Syllabus-Corporation Law Review2
Content
Corporation Law Review Course Syllabus Part I – General Provisions
A. Corporation, defined (Sec. 2) Case: a. Tayag v. Benguet Consolidated, 26 SCRA 22 !. Torres Torres v. Court of Appeals, Appeals, 2"# SCRA "$% c. &'ilippine Stoc *c'ange, +nc. v. Court of Appeals, Appeals, 2# SCRA 2%2 . Art. -++ Section 6, $#" &'ilippine Constitution Case: a. el elici iciano ano v. v. C/A, C/A, 0R 1o. 1o. "2, "2, 3anu 3anuary ary , , 2 2 2. Attri!utes of a Corporation %. Si4ilarities and 5istinctions !eteen Contract of &artners'ip and Corporations . Corporations Created !y Special 7as or o r C'arter Cases: a. 1ational Coal Co. v. Collector of +nternal Revenue, 6 &'il. 8#% 8# % !. 9arilao ater ater Consu4ers Association, +nc. v. v. +AC, 2 SCRA %" B. Classification of Corporations . ;nder t'e Corporation Code (Sec. %) 2. Sole and Aggregate %. cclesiastic and 7ay . lee4osynary and Civil 8. 5o4estic and oreign 6. 5e <ure and de facto corporations 6. Re=uisite of 5e acto Corporation 6.2 >uo arranto Cases: a. Saad<aan v. Court of Appeals, 0.R. 1o. "%8, 3une #, 28 ". Close and /pen Corporation #. &arent, Su!sidiary, and Affiliated Affiliated $. &rivate and &u!lic . Corporation !y &rescription and Corporation !y stoppel C. 1ationality of Corporations . Control test 2. 0randfat'er rule Case: a. ilson 0a4!oa v. Sec. 9argarito Teves, Teves, 0R 1/. "68"$, 3une 2#, 2 2 5. Corporations created !y special las (Sec. ) . Corporators and incorporators, stoc'olders and 4e4!ers (Sec. 8)
. Corporate <uridical personality . 5octrine of separate <uridical personality (or 5octrine of Corporate ntity) Case: a. Cease v. CA, 0R 1/. %%"2, /cto!er #, $"$ 2. 5octrine of piercing t'e corporate veil a) 0rounds for application of doctrine !) Test Test in deter4ining applica!ility Cases: a. C+R v. 1orton and ?arrison Co4pany, 0.R. 1o. "6#, August %, $6 !. 9c7eod v. 17RC, 0R 1o. 666", 3anuary 2%, 2" c. 5e Asis and Co. v. Court of Appeals, 0R 1o. 7@68$, 9ay 2", $#8 d. 9artine v. Court of Appeals, Appeals, 0R 1/. %6"%, Septe4!er , 2 e. Solid!an Corporation v. 9indanao erroalloy erroalloy Corporation,, Corporation,, 0R 0R 1o. 8%8%8, 3uly 2#,
28
f. a4a4oto a4a4oto v. 1is'ino 7eat'er +ndustries, +nc., 0R 1o. 82#%, April 6, 2# g. AS3 Corporation v. Sps. vangelista, 0R 1/. 8##6, e!ruary , 2# %. ntitle4ent to constitutional rig'ts a) 5ue process Case: a. Al!ert v. ;niversity ;niversity &u!lis'ing, +nc. 0.R. 1o. #, 3une 6, $68) !) =ual protection of t'e la c) &rotection against unreasona!le searc'es and seiure . ntitle4ent to 9oral 5a4ages Case: a. ABS@CB1 v. Court of Appeals, Appeals, 0R 1/. 2#6$, 3anuary 2, $$$ !. Coastal &acific Trading, Trading, +nc. v. Sot'ern Rolling Rolling 9ills, Co., +nc., 3uly 2#, 26 8. 7i!el Case: a. ilipinas Broadcasting v. Ago 9edical Center, 0R 1o. $$, 3anuary ", 28 6. 7ia!ility for torts Case: a. &1B v. CA, 0R 1/. 2"88, 9ay #, $"# ". 5octrine of Corporate 1egligence Case: a. &rofessional Services +nc., v. Court of Appeals, Appeals, 0.R. 1o. 262$", e!. 2, 2
#. 7ia!ility for cri4e 0. Classification of S'ares (Sec. 6) . &ar value or no par value 2. oting or non@voting %. Co44on or preferred . &ro4otion s'are 8. S'are in escro 6. Converti!le stoc ". ounderDs s'are (Sec. ") #. Redee4a!le s'are (Sec. #) $. Treasury s'are (Sec. $) Part II – Incorporation and Organization of Private Corporations
A. 1u4!er and =ualifications of incorporators (Sec. ) . Capital stoc (distinguis' fro4 capital) 2. Aut'oried capital stoc %. Su!scri!ed capital stoc . /utstanding capital stoc 8. &aid@up capital stoc 6. ;nissued capital stoc ". 7egal capital (distinguis' fro4 capital stoc) #. &ar value $. Certificate of stoc Case: a. Euan +nternational Corp. v. Reyes, 0.R 1o. #2"2$, Sept. S ept. 2$, 2 B. T'eory on 9ultiple Corporate &ersonalities C. 9ini4u4 capital stoc and su!scription re=uire4ents . +ncorporation and organiation a. &ro4oter a.) 7ia!ility of pro4oter a.2) 7ia!ility of corporation for pro4oterDs contracts 2. Su!scription contract Cases: a. 3aa +nvest4ents Corp. v. C+R, 0R 1o. "62$, 3uly 2#, 2 !. /ng ong ong v. v. Tiu, Tiu, 0R 1o. "6, April #, 2% %. &re@incorporation su!scription agree4ents . Consideration for stocs 8. ilipino oners'ip re=uire4ent !ased on specific constitutional and legal grounds 5. Corporate ter4 (Sec. ) . 5octrine of Relation (Relating Bac 5octrine) Cases: a. Al'a4!ra Cigar F Cigarette 9anufacturing Co4pany, +nc. v. SC, 0R 1o. 7@ 2%66, 3uly 2$, $6#
!. &1B v. CA, 0R 1o. 6%2, 9ay 2", $$2 . Articles of incorporation (Sec. ) . Contents 2. 1on@a4enda!le ite4s %. 5octrine of su!stantial co4pliance . 0round for re<ection (Sec. ") 0. Corporate na4e (Sec. #) ?. Co44ence4ent of corporate e*istence (Sec. $) . 0enossensc'aft T'eory 2. T'eory on concession %. T'eory of Corporate nterprise or cono4ic ;nit +. 5e facto corporation (Sec. 2) . 5ifferences !eteen de <ure, de facto and corporation !y estoppels Case: a. Sevent' 5ay Adventist Conference C'urc' of Sout'ern &'ilippines, +nc. v. 1ort'eastern 9indanao 9ission of Sevent' 5ay Adventist, Adventist, +nc. 0R 1o. 86, 3uly 2, 26 3. Corporation !y estoppel (Sec. 2) E. 1on@use of corporate c'arter (Sec. 22)
Part III – Board of irectors!"rustees!Officers
A. T'e Board of 5irectors of Trustees (Sec. 2%) . iduciary duties B. lection of directors or trustees (Sec. 2) . 9et'ods of voting a. Straig't voting !. Cu4ulative voting 2. 1on@stoc corporation C. Corporate officers, =uoru4 (Sec. 28) Case: a. 9atling +ndustrial and Co44ercial Corp. . Coros, 0.R. 1o. 8"#2, 8 "#2, /cto!er %, 2
5. Report of election (Sec. 26) . 5is=ualification of directors, trustees or officers (Sec. 2") . Re4oval of directors or trustees (Sec. 2#) 0. acancies acancies in t'e office of director or trustee (Sec. 2$)
Cases: a. alle alle erde erde Country Clu!, +nc. v. Africa, 0.R. 1o. 8$6$, Septe4!er , 2$ !. Tan Tan v. Sycip, 0.R. 1o. 8%6#, August August ", 26 ?. Co4pensation of directors (Sec. %) +. 7ia!ility of directors, trustees or officers (Sec. %) . Corporate opportunity doctrine 3. 5ealings of directors, trustees or officers it' t'e corporation (Sec. %2) E. Contracts !eteen corporations it' interlocing directors (Sec. %%) 7. 5isloyalty of a director (Sec. %) 9. *ecutive co44ittee (Sec. %8) /. Business 3udg4ent Rule Case: Sa!er v. Court of Appeals, 0.R. 1o. %2$#, %2$# , August %, 2 Part I# – Powers of Corporations
A. Classification of poers . *press poers 2. +4plied poers %. +ncidental or in'erent poers Cases: a. Ce!u Bionic Builders Supply, +nc. v. 5B&, 5B&, 0R 1o. 8%66, 1ove4!er 1ove 4!er ", 2 !. S'ipside +ncorporated v. CA, 0R 1o. %%"", e!ruary 2, 2 B. Corporate poers and capacity (Sec. %6) . 0eneral poers, t'eory of general capacity 2. Specific poers, t'eory of specific capacity capac ity a) &oer to e*tend or s'orten corporate ter4 (Sec. %") a.) Appraisal rig't of dissenting stoc'olders !) &oer to%#) increase or decrease capital stoc or incur, create, increase !onded inde!tedness (Sec. !.) 7i4itation !.2) 1ecessity c) &oer to deny pre@e4ptive p re@e4ptive rig'ts (Sec. %$) c.) As to treasury s'ares d) &oer to sell or dispose of corporate assets (Sec. ) d.) Appraisal rig't of dissenting stoc'older e) &oer to ac=uire on s'ares (Sec. ) e.) Conditions for t'e e*ercise of t'e poer e.2) Trust fund doctrine f) &oer to invest corporate funds in anot'er corporation or !usiness (Sec. 2) g) &oer to declare dividends (Sec. %) g.) Concept of dividends (distinguis'ed fro4 profits) g.2) Classes of dividends g.%) retained earnings ') &oer to ;nrestricted enter into 4anage4ent contract (Sec. ) i) ;ltra vires acts (Sec. 8)
(i) Applica!ility of ultra vires doctrine (ii) Conse=uences of ultra vires acts Cases: a. Go4er 5evelop4ent Co4pany, Co4pan y, +nc. +nc. v. +nternational *c'ange Ban, 0R 1o. 86$, 9arc' %, 2$ !. Repu!lic v. Aco<e 9ining, +nc. 0R 1o. 7@#62, e!ruary 2#, $6% (iii) Ratification <) 5octrine of apparent aut'ority Cases: a. est4ont est4ont Ban v. +nland Construction and 5evelop4ent 5ev elop4ent Corp., 0R 1o 1o.. 2%68, 9arc' 2%, 2$ !. B&+ a4ily Savings Ban v. irst irst 9etro +nvest4ent Corp, 0R 1o. %2%$, 9ay 2, 2 ) 5octrine of individuality of su!scription l) 5octrine of e=uality of s'ares 4) Trust fund doctrine Part # – By Laws
A. Adoption of !y@las (Sec. 6) a) Re=uisites of valid !y@las !) Binding effects c) Contents (Sec. ") d) A4end4ents (Sec. #) Case: a. &9+ Colleges v. 17RC, 0R 1/. 266, August 8, $$" Part #I – $eetings
A. Einds (Sec. $@8) . 1ecessity of 4eetings B. &lace and ti4e of 4eeting of stoc'olders or 4e4!ers (Sec. 8) Case: a. *pertravel F To Tours, urs, +nc. v. Court of Appeals, 0.R. 1o. 82%$2, 8 2%$2, 9ay 26, 28 C. >uoru4 (Sec. 82) . Re=uisites for a valid 4eeting of stoc'olders 2. Specific nu4!er of votes re=uired !y la 5. Regular and special 4eetings of directors d irectors or trustees (Sec. 8%) . Business <udg4ent rule 2. Solidary lia!ilities for da4ages . 'o s'all preside (Sec. 8) . &ledgors, 4ortgagors and ad4inistrators (Sec. 88) 0. oting oting in case of <oint oners'ip (Sec. 86)
?. oting oting rig't for treasury s'ares (Sec. 8") +. &ro*ies (Sec. 8#) E. oting trust (Sec. 8$) Case: a. 7ee vs. Court of Appeals, 0.R. 1o. , 5ec. ", $$6 "itle #II – Stoc%s and Stoc%&olders
A. Rig'ts of stoc'olders in general B. 5erivative suit C. 7ia!ilities of stoc'olders 5. Su!scription contract (Sec. 6) . &re@incorporation su!scription (Sec. 6) . Certificate Certificate of stoc . 1ature of t'e certificate 2. ;ncertificated s'ares %. 1egotia!ility . Re=uire4ents for valid transfer of stocs 8. +ssuance 6. ull pay4ent ". &ay4ent pro@rata #. Stoc and transfer !oo $. 7ost or destroyed certificates . Situs of t'e s'ares of stoc 0. Consideration for stocs (Sec. 62) ?. Certificate of stoc and transfer of s'ares (Sec. 6%) +. +ssuance of stoc certificate (Sec. 6) 3. 7ia!ility of directors for atered stocs (Sec. 68) E. +nterest on unpaid su!scription (Sec. 66) 7. &ay4ent of !alance (Sec. 6") 9. 5elin=uency sale (Sec. 6#) 1. 'en sale 4ay !e =uestioned (Sec. 6$) /. Court action to recover unpaid un paid su!scription (Sec. ") &. ffect of delin=uency (Sec. ") >. Rig'ts of unpaid s'ares (Sec. "2) R. 7ost or destroyed certificates (Sec. "2)
Part #III – Corporate Boo%s and Records 'Sec( )*+
A. Contents B. 'o 4ay 4ae valid entries
Part I, – $erger and Consolidation
A. 9erger and consolidation (Sec. "6) B. Approval re=uired (Sec. "") C. Articles of 4erger or consolidation (Sec. "#) 5. ffectivity (Sec. "$) . ffects (Sec. #)
Part , – -ppraisal Rig&t
A. +nstances of appraisal rig't (Sec. #) B. ?o rig't is e*ercised (Sec. #2) C. ffect of de4and and ter4ination of rig't (Sec. #%) 5. 'en rig't to pay4ent ceases (Sec. #) . 'o !ears costs of appraisal (Sec. #8) . 1otation 1otation on certificatesH cer tificatesH rig'ts of transferee (Sec. #6)
Part ,I – .on/Stoc% Corporations
A. 5efinition (Sec. #") B. &urposes (Sec. ##) C. 9e4!ers rig't to vote (Sec. #$) 5. 1on@transfera!ility of 4e4!ers'ip (Sec. $) . Ter4ination Ter4ination of 4e4!ers'ip (Sec. $) . lection and ter4 of trustees (Sec. $2) 0. &lace of 4eetings (Sec. $%)
Part ,II – istribution of -ssets in .on/Stoc% Corporations
A. Rules of distri!ution (Sec. $)
B. &lan of distri!ution of assets (Sec. $8)
Part ,III – Close Corporations
A. 5efinition and applica!ility of Title (Sec. $6) B. Articles of incorporation (Sec. $") C. alidity alidity of restrictions on transfer of s'ares (Sec. $#) 5. ffects of issuance or transfer of stoc in !reac' of =ualifying =u alifying conditions (Sec. $$) . Agree4ents !y stoc'olders (Sec. ) . 'en !oard 4eeting is unnecessary or i4properly 'eld (Sec. ) 0. &re@e4ptive rig't in close corporations (Sec. 2) ?. A4end4ent of articles of incorporation (Sec. %) +. 5eadlocs (Sec. ) 3. it'draal of stoc'older or dissolution of corporation (Sec. 8) Part ,I# – Special Corporations
A. ducational Corporations . +ncorporation (Sec. 6) 2. &re@re=uisites to incorporation (Sec. ") %. Board of trustees (Sec. #) B. R7+0+/;S C/R&/RAT+/1S . Classes of religious corporations (Sec. $) 2. Corporation sole (Sec. ) %. Articles of incorporation (Sec. ) ) . Su!4ission of t'e articles of incorporation (Sec. 2) 8. Ac=uisition and alienation of property (Sec. %) 6. illing of vacancies (Sec. ) ". 5issolution (Sec. 8) #. Religious societies (Sec. 6) Part ,# – issolution
A. 9et'ods of dissolution (Sec. ") B. oluntary oluntary dissolution 'ere no creditors are affected (Sec. #) C. oluntary oluntary dissolution 'ere creditors are affected (Sec. $) 5. 5issolution !y s'ortening corporate ter4 (Sec. 2) . +nvoluntary dissolution (Sec. 2) . Corporate Corporate li=uidation (Sec. 22)
Part ,#I – 0oreign Corporations
A. 5efinition and rig'ts of foreign corporations (Sec. 2%) B. Application to e*isting foreign corporations (Sec. 2) C. Application for a license (Sec. 28) 5. +ssuance of a license (Sec. 26) . 'o 4ay !e a resident agent (Sec. 2") . Resident Resident agentH service of process (Sec. 2#) 2 #) 0. 7a applica!le (Sec. 2$) ?. A4ended license (Sec. %) +. 9erger or consolidation involving a foreign corporation licensed in t'e &'ilippines (Sec. %2) 3. 5oing !usiness it'out a license (Sec. %%) E. Revocation of license (Sec. %) 7. +ssuance of certificate of revocation (Sec. %8) %8 ) 9. it'draal of foreign corporations (Sec. %6)
P-R" ,#II / 0oreign Invest1ents -ct 'R(-( .o( )2*3+
. &olicy of t'e 7a 2. 5efinition of Ter4s a. oreign +nvest4ent !. I5oing BusinessJ in t'e &'ilippines c. *port nterprise d. 5o4estic 9aret nterprise %. Registration of +nvest4ents on 1on@&'ilippine 1ationals . oreign +nvest4ents in *port nterprise 8. oreign +nvest4ents in 5o4estic 9aret nterprise 6. oreign +nvest4ent 1egative 7ist
P-R" ,#III / Securities Regulation Code 'R(-( .o( 4)55+
A. State &olicy, &urpose B. Securities Re=uired to Be Registered . *e4pt Securities 2. *e4pt Transactions C. &rocedure for Registration of Securities 5. &ro'i!itions on raud, 9anipulation and +nsider Trading . 9anipulation of Security &rices 2. S'ort Sales %. raudulent Transactions . +nsider Trading . &rotection of +nvestors . Tender /ffer Rule 2. Rules on &ro*y Solicitation %. 5isclosure Rule . Civil 7ia!ility
