Professional Documents
Culture Documents
Course Outline
1. INTRODUCTION
Historical Background of Philippine Corporate Law
5. CORPORATE POWERS
A. Doctrine of limited capacity; concept of ultra vires act (Sec. 45, CC)
B. Classes of corporate powers (express, implied and incidental)
C. Statutory powers of a corporation and the limitations on their exercise (Sec. 36, CC)
1. amendment of articles of incorporation (Sec. 16, CC)
2. extension/shortening of corporate term (Sec. 37, CC)
3. increase or decrease of capital stock (Sec. 38, CC)
4. incurrence, creation or increase of bonded indebtedness (Sec. 38, CC)
5. sale or disposition of assets (Sec. 40, CC)
6. acquisition of corporate shares (Sec. 41, CC) (See Trust Fund Doctrine)
7. investment of corporate funds (Sec. 42, CC)
8. declaration of dividends (Sec. 43, CC)
9. management contract (Sec. 44, CC)
10. adoption/amendment of By-laws
a.Concept, use and nature of by-laws
b.By-laws in relation to articles of incorporation
c. Adoption of by-laws (Sec. 46, CC);
1. effect of non-filing within the
prescribed period
d.Contents of by-laws; requisites of a valid by-law provision
e.Amendment to by-laws (Sec. 48, CC)
f. By-laws in relation to third parties
g.merger and consolidation
(i) Requisites of and procedure for merger and consolidation (Sec.
77, CC)
(ii) Effects of merger or consolidation (Sec. 80, CC)
D. CASES:
1. Nielson & Co. vs. Lepanto Consolidated Mining Co., 26 SCRA 540;
2. Islamic Directorate vs. CA, 272 SCRA 454;
3. Dee vs. SEC, 199 SCRA 238;
4. Ma. Corina C. Jiao, et. al. v. National Labor Relations Commission, Global Business
Bank, Inc., et. al., G.R. No. 182331, April 18, 2012;
5. Loyola Grandvillas Homeowners Association vs. CA, 276 SCRA 681;
6. China Banking Corporation vs. CA, 270 SCRA 503;
7. Associated Bank vs. CA, 291 SCRA 511;
8. Babst vs. CA, January 26, 2001;
9. Mindanao Savings vs. Willkom, 11 October 2010
RIGHTS OF SHAREHOLDERS
A. Right to attend meetings
1. Kinds of meetings
2. Requirements of a meeting
B. Right to vote
1. instances when voting right not available
2. rules on:
a.delinquent shares; (Sec. 71, CC)
b.escrow shares;
c. unpaid shares; (Sec. 72, CC)
d.sequestered shares;
e.pledgor, mortgagor, or administrator of shares (Sec. 55, CC)
f. shares jointly owned (Sec. 56, CC)
C. Right to appoint proxy (Sec. 58, CC)
D. Right to execute voting trust agreement (Sec. 58 & 59, CC)
E. Right of Inspection of corporate books
1. Books required to be kept by a corporation (Sec. 74, CC)
2. Basis and extent of the right of inspection
3. Limitations on the right of inspection
4. Remedies to enforce right of inspection
F. Pre-emptive right (Sec. 39, CC)
G. Appraisal Right
1. Concept of appraisal right
2. Instances of appraisal right (Sec. 81, Sec. 77, Sec. 42, CC)
3. Requirements for a valid exercise of appraisal right (Sec. 82, CC)
4. Effects of exercising appraisal right (Sec. 83, CC)
E. Derivative suit; concept and requisites
F. CASES:
1. Lee vs. CA 205 SCRA 725;
2. Republic vs. Sandiganbayan, April 30, 2003;
3. Republic vs. Cocofed, December 12, 2001;
4. Evangelista vs. Santos, 86 SCRA 387;
5. Chua vs. CA, GR No. 150793, November 19, 2004;
6. Expert Travel & Tours, Inc. vs. Court of Appeals and Korean Airlines GR No. 152392,
May 26, 2005;
7. Gonzales vs. PNB, 122 SCRA 489;
8. Nestor Ching and Andrew Wellington v. Subic Bay Golf and Country Club, Inc., G.R.
No. 174353, September 10, 2014
SUBSCRIPTION CONTRACT
A. Ways to become a stockholder of a corporation
B. Concept of subscription contract
C. Kinds of subscription (pre and post incorporation subscription, Sec. 61, CC)
D. Consideration for the issuance of shares (Sec. 62, CC)
E. Payment of subscription
1. remedies to enforce payment of subscription (Sec. 68, 69 & 70, CC)
2. when shares are considered delinquent (Sec. 67, CC)
F. Certificate of Stock (Sec. 63, CC)
1. doctrine of indivisibility of subscription contract
2. certificate of stock, quasi-negotiable
G. Transfer of shares
H. Lost and destroyed certificate of stock (Sec. 73, CC)
I. CASES:
1. Lim Tay vs. CA, August 5, 1998;
2. Rural Bank of Lipa vs. CA, Sept. 28, 2001;
3. Ponce vs. Alsons Cement, Dec. 10, 2002;
4. Ong Yong, et al. vs. Tiu, et al., G.R. Nos. 144476 & 144629, April 8, 2003
NON-STOCK CORPORATIONS
A. Definition and purposes of a non-stock corporation (Sec. 87 & 88, CC)
B. Distinguished from stock corporation
C. Membership in a non-stock corporation
D. Rule on distribution of assets (Sec. 94, CC)
E. CASES:
1. Long vs. Basa, et al., Sept. 27, 2001;
2. Sta. Clara Homeowners' Association vs. Sps. Gaston, Jan. 23, 2002;
3. Padcom vs. Ortigas Center, May 9, 2002; Tan vs. Sycip 17 August 2006
CLOSE CORPORATIONS
A. Concept; distinguished from open corporations (Sec. 96, 97, 101, & 102, CC)
B. Permissive provisions in the articles of incorporation (Sec. 97, CC)
C. Restrictions on transfer of shares (Sec. 98 & 99 CC)
D. CASES:
1. Dulay Enterprises vs. CA, 225 SCRA 678;
2. San Juan Structural Steel Fabricators, 296 SCRA 632
RELIGIOUS/EDUCATIONAL CORPORATIONS
A. Classes of Religious Corporation
1. corporation sole
2. religious society
B. Educational Corporation
C. CASE: Iglesia Evangelica vs. Bishop Lazaro, 6 July 2010
CORPORATE DISSOLUTION/LIQUIDATION
A. Methods of voluntary corporate dissolution and the requirements therefor
B. Concept of involuntary dissolution and the grounds therefor (Sec. 121, CC)
C. Corporate liquidation (Sec. 122, CC)
1. Methods of liquidation or winding up
D. Concept of Rehabilitation;
1. Effects of appointment of management committee
or receiver
E. CASES:
1. Gelano vs. CA, 103 SCRA 90;
2. Clarion Printing House, Inc. vs. NLRC, GR No. 148372, June 27, 2005;
3. Lingkod Manggagawa sa Rubberworld vs. Rubberworld Phils., Inc. 29 January 2007;
4. Garcia, et al vs. PAL, 29 August 2007;
5. Sobrejuanite vs. ASB, 30 September 2005;
6. Panlilio, et al. v. Regional Trial Court, etc.,
7. People of the Philippines and Social Security System, G.R. No. 173846, February 2,
2011;
8. Alfredo Villamor, Jr. vs. John Umale, G.R. No. 172843, September 24, 2014
FOREIGN CORPORATIONS
A. Concept of foreign corporation
B. Tests to determine nationality of a corporation (Control Test and Grandfather Rule)
C. Concept of "doing business" and the license requirement therefor (see Sec. 3(d), RA 7042)
D. Effects of being issued a license
E. Revocation and withdrawal of license
F. CASES:
1. Facilities Management vs. De la Osa, 89 SCRA 131;
2. Home Insurance vs. Eastern Shipping Lines, 123 SCRA 424;
3. Mentholatum, Inc. vs. Mangaliman, 73 Phil 524;
4. Eriks vs. CA, 267 SCRA 567;
5. Mentholatum vs. Mangaliman, 72 Phil 524;
6. Merrill Lynch Futures, Inc. vs. CA, 211 SCRA 824;
7. Agilent Technologies Singapore vs. Integrated Silicon Technology Philippines
Corporation, G.R. No. 154618, April 14, 2004;
8. Expertravel & Tours, Inc. vs. Court of Appeals and Korean Airlines GR No. 152392,
May 26, 2005;
9. Steelcase, Inc. v. Design International Selections, Inc., 18 April 2012;
10. Air Canada vs. Commissioner of Internal Revenue, 778 SCRA 131, G.R. No. 169507
January 11, 2016