Revised Corporation Code of the Philippines - Vocabulary

Flashcards covering key vocabulary and definitions from the Revised Corporation Code of the Philippines.

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 corporations

Corporations that have capital stock divided into shares and are authorized to distribute to the holders of such shares, dividends, or allotments of the surplus profits on the basis of the shares held.

Nonstock corporations

All corporations that aren't stock corporations.

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 that may be given certain rights and privileges not enjoyed by the owners of other stocks.

Redeemable Shares

Shares which may be purchased by the corporation from the holders of such shares upon the expiration of a fixed period.

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 some other lawful means.

One Person Corporation

A corporation with a single stockholder.

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, or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director.

Nonstock corporation

One where no part of its income is distributable as dividends to its members, trustees, or officers.

Close corporation

One whose articles of incorporation provides that: (a) all the corporation’s issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20); (b) all the issued stock of all classes shall be subject to one or more specified restrictions on transfer permitted by this Title; and (c) the corporation shall not list in any stock exchange or make any public offering of its stocks of any class.

Preemptive Right

The right of stockholders to subscribe to all issues or disposition of shares of any class, in proportion to their respective shareholdings.