corporations may

OUTLINE: Republic Act transact business

11232 (Revised 6. Provides penalties
Corporation Code of the
for violations of the
Philippines)
code
7. Repeals all laws
and parts of laws
Sec 1. Title of the code
conflict and
The code shall be known as the inconsistent with
“Revised Corporation Code of the code
the Philippines”
- An act providing
Sec. 2 CORPORATION
for the revised DEFINED.
corporation code Definition of Corporation (The
of the Philippines definition refers only to private
- Enacted on corporations or to corporations
organized under the
February 20, 2019
corporation code)
Scope of the code
Attributes of Corporation:
1. Provide incorporation, 1. An artificial being;
organization, and 2. Created by operation of law;
regulation of private 3. Having the right to succession;
corporations, both stock 4. has the powers,
and non-stock, including attributes, and properties
expressly authorized by law
educational and religious
or incidental to its
corporations. existence.
2. Defines their powers and
provides for their - It is an artificial
being; (Doctrine of
dissolution.
corporate personality)
3. Fixes the duties and
liabilities of directors or
A corporation is a legal or
trustees and other
juridical person, separate and
officers
distinct from its shareholders.
4. Declares the rights Its corporate name may take,
and liabilities of hold, or dispose property
stockholders and under its corporate capacity.
members May enter a contract, can sue
and be sued on court. As a
5. Prescribes the
consequence:
conditions under
which corporations a. Liability for acts or
including foreign contracts
 Exception: Doctrine of stockholders
piercing the veil of
corporate entity – It is g. Changes in stockholders
when the corporate will not change the
entity is being used as a partnership
cloak or cover for fraud
or illegality, or to defeat - It is created by
public convenience, operation of Law;
justify wrong, protect or created by law
fraud, or defend crime.
Instances: Where a
corporation is dissolved A corporation require special
and its assets are authority or grant from the
transferred to another state. (GOCC: GSIS, SSS)
corporation to avoid a
a. Created by operation of
financial liability of the
law – A special
first corporation.
incorporation law which
directly creates the
b. Right to acquire and
corporation.
possess property
– acquire any
property. Claims of b. It has the right of
ownership: but succession
residual interest only.
A corporation has a
c. Property acquired by capacity of continuous
the corporation is existence irrespective of
owned by corporation the death, withdrawal,
and not of stockholders insolvency, or
incapacity of a
d. All contracts entered stockholders, and
into in its name by its regardless of the
regular appointed transfer their interest or
officers or agents of share of stock.
contracts and not those (perpetual existence
of stockholders, belong unless stipulated in AOI)
to the partnership. 50 years renewable
in the old law: BP
e. The tax Blg. 68, amended
exemption by RA 11262
granted to Corporations created
corporation is by special laws have
not extended the right of
to dividends successions for the
paid. term provided in the
laws creating them.
f. Corporation has no
personality to bring c. It has only the
action in behalf of its powers, attributes
 and properties by special laws or
expressly authorized charters – This
by law or incident to Corporation shall be
its existence. governed primarily by
A corporation, being the provisions of the
purely a creation of special law or charter.
law, may exercise only GOCC
such powers granted by
the law of its creation. Sec. 5 CORPORATORS – are
those who compose a
Express grant – power corporation, whether as:
nakalagay sa law pag • Stockholders in a stock
created by law, pag corporation
created by operation of • Members in a non-
law yung mga stock corporation
nakalagay sa AOI. INCORPORATORS - are those
stockholders or members
Implied power- mentioned in the articles of
mga hindi incorporation as originally
nakalagay, mga forming and composing the
kailangan lang corporation and who are
gagawin. signatories thereof.

Sec. 3&4 Sec. 6 CLASSIFICATION OF

DIFFERENT SHARES
TYPES OF • The rights, privileges,
CORPORATIONS or restrictions, and
their stated par value
• Stock Corporations – must be indicated in
Corporations that have the articles of
capital stock divided into incorporation.
shares that are
• Each share shall be
authorized to be equal to other share,
distributed. except provided in the
articles of
incorporation and in
• Non-stock the certificate of
Corporations – stock.
Corporations that
Par value shares – One in which
are not stock
a specific value if fixed in the
corporations.
Contribution of articles of incorporation and
themember is appearing in the certificate of
where they get stock.
their capital.
No-par value shares – One
without any value appearing on
• Corporations created
the face of the certificate of
stock.
Promotion shares – Those issued
• It must be issued for to promoters as compensation in
a consideration of at promoting the incorporation of
least 5 pesos per a corporation.
share.
• Entire consideration Treasury shares – A stock that
received by the has been issued by the
corporation as fully paid and
corporation for its no par
value shares shall be later reacquired but not retired.
treated as capital and
shall
Convertible shares – A stock
not be available for
which is convertible from one
distribution as
class to another class.
dividends.
• (banks, trust, insurance, Founder’s share - Founders’
and preneed shares may be
companies, public given certain rights and
utilities, building and privileges not enjoyed by the
owners of other stocks.
loan associations, and
other corporations Redeemable shares – These
authorized to obtain or are shares which may be
access funds from the purchased by the corporation
public, whether publicly from the holders of such
listed or not, shall not shares.
be permitted to issue no
par value shares of • May be issued by
stock.) the corporations
when expressly
Voting Shares – Issued with the provided in the
right to vote BOD and officers article of
corporation.
Non-voting Shares- issued
without the right to vote BOD
II. NUMBER AND
and officer
QUALIFICATIONS OF
Ordinary shares – These shares INCORPORATORS
entitle the holder to an equal
Any person, partnership,
pro-rata division of profits
association or corporation,
without any preference.
singly or jointly with others but
Preference shares – These not more than 15 in number,
may organize a corporation.
shares entitle the holder to
certain advantages over the Following are not allowed to
holders of ordinary shares. organize as a corporation:
1. Natural persons who are
• Issued only with stated
licensed to practice a
par value
 profession; • Purpose or primary
2. Government offices, business
agencies, or instrumentalities • Principal office
cannot organize corporations, • Incorporators and
unless authorized by a special their details
law; • Authorized capital
3. Persons convicted of crimes stock (for stock corporations)
involving moral turpitude (e.g.
fraud, syndicated estafa, 3. Incorporators
embezzlement); • The individuals or
4. Foreign nationals in industries entities who initiate the formation
restricted vy Foreign of the corporation.
Investment Negative List, • Under the Revised
such as mass meia, public Corporation Code, a corporation
utilities, and land ownership; may now have:
and • A minimum of one
5. Persons already disqualified incorporator (for a One Person
by SEC due ro violations of Corporation or OPC)
corporate laws or regulations. • A maximum of 15
incorporators (for regular
Incorporation is the legal process corporations)
of creating a corporation, a
business entity that is recognized 4. One Person Corporation
as a separate legal personality (OPC)
under the law. This process • An innovation under
involves fulfilling specific the Revised Corporation Code that
requirements and registering with allows a single individual (natural
the Securities and Exchange person, trust, or estate) to form a
Commission (SEC) in the corporation.
Philippines. • This simplifies the
incorporation process for small
Key Elements of Incorporation businesses and entrepreneurs.

1. Creation by Law Steps in Incorporation

• A corporation is not
automatically formed by 1. Preparation of the
agreement among individuals. It Articles of Incorporation (AOI) and
must be established following the By-Laws (optional for OPCs).
provisions of the law (Revised 2. Submission to the
Corporation Code). SEC for registration.
3. Issuance of a
2. Articles of Incorporation Certificate of Incorporation by the
(AOI) SEC, officially granting the entity
legal status as a corporation.
• This document is Submission to the SEC for
essential for incorporation. It registration.
outlines the corporation’s basic
information, such as: Why Incorporation is
• Corporate name Important
 • Trustees govern non-
1. Separate Legal
stock corporations.
Personality
• A corporation is 2. Qualifications
distinct from its owners, meaning
it can enter into contracts, own • Must hold at least one
property, and sue or be sued in its share (for stock corporations).
own name.
• Must meet other
2. Limited Liability
• The liability of qualifications as specified in the
shareholders is limited to their bylaws.
investment in the corporation.
3. Term of Office
Their personal assets are
generally protected. • Directors and trustees
3. Access to Capital have a 1-year term, renewable
• Corporations can
unless otherwise stated.
raise funds through the issuance
of shares or other securities. 4. Corporate Officers
4. Perpetual Existence
• The corporation can • President: Must be a
continue to exist regardless of director.
changes in ownership or
• Treasurer: May be the
management.
same person as the president in
Incorporation is a vital step for OPCs.
individuals or groups looking to
• Compliance officer:
establish a business entity that
benefits from these legal Required for large corporations.
protections and operational
advantages.
IV. Capital Stock
COMMENCEMENT OF
CORPORATE EXISTENCE
A private corporation 1. Authorized Capital Stock
commences its corporate
existence and juridical • Maximum amount of
personality from the date the shares a corporation is authorized to
Commission issues the issue.
certificate of incorporation under
its official seal. 2. Subscription and
Payment

• At least 25% of the

III. Board of Directors/Trustees
authorized capital stock must be
1. Composition subscribed.

• Minimum of 5, • At least 25% of the

maximum of 15 members for subscribed capital must be paid.
corporations (except OPC).
 3. Shares • Stockholders/Trustees:
Annual and special meetings.
• Can be common or
preferred. • Board of Directors:
Regular and special meetings.
• May be issued as voting
or non-voting, depending on the AOI. 2. Notice Requirements

• Written notice must be

given within a reasonable time (e.g.,
V. Corporate Powers
21 days for stockholder meetings).

3. Quorum
1. Express Powers
• Majority of the
• Sue and be sued, outstanding capital stock or
amend AOI, adopt bylaws, issue members present.
shares, declare dividends.

2. Incidental Powers

• Powers necessary for

VIII. Dissolution and Liquidation
the fulfillment of corporate purposes.

1. Voluntary Dissolution
VI. Corporate Governance
• Requires a resolution
approved by stockholders or
1. Corporate Secretary members.
• Ensures compliance 2. Involuntary Dissolution
with legal requirements.
• Initiated by the SEC for
2. Audit Committee reasons such as fraud or non-
• Required for publicly compliance with requirements.
listed and other large corporations. 3. Liquidation
3. Transparency • Assets are distributed to
Requirements creditors first, then to stockholders
• Regular filing of audited or members.
financial statements and general
information sheets with the SEC.
IX. Penal Provisions

VII. Meetings
1. Fines and Penalties

• Imposed for violations

1. Types of Meetings
of the Code.

• Examples: Fraudulent
practices, failure to file required
documents.

2. Liabilities of Directors
and Officers

• Held personally liable

for bad faith, gross negligence, or
conflict of interest.