Chapter 6

large amount of money

The need to expand business operations brought about by the industrial revolution required increasingly ___

Shares of a corporation

can be traded freely without interrupting the business operations of the corporation

Shareholder

may sell his interest in the business, retire from the company, or die without causing any stoppage in the company’s business activities

Corporate form of business

enduring type of business

incorporating

By ___, the enterprise is communicating efforts for stability or permanence to clients and vendors

Corporate form of business

is not easily dissolved

incorporated or corporation

The word ___ attached to the business name, helps a company attracts investors easier than partnership or a sole proprietorship

Republic Act No. 11232

The Revised Corporation Code of the Philippines

February 20, 2019

The Revised Corporation Code of the Philippines was approved last ___

Batas Pambansa Blg. 68 or the “The Corporation Code of the Philippines”

The Revised Corporation Code of the Philippines repealed the ___

Separate legal entity

Created by operation of law

Continuing lifespan or perpetual existence

Powers, attributes and properties authorized by law

Transferability of ownership

Limited Liability

Characteristics of a Corporation:

Corporation

is a legal or juridical person with a personality separate and apart from its individual members or shareholders who, as natural persons, are merged in the corporate body

cannot come into existence

The corporation ___ by mere agreement of the parties

Corporation

It is created by existing legal principles

The Revised Corporation Code of the Philippines

governs the creation and operation of corporation except except for those corporations that are created by special laws or charters

continuous existence

A corporation has the capacity of ___ irrespective of the death, withdrawal, insolvency or incapacity of the individual members or stockholders regardless of the transfer of their interest or shares of stock

authorized by law or incident to its existence

A corporation, being a mere creating by law has only the powers, attributes and properties expressly ___

without the consent

A shareholder or investor may sell his ownership shares ___ of the shareholders

without getting approval

A shareholder may sell either a portion of his interest or all of his interest to individuals or other entities ___ for such transfer from other shareholders

owners

The individuals or companies that purchased such shares will become ___ of the corporation

lose their investments

If ever the corporation incurs losses and ultimately fails, shareholders may ___

will not

Shareholders ___ be liable to pay for the debts of the corporation beyond their investments

amount of their investment in the corporation

The maximum loss that shareholder may incur will only be to the ___

continuous

The corporation has ___ existencec

limited

Owners of a corporation have a ___ liability

easier

Financing is ___ to obtain

large

A corporation is well adapted to large-scale business that requires ___ investment of capital

board of directors

Corporation’s management is centralized in the ___

not general agents

The shareholders are ___ of the business

Stock Corporations

Non-Stock Corporations

Corporations formed and organized under the New Corporation Code maybe:

Stock corporations

corporations that have capital stock divided into shares and are authorized to distribute to the holder of such shares dividends or allotments of the surplus profits on the basis of shares held

stockholders or shareholders

owners of stock corporations are called ___

Non-stock corporations

private corporations which do not issue stock bit capital comes from fees paid by the individuals composing it

Non-stock corporations

They are created not for profit but for public and good welfare

members

The owners of non-stock corporations are called ___

Any profit from its operations

shall be used for the furtherance of the purpose or purposes for which the corporation was organized

non-stock corporations

Central Philippine University and Filamer Christian University are ___

Ecclesiastical corporation

Lay corporation

Other classifications of corporations as to whether they are for religious purpose or not:

Eleemosynary corporation

Civil corporation

Types of Lay corporation:

Ecclesiastical corporation

a corporation organized for religious purposes

Ecclesiastical corporation

Jaro Evangelical Church (JEC) is an ___

Lay corporation

a corporation organized for a purpose other than for religion

Eleemosynary corporation

a corporation organized for charitable purpose

Civil corporation

a corporation organized for business profit

Domestic corporation

Foreign corporation

Other classifications of corporations as to law of creation:

Domestic corporation

one which is organized under the Philippine laws

Domestic corporation

Jollibee, Mabuhay Satellite Corporations (MSC) and Queenbank, Inc, are ___

Foreign corporation

one formed, organized or existing under laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do business in its own country or state (Section 140)

Foreign corporation

Levi Strauss Corp, Citizen, and Nokia, Inc. are ___

Close corporation

Open corporation

Other classifications of corporations as to whether they are open to the public or not:

Close corporation

a corporation whose issued stock of all classes are held by specified number of persons, not exceeding twenty

Close corporation

The corporation shall not list in any stock exchange or make any public offering of its stocks in any class

Close corporation

Any corporation may be incorporated as a close corporation except mining, oil companies, stock exchanges, banks, insurance companies, public utilities and educational institutions

Open corporation

a corporation which is open to any person who would like to be a shareholder or member thereto

Open corporation

are those corporations which shares of stocks are traded through broker authorized by the Philippine Stock Exchange

Open corporation

J.P Morgan Securities Philippines, Inc

Open corporation

Regina Capital Development Corporation (RCDC)

Open corporation

BPI Securities Corporation

Open corporation

First Metro Securities Brokerage Corporation

De jure corporation

De Facto corporation

Other classifications of corporations as to their legal right to corporate existence:

De jure corporation

a corporation which exists both in fact and in law

fact

De jure corporation exist in ___ because it is operating as a corporation

law

De jure corporation exists in ___ because it has complied with the legal requirements

Parent or holding corporation

Subsidiary corporation

Other classifications of corporations as to their relation to another corporation:

Parent or holding corporation

a corporation which is so related to another corporation that it has the power either, directly or indirectly to, elect the majority of the directors of such corporation

Parent or holding corporation

Philippine Long Distance Company (PLDT) is a ___

Subsidiary corporation

a corporation which is so related to another corporation that the majority of the directors can be elected either directly or indirectly, by such corporation

Public corporation

Private corporations

Other classifications of corporations as to purpose:

Public corporation

is a corporation formed or organized for the government of a portion of the state

provinces

cities

municipalities

barangays

In the Philippines, the public corporations are the:

Private corporations

is formed for some private purposes, benefit, aim or end

Stock corporation

Non-stock corporation

Quasi-public corporations

Private corporations include:

Quasi-public corporations

private corporations performing public functions

Quasi-public corporations

PLDT and MERALCO are example of ___

Multinational corporations

Many corporations which are organized in one state or country extend their corporate business in other territories or countries

One Person Corporation

is a corporation with a single stockholder

New Code

What code stated that a One Person Corporation is a corporation with a single stockholder

Single stockholder

is also the sole director and president of the corporation

One Person Corporation

Only a natural person, trust or an estate may form a ___

not allowed to form OPCs

Banks, non-bank financial institutions, quasi-banks, pre-need, trust and insurance companies are examples of companies that are ___

One Person Corporation

is an innovation by combining limited liability of a corporation and the complete dominion of a sole proprietorship

may appoint

OPC ___ a nominee and an alternative nominee who may manage affairs of the corporation in case of incapacity or his death

below or at the end

A One Person Corporation shall indicate the letters of “OPC” either ___ of its corporate name

not required

The One Person Corporation is ___ to submit and file corporate by laws

Corporators

Incorporators

Stockholders or shareholders

Members

Components of a Corporation:

Corporators

Section 5 of the Revised Corporation Code of the Philippines states that ___ are those who compose the corporation, whether as stockholders shareholders in a stock corporation or as members in a non-stock corporation

Incorporators

The New Code States that ___ are those stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof

Corporators

All incorporators are ___

Incorporator

A corporator is not necessarily an ___

at least one

Each incorporator of a stock corporation must own or be a subscriber to at ___ share of the capital stock

Stockholders or shareholders

They are owners of the shares of stocks in a stock corporation either by subscription or by direct purchase or by transfer of stock from another shareholder

members

They are corporators of a non-stock corporation

Promoters

Subscribers

Underwriters

Persons who play important roles in the formation and organization of a corporation:

Promoters

are persons who bring about or cause to bring about the formation and organization of a corporation

Promoters

They undertake the steps towards the launching of a business enterprise

Subsribers

a persons who agreed to take and pay for original, unissued shares of a corporation

Underwriters

are usually investment bankers who have agreed, alone or with others, to buy at stated terms an entire or a substantial part of an issue of securities

Underwriters

guaranteed the sale of an issue by agreement to buy from the issuing corporation any unsold portion at a stated price

Underwriters

agreed to use his best efforts to market all or part of an issue

Underwriters

offer for sale stocks he has purchased from controlling shareholder