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

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.