What are the steps of forming a corporation?

Summary

Attorney Marie Chris Bataan Lasko's video educates viewers on the process of creating a corporation in the Philippines. She outlines three key steps: promotion, incorporation, and formal organization. The video simplifies legal concepts by explaining the roles of promoters and incorporators, the drafting of articles of incorporation, and the importance of substantial compliance with legal requirements. The issuance of a certificate of incorporation by the Securities and Exchange Commission is highlighted as the pivotal moment that brings the corporation into legal existence.

Takeaways

• 📚 Attorney Marie Chris Bataan introduces her virtual classroom and YouTube channel aimed at simplifying the law.
• 🏢 The video focuses on explaining the process of creating a corporation, which involves three main steps: promotion, incorporation, and formal organization.
• 🤝 In the promotion phase, promoters gather potential incorporators who are interested in forming a corporation, though this step can be skipped if incorporators already agree.
• ✍️ Incorporation involves drafting and executing the Articles of Incorporation, which have a prescribed form available online through the Securities and Exchange Commission (SEC).
• 📄 Additional required documents for incorporation may include recommendations from relevant agencies for corporations governed by special laws, like educational corporations.
• 💼 Incorporators must file the Articles of Incorporation and other necessary documents with the SEC to initiate the incorporation process.
• 💵 A key part of incorporation is paying the required fees for registration and incorporation as assessed by the SEC.
• ⏱️ After filing, incorporators wait for the SEC to issue a Certificate of Incorporation, which signifies the corporation's legal existence.
• 📜 Substantial compliance with the law's requirements for incorporation is necessary, not strict compliance, as outlined in Section 13 of the Revised Corporation Code.
• 📑 The issuance of the Certificate of Incorporation by the SEC is the legal basis for the corporation's existence, as stated in Section 18 of the Revised Corporation Code.
• 🔚 The final step in creating a corporation is the formal organization and commencement of business operations, where stockholders elect the board of directors and start the business activities.

Q & A

What are the three steps involved in creating a corporation as described in the video?

The three steps involved in creating a corporation are promotion, incorporation, and formal organization and commencement of business.

Who are the promoters in the context of forming a corporation?

Promoters are individuals who bring together people who may form the corporation and try to meet those interested in becoming incorporators.

Is it necessary to have promoters in the process of creating a corporation?

No, the promotion step can be skipped if the incorporators have already decided to form the corporation.

What is the second step in creating a corporation and what does it involve?

The second step is incorporation, which involves drafting and executing the articles of incorporation, gathering other required documents for registration, filing them with the Securities and Exchange Commission (SEC), and paying the required fees.

Where can one find the prescribed form for the articles of incorporation?

The prescribed form for the articles of incorporation can be found on the SEC website under Section 14 of the Revised Corporation Code.

What is the role of the incorporators in the process of incorporation?

Incorporate are the original founders of the corporation who draft and execute the articles of incorporation.

What is the significance of the certificate of incorporation in the process of creating a corporation?

The issuance of the certificate of incorporation by the SEC signifies the existence of the corporation as a juridical person.

What does the term 'substantial compliance' mean in the context of incorporating a corporation?

Substantial compliance refers to the requirement that the incorporators must file articles of incorporation containing substantially all the matters enumerated under Section 13 of the Revised Corporation Code, not necessarily strict compliance with every detail.

What is the legal basis for considering a corporation as existing in the Philippines?

A corporation is considered to exist from the date the SEC issues the certificate of incorporation under its official seal, as stated in Section 18 of the Revised Corporation Code.

What is the final step in the creation of a corporation after it has been legally formed?

The final step after the corporation has been legally formed is the formal organization and commencement of business operations.

What does the video suggest as a way to enhance understanding of the steps in creating a corporation?

The video suggests that viewers should review the steps of promotion, incorporation, and formal organization to enhance their understanding of the process.