Business and Labor Law Lecture Flashcards

A comprehensive set of vocabulary flashcards covering key legal terms in Philippine Business Law (Corporations, Partnerships, Bankruptcy) and Labor Law based on the provided transcription.

Public Corporation

A corporation organized by the State alone for the government of a portion of the State for the general good and welfare.

Private Corporation

A corporation formed by private persons alone or with the State for some private purpose, benefit, or end.

Government-Owned and Controlled Corporation (GOCC)

A corporation created by the government or of which the government is the majority stockholder, such as GSIS, NAPOCOR, PNR, and PNB.

Quasi-public corporation

A private corporation that has accepted a grant of franchise or contract from the State involving public duties but is organized for profit, such as electric or water companies.

De Jure corporation

A corporation created in strict or substantial conformity with mandatory statutory requirements whose right to exist cannot be successfully attacked even by the State.

De facto corporation

A corporation organized with a colorable compliance with the requirements of a valid law; its existence can only be inquired by the Solicitor General in a quo warranto proceeding.

Corporation by Estoppel

A group of persons that assumes to act as a corporation without authority and enters into transactions with third persons; they cannot deny corporate existence in actions under said transactions.

Corporation by prescription

A corporation that has exercised corporate powers for an indefinite period without interference from the sovereign power, such as the Roman Catholic Church.

Domestic corporation

A corporation formed, organized, or existing under Philippine laws.

Foreign corporation

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

Close Corporation

A corporation whose articles limit the number of persons holding issued stock to not more than $20$, subjects all stock to transfer restrictions, and prohibits listing in any stock exchange.

Holding corporation

A corporation that controls another as a subsidiary by the power to elect management and holds stocks for control rather than mere investment.

Subsidiary

A corporation so related to another that the other corporation (the parent) could elect the majority of its directors either directly or indirectly.

Affiliate

A corporation that is controlled by, or is under the common control of, another corporation through one or more intermediaries.

Aggregate corporation

A corporation consisting of more than one person or member.

Corporation sole

A corporation consisting of only one person or member.

Ecclesiastical corporation

A corporation organized specifically for religious purposes.

Eleemosynary corporation

A corporation established for or devoted to charitable purposes or those supported by charity.

Civil corporation

A corporation established for business or profit.

Place of incorporation test

A test stating that a corporation is a national of the country under whose laws it has been organized and registered.

Control Test

A method where the nationality of a corporation is determined by the nationality of the majority of stockholders on whom equity control is vested.

Grandfather rule

A method to compute the percentage of Filipino equity in nationalized areas of activity by attributing the nationality of subsequent tiers of ownership to the corporate shareholder.

Doctrine of Separate Juridical Personality

The rule that a corporation is a legal entity with a personality separate and distinct from the people comprising it; therefore, its obligations are its sole liabilities.

Doctrine of Piercing the Veil of Corporate Fiction

A legal precept allowing a corporation's separate personality to be disregarded so it and its stockholders are treated as a single entity when the fiction is used to defeat public convenience, justify wrong, or protect fraud.

Corporators

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

Incorporators

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

Outstanding Capital Stock

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

Articles of Incorporation

A document that defines the charter of the corporation and the contractual relationships between the State, the corporation, and the stockholders.

By-laws

The rules and regulations or private laws enacted by a corporation to regulate, govern, and control its own actions, affairs, and concerns.

Dividend

Corporate profit set aside and ordered by the directors to be paid to the stockholders on demand or at a fixed time.

Ultra vires act

An act committed outside the object for which a corporation is created as defined by law and beyond the powers conferred upon it.

Watered stock

Stock issued for consideration less than its par or issued value, or for non-cash consideration valued in excess of its fair value.

Merger

The union whereby one or more existing corporations are absorbed by another corporation which survives and continues the combined business.

Consolidation

The union of two or more existing corporations to form a new corporation called the consolidated corporation.

Principle of Delectus Personae

An inherent rule in partnerships stating that no one can become a member of the association without the consent of all the partners.

Joint venture

An association of persons or companies jointly undertaking a commercial enterprise, generally contributing assets and sharing risks, profits, and losses.

RA No. 10142

The Financial Rehabilitation and Insolvency Act of 2010, which provides for court proceedings in the rehabilitation or liquidation of debtors.

Labor Standards law

Law that sets out the minimum or basic terms, conditions, and benefits of employment that employers must provide and to which employees are entitled as a matter of right.

Labor Relations law

Law that defines the status, rights, and duties, and the institutional mechanisms that govern interactions between employers and employees.

Four-fold test

Criteria used to determine an employer-employee relationship: (1) selection and engagement, (2) payment of wages, (3) power of dismissal, and (4) power of control over means and methods.

Managerial employee

An employee vested with powers to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, or discipline employees.

Minimum Wage (NCR)

The lowest wage rate fixed by law; as of July 18, 2025, in Metro Manila, it is $P695.00$.

13th Month Pay

A statutory benefit not less than $\frac{1}{12}$ of the total basic salary earned by an employee within a calendar year, payable not later than December 24th.

Service Incentive Leave

A yearly leave of five days with pay for every employee who has rendered at least one year of service.

Maternity Leave (RA 11210)

A benefit granting $105$ days leave with full pay for female workers, with an additional $15$ days for solo parents.

Night-Shift Differential Pay

Additional compensation of not less than $10\%$ of an employee's regular wage for each hour of work performed between $10:00$ PM and $6:00$ AM.

Overtime Pay

Additional compensation for work beyond eight hours a day, equivalent to the regular wage plus at least $25\%$ (or $30\%$ on holidays/rest days).

Constructive Dismissal

A quitting because continued employment is rendered impossible, unreasonable, or unlikely, often involving a demotion in rank or diminution in pay.

Serious Misconduct

Improper or wrong conduct that is serious, relates to the performance of duties, and shows the employee is unfit to continue working.

Yellow-dog contract

An agreement or condition imposed upon an employee not to join or remain in a union.

Closed shop

An enterprise agreement where no person may be employed unless they are and remain a member in good standing of a specific union.