COURSE OUTLINE

BUSINESS ORG II
(CORPORATION CODE AND RELATED LAWS)

LPU College of Law
1
st
Semester, SY 2014-2015
Atty. Romarico I. Gatchalian



I. THE CORPORATION CODE (Batas Pambansa Blg. 68)

1. Sec 1 Corp Code

II. NATURE, ATTRIBUTES AND CLASSIFICATIONS OF CORPORATIONS

1. Definition of a Corporation

(a) Sec 2 Corp Code

2. Corporation as a Creature of Law

(a) Sec 16, Art XII, 1987 Phil. Constitution

(b) Art 44-45 NCC

(c) Franchises of Corporations

(1) JRS Business Corp v. Imperial Insurance, 11 SCRA 634 (1964)

3. Attributes of Corporation

(a) Artificial being

(b) Creature of Law

(c) Right of Succession

4. Advantages of Corporate Form

(a) Strong legal personality

(b) Limited liability of stockholders

(1) San Juan Structural & Steel Fabricators v. CA, 296 SCRA 631 (1998)

(c) Transferability of shares of stock

(d) Centralized management

(1) Sec 23 Corp Code

(e) Unregistered Associations

(1) Art 1775 NCC

5. Disadvantages of Corporate Form; Comparison with other Business Media

(a) Sole Proprietorships

(b) Partnerships

(1) Art 1767-1768 NCC

(2) Art 1818 NCC

(3) Art 1830, 1839 NCC

(c) Business Trusts

(d) Joint Ventures

(1) Kilosbayan Inc v. Guingona, 232 SCRA 110 (1994)

(2) Philex Mining Corp v. CIR, G.R. No 148187 (2008)

(e) Cooperatives

(1) Art 3, Cooperative Development Authority Act (RA 6939)

6. Entitlement to Constitutional Guarantees

(a) Smith Bell & Co v. Natividad, 40 PHIL 136 (1919)

(b) Stonehill v. Diokno, 20 SCRA 383 (1967)

(c) Bache & Co (Phil) Inc v. Ruiz, 37 SCRA 823 (1971)

(d) Bataan Shipyard & Engineering Co Inc v. PCGG, 150 SCRA 181 (1987)

7. Liability for Torts

(a) PNB v. CA, 83 SCRA 237 (1978)

(b) Naguiat v. NLRC, 269 SCRA 564 (1997)

(c) Aratea v. Suico, 518 SCRA 501 (2007)

8. Criminal Liability

(a) People v. Tan Boon Kong, 54 PHIL 607 (1930)

(b) Sia v. People, 121 SCRA 655 (1983)

(c) Cometa v. CA, 301 SCRA 459 (1999)

9. Entitlement to Moral Damages

(a) Mambulao Lumber Co v. PNB, 22 SCRA 359 (1968)

(b) ABS-CBN Broadcasting Corp v. CA, 301 SCRA 589 (1999)

(c) Filipinas Broadcasting Network v. Ago Medical & Educational Center
(G.R. no 141993, January 17, 205)

10. Nationality of Corporations

(a) Place of Incorporation Test

(1) Sec 123, Corp Code

(b) Control Test

(1) Exploitation of Natural Resources

1) Sec 2, Art XII, 1987 Phil. Constitution

(2) Ownership and Operation of Public Utilities

1) Sec 11, Art XII, 1987 Phil. Constitution

2) People v. Quasha, 93 PHIL 333 (1953)

(3) Mass Media

1) Sec 11, Art XVI, 1987 Phil. Constitution

(4) Advertising Industry

1) Sec 11, Art XVI, 1987 Phil. Constitution

(5) War-Time Test

1) Haw Pia v. China Banking Corp, 80 PHIL 604 (1948)
(6) Investment Test and Grandfather Rule

(7) Policy of Corporation Code on Control Test

1) Sec 140 Corp Code

11. Classification of Corporations

(a) In Relation to the State

(1) Public and Private Corporations

(2) Distinction between Public and Private Corporations

1) National Coal Co v. CIR, 46 PHIL 583 (1924)

2) Cervantes v. Auditor General, 91 PHIL 359 (1952)

(3) Quasi-Public Corporations

1) Marilao Water Consumers Assoc. Inc v. IAC, 201 SCRA 437 (1991)

(b) As to Place of Corporation

(1) Domestic Corporation

1) Sec 123 Corp Code

(2) Foreign Corporations

(c) As to Legal Status

(1) De Jure Corporation

(2) De Facto Corporation

1) Sec 20 Corp Code

(3) Corporation by Estoppel

1) Sec 21 Corp Code
(4) Corporation by Prescription

(d) As to Existence of Shares of Stock

(1) Stock Corporations

1) Sec 3 & 43 Corp Code

(2) Non-Stock Corporations

1) Sec 87-88 Corp Code

2) CIR v. Club Filipino, 5 SCRA 321 (1962)

(e) As to Relationship of Management and Control

(1) Holding Company

(2) Affiliate Company

(3) Parent and Subsidiary Companies

III. CORPORATE JURIDICAL PERSONALITY AND DOCTRINE OF PIERCING THE VEIL OF
CORPORATE FICTION

1. Main Doctrine: Separate Juridical Personality

(a) Sec 2 Corp Code

(b) Traders Royal Bank v. CA, 177 SCRA 789 (1989)

(c) National Power Corp v. CA, 273 SCRA 419 (1997)

(d) Lidell & Co v. CIR, 2 SCRA 632 (1961)

(e) Remo v. IAC, 172 SCRA 405 (1989)

(f) Umali v. CA, 189 SCRA 529 (1990)

2. Piercing the Veil of Corporate Fiction

(a) San Juan Structural & Steel Fabricators Inc v. CA, 296 SCRA 631 (1998)

(b) Luxuria Homes Inc v. CA, 302 SCRA 315 (1999)

(c) Traders Royal Bank v. CA, 269 SCRA 601 (1997)

3. Nature and Consequence of Piercing Doctrine

(a) Res Judicata
4. Classification of Piercing Cases

5. Alter Ego Cases

6. Equity Cases

7. Piercing Doctrine and Due Process Clause

IV. CORPORATE CONTRACT LAW

V. ARTICLES OF INCORPORATION

VI. BY-LAWS

VII. CORPORATE POWERS AND AUTHORITY

VIII. DIRECTORS, TRUSTEES AND OFFICERS

IX.