Revised Corporation Code of the Philippines (Republic Act No. 11232) Vocabulary Flashcards

Vocabulary terms and legal definitions extracted from Title I through Title XVII of the Revised Corporation Code of the Philippines (Republic Act No. 11232).

Corporation

An artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incidental to its existence.

Stock Corporation

A corporation which has capital stock divided into shares and is authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held.

Nonstock Corporation

A corporation where no part of its income is distributable as dividends to its members, trustees, or officers, organized for purposes such as charitable, religious, educational, professional, or civic service.

Corporators

Those who compose a corporation, whether as stockholders or shareholders in a stock corporation or as members in a nonstock corporation.

Incorporators

Those stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof.

Founders' Shares

Shares given certain rights and privileges not enjoyed by the owners of other stocks; if granted exclusive rights to vote and be voted for as directors, it must be for a period not exceeding five (5) years from incorporation.

Redeemable Shares

Shares which may be purchased by the issuing corporation from holders upon the expiration of a fixed period, regardless of the existence of unrestricted retained earnings, when expressly provided in the articles of incorporation.

Treasury Shares

Shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing corporation through purchase, redemption, donation, or other lawful means.

De Facto Corporation

An association claiming in good faith to be a corporation under the Code, whose due incorporation and right to exercise corporate powers cannot be inquired into collaterally in any private suit.

Corporation by Estoppel

Persons who assume to act as a corporation knowing it to be without authority to do so, making them liable as general partners for all debts, liabilities, and damages incurred.

Independent Director

A person who, apart from shareholdings and fees received from the corporation, is independent of management and free from any business or other relationship which could materially interfere with independent judgment.

Executive Committee

A committee composed of at least three (3) directors created if provided in the bylaws, which may act by majority vote on specific matters delegated to it by the board.

Preemptive Right

The right of all stockholders of a stock corporation to subscribe to all issues or disposition of shares of any class, in proportion to their respective shareholdings, unless denied by the articles of incorporation.

Ultra Vires Acts

Acts possessed or exercised by a corporation other than those conferred by the Code or by its articles of incorporation, and except as necessary or incidental to the exercise of the powers conferred.

Delinquent Stock

Subscribed shares for which no payment is made within thirty (30) days from the due date specified in the subscription contract or call made by the board of directors.

Voting Trust Agreement

A written, notarized agreement created by stockholders conferring upon a trustee the right to vote and other rights pertaining to the shares for a period generally not exceeding five (5) years.

Close Corporation

A corporation whose articles of incorporation restrict share ownership to not more than twenty (20) persons, subject all issued stock to transfer restrictions, and prohibit public offering or listing on any stock exchange.

Corporation Sole

A religious corporation formed by a chief archbishop, bishop, priest, minister, rabbi, or presiding elder to administer and manage, as trustee, the temporalities, estate, and properties of a religious denomination.

One Person Corporation

A corporation with a single stockholder, formed only by a natural person, trust, or an estate.

Foreign Corporation

A corporation formed, organized, or existing under laws other than those of the Philippines whose laws allow Filipino citizens and corporations to do business in its own country or State.

Whistleblower

Any person who provides truthful information relating to the commission or possible commission of any offense or violation under the Revised Corporation Code.

Outstanding Capital Stock

The total shares of stock issued under binding subscription contracts to subscribers or stockholders, whether fully or partially paid, except treasury shares.

Board of Directors

A group of individuals elected to represent shareholders and manage corporate affairs, responsible for making significant decisions and overseeing the company's operations.

Quorum

The minimum number of directors or shareholders required to be present at a meeting to conduct business legally.

Dissenting Shareholder

A shareholder who does not agree with the decisions made by the majority of shareholders during a vote, often entitled to certain rights like appraisal.

Liability of Directors

The legal responsibility of directors for actions taken on behalf of the corporation, which may include duties of care and loyalty.

Corporate Compliance

The process of ensuring that a corporation adheres to laws, regulations, standards, and ethical practices in its operations.

Shareholder Agreement

A contract among the shareholders outlining the rights and obligations of the shareholders regarding the management and operation of the corporation.

Minutes of Meeting

The official written record of the proceedings and decisions made during a board meeting or shareholder meeting, which must be maintained by the corporation.

Conflict of Interest

A situation where a director's personal interests might conflict with the interests of the corporation, potentially affecting their judgment.

Corporate Arbitral Clause

A clause in a corporation's bylaws that mandates arbitration as the method for resolving disputes among shareholders or between shareholders and the corporation.

Corporate Governance

The system of rules, practices, and processes by which a corporation is directed and controlled, focusing on the balance between stakeholder interests.