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.

Outlines

00:00

🏢 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.

05:01

📄 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.

10:03

🔚 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.

Keywords

💡Virtual Classroom

A virtual classroom refers to an online learning environment where educational content is delivered via digital platforms. In the context of the video, Attorney Marie Chris Bataan Lasko uses a virtual classroom to educate her audience on legal concepts, specifically the process of creating a corporation. This method allows for a broader reach and accessibility to legal education.

💡Corporation

A corporation is a legal entity that is separate from its owners, allowing for limited liability and the ability to act as a single entity in the eyes of the law. In the video, the main theme revolves around the process of creating a corporation, which includes steps like promotion, incorporation, and formal organization.

💡Promoters

Promoters are individuals who initiate the process of forming a corporation by bringing together potential incorporators. They are crucial in the promotion phase of creating a corporation, as they help to gather interest and support for the new entity. In the script, it is mentioned that promoters can be skipped if the incorporators have already decided to form the corporation.

💡Incorporate

To incorporate means to establish a corporation legally. It involves drafting and filing the necessary documents, such as the articles of incorporation, with the appropriate government authority. The video explains that incorporation is the second step in creating a corporation and is governed by specific laws and regulations.

💡Articles of Incorporation

The articles of incorporation are the foundational legal documents that outline the basic structure and purpose of a corporation. They must be drafted and executed by the incorporators and filed with the Securities and Exchange Commission (SEC). The video script provides an example of where to find the prescribed form for these articles under section 14 of the revised corporation code.

💡Incorporatees

Incorporatees, also known as incorporators, are the individuals who sign and file the articles of incorporation to legally establish a corporation. They are the original founders of the corporation and are responsible for its initial formation. The video emphasizes the role of incorporatees in the incorporation process.

💡Substantial Compliance

Substantial compliance refers to the requirement that the articles of incorporation and other documents filed with the SEC must contain all the necessary elements as required by law, though not necessarily in the exact form. The video explains that the law requires substantial compliance, not strict compliance, for the incorporation process.

💡Certificate of Incorporation

The certificate of incorporation is a document issued by the SEC that signifies the official recognition of a corporation's existence. It is the final step in the incorporation process and marks the birth of the corporation as a legal entity. The video script cites section 18 of the revised corporation code to explain the significance of this certificate.

💡Formal Organization

Formal organization refers to the establishment of the corporate structure, including the election of the board of directors and other key officers, after the corporation has been legally incorporated. This step is essential for commencing business operations and is the final phase in the creation of a corporation as discussed in the video.

💡Commencement of Business Operations

The commencement of business operations marks the beginning of the corporation's activities as a legally recognized entity. This step involves the corporation starting its business activities, such as trading goods or providing services, after the formal organization has been established. The video concludes with this step, indicating the completion of the corporation's creation.

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]