San Beda University: College of LawNotes on Private Corporation LawCruz, J. | 2020I.Basic Principles 1 II.Nature & Attributes of Private Corporations. 2 III.Nationality of Private Corporations 4 IV.Doctrine of Separate Juridical Personality 6 V.Doctrine of Piercing the Veil of Corporate Fiction 6 VI.Articles of Incorporation 9 VII.Corporate By-Laws 11 VIII.Corporate Contract Law 12 IX.Shares & Capital Stock 14 X.The Board & Corporate Officers 19 XI.Stockholders & Members 24 XII.Corporate Powers & Capacity 33 XIII.Acquisitions & Transfers 37 XIV.Mergers & Consolidations 38 XV.Corporate Dissolution & Liquidation 39 XVI.Foreign Corporations 40 XVII.Non-stock Corporations 42 XVIII.Close Corporations 43 XIX.One Person Corporations 44 XX.Special Corporations 46 XXI.Powers of the SEC, Offenses, & Penalties 48 XXII.Miscellaneous Provisions 49 This endeavor is based on the following references: 1.Revised Corporation Code and other related laws; 2.Pertinent SEC Opinions, Memorandums, and Circulars; 3.Related and relevant jurisprudence; 4.Corporation Law Books of Aquino, De Leon, Ricalde, Soriano, Sundiang, and Villanueva; 5.Ateneo de Manila University: CLV Outline 2020; 6.San Beda University: 2019 Memory Aid on Corporation Law; and 7.The writer‖s personal notes on Corporation Law.While I did my best to guarantee the accuracy of those stated here, I apologize should there be any error included herein. This material is not intended to be used to replace the reading of the sources aforementioned.
Notes on Private Corporation Law Cruz, J. | 2020 Page1 HISTORICAL BACKGROUND 1.Sociedades Anónimas under the Spanish Code of Commerce: Sociedades anónimas were introduced in our jurisdiction in December 1888 with the extension to Philippine territorial application of Articles 151 to 159 of the Spanish Code of Commerce, which constituted the juridical entities with features of limited liability and centralized management; but they were more similar to the English joint stock companies than the modern corporations.1A sociedad anónima was considered a commercial partnership “where upon the execution of the public instrument in which its articles of agreement appear, and the contribution of funds and personal property, becomes a juridical person—an artificial being, invisible, intangible, and existing only in contemplation of law—with power to hold, buy, and sell property, and to sue and be sued—a corporation—not a general partnership nor a limited partnership … The inscribing of its articles of agreement in the commercial register was not necessary to make it a juridical person; such inscription only operated to show that it partook of the form of a commercial corporation.” 22.Philippine Corporate Law –Sort of Codification of American Corporate Law:When attention was drawn to the fact that there was no entity in Spanish law corresponding to the notion of the American “corporation”, the Philippine Commission enacted the Corporation Law (Act No. 1459), to introduce the American corporation as the standard commercial entity in the Philippines and to