership and the corporation must be a limited partner 3. If it is a foreign corporation, it must obtain a license to transact business in the country. Q: Does a defective incorporation result into a partnership? A: The answer depends on whether or not there is a clear intent to participate in the management of the business affairs on the part of the investor. Parties who intends to participate or has actually participated in the business affairs of the proposed corporation would be considered as partners under a de facto partnership. On the other hand, parties who took no part notwithstanding their subscriptions do not become partners with other subscribers . (Pioneer Insurance v. CA, G.R. No. 84197, July 28, 1989) Q: May a corporation enter into a joint venture? A: Yes. It may enter into a joint venture with another where the nature of that venture is in line with the business authorized by its charter. (Aurbach v. Sanitary Wares Manufacturing Corporation, G.R. No. 75875, Dec. 15, 1989) Q: What are the distinctions between joint account and partnership? A: JOINT ACCOUNT PARTNERSHIP Has no firm name and is conducted In the name of the ostensible partner. Has a firm name. Has no juridical personality and can sue or be sued only in the name of the ostensible partner.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 64 pages?

  • Fall '16
  • james reyes

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture