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    Corporation Law

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    Gian Paula Monghit
    A corporation is defined as an artificial being created by operation of law. It has four main attributes: 1) it is an artificial being separate from its owners, 2) it is created through legal compliance rather than private agreement alone, 3) it has perpetual existence despite changes in ownership, and 4) it only has the powers granted by law. Corporations are generally formed through general law rather than special charters, with some exceptions for government-owned corporations. They share some similarities with partnerships as organizations with legal personalities distinct from their members that act through agents.

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    Corporation Law

    Uploaded by

    Gian Paula Monghit
    110 views2 pages
    A corporation is defined as an artificial being created by operation of law. It has four main attributes: 1) it is an artificial being separate from its owners, 2) it is created through legal compliance rather than private agreement alone, 3) it has perpetual existence despite changes in ownership, and 4) it only has the powers granted by law. Corporations are generally formed through general law rather than special charters, with some exceptions for government-owned corporations. They share some similarities with partnerships as organizations with legal personalities distinct from their members that act through agents.

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    CORPORATION LAW

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    A corporation is defined as an artificial being created by operation of law. It has four main attributes: 1) it is an artificial being separate from its owners, 2) it is created through legal compliance rather than private agreement alone, 3) it has perpetual existence despite changes in ownership, and 4) it only has the powers granted by law. Corporations are generally formed through general law rather than special charters, with some exceptions for government-owned corporations. They share some similarities with partnerships as organizations with legal personalities distinct from their members that act through agents.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    110 views2 pages

    Corporation Law

    Uploaded by

    Gian Paula Monghit
    A corporation is defined as an artificial being created by operation of law. It has four main attributes: 1) it is an artificial being separate from its owners, 2) it is created through legal compliance rather than private agreement alone, 3) it has perpetual existence despite changes in ownership, and 4) it only has the powers granted by law. Corporations are generally formed through general law rather than special charters, with some exceptions for government-owned corporations. They share some similarities with partnerships as organizations with legal personalities distinct from their members that act through agents.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CORPORATION LAW

    Sec. 2. Corporation defined. - 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.

    Based on the statutory definition, you can identify FOUR ATTRIBUTES

    1. ARTIFICIAL BEING - it has a juridical personality, separate and distinct from the persons composing it.

    2. CREATED BY OPERATION OF LAW- the formal requirement of the State’s consent through compliance
    with the requirements imposed by law is necessary for its creation such that the mere agreement of the
    persons composing it or intending to organize it does not warrant the grant of its independent existence as a
    juridical entity

    3. RIGHT OF SUCCESSION- unlike in a partnership, the death, incapacity or civil interdiction of one or more of
    its stockholder does not result in its dissolution;

    4. POWERS, ATTRIBUTES AND PROPERTIES EXPRESSLY AUTDHORIZED BY LAW.- it can exercise only
    such powers and can hold only such properties as are granted to it by the enabling statutes unlike natural
    persons who can do anything as they please.

    CREATED BY OPERATION OF LAW:

    Article XII: Section 16. The Congress shall not, except by general law, provide for the formation, organization, or
    regulation of private corporations. Government-owned or controlled corporations may be created or established by
    special charters in the interest of the common good and subject to the test of economic viability. (1987 constitution)

    Q: How does it limit?

    A: As a rule, congress cannot enact laws to create private corporations. It must be a general law.

    Q: Do we have that law?

    A: Yes. The commercial code of the Philippines.

    Q: Does it have the attribute of a general enabling law?

    A: Yes, it applies to all private corporations; even future companies.

    - the objective is to eliminate corrupt practices.

    EXCEPTION: GOCC’s may be created by special laws, provided the majority of the shareholdings must pertain to the
    state. Note: GOCC’s are still private corporations.
    Similarities between a partnership and a corporation. The similarities are as follows:

    (1) Like a partnership, a corporation has a juridical personality separate and distinct from that of the individuals
    composing it;

    (2) Like a partnership, a corporation can act only through agents;

    (3) Like a partnership, a corporation (except a corporation sole) is an organization composed of an aggregate of
    individuals;

    (4) Like a partnership, a (stock) corporation distributes its profits to those who contribute capital to the business
    (although an industrial partner also shares in partnership profits)

    (5) Like a partnership, a corporation can be organized only where there is a law authorizing its organization. To organize
    a corporation or a partnership that could claim juridical personality of its own and transact business as such is not a
    matter of absolute right but a privilege which may be enjoyed only under such terms as the State may deem necessary
    to impose (Ang Pue & Co. vs. Sec. of Commerce and Industry, 5 SCRA 645 [1962].); and

    (6) A partnership,12 no matter how created or organized, is taxable as a corporation, subject to income tax. (Sec. 24[a],
    National Internal Revenue Code.)

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