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Definitions

The document defines key terms related to corporations including corporation, stock corporation, capital stock, outstanding stock capital, cumulative preferred share, and treasury share. It also discusses the distinctions between a corporation and partnership and the differences between share of stock and capital stock. Additionally, it mentions no par value shares.

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39 views

Definitions

The document defines key terms related to corporations including corporation, stock corporation, capital stock, outstanding stock capital, cumulative preferred share, and treasury share. It also discusses the distinctions between a corporation and partnership and the differences between share of stock and capital stock. Additionally, it mentions no par value shares.

Uploaded by

rocker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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I.

Definitions

1. Corporation - a corporation 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.
2. Fiction of corporate entity - / doctrine of piercing the veil of corporate entity or
disregarding the fiction of corporate entity where the separate personality of the
corporation is disregarded, the corporation will be treated merely as association of
persons and the stockholder or members will be considered as the corporation, i.e.,
liability will attach personally or directly to the officers and stockholders.
3. Stock Corporation corporations which have share capital divided into shares and are
authorized to distribute to the holders of such shares dividends or allotments of the
surplus profits on the basis of the shares held.
4. Capital Stock it is the shares to be subscribed and paid in or secured to be paid in by
the shareholders, either in money, property or services, at the time of organization of
the corporation or afterwards, and upon which it is to conduct its operations.
5. Outstanding Stock Capital these are issued, which are in the hands of the
shareholders. (issued shares treasury shares)
6. Cumulative preferred share these shares entitle the holder to payment not only of
current dividends but also of dividends in arrears, if and dividends are declared, before
the ordinary shareholders are paid.
7. Treasury share shares of stock which have been issued and fully paid for, but
subsequently reacquired by the issuing corporation either by purchase, redemption, and
donation or through other lawful means. Such shares may again be disposed for a
reasonable price fixed by the bod.
8. Promoters a promoter is a person, natural or juridical, who usually discovers a
prospective business and brings persons interested to invest through the information of
a corporation.

II. Discussion

1. 4 distinctions between a corporation and partnership

Manner of creation Operation of law Mere agreement


Number of organizers 5-15 2 or more
Right of succession / X
Management BOD General partner as
agent unless stipulated
Liability of members for SH Not liable for GP Liable with their
debts corporation separate assets
Commencement of On the date of issuance Execution of
existence of its certificate partnership contract
unless other date is
stipulated
Transferability of interest Without consent of other With consent of the
SH other partners delectus
personae
Term of existence Not exceeding 50 years Indefinite period
Dissolution Consent of state is By any partner
necessary

2. Share of stock vs. Capital stock

Share of stock is commonly used in distributive sense to refer to the stock in the hands
of stockholders. Capital stock is used in collective sense to signify the whole bady of
shares of stock in the corporation.

3. No Par Value Shares

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