CORP | Midterms

Stock corporation

A corporation:

1. With capital stock that is divided into shares

2. Authorized to distribute to holders of such shares, dividends or allotments, of the surplus profits on the basis of the shares held

Non-stock corporation

A corporation that

1. Has no capital stock

2. Does not issue stocks

3. Does not distribute dividends to its members

Stock corporation vs. Nonstock corporation

What comes first is nonstock, then stock.

As to components, members vs. shareholders

As to board members, trustees who can be more than 15 vs. directors who cannot be more than 15

As to existence of shares, no capital stock divided into shares vs. capital stock divided into shares

As to dividends, no dividends vs. dividends declared

As to purpose, nonprofit, and limited to those specified under Section 87 vs. primarily business

As to business activities, can conduct business but only if it is incidental to the primary purpose vs. business purpose is the primary purpose

As to voting rights, can be modified, limited or broadened vs. one share-one vote

As to transferability of interest, non-transferable vs. transferable

As to termination, can be terminated vs. cannot be terminated until the transfer of the shares or upon liquidation

As to effect of death, terminates the membership vs. shares can be acquired through succession

As to dues, payment can be required vs. no dues are paid

As to term of board members, three years vs. one year

As to voting, cumulative voting is not allowed vs. cumulative voting is expressly allowed

As to liquidation, the members will not get a share in the assets vs. shareholders will get their share in the net assets

As to election of officers, members may directly elect the officers vs. elected by the Board of Directors

Capital

The capital involved is to be used for the operation of the corporation

Purposes of nonstock corporation

1. Charitable

2. Religious

3. Educational

4. Professional

5. Cultural

6. Fraternal

7. Literary

8. Scientific

9. Social

10. Civic service

11. Similar purposes, like trade, industry, agricultural, and like chambers

12. Any combination thereof

Incidental profit