TITLE II: INCORPORATION & ORG OF PRIVATE CORPO

CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

Steps in the creation of a corporation

Sec 10 Number and Qualifications of
Incorporators.

1. Promotion
Any person, partnership, association or
corporation, singly or jointly with others but This includes activities done by promoter for
not more than fifteen (15) in number, may the founding and organizing of the business or
organize a corporation for are any lawful enterprise of the issuer.
purpose or purposes: Provided, That natural
persons who licensed to practice a profession,
and partnerships or associations organized 2. Incorporation
allowed to for organize the purpose of
practicing a profession, shall not be as a a. Execution of articles of incorporation
corporation unless otherwise provided under by incorporators and other documents
special laws. Incorporators who are natural required for registration of
persons must be of legal age. corporation.
b. Filing of the articles of incorporation
Each incorporator of a stock corporation must with SEC together w/ treasurer's
own or be a to at least one (1) share of the affidavit. I
capital stock.
In case the corporation is governed by
A corporation with a single stockholder is special law, a favorable recom of
considered a One Person Corporation as appropriate government agency (e.g.
described in Title XIII, Chapter III of this Code. CHED or DepEd) that such articles of
incorporation and by-laws is in
accordance with law.
One Person Corporation (OCP)

A Corpo w/ a single stockholder. Only natural Formal organization &

3.
person, trust, or an estate may form OCP. commencement of business
transactions
Banks and quasi-banks, preneed, trust,
insurance, public and publicly listed Examples of formal organization:
companies, and non-chartered GOOC may not a. Adoption of by-laws and filing the
be incorporated as One Person Corporations same with the SEC
b. Election of board of directors or board
Moreover, a natural person who is licensed to of trustees and officers
exercise a profession may not organize as an c. Payment of shares
OPC for exercising such profession except as
otherwise provided under special laws.
NOTE: Any person, partnership, association or
corporation, singly or jointly with others but
Incorporator vs Corporator
not more than fifteen (15) in number, may
organize a corporation for any lawful purpose
or purposes.

Natural persons who are licensed to practice a

profession, and partnerships or associations
organized for the purpose of practicing a
profession, shall not be allowed to organize as
a corporation unless otherwise provided under
special laws.

Number of Incorporators
For the purpose of forming a new domestic
corporation under RCCP, two (2) or more
persons, but not more than fifteen (15), may
organize themselves and form a corporation.
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

Only OPC may have a single stockholder, as

well as a sole director. Accordingly, its The certificate must indicate:
registration must comply with the  Necessary approvals.
corresponding separate guidelines on the  Authorized signatory for incorporation
establishment of an OPC. documents.

Restrictions:
Qualifications of Incorporators
Domestic corporations with "delinquent,"
Each incorporator of a stock corporation must "suspended," "revoked," or "expired" SEC
own, or be a subscriber to, at least one (1) status cannot be incorporators.
share of the capital stock. Each incorporator of
a nonstock corporation must be a member of
Foreign Corporations as Incorporators
the corporation.

The incorporators may be composed of any Required Documentation:

combination of: The registration application must include a duly
 natural persons/s. authenticated document, such as:
 corporation/s  Board Resolution
 SEC-registered or  Directors' Certificate
 association/s. partnership/s. S  Secretary's Certificate
 EC-registered domestic  Any equivalent document
 foreign corporation/s.
The document must be:
Incorporators who are natural persons must be  Authenticated by PH Consulate or
of legal age and must sign the Articles of have an apostille.
Incorporation/Bylaws.  Explicitly authorize foreign corporation
to invest.
 Name the designated signatory for
Partnerships as Incorporators
incorporation.

Requirements:
Signatories of the Articles of
A SEC-registered partnership can be an
Incorporation
incorporator if:
 All partners execute a Partner's
Affidavit confirming authorization. Signing Requirements:
 One partner is designated as the  Each signatory must indicate their
signatory for incorporation capacity
documents.  If signing on behalf of a non-natural
person (corporation or partnership),
Restrictions: the entity’s name must be included.
 Dissolved or expired partnerships
cannot act as incorporators. Taxpayer Identification Number (TIN):
 The TIN of both the principal and the
designated signatory must be stated
Domestic Corporations or Associations in the Articles of Incorporation.
as Incorporators  Foreign investors must provide either:
 A TIN (if issued).
Approval Requirements:  A passport number (if no TIN
Investment must be approved by: yet).
 majority of board of directors/trustees.  No incorporation application will be
 Ratified by at least two-thirds (2/3) of accepted without these details.
stockholders (for stock corporations).
 Ratified by at least two-thirds (2/3) of Post-Incorporation Requirement:
members (for non-stock corporations).  All foreign investors (individuals and
corporations) must secure a TIN after
Approval must occur in a duly called meeting. incorporation.
 The SEC will not accept any post-
Required Documentation: incorporation documents (e.g.,
A Directors'/Trustees' Certificate or Secretary's General Information Sheets) unless
Certificate, executed under oath, must be the TINs of all foreign investors are
submitted. provided.
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

any change in the corporate right of

dissenting stockholders in accordance with
Designation of Incorporators as the provisions of this Code.
Directors or Trustees
A person signing the Articles of Incorporation A corporate term for a specific period may be
on behalf of a non-natural person (corporation extended or shortened by amending the
or partnership) cannot be named as a director articles of incorporation: Provided, That no
or trustee unless: extension may be made earlier than three (3)
years prior to the original or subsequent
expiry date(s) unless there are justifiable
1. They own at least one (1) share of stock reasons for an earlier extension as may be
(for stock corporations), or determined by the Commission: Provided,
further, That such extension of the corporate
term shall take effect only on the day
2. They are member of non-stock corporation
following the original or subsequent expiry
being formed.
date(s).

A corporation whose term has expired may

Foreign Nationals in the Articles of apply for revival of its corporate existence,
Incorporation together with all the rights and privileges
under its certificate of incorporation and
Inclusion of foreign nationals as incorporators subject to all of its duties, debts and liabilities
is subject to: existing prior to its revival. Upon approval by
 Constitutional limits the Commission, the corporation shall be
deemed revived and a certificate of revival of
 Statutory laws
corporate existence shall be issued, giving it
 Regulatory restrictions perpetual existence, unless its application for
 Conditions on foreign participation in revival provides otherwise.
specific investment areas or activities
No application for revival of certificate of
Compliance with foreign ownership restrictions incorporation of banks, banking and quasi-
in certain industries is required. banking institutions, preneed, insurance and
trust companies, non-stock savings and loan
Additional Requirements for Certain associations (NSSLAs), pawnshops,
Corpo corporations engaged in money service
business, and other financial intermediaries
shall be approved by the Commission unless
Banks, quasi-banking institutions, and financial accompanied by a favorable recommendation
intermediaries (including preneed insurance, of the appropriate government agency.
trust companies, NSSLAs, and pawnshops)
must secure a favorable recommendation from
the relevant government agency before their General Rule
Articles of Incorporation can be approved.
A corporation shall have perpetual existence.
This ensures compliance with laws and
regulations governing financial entities.
Exception

Sec 11 Corporation Term If the article of incorporation provides

otherwise or if it provides for a specific period.
A corporation shall have perpetual existence
NOTE: A corporate term for a specific period:
unless its articles of incorporation provides
otherwise.
 may be extended or shortened by
amending the articles of
Corporations with certificates of incorporation
incorporation.
issued prior to the effectivity of this Code and
which continue to exist shall have perpetual  ceases to exist and is dissolved ipso
facto upon the expiration of the
existence, unless the corporation, upon a vote
period fixed in the original articles of
of its stockholders representing a majority of
incorporation, in the absence of
its articles of incorporation: Provided, That
compliance with the legal requisites
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

of extension of period. Petition to Revive, and must settle

the corresponding penalties thereof;
Revival of Corporate Existence
3. An Expired Corporation whose
A corporation whose term has expired may Certificate of Registration has been
apply for a revival of its corporate existence. suspended, provided that it shall
file the proper Petition to Lift its
Gen Rule: Suspended Status, which may be
Upon approval by the SEC, the corporation incorporated in its Petition to Revive,
shall be deemed revived and a certificate of and must settle the corresponding
revival of corporate existence shall be issued, penalties thereof; or
giving it perpetual existence.
4. An Expired Corporation whose
Exception:
corporate name has already
If its application for revival provides otherwise
been validly re-used, and is
or provides for a specific period.
currently being used, by another
existing corporation duly registered
Ff. Corpo req favorable recommendation with the SEC, provided that the
of appropriate gov agency bef SEC former shall change its corporate
approve revival of certificate of name within thirty (30) days from the
incorporation issuance of its Certificate of Revival
of Corporate Existence.

1. Banks
Who May NOT Apply for Revival?
2. Banking and quasi-banking
institutions;
1. An Expired Corporation which has
3. Preneed completed the liquidation of its
assets;
4. Insurance and trust companies
2. A corporation whose Certificate of
5. Nonstock savings and loan Registration has been revoked for
associations; and reasons other than non-filing
ofreports (e.g. General Information
6. Pawnshops Sheet Audited Financial Statements);

7. Corporations engaged in money 3. A Presidential corporation dissolved

service business; and by virtue of Sections 6(c) and 6(d) of
No. 1799; Decree No. 902-A, as
amended by Presidential Decree or
8. Other financial intermediate.

4. An Expired Corporation which alr

availed of re-registration, in accord
Who May Apply for Revival?
w/ Memorandum Circular No. 13,
series of 2019 (Amended Guidelines
& Procedures on Use of Corporate
1. Generally, a corporation whose term and Partnership Names), or other
has expired; memorandum circulars issued by the
SEC pertaining to re-registration,
2. An Expired Corporation whose except when:
Certificate of Registration has been
revoked for non-filing of reports  (except) re-registered corporation
(e.g. General Information Sheet and has given its consent to the
Audited Financial Statements), Petitioner to use its corporate name,
provided that it shall file the proper and has undertaken to the undergo
Petition to Lift its Revoked Status, voluntary dissolution immediately
which may be incorporated in its after the issuance of Petitioner's
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

Certificate of Revival; or a. The name of corporation;

b. The specific purpose or purposes for
 (except) re-registered corporation which the corporation is being
has given its consent to the formed. Where a corporation has
Petitioner to use its corporate name, more than one stated purpose, the
and has undertaken to change articles of incorporation shall
Petitioner's its corporate name indicate the primary purpose & the
immediately after the issuance of the secondary purpose or
Certificate of Revival purposes: Provided, That a nonstock
corporation may not include a
purpose which would change or
contradict its nature as such
Required Voted to Initiate Revival
c. The place where the principal office
of the corporation is to be located,
For Expired Stock Corpo: which must be within the Philippines
At least a majority vote of the board of d. The term for which the corporation is
directors, and the vote of at least majority of to exist, if the corporation has not
the outstanding capital stock. elected perpetual existence
e. The names, nationalities, and
For Non-Stock Corpo: residence addresses of the
At least a majority vote of the board of incorporators
trustees, and the vote of at least majority of f. The number of directors, which shall
the members not be more than fifteen (15) or the
number of trustees which may be
more than fifteen (15);
Appraisal Right
g. The names, nationalities, and
The revival of the corporate existence is residence addresses of persons who
without prejudice to the appraisal right of shall act as directors or trustees until
dissenting stockholders in accordance with the the first regular directors or trustees
provisions of the Revised Corporation Code. are duly elected and qualified in
accordance with this Code
h. If it be a stock corporation, the
Minimum Capital Stock Not amount of its authorized capital
Sec 12
Required of Stock Corporations. stock, number of shares into which it
is divided, the par value of each,
names, nationalities, and
Stock corporations shall not be required to subscribers, amount subscribed and
have minimum capital stock, except as paid by each on the subscription,
otherwise specially provided by special law. and a statement that some or all of
the shares are without par value, if
Gen rule: applicable;
There is no minimum authorized capital stock. i. If it be a nonstock corporation, the
amount of its capital, the names,
Exception: nationalities, and residence
If provided by special law. addresses of the contributors, and
amount contributed by each; and
j. Such other matters consistent with
Contents of the Articles of law and which the incorporators may
Sec 13 deem necessary and convenient.
Incorporation

An arbitration agreement may be provided in

All corporations shall file with the Commission the articles of incorporation pursuant to
articles of incorporation in any of the official Section 181 of this Code.
languages, duly signed and acknowledged or
authenticated, in such form and manner as The Articles of incorporation and applications
may be allowed by the Commission, for amendments thereto may be filed with the
containing substantially the following Commission in the form of an electronic
matters, except as otherwise prescribed by document, in accordance with the
this Code or by special law: Commission's rule and regulations on
electronic filing.
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

____________ ______________ ______________

____________ ______________ ______________
____________ ______________ ______________
____________ ______________ ______________
Sec 14 Form of Articles of ____________ ______________ ______________
Incorporation
Seventh: That the authorized capital stock of
the corporation is _____ PESOS (₱______),
Unless otherwise prescribed by special law, dividend into ____ shares with the par value of
the articles of incorporation of all domestic ________ PESOS (₱____) per share. (In case all
corporations shall comply substantially with the shares are without par value): That the
the following form: capital stock of the corporation is _________
shares without par value.
Articles of Incorporation
of (In case some shares have par value and
_____________________ some are without par value): That the capital
(Name of Corporation) stock of said corporation consists of
____________ shares, of which _______ shares
The undersigned incorporators, all of legal have a par value of ____________PESOS
age, have voluntarily agreed to form a (stock) (₱_______) each, and of which __________
(nonstock) corporation under the laws of the shares are without par value.
Republic of the Philippines and certify the
following: Eight: That the number of shares of the
authorized capital stock-stated has been
First: That the name of said corporation shall subscribed as follows:
be "_____________", Inc. Corporation or OPC";

Second: That the purpose or purposes for

which such corporation is incorporated are: (If
there is more than one purpose, indicate
primary and secondary purposes);
(Modify No. 8 if shares are with no-par value.
Third: That the principal office of the In case the corporation is nonstock, Nos. 7
corporation is located in the City/Municipality and 8 of the above articles may be modified
of ___________, Province of ______, Philippines; accordingly, and it is sufficient if the articles
may be modified accordingly, and it is
Fourth: That the corporation shall have sufficient if the articles state the amount of
perpetual existence or a term of ________ capital or money contributed or donated by
years from the date of issuance of the specified persons, stating the names,
certificate of incorporation; nationalities, and residence addresses of the
contributors or donors and the respective
Fifth: That the names, nationalities, and amount given by each.)
residence addresses of the incorporators of
the corporation are as follows: Ninth: That _______________________ has been
elected by the subscribers as Treasurer of the
Name Nationality Residence Corporation to act as such until after the
____________ ______________ ______________ successor is duly elected and qualified in
____________ ______________ ______________ accordance with the bylaws, that as
____________ ______________ ______________ Treasurer, authority has been given to
____________ ______________ ______________ receive in the name and for the benefit of the
____________ ______________ ______________ corporation, all subscriptions, contributions or
donations paid or given by the subscribers or
Sixth: That the number if directors or trustees members, who certifies the information set
of the corporation shall be forth in the seventh and eighth clauses
___________________; and the names, above, and that the paid-up portion of the
nationalities, and residence addresses of the subscription in cash and/or property for the
first directors or trustees of the corporation benefit and credit of the corporation has been
are as follows: duly received.

Name Nationality Residence Tenth: That the incorporators undertake to

TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

change the name of the corporation There is no gainsaying that the contents of the
immediately upon receipt of notice from the articles of incorporation are binding, not only
Commission that another corporation, on the corporation, but also on its
partnership or person has acquired a prior shareholders.
right to the use of such name, that the name
has been declared not distinguishable from a
corporation, or that it is contrary to law, Three-fold nature of the articles of
public morals, good customs or public policy. incorporation
Eleventh: (Corporations which will engage in
any business or activity reserved for Filipino
citizens shall provide the following): 1. A contract between the State and the
corporation
"No transfer of stock or interest which shall
reduce the ownership of Filipino citizens to 2. A contract between the corporation
less than the required percentage of capital and its stockholders
stock as provided by existing laws shall be
allowed or permitted to be recorder in the 3. A contract between the stockholders
proper books of the corporation, and this inter se
restriction shall be indicated in all stock
certificates issued by the corporation."
Name of the Corporation
IN WITNESS WHEREOF, we have hereunto
signed these Articles of Incorporation, this A corporation's name is essential to its
______ day of _____, 20___ in the existence, identity, and legal operations.
City/Municipality of _________________, Just like an individual's name identifies a
Province of ________________, Republic of the person, a corporation's name distinguishes it
Philippines. and allows it to sue, be sued, and conduct
legal acts.
___________________ __________________
___________________ __________________ Each corporation must have a unique name, as
___________________ __________________ it is a fundamental attribute of its
corporate franchise, just like any other
(Names and signatures of the incorporators) privilege granted to it.
____________________________
(Name and signature of Treasurer)
Limitation on the use of Corpo Name

The name must not be identical, deceptively or

Subscription confusingly similar to that law, or of any
patently existing corporation or to any other
A written contract to purchase newly issued
name already protected by deceptive,
shares of stock or bonds. Also termed stock
confusing or contrary to law.
subscription.
It must contain the word "Inc., Corporation, or
Paid-up Capital OPC.

Portion of the authorized capital stock which

has been both subscribed and paid. Change of Corporation Name

A corporation can change its name by

To reiterate, such must form part of the
amending its articles of incorporation.
authorized capital stock of the corporation,
subscribed and then actually paid up.
Purpose Clause
Article of Incorporation A corporation's name defines and limits the
powers it can exercise. Any action beyond
Described as one that defines the charter of
these powers is considered an ultra vires act
the corporation and the contractual
(beyond legal authority).
relationships between the State and the
corporation, the stockholders and the State,
If a corporation has multiple stated purposes,
and between the corporation and its
its Articles of Incorporation must specify:
stockholders.
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

 The primary purpose, which is the This is the maximum amount fixed in articles
main business activity. of incorporation that may be subscribed and
 The secondary purpose(s), which paid by the stockholders of the corporation.
support the primary purpose.
The Articles of Incorporation of a stock
This distinction helps determine which corporation must include the following
investments of funds require approval from details:
both the Board of Directors and
Stockholders. 1. Authorized Capital Stock – The
total capital stock expressed in lawful
Philippine currency.
NOTE: Invest of Corporate Funds (Sec 2. Number of Shares – How the
41) authorized capital stock is divided into
shares.
A private corporation may invest its funds
in another corporation, business, or purpose 3. Par Value (if applicable) – If the
outside its primary purpose, provided that: shares have a par value, the Articles
1. The investment is approved by a must state:
majority of the Board of Directors o The par value of each share.
or Trustees.
2. It is ratified by stockholders
o The names, nationalities,
holding at least two-thirds (2/3) of and residences of the
the outstanding capital stock. original subscribers.
3. For nonstock corporations, it must o The amount subscribed
be approved by at least two- and paid by each
thirds (2/3) of the members in a subscriber.
properly called meeting.
4. No Par Value Shares (if
applicable) – If some or all shares
Principal Office of the Corporation have no par value, this must be
clearly stated.

1. To fix the residence of the

corporation in a definite place; Amendment of Articles of
Sec 15
Incorporation
2. To determine the venue of court 5.

cases involving the corporation; Unless otherwise prescribed by this Code or

by special law, and for legitimate purposes,
3. For purposes of stockholders or any provision or matter stated in the articles
members meeting of incorporation may be amended by a
majority vote of the board of directors or
4. To determine the place where the trustees and the vote or written assent of the
books and records of the corporation stockholders representing at least two-thirds
are ordinarily kept. (2/3) of the outstanding capital stock, without
prejudice to the appraisal right of dissenting
stockholders in accordance with the
Term of Existence provisions of this Code. The articles of
incorporation of a nonstock corporation may
A corporation shall have perpetual existence be amended by the vote or written assent of
unless its articles of incorporation provides majority of the trustees and at least two-
otherwise. thirds (2/3) of the members.

Number of Board of Directors or The original and amended articles together

Trustees shall contain all provisions required by law to
be set out in the articles of incorporation.
The number of directors shall not be more than Amendments to the articles shall be indicated
fifteen (15). The number of trustees may be by underscoring the change or changes made,
more than fifteen (15) and a copy thereof duly certified under oath
by the corporate secretary and a majority of
Authorized Capital Stock the directors or trustees, with a statement
that the amendments have been duly
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

approved by the required vote of the a. Banks

stockholders or members, shall be submitted b. Banking and quasi-banking
to the Commission. institutions;
c. Preneed
The amendments shall take effect upon their d. Insurance and trust companies
approval by the Commission or from the date e. Nonstock savings and loan
of filing with the said Commission if not acted associations (NSSLAs)
upon within six (6) months from the date of f. Pawnshops; and
filing for a cause not attributable to the g. Other financial intermediaries.
corporation.

Grounds When Articles of

Sec 16 Incorporation or Amendment
May be Disapproved.
Limitations in Amendment of Articles of 1.

Incorporation
The Commission may disapprove the articles
of incorporation or any amendment thereto if
1. The contrary amendment to the must the same is not compliant with the
be for legitimate purposes and must requirements of this Code: Provided, That the
not be Corporation Code and special Commission shall give the incorporators,
laws directors, trustees, or officers as reasonable
time from receipt of the disapproval within
which to modify the objectionable portions of
2. The directors amendment or board
the articles or amendment. The following are
must of be approved by a majority of
ground for such disapproval:
the board of trustees
(a) The articles of incorporation or any
3. The amendment requires the vote or amendment thereto is not substantially in
written assent of stockholders accordance with the form prescribed herein;
representing 2/3 of the outstanding
capital stock or 2/3 members if it be (b) The purpose or purposes of the
a non-stock corporation corporation are patently unconstitutional,
illegal, immoral or contrary to government
4. The original and amended articles rules and regulations;
together shall contain all provisions
required by law to be set out in the (c) The certification concerning the amount of
articles of incorporation. Such capital stock subscribed and/or paid is false;
articles, as amended, shall be and
indicated by underscoring the
changes made; (d) The required percentage of Filipino
ownership of the capital stock under existing
5. Certification under oath by the laws or the Constitution has not been
corporate secretary and a majority of complied with.
the board of directors or board of
trustees stating the fact that said No articles of incorporation or amendment to
amendments have been duly articles of incorporation of banks, banking and
approved by the required vote of the quasi-banking institutions, preneed, insurance
stockholders or members, shall be and trust companies, NSSLAs, pawnshops and
submitted to the SEC; other financial intermediaries shall be
approved by the Commission unless
accompanied by a favorable recommendation
6. The amendment must be approved
of the appropriate government agency to the
by the SEC;
effect that such articles or amendment is in
accordance with law.
7. The amendment must be
accompanied by a favorable
recommendation of the appropriate
NOTE: Before disapproving the articles of
government agency in cases of:
incorporation or its amendments, the SEC
should give the which incorporators, to
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

correct directors, trustees, or officers a use is contrary to existing law, rules and
reasonable time within which to correct or regulations.
modify the objectionable portion of the
articles or amendment.
A corporation's name is essential to its
existence, identity, and legal operations.
Just as a person's name identifies them, a
corporate name distinguishes a corporation,
Sec 17 Corporate Name allowing it to sue, be sued, and conduct
1.
legal transactions.
No corporate name shall be allowed by the
Commission if it is not distinguishable from Each corporation must have a unique name, as
that already reserved or registered for the use it is a fundamental part of its corporate
of another corporation, or if such name is franchise, just like any other privilege granted
already protected by law, or when its use is to it.
contrary to existing law, rules and regulations.
A name is not distinguishable even if it
contains one or more of the following: Amended Guidelines and Procedures on
the Use of Corporate and Partnership
(a) The word "corporation", "company", Names
incorporated", "limited", "limited liability", or
an abbreviation ofone if such words; and To stay updated with business and information
technology developments, the SEC has
(b) Punctuations, articles, conjunctions, established the following guidelines and
contractions, prepositions, abbreviations, procedures for registering corporate, one-
different tenses, spacing, or number of the person corporate, and partnership names:
same word or phrase.

The Commission upon determination that the

corporate name is: (1) not distinguishable
from a name already reserved or registered
for the use of another corporation; (2) already
protected by law; or (3) contrary to law, rules
and regulations, may summarily order the
corporation to immediately cease and desist
from using such name and require the
corporation to register a new one. The
Commission shall also cause the removal of
all visible signages, marks, advertisements,
labels prints and other effects bearing such
coroporate name. Upon the approval of the
new corporate name, the Commission shall
issue a certificate of incorporation under the
amended name.

If the corporation fails to comply with the

Commission's order, the Commission may
hold the corporation and its responsible
directors or officers in contempt and/or hold
them administratively, civilly and/or criminally
liable under this Code and other applicable
laws and/or revoke the registration of the
corporation.

NOTE: No corporate name shall be allowed by

the Commission if it is not distinguishable
another corporation, from that already
reserved or registered for the use of or if such
name is already protected by law, or when its
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

name shall be reserved in favor of the

incorporators. The incorporators shall then
submit their articles of incorporation and
bylaws to the Commission.

If the Commission finds that the submitted

document s and information are fully
compliant with the requirements of this Code,
other relevant laws, rules and regulations, the
Commission shall issue the certificate of
incorporation.

A private corporation organized under this

Code commences its corporate existence and
juridical personality from the date the
Commission issues the certificate of
incorporation under its official seal thereupon
the incorporators, stockholders/members and
their successors shall constitute a body
corporate under the name stated in the
articles of incorporation for the period of time
mentioned therein, unless said period is
extended or the corporation is sooner
dissolved in accordance with law.

It is the certificate of incorporation that gives

juridical personality to a corporation and places
it under the jurisdiction of the Securities and
Exchange Commission.

A corporation commences its corporate

existence and juridical personality and is
deemed incorporated from the date the
Securities and Exchange Commission issues
certificate of incorporation under its official
seal.

Sec 19 De Facto Corporations

The due incorporation of any corporation

claiming in good faith to be a corporation
under this Code, and its right to exercise
corporate powers, shall not be required into
collaterally in any private suit to which such
corporation may be a party. Such inquiry may
be made by the Solicitor General in a quo
Sec 18 Corporate Name warranto proceeding.

Registration, Incorporation and

Requirements before one can qualify as
Commencement of Corporation Existence. - A
a de facto corporation
person or group of persons desiring to
incorporate shall submit the intended
corporate name to the Commission for
verification. If the Commission finds that the 1. The existence of a valid law under
name is distinguishable from a name already which it may be incorporated;
reserved or registered for the use of another
corporation, not protected by law and is not 2. An attempt in good faith to
contrary to law, rules and regulation, the incorporate; and
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

as both involve voluntarily giving up a legal

3. Assumption of corporate powers. claim.

For estoppel to apply, it must be clear and

NOTE: The filing of articles of incorporation intentional; otherwise, it could be misused. It
and the issuance of the certificate of is not a general rule but an exception that
incorporation are essential for the existence applies only in rare and justifiable cases.
of a de facto corporation. The Supreme Court
held that an organization not registered with
the Securities and Exchange Commission Effects of Non-Use of Corporate
Sec 21
(SEC) cannot be considered a corporation in Charter & Continuous
any concept, not even as a corporation de Inoperation.
facto.
If a corporation does not formally organize
Two conflicting public interest under de and commence its business within five (5)
facto doctrine year from the date of its incorporation, its
certificate of incorporation shall be deemed
revoked as of the day following the end of the
The de facto doctrine thus effects compromise five (5)-year period.
between two conflicting public interests:

1. The one opposed to an unauthorized However, if a corporation has commence its

assumption of corporate privileges; business but subsequently becomes
and inoperative for a period of at least five (5)
consecutive years, the Commission may, after
due notice and hearing, place the corporation
2. The other in favor of doing justice to under delinquent status.
the parties and of establishing a
general assurance of security in A delinquent corporation shall have a period
business dealing with corporations. of two (2) years to resume operations and
comply with all requirements that the
Generally, the de facto doctrine exists to Commission shall prescribed. Upon the
protect the public dealing with supposed compliance by the corporation, the
corporate entities, not to favor the defective or Commission shall issue an order lifting the
non-existent corporation. delinquent status. Failure to comply with the
requirements and resume operations within
the period given by the Commission shall
Sec 20 Corporation by Estoppel cause the revocation of the corporation's
certificate of incorporation.

All persons who assume to act as a The Commission shall give reasonable notice
corporation knowing it to be without the to, and coordinate with the appropriate
authority to do so shall be liable as general regulatory agency prior to the suspension or
partners for all debts, liabilities and damages revocation of the certificate of incorporation
incurred or arising as a result of companies under their special regulatory
thereof: Provided, however, That when any jurisdiction.
such ostensible corporation is sued on any
transaction entered by its as a corporation or
on any tort committed by it as such, it shall I. Failure to Formally Organize and
not be allowed to use on any its lack of Commence its Business within 5 years
corporate personality as a defense. Anyone from the date of its incorporation
who assumes an obligation to an ostensible
corporation as such cannot resist performance The certificate of incorporation shall be
thereof on the ground that there was in fact deemed revoked as of the day following the
no corporation. end of the five (5) year period.

Examples of acts constituting formal org

Doctrine of Estoppel
1. Adoption of by-laws and filing of the
Estoppel is based on equity—justice according same with the SEC.
to fairness and natural law. It prevents clear
injustice and is similar to a waiver of rights,
TITLE II: INCORPORATION & ORG OF PRIVATE CORPO
CORPORATION (RA.
2ND SEMESTER MIDTERMS Atty. Mae
11232)

2. Election of Board of Directors or

Board of Trustees as well as the
officers like the President, Secretary,
Treasurer, and other officers as
stated in its by-laws

3. Establishment of the principal office.

4. Providing for the subscription and

payment of its shares of stock.

5. Other acts necessary to enable the

corporation to transact business o
accomplish the purpose for which it
was created.

Examples of acts constituting

commencement of business

1. Entering into contracts or negotiation

for lease or sale of properties to be
used as business or factory site.

2. Making plans for and the

construction of the factory.

3. Taking steps to expedite the

construction of the corporation's
working equipment

II. Continuous Inoperation for at least 5

consecutive years
The SEC may, after due notice and hearing,
place the corporation under delinquent status.