Chapter 1 Corporation Code

Summary

In this lecture, the professor introduces Module 2 of the Revised Corporation Code of the Philippines, focusing on Title 1. The key concepts include defining a corporation, explaining its characteristics, and distinguishing between incorporators, stockholders, and members. A corporation is defined as an artificial entity created by law with rights of succession and specific powers granted by law. The lesson highlights the four key characteristics of corporations and the roles of incorporators, stockholders, and members in both stock and non-stock corporations. Students are encouraged to review lecture notes for deeper understanding.

Takeaways

• 😀 A corporation is an artificial being created by law, with rights of succession and properties granted or incidental to its existence.
• 😀 The Revised Corporation Code of the Philippines was promulgated on February 23, 2019, and defines the legal structure and attributes of corporations.
• 😀 A corporation starts its life when the Certificate of Incorporation is issued by the Securities and Exchange Commission (SEC).
• 😀 The characteristics of a corporation include being an artificial being, created by law, having the right of succession, and powers granted by law.
• 😀 The first characteristic of a corporation is that it is an artificial being—meaning it is not a natural entity like humans.
• 😀 Corporations are created by the operations of the law, meaning they have legal recognition and power derived from statutory regulations.
• 😀 A corporation has the right of succession, allowing ownership and rights to transfer, unlike partnerships where interests are non-transferable.
• 😀 Corporations are granted powers, attributes, and properties by law or by what is incidental to their existence.
• 😀 Incorporators are individuals who initially sign the Articles of Incorporation and are responsible for setting up the corporation before it is approved by the SEC.
• 😀 The difference between incorporators, stockholders, and members is key to understanding corporate structure: incorporators are founders, stockholders own shares in stock corporations, and members are part of non-stock corporations.
• 😀 A stock corporation has stockholders, who hold shares and contribute to the corporation's decisions, while non-stock corporations have members who contribute to decisions without holding shares.

Q & A

What is the Revised Corporation Code of the Philippines?

The Revised Corporation Code of the Philippines, promulgated under Republic Act 11232 on February 23, 2019, is a law that governs the creation, operation, and regulation of corporations in the Philippines.

What are the key areas of focus in Title 1 of the Revised Corporation Code?

Title 1 focuses on three main points: 1) the definition of a corporation, 2) the characteristics of a corporation, and 3) the differences between incorporators, stockholders, and members.

How does the Revised Corporation Code define a corporation?

A corporation is defined as an artificial being created by law, with the rights of succession and other powers and attributes expressly granted or incidental to its existence.

What does it mean for a corporation to be an 'artificial being'?

Being an artificial being means that a corporation is not a natural person; its life begins when its certificate of incorporation is issued by the Securities and Exchange Commission (SEC).

What is the significance of a corporation being 'created by the operations of the law'?

This means that a corporation is not created by individuals or private agreements alone, but by a legal process authorized by the state, granting it recognition and legal existence.

What does 'right of succession' refer to in the context of a corporation?

The right of succession allows a corporation to continue its existence even as ownership changes hands, unlike a partnership where the ownership interest cannot be transferred due to the personal nature of the partnership.

What are the four essential characteristics of a corporation?

The four essential characteristics of a corporation are: 1) it is an artificial being, 2) it is created by the operations of the law, 3) it has the right of succession, and 4) it has powers, attributes, and properties granted by law or necessary for its existence.

What is the difference between incorporators, stockholders, and members?

Incorporators are the individuals who originally sign the Articles of Incorporation. Stockholders are those who hold shares in a stock corporation, while members are individuals who belong to a non-stock corporation and hold membership, not shares.

How does a corporation's structure differ from a partnership?

In a corporation, ownership can be transferred through the sale or assignment of shares (for stock corporations), while in a partnership, ownership interests are generally non-transferable due to the personal nature of the relationship.

What role do incorporators play in the formation of a corporation?

Incorporators are the individuals who sign the Articles of Incorporation before the corporation is officially recognized. They initiate the process and are essential to the formation of the corporation.