Summary or reviewer in LAW (corporation) Section 1: The corporation code of the Phil. Section 2: The corporation attributes 1.

It is an artificial beingPossess of the personality separate and distinct 2. Created by operation of law Created and organized under general law It is not created by agreement of person 3. Right of succession Continue to exist for the period stated in the articles of incorporation By succession it is not meant that the corporation is immortal 4. It has a power attributes and properties expressly authorized by law or incident to its existence A. Those expressly granted by law B. Powers inherent to corporate existence Distinction: 1. Manner of creation P: created by mere agreement of the parties C: by operation of law 2. Number of incorporators P: two or more persons C: atleast five persons 3. Commencement of juridical personalities P: from execution of contract C: insuance of certificate of corporation by SEC 4. Powers P: any power not contrary to law C: only the powers expressly granted by law or incident to existence 5. Management P: ever partner is an agent of the partnership(management is not agreed upon) C: board of directors 6. Effect of mismanagement P: can sue a co-partners who mismanage C: can sue against a member of board of directors who mismanage must be in the name of the corporation 7. Right of succession P: no right C: has right 8. Extend of the liablility P: liable personally (exempt limited partners) C: liable up to their investment only 9. Transferability of interest P: cannot transfer w/o consent base on principles of delectus personarum C: can transfer w/o consent 10. Term of existence P: may established for any period stipulated by the partners C: 50 years but extendible 11. Firm name P: required to add a word LTD for limited partnership C: any name provided not similar and not contrary to law 12. Dissolution P: may be dissolve at any time by the will of any or all the partners C: can only be dissolve with the consent of the state 13. Laws which govern P: civil code C: corporation code

Section 3: Classes of corporation 1. Stock corporation- created and operated for the purpose of making profit Have capital stock divided into shares Authorized to distribute to the holders 2. Non-stock- not issued stock and are created not for profit but for the public good and welfare e.q. religious corp. Other classification 1. As to number of person who composed A. Corporation aggregate consisting of one member B. Corporation sole consist of one member (religious corporation e.q bishop) 2. For religious purpose or not A.ecclesiastical- organized for religious purpose B. lay- a purpose other than religious 3. charitable purpose or not A. eleemosynary- for charitable purpose B. civil- for business or profit 4. as to state or country A. domestic- ration 60% Filipinos corporators 40% foreign B. foreign 5. legal right to existence A. de jure- existence in fact and in law B. de facto- existence in fact but not in law 6. open to public or not A. close- limited to selected person or member of family (family corp) B. open- open to any person 7. relation to another corporation A. parent- has the power either directly or indirectly to elect the majority of the director of such other corporation B. subsidiary- majority of its directors can be elected either directly or indirectly by such other corporation

8. as to whether theyre corporations in a true sense or only in a limited sense A. true corp. exists by statutory authority B. quasi corp. exists w/o formal legislative grant >>corporation by the prescription- has exercise corporate power for an indefinite period w/o interference on the part of the sovereign power(roman catholic church) >> corporation by estoppel- not a corporation either de jure or de facto because it is so defectively form, but it is considered a corporation 9. private or a public A.public- form or organized for the government B. private- form for private purpose benefit, either GOCC or quasi public corp GOCC- own or control by the government directly through a parent or subsidiary corp, to extend of atleast a majority of its outstanding of voting or capital stock -this are private not a public corp e.q GSIS, PCSO Quasi public- accepted from the estate the grant of a franchise -also known public utilities or public service corp e.q ELECTRIC, TELEPHONE

Section 4: Corporation created by special laws or chartersSection 5: Corporation and Incorporators, Stockholders and Members Components of Corporation 4Classes of Persons 1. Corporators- Those compose the corporation

Incorporators- Those corporator mention in the articles of incorporation -Originally forming and composing in the corporation and who sign the articles of incorporation -All incorporators are corporators but a corporator is not necesarly a incorporator. -Principal function is to incorporate the corporation and to enable it to become a body politic and corporate under the law 3. Stockholder- Owners of share of stacks - Maybe natural or juridical persons but only natural persons can be incorporator 4. Members- Corporators of a corporation which has no capital stock 3 Other classes of person 1. Promoters Persons who bring about or cost to bring about the formation of a corporation by bringing together the incorporator or the persons interested in the enterprice 2. Subscriber- One who has a agreed to take stock from the corporation on the original issue of such stock -Subscriber may not be stockholder until their subscription are accepted by the corporation. 3. Underwriter- A person usually an investment banker, Made before corporate share are brought before the public and in the event the public will not take them, The underwriter will be the one to take them Section 6 Concept 1. Capital stock- The sum total specified by the charter or articles of incorporation paid in or to be paid in 2. Subscribe Capital Stock- The part of the capital stock subscribe by the subscribers, Whether paid or unpaid 3. Paid up Capital Stock- Part of the subscribe capital stock which has been paid to the corporation. 4. Capital- Aggregate of the sum subscribe and paid in. 5. Stated Capital- the capital with which the corporation issuing share without par value begins business. 6. Outstanding Capital Stock- Total shares of stock issued to subscriber or stock holders whether not fully paid or partially paid. 7. Unissued Capital Stock- The portion of the capital stock that is not subscribes or issued. 8. Legal Capital- Amount equal to the aggregate par value of all the par value shares not including form premium. Shares of Stock 1. Concept- Interest or right of the owner in the management of a corporation. 2. Property- Shares of stock constitute property distinct form the capital or tangible property of the corporation 3. Situs- Share os stocks are located at the domicile of the owner. 4. Classes of Shares of Stocka. Common Stock- Ordinary stock of the corporation in title the owner to pro rata in the dividends without any priority. b. Preferred Stock- Stock which is entitle certain preferences over common stock. -As to assets- entitle to preference in the distribution of assets in case of liquidation -As to dividend- entitle to preference in the payment in the dividend. Distinction between share of stock and certificates of stock. Share of Stock- Intangible property Certificate of Stock- tangible property Share of Stock-Represents the right of interest Certificate of stock- Written dividend of that right or interest. Share of Stock- Maybe issued even if the subscription is not fully paid Certificate of stock- May not be issued unless subscription is fully paid Classes of Share 1. Par Value-Their a stated value per stock 2. No par value-their no stated value per stock so automatically 5 per stock 3. Voting- Entitle the holder to vote in the meeting of the corporation 4. No Voting- Is not Entitle the holder to vote in the meeting of the corporation 5. Promotion Stock- Stock issued to promoters. rd 6. Share in Escrow- Share subject to an agreement by virtue of which the share is deposited by the grantor with the 3 person to be kept until the happening of the certain event in the agreement. 7. Convertible Stock- Changeable by the stock holder from 1 class to another 8. Watered Stock- Stock which been issued as a fully paid up when in fact it is not, because it has been issued without any consideration or less than par

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9. Treasury Share- Reacquired stock 10. Founder stock- Stock issued to the founders. 11. Redeemable Stock- Stock maybe redeem at fix date. Limitation in the issuance of no par value share 1. No Far value Share cannot be issued for a consideration of less than 5 2. No Far value Share cannot be issued with preference as to assets or as to dividend. 3. No Far value Share cannot be issued without being fully paid 4. No Far value Share cannot be issued with the fallowing: a. Bank b. Trust Campany c. Insurance Company d. Building and loading Association e. Public Utilities When non-voting may not be voted 1. Amendment of the articles of incorporation 2. Adoption and Amendment of by laws 3. Sale, Least, Exchange, Mortgage, Pledge or other disposition of all or substantially all of the corporate property 4. Incurring, Creating, Increasing Bonded indebtedness 5. Increase or decrease of capital stock 6. Merger or consolidation 7. Investment of corporate funds in another corporation or business 8. Dissolution of corporation

Section 7 Founders Share- Share issued to organizer or founder of the organization Special right or privileges maybe given not enjoyed by the other owners of stock Exclusive right to vote and be voted in the election of directors is granted, must be for a limited period not exceeding 5 years and must be approve by SEC.

Section8 Redeemable Shares- Maybe issued only when expressly provided in the articles of incorporation -Those Share maybe deprived of voting rights and are classified as non-voting share -Maybe redeem purchase or taken upon the expiration -When the corporation is insolvent, Redeemable share maybe redeem regardless of the existence of un restricted retained earnings provided sufficient assets cover debts and liabilities

Section9 Treasury Share- Issued and later reacquired 1. Status- in the absence of a qualified bidder to perchance or acquired, only surplus earnings for the purchase of treasury shares -Treasury shares are not retired shares 2. Resale- They maybe resold by the corporation in any price provided that such price are reasonable. -It becomes again out standing stocks 3. Declaration as property dividend- are not consider as part of earned or surplus therefore not distributable as dividend. 4. Voting rights- Treasury share has no voting rights 5. Right to Dividends- Treasury shares cannot declare as dividends -Stock dividend may not be declared on treasury stock