What are the steps of forming a corporation?
Summary
TLDRAttorney 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.
Outlines
🏢 Introduction to Creating a Corporation
Attorney Marie Chris Bataan introduces her YouTube channel dedicated to simplifying law concepts. In this video, she discusses the process of creating a corporation, which involves three main steps: promotion, incorporation, and formal organization followed by the commencement of business. Promotion is the initial stage where promoters gather interested parties to form a corporation. Incorporation is the legal process covered by section 10 of the revised corporation code, involving drafting and executing the articles of incorporation. The articles have a prescribed form available online through the Securities and Exchange Commission (SEC) website. Additionally, corporations governed by special laws may require recommendations from relevant agencies, such as the Department of Education for educational corporations.
📄 The Incorporation Process
The second paragraph delves deeper into the incorporation process, which includes filing the articles of incorporation and other necessary documents with the SEC. This step requires the payment of registration and incorporation fees. After submission, the SEC reviews the documents for substantial compliance, ensuring that all major requirements are met, as stipulated in section 13 of the revised corporation code. The process culminates with the issuance of a certificate of incorporation by the SEC, which legally brings the corporation into existence. The difference between the terms 'incorporation' and 'corporation' is clarified, with the former referring to the creation process and the latter to the juridical entity itself. Section 18 of the code is cited to explain that the corporate existence begins from the date of the certificate issuance.
🔚 Finalizing the Corporation Creation
The final paragraph summarizes the steps for creating a corporation: promotion, incorporation with its detailed steps, and the organization and commencement of business operations. After the corporation is legally formed, the stockholders can elect the board of directors and start the business operations. The video concludes with a recap of the key points and an invitation for viewers to like, subscribe, and enable notifications for future videos, emphasizing the educational value of the content provided.
Mindmap
Keywords
💡Virtual Classroom
💡Corporation
💡Promoters
💡Incorporate
💡Articles of Incorporation
💡Incorporatees
💡Substantial Compliance
💡Certificate of Incorporation
💡Formal Organization
💡Commencement of Business Operations
Highlights
Introduction to simplifying the law through a virtual classroom on YouTube.
Discussion on how to create a corporation with friends or family members.
Three steps in forming a corporation: promotion, incorporation, and formal organization.
Promotion step involves promoters who bring together potential incorporators.
Incorporate can be formed without promoters if the group has already decided.
Incorporation involves drafting documents and getting certifications.
Articles of Incorporation must be drafted and executed by the incorporators.
Prescribed form for Articles of Incorporation can be found online at the SEC website.
Gathering other required documents for registration is part of the incorporation process.
Special laws may require additional documents, like a recommendation from the Department of Education.
Filing the Articles of Incorporation and necessary documents with the SEC is a key step.
Paying the required fees for incorporation and other assessments to the SEC.
Waiting for the SEC to issue the Certificate of Incorporation is the final step in incorporation.
Substantial compliance, not strict compliance, is required by law for incorporation.
The issuance of the Certificate of Incorporation legally brings the corporation into existence.
The formal organization and commencement of business operations mark the final stage of creating a corporation.
Recap of the stages of creating a corporation: promotion, incorporation, and organization.
Encouragement for viewers 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 welcome to my
virtual classroom so for this video i
want us to talk about how to create a
corporation so if you want to create a
cooperation with your friends or even
with your other family members how do
you go about it
so let's begin
there are three steps
in forming a corporation
first promotion
second
incorporation
and third is the formal organization and
commencement of the business the first
step in the creation of a corporation
promotion
involves people who we call as promoters
the promoters bring together
who may form the corporation
they would now try to meet people who
would be interested
in becoming an incorporator of a
corporation
now remember that the first step
promotion
you can actually do away with it
meaning you can skip that and your
incorporators can actually just decide
among themselves to incorporate to form
the corporation they may actually do
away with hiring promoters if they have
actually already decided that they want
to form the
corporation
which leads us to the second step
of creating a corporation
and that is
incorporation
your incorporation now is actually what
is covered by section 10 of your revised
corporation code
now what is incorporation
incorporation
actually refers to the process
of drafting documents
of getting certifications
that bring about the existence of the
corporation
the income the incorporation being a
process it also involves several steps
what are these steps the first step of
incorporation is the drafting and
execution of the articles of
incorporation by the incorporators
again who are these incorporators they
are the original formers of the
corporation these are the people who
want to form the corporation
so they now draft and execute the
articles of incorporation
now the articles of incorporation in
fact there is already a prescribed form
for that and that's actually available
online you just go to the
sec or securities and exchange
commission website and you can just fill
it out
or you can actually make your own
but you have to follow the prescribed
form
where do you find the prescribed form
you can find the prescribed form
actually under section 14 of your
revised corporation code
included in the first step would also be
gathering other required documents for
registration
now what other documents would we be
referring to
so for example for
corporations
that are governed by special laws like
your educational corporations
they would need
uh
a recommendation from the appropriate
agency
so from the department of education so
there must be a
recommendation a favorable
recommendation
from the department of education and
this shall be
submitted to your securities and
exchange commission together with your
articles of incorporation
so that is actually your second step
after you have drafted your articles of
incorporation you have executed the
articles of incorporation you have also
all the other necessary documents just
like what we have mentioned earlier on
just like an educational corporation you
then file it with a securities and
exchange commission so that is the
second step
filing now the articles of incorporation
together with the other necessary
documents
now the third step
upon registering of course you have to
pay the required fees
you know pay the registration the
incorporation and other fees as may be
assessed to you by your securities and
exchange commission
after that
you will have to wait what do you wait
for that is now the final step of
incorporation
you will now have to wait for the
securities and exchange commission to
issue you
the certificate of
incorporation of course
before your sec or your securities and
exchange commission will issue you the
certificate of incorporation of course
they will have to go over the
requirements that you have submitted
you have to make sure that you have
complied with all the requirements for
the incorporation
remember however
that what is required by law is
substantial
compliance
not strict compliance of everything
but substantial
compliance
why do i say that what is required is
really substantial compliance
we can actually find that under section
13 of your device corporation code where
it says there that the incorporators
must file with the securities and
exchange commission there are articles
of incorporation containing
substantially
all the matters that are enumerated
under section 13. so the law requires
only
substantial compliance
it is the issuance of the certificate of
incorporation
that now brings to existence the
corporation
remember
that the term incorporation is different
from
corporation
they are not the same
as i mentioned earlier incorporation
refers to the process
of creating the corporation it refers to
what you go through to create the
corporation while the corporation is
already
the juridical person that is being
created
what is our legal basis for saying that
it is the issue once of the certificate
of incorporation that brings into
existence your corporation you can
actually find that under the third
paragraph of section 18.
let's read the third paragraph of
section 18. it says
a private corporation organized under
this code commences its corporate
existence and juridical personality from
the date the commission issues the
certificate of incorporation
under its official seal and there upon
the incorporators stockholders or
members and their successors shall
constitute a body corporate under the
name stated in the articles of
incorporation for the period of time
mentioned therein unless a period is
extended or the corporation is sooner
dissolved in accordance with law
so there you have it
the law under section 18 of your revised
corporation code tells you
when you will consider the corporation
as already existing
as to when that juridical person has
been formed in other words that is the
birth
of your corporation the issuance of the
certificate of incorporation by the
securities and exchange commission
which is actually your last step in your
incorporation
of course after
the corporation is now formed then there
is now the final step of the creation of
the core of the corporation and that is
the formal organization now and the
commencement of business operations so
of course your
your
corporation now the stockholders can now
elect who the
board of directors are they can now
commence the business and so there's now
the creation of your
corporation so again just a very quick
recap what are the stages of
creating a corporation you have
number one promotion
number two
incorporation to which we have also
discussed the steps of incorporation
and lastly the organization
and the commencement of the business
operations
so that is it for this video i hope you
now have learned the steps of creating a
corporation
the steps of incorporation i hope you
have learned from this video and i'll
see you in the next 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]
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