CHAPTER XI 1. Place of Incorporation Test ...

441
CORPORATION CODE N.C.C. Section 123
2. Control Test ...
TABLE OF CONTENTS 441
3. Grandfather Rule ..
I. The Corporation Code of the Philippines 442
417 D. Classes of Corporation .
II. Nature ... 444
417 1. Government Owned and/or
A. Defined .. 417 Controlled Corporations 445
N.C.C. Section 2 2. Private Corporations ...
B. Attributes ..... 419 448
1. In General ... 1) Stock Corporations ...
419 448
2. Particular Attributes 420 N.C.C. Section 3
a. Distinct Personality .. 420 a. Par value stock corporations ...
BAR 448
Doctrine of legal entity pg. 422 b. No par value stock corporations .
Piercing the veil of corporation fiction pg. 422 448
May a corporation be sued for moral damages? 2) Non-stock Corporation 450
General rule and exception pg. 424 N.C.C. Section 87
1. Doctrine of Piercing the Veil of 3) Aggregate and Sole ........................
Corporate Fiction 450
427 a. Aggregate . 450
Instrumentality rule pg. 429 b. Corporation Sole .
a. When applied . 450
430 N.C.C. Section 10
b. When not applied .. 4) Ecclesiastical and Lay ..
434 450
c. Consequences if the Veil is Pierced a. Ecclesiastical ...
439 450
b. Perpetual Succession .. 439 b. Lay .. 450
c. Use of Corporate Name 1) Eleemosynary
440 450
N.C.C. Section 18 2) Civil corporations .
C. Nationality of Corporations .. 450
441 5) Domestic and Foreign ..
450
 a. Domestic ... b. Number of Directors ..
450 466
b. Foreign .. 450 c. Liability of Directors ..
N.C.C. Section 110 466
6) De Jure, De Facto, Doctrine of Corporate Opportunity pg. 472
By Estoppel, by Prescription .. d. Compensation of Directors .
450 473
a. De jure Corporation 6. The Executive Committee ..
450 474
b. De facto Corporation .. 7. Officers ...
451 474
N.C.C. Section 20 Doctrine of limited liability pg. 475
c. Corporation by Estoppel ... Jurisdiction of the NLRC pg. 476
454 Intra-corporate disputes pg. 476
N.C.C. Section 21 a. The President . 476
d. Corporation by Prescription 457 Theory of imputed knowledge pg. 477
7) Quasi-Public and Quasi-Corporation ... b. The Treasurer . 478
457 c. The Secretary . 478
8) Condominium Corporation . III. Capital Structure of Stock Corporations 479
457 A. Important Concepts Defined
E. Components of a Corporation . 479
458 1. Capital Stock .
1. Incorporators 458 479
N.C.C. Section 5 N.C.C. Section 6, 3rd paragraph
2. Corporators ... 2. Capital .
459 479
N.C.C. Section 5 3. Share of Stock ...
3. Stockholders and Members .. 480
460 B. Prerequisites to Incorporation
See Corporators 480
4. Promoter . 1. Capital Stock .
460 480
5. The Board of Directors BAR Par value share vs no par value share pg. 481
461 2. Subscribed Capital ..
N.C.C. Section 23 482
a. Qualifications of Directors .. a. Trust Fund Doctrine ..
462 483
Holdover period pg. 465 3. Paid up Capital ..
488
 N.C.C. Section 14, 2nd paragraph Owners of Non-Voting Shares ...
BAR Authorized capital vs subscribed capital 496
vs paid-up capital pg. 488 N.C.C. Section 57; Section 6, paragraph 6
C. Increase or Decrease of Capital Stock .. Par Value and No-Par Value Shares pg. 497
489 BAR
1. Required Vote What is meant by preferred cumulative participating
489 share of stock pg. 497
N.C.C. Section 39 2. Other Classifications .. 498
Voting shares and non-voting shares pg. 490 a. Promotion Stock
N.C.C. Section 6 498
Voting rights pg. 490 b. Escrow Stock ..
N.C.C. Section 30 498
2. Procedure .. 490 c. Over-issued Stock .
BAR Steps to be taken for increasing the 498
capital stock of the corporation pg. 490 d. Watered Stock 498
D. Classes of Shares ... N.C.C. Section 65
493 E. Issue and Transfer of Shares ...
1. Statutory Classification .. 498
493 1. Issue of Stocks .
a. Voting and Non- Voting Shares ..... 498
493 a. Modes of Issue
N.C.C. Section 6 499
1. Voting Shares .. 493 b. Consideration .
a. Founders Shares . 499
493 N.C.C. Section 62, 1st paragraph
N.C.C. Section 7 2. Preemptive Right of Stockholders
2. Non-voting Shares .. 501
493 N.C.C. Section 39
N.C.C. Section 9 3. Issuance of Certificate of Stock ..
a. Preferred Shares .. 493 504
Common Shares vs. Preferred Shares; a. Nature of a Certificate of Stock .
Doctrine of Equality of Shares pg. 495 504
b. Redeemable Shares 495 b. Formalities for Issuance
N.C.C. Section 8 505
c. Treasury Stocks c. Right of Stockholder to a Certificate ..
496 505
N.C.C. Section 9 d. Lost and Stolen Certificate
d. Voting rights Exercisable by 507
N.C.C. Section 73
 4. Transfer of Shares .. 1. Visitorial Power ...
509 526
a. Nature of Right . D. Election of the Board and Adoption of the By-Laws ..
509 527
b. Manner of Transfer .. E. Amendment of Articles and By-laws ..
513 531
5. Pledge or Mortgage of Shares . 1. Procedure .
515 531
a. Pledge of Shares .. 2. Legal Effect of Change of Corporate Name .
516 532
b. Chattel Mortgage of Shares .. 3. Date of Effectivity of Amendment ..
516 532
6. Collection of Unpaid Subscription . F. Merger and Consolidation of Corporations ..
517 534
a. Methods . 517 1. Defined ..
b. Call, Delinquency and Sale at Auction .. 535
518 2. Procedure for Merger or Consolidation ...
N.C.C. Section 67 and 86 536
N.C.C. Section 63 3. Effects of Merger or Consolidation
7. Reacquisition by a Corporation of its Stock 536
520 N.C.C. Section 89
Appraisal rights pg. 521 G. Corporate Books and Records .
IV. Incorporation and Organization 539
521 1. Books Required to be Kept ..
A. Contents of Articles of Incorporation 540
521 N.C.C. Section 74
1. Stock Corporations . 522 a. Book of Minutes ...
2. Non-Stock Corporation .. 523 540
3. Conversion from Stock to Non-stock b. Book of Accounts
and Vice-versa .. 540
524 c. Stock and Transfer Book ..
B. Documents Accompanying the Articles ... 541
525
1. Grounds for Rejection or Disapproval by SEC of
Articles or Amendments 525
N.C.C. Section 17
C. Issue of Certificate of Incorporation ..
526
N.C.C. Section 19