What are the different classes of corporations? (Section 3-4, Revised Corporation Code)
Summary
TLDRAttorney Marie Chris Bataan introduces viewers to the classes of corporations as outlined in the Revised Corporation Code. She explains the distinction between stock and non-stock corporations, with the former aiming for profit distribution and the latter focusing on public welfare. Special mention is given to educational institutions and financial entities, which can be either stock or non-stock, and GOCCs, which are governed by their own charters. The video aims to simplify legal concepts for viewers.
Takeaways
- 📚 The video is an educational resource aimed at simplifying legal concepts, specifically focusing on the classification of corporations.
- 🏢 Section 3 of the Revised Corporation Code outlines that corporations can be classified as either stock or non-stock.
- 💼 Stock corporations are businesses created for profit, with capital stock divided into shares that can be distributed to shareholders.
- 🌐 Non-stock corporations are established for public welfare or public good rather than profit, and do not distribute capital stock to members.
- 🔄 The distinction between stockholders and members is clarified, with stockholders being associated with stock corporations and members with non-stock corporations.
- 🏛️ Non-stock corporations often include religious, charitable, scientific, literary, or civic organizations.
- 🏫 Educational institutions can be either non-stock (non-profit) or stock (for-profit) corporations, indicating flexibility in their legal structure.
- 🏦 Certain businesses, such as banks and financial institutions, are required to be organized as stock corporations.
- 📜 Section 4 discusses corporations created by special laws or charters, which are primarily governed by their specific charter or law, with the Revised Corporation Code applying only supplementary.
- 🏛️ Government-owned or controlled corporations (GOCCs) are examples of entities governed by special charters, highlighting the diversity in corporate governance.
- 🔑 The video emphasizes the importance of understanding the legal framework that governs different types of corporations for both legal professionals and the general public.
Q & A
What are the two major types of corporations classified under Section 3 of the Corporation Code?
-The two major types of corporations classified under Section 3 of the Corporation Code are stock corporations and non-stock corporations.
What is the primary characteristic that distinguishes a stock corporation from a non-stock corporation?
-A stock corporation has capital stock divided into shares and is authorized to distribute dividends or allotments of surplus profits to the stockholders based on their shares, while a non-stock corporation does not have capital stock distributed to its members.
What is the purpose of a stock corporation as mentioned in the script?
-The purpose of a stock corporation is to make a profit, which is then distributed to the stockholders in the form of dividends based on their shareholdings.
What is the purpose of a non-stock corporation according to the video?
-A non-stock corporation is created for public welfare or public good, not for the purpose of making profits.
Can you provide examples of organizations that are typically non-stock corporations?
-Typically, non-stock corporations include religious, charitable, scientific, literary, and civic organizations.
What are some institutions that can be created either as stock or non-stock corporations?
-Educational institutions, such as schools, can be created either as non-stock non-profit or for-profit stock corporations.
What types of businesses are required to be created as stock corporations?
-Banks and financial institutions are examples of businesses that can only be created in the form of stock corporations.
What does Section 4 of the Corporation Code discuss regarding corporations?
-Section 4 discusses corporations created by special laws or charters, stating that they are primarily governed by the provisions of the special law or charter creating them, supplemented by the provisions of the Corporation Code where applicable.
What are GOCCs and how do they relate to the discussion in the script?
-GOCCs are Government-Owned or Controlled Corporations, like Land Bank of the Philippines and GSIS. They are created by special laws or charters, and their primary governing law is the charter or law that created them.
What is the role of the Revised Corporation Code in relation to corporations created by special charters?
-The Revised Corporation Code applies to corporations created by special charters only insofar as the provisions are applicable and do not conflict with the special law or charter creating the corporation.
What does the script suggest for viewers who have found the video informative?
-The script encourages viewers who have found the video informative to click like, subscribe, and enable notifications for new video uploads.
Outlines
📚 Introduction to Corporation Classes
Attorney Marie Chris Bataan introduces the topic of different classes of corporations as defined by the Revised Corporation Code. She explains that corporations can be classified into stock and non-stock corporations. Stock corporations are those with capital stock divided into shares, which can distribute dividends or surplus profits to shareholders based on their shareholdings. These are typically profit-oriented businesses. Non-stock corporations, on the other hand, do not have capital stock distributed to members and are created for public welfare or public good, such as religious, charitable, scientific, literary, or civic organizations. The video also touches on the possibility of educational institutions being either non-profit or for-profit entities, and the necessity of certain businesses like banks to be organized as stock corporations.
🏛️ Corporations Created by Special Charters
In the second paragraph, the discussion shifts to corporations created by special laws or charters, which are primarily governed by the provisions of their creating law or charter, supplemented by the Revised Corporation Code where applicable. These corporations, such as Government-Owned or Controlled Corporations (GOCCs), have their own charters and are regulated by the specific laws that established them. Examples given include the Land Bank of the Philippines, GSIS, and the Development Bank of the Philippines. The video concludes with a prompt for viewers to engage with the content, subscribe, and enable notifications for future uploads.
Mindmap
Keywords
💡Stock Corporation
💡Non-Stock Corporation
💡Capital Stock
💡Dividends
💡Revised Corporation Code
💡Public Welfare
💡Special Charters
💡GOCCs (Government-Owned or Controlled Corporations)
💡Educational Institutions
💡Banks and Financial Institutions
Highlights
Introduction to simplifying the law through the YouTube channel
Discussion on the different classes of corporations as per Section 3 and 4 of the Revised Corporation Code
Definition of stock corporations having capital stock divided into shares
Stock corporations are authorized to distribute dividends based on shareholdings
Non-stock corporations do not have capital stock distributed to members
Non-stock corporations are created for public welfare or public good, not for profit
Examples of non-stock corporations include religious, charitable, scientific, literary, and civic organizations
Educational institutions can be either non-stock or stock corporations
Banks and financial institutions can only be created as stock corporations
Section 4 discusses corporations created by special laws or charters
Special charter corporations are primarily governed by the provisions of their creating law or charter
Revised Corporation Code supplements the governance of special charter corporations
Examples of corporations created by special charter include GOCCs like Land Bank of the Philippines
GOCCs have their own charters or laws that created them
Concluding remarks and invitation to like, subscribe, and enable notifications for new video uploads
Transcripts
foreign
[Music]
hi i am attorney marie chris bataan
lasko this is my virtual classroom
welcome to my youtube channel in this
channel i shall aim to simplify the law
i shall discuss concepts and principles
of law in under 10 minutes
hello again everyone for this video i
want to talk about the different classes
of corporations is classified by
section 3 and 4 of your revised
corporation code
let's look into section 3.
section three
states
corporations formed or organized under
this code may be stock or non-stock
corporations
stock corporations are those which 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 health all other
corporations are non-stock corporations
there are therefore
two
major types of corporations is
classified under section three of your
corporation code and that is your stock
corporation and your non-stop
corporation so what is a stock
corporation your stock corporation is
basically your ordinary
um business corporations
that were created for the purpose of
making a profit
and such profit is then distributed to
the stockholders
in the form of dividends
um
in the form of dividends on the basis of
their investment or of their
shareholdings so this is what you
usually see
the the business um corporations again
the purpose is to make profit
another thing to remember about stock
corporations
is that they have a capital stock
that is to be distributed to those who
would want to
have shareholdings in a corporation
as opposed to a non-stock corporation
a non-stock corporation does not have a
capital stock that is distributed to the
members we do not call them stockholders
if it's a non-stop corporation we call
them
members of the
non-stop corporation as opposed also to
us the corporation that is created for
the purpose of making profits your
non-stock corporation is not created
for the purpose of making a profit it is
created for
the public welfare or for the public
good so non-stop corporations are
usually those that are religious um
religious charitable organization
scientific literary or civic
organizations they are created for
public wear welfare or public good they
are not created for
profits
there are however some institutions that
can be created either
either in the form of stock corporations
or non-stock corporations
as in educational institutions your
schools
some schools are non-stock non-profit
and there are also schools that are
for-profit or are stock corporations
there are also
um
businesses
that can only be
created
in the form of stock corporations as in
the case of
banks or financial institutions
now how about section four
section four talks about corporations
created by special charters what does it
say it says
corporations created by special laws or
charters shall be governed primarily by
the provisions of the special law or
charter creating them or applicable to
them supplemented by the provisions of
this code insofar as they are applicable
what does that tell you it tells you
that
if it is a corporation created by a
special law or a special charter
that means that the primary law that
will govern them will be the charter or
the law creating them and of course your
revised corporation code will only apply
solitarily
what are examples of your
corporations that are created by special
charter your gocc's or your
government-owned or controlled
corporations like your land bank of the
philippines like your gsis your
development of bank of the philippines
so the gocc's
they have their own charter or there is
a law that created them
so what will govern them primarily will
of course be that law that created them
and so preparing
the general law on corporations or your
revised corporation code
so that is it for this very short video
lecture on the different classes of
corporations is classified by your
section three and four of your
corporation code i hope you have learned
something from this video and i will see
you in the text i hope you have learned
something from this video if you have
please click like subscribe and that
notification bell so that you will be
notified of new video uploads thank you
for watching see you next time in mbl
classroom
[Music]
you
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