What are the different classes of corporations? (Section 3-4, Revised Corporation Code)

Summary

Attorney 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.