Corporation defined FELICIANO vs COA [G.R. No. 147402. January 14, 2004] CARPIO, J.: FAC !

: COA audited the accounts of LMWD and charged it auditing fees. Petitioner, as general manager, requested for COA to cease all audit services and to stop charging auditing fees. t also requested for COA to refund all auditing fees previousl! paid "! LMWD. Petitioner contends that LWDs are not government# o$ned and controlled corporations $ith original charters. %e argues that LWDs are private corporations hence not su"&ect to the audit &urisdiction of COA ''(): Whether LWDs are Private Corporations $ith Original Charters. or *overnment#O$ned and Controlled

%)LD: An LWD is a *OCC $ith an original charter. +he Constitution recogni,es t$o classes of corporations. +he first refers to private corporations created under a general la$. +he second refers to government#o$ned or controlled corporations created "! special charters. Private corporations ma! e-ist onl! under a general la$. f the corporation is private, it must necessaril! e-ist under a general la$. 'tated differentl!, onl! corporations created under a general la$ can qualif! as private corporations. (nder e-isting la$s, that general la$ is the Corporation Code. LWDs are not private corporations "ecause the! are not created under the Corporation Code. LWDs are not registered $ith the 'ecurities and )-change Commission. LWDs have no articles of incorporation, no incorporators and no stoc.holders or mem"ers. +here are no stoc.holders or mem"ers to elect the "oard directors of LWDs as in the case of all corporations registered $ith the ')C. +he local ma!or or the provincial governor appoints the directors of LWDs for a fi-ed term of office. LWDs e-ist "! virtue of PD /01, $hich constitutes their special charter. 'ince under the Constitution onl! *OCCs ma! have special charters, LWDs can validl! e-ist onl! if the! are government#o$ned or controlled. +o claim that LWDs are private corporations $ith a special charter is to admit that their e-istence is constitutionall! infirm.