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.
COMPONENTS OF CORPORATION
Incorporators - those mentioned in the articles of incorporation
as originally forming and composing the corporation, having
signed the articles and acknowledged the same before the
notary
public.

They must be natural persons

At least five (5) but not more than fifteen (15);
They must be of Legal Age;
Majority must be residents of the Philippines; and
Each must own or subscribe to at leat one share.

Promoter - A self-constituted organizer who finds an

enterprise or venture and helps to attract investors, forms a
corporation and launches it in business, all with a view to
promotion profits.

Piercing the veil of Corporate Entity

Piercing the veil of corporate fiction means that while the
corporation cannot be generally held liable for acts or liabilities
of its stockholders or members, and vice versa because a
corporation has a personality separate and distinct from its
members or stockholders, however, the corporate existence is
disregarded under this doctrine when the corporation is
formed or used for illegitimate purposes, particularly, as a
shield to perpetuate fraud, defeat public convenience, justify
wrong, evade a just and valid obligation or defend a crime.
KINDS OF CORPORATION

Corporators - All the stockholders and members of a

corporation including the incorporators who are still
stockholders.
Stockholders

non-stock

corporation

Directors and Trustees - The Board of Directors is the

governing body in a stock corporation while the Board of
Trustees is the governing body in a non-stock corporation.

Corporators

in

in
a

Elements

corporation

Corporators

Facto

stock

Members

De

Corporate Officers - They are the officers who are identified as

such in the Corporation Code, the Articles of Incorporation or
the By-laws of the corporation.

for

Existence

Corporation (Sec.
of

De

Facto

20)
Corporation:

Valid law under which incorporated

Attempt in good faith to incorporate;
compliance;
Assumption of corporate powers
Issuance of certificate of incorporation

colourable

Disloyalty of a director. - Where a director, by virtue of his

office, acquires for himself a business opportunity which
should belong to the corporation, thereby obtaining profits to
the prejudice of such corporation, he must account to the
latter for all such profits by refunding the same, unless his act

has been ratified by a vote of the stockholders owning or

representing at least two-thirds (2/3) of the outstanding
capital
stock.
This
provision
shall
be
applicable,
notwithstanding the fact that the director risked his own
funds in the venture.

Dissolution the termination of a corporations legal existence

Methods of Dissolution
Voluntary
Involuntary

RIGHT OF APPRAISAL means that a stockholder who

dissented and voted against the proposed corporate action,
may choose to get out of the corporation by demanding
payment of the fair market value of his shares
VOTING TRUST
A trust created by an agreement between a group of the
stockholders of a corporation and the trustee or by a
group of identical agreements between individual
stockholders and a common trustee, whereby it is
provided for a term of years, or for a period contingent
upon a certain event or until the agreement is
terminated, control over the stock owned by such
stockholders, either for certain purpose or all purposes,
is to be lodged in the trustee, either with or without
reservation to the owners or person designated by them
of the power to direct how such control shall be used.

KINDS OF VOLUNTARY DISSOLUTION

Voluntary Dissolution where no creditors are affected
Voluntary Dissolution where creditors are affected
Dissolution by shortening corporate terms
A corporation sole may be dissolved and its affairs
settled voluntarily by submitting to SEC a verified
declaration of dissolution

BOOKS REQUIRED TO BE KEPT BY CORPORATION

Book for the minutes of Stockholder and Board of
Director meetings
Record of transaction
Stock and transfer book
Other books required to be kept

KINDS OF INVOLUNTARY DISSOLUTION

By legislative act
By expiration of the term
By failure to formally organize within 2 years from date
of incorporation
By order of dissolution of the SEC under Sec 121 of the
Code or by Quo Warranto proceeding under Section 66
of the Rules of Court

Content of Stock Transfer Book

All stock in the name of stockholders alphabetically
arranged
Amount paid and unpaid on all stocks and the date of
payment of any instalment
Alienation, sale or transfer of stocks
Other entries as the by-laws may prescribe