AvLaw - Entity of Choice and Transportation Law Flashcards
Form of Organization has a single owner
Sole Proprietorship
What do you call the single owner of a Sole Proprietorship entity?
Proprietor - also the manager
How is sole proprietor ship distinct from its proprietor?
accounting records for the sole proprietorship does not include the proprietor’s personal financial records
are those with assets of p3m or less and not more than 9 workers
micro enterprises
are those with assets above p3m to p15m and have 1-99 workers
small enterprises
are those with assets above p15m to p100m and employ 100-199 workers
medium enterprises
is a business owned and operated by two or more
persons who bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits
among themselves.
Partnership
T or F
Each partner is liable for their individual debt
incurred during the partnership.
False. Solitarily (Solidary) liable or personally liable for ANY debt
An artificial being crated by operation of law, having the rights of success and the powers, attributes, and properties expressly authorized by law, or incident to its existence
Corporation
T or F - Stockholders are personally liable for the corporation’s debts
F - liable only to the extent of their share
New type of corporation with a single stockholder
One Person Corporation
What is the benefit of OPC?
Control and Authority of sole proprietorship and limited liability of a corporation
T or F - a sole proprietor cannot be sued using his OWN NAME since he has limited liabilities when it comes to the debts of the business.
F - proprietors have unlimited liabilities that is why the business’ debts are not distinct from their own personality; thus, they can be sued using their own name.
Who may form an OPC?
Natural Person
Trust (Subject managed by trustee)
Estate
Basic document req for OPC
Cover sheet
Articles of incorporation
written consent from nominee and alternate nominee
Fill in the blanks:
The single stockholder claiming limited liability has the burden
of affirmatively showing that the corporation __________
was adequately
financed.
Fill in the blanks:
Within 15 days of issuance of Certificate of Incorporation, the OPC shall ______________.
appoint a Treasurer, Corporate Secretary and other officers
T or F:
The single stockholder shall be appointed as Corporate Secretary and may assume the role of a Treasurer (bond required if self is appointed).
F - secretary must be other than the single stockholder but he can assume the role of a treasurer.
Persons elected by shareholders and responsible for overall management, but not hands on more
philosophic) of the corporation;
Directors
Persons hired by the board of directors and responsible for day to day operations of the
corporation and carrying out the vision of the directors
Officers
Owners of the corporation in proportion to their ownership of corporate stock outstanding.
Shareholders
Rights of a stockholder
- Vote in election of board of directors at annual meeting, and
actions that require stockholder approval - Share the corporate earnings through dividends
- Keep the same percent of ownership when new shares of stock are
issued - preemptive right - Share in assets upon liquidation in proportion to their holdings. Called residual claim as they are paid after all claims have been
paid.
Corporate profits distributed to shareholders in proportion to their shares held usually in cash;
Dividends
Corporate profits not (yet) distributed to
shareholders.
Retained Earnings
A corporation formed by and owned by individuals and other private interests.
Private Corporation
A corporation whose shares are sold to and held by, or on behalf of, the
general public, and are traded on a public exchange.
Publicly-Held Corporation
A corporation whose shares are not publicly-traded, and may generally
only be bought from or sold to the corporation.
Privately-Held Corporation
A privately-held corporation with a small number of shareholders, often members of the same family
Close Corporation
A corporation formed by a
government to serve some public purpose.
Public Corporation
A corporation formed, in many cases, for charitable, educational, religious, or similar purposes, and organized and operated without the goal of making a profit.
Non-Profit Corporation
A debt security that represents borrowing by the corporation
bond
an equity security that represents the purchase of a share of ownership in a corporation by a shareholder.
Stock
explain the Doctrine of Separate Corporate Entity
Shareholders have distinct and separate personality from the corporation. Hence, the liability of the shareholders are limited only to the amount of their investments.
Explain the Doctrine of Piercing the Corporate Veil
Allows the state to disregard the doctrine of separate corporate entity for justifiable reasons.
Grounds of the Doctrine of Piercing the Corporate Veil
Fraud, Control, Alter Ego, Objective test
Law governing transportation contracts.
Transportation Law
Jurisdiction of Transportation Law of the Philippines
[i] if within
the Philippines; or
[ii] if the transportation of goods be from a foreign
country to the Philippines.
Laws governing Transport Contracts
- Provisions of the New Civil Code on Common Carriers;
- Code of Commerce
are persons, corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation, offering their services to the public
Common Carrier
Elements of Common Carrier
- Entity
- Engaged in transportation
- means is by land, water, and/or air
- for fee
- offered to public without distinction
One is still considered a common carrier even if:
- The mode of transportation is not a motor vehicle (FPIC vs.
CA) - It has no fixed and publicly known route, maintains no
terminals, and issues no tickets. (Asia Lighterage vs. CA) - It is not in the business of public transportation. (Calvo vs. CA)
is one who, without making the activity a vocation, or without holding himself or itself out to the public as
ready to act for all who may desire his or its services,
undertakes, by special agreement in a particular instance only, to transport goods or persons from one place to another either
gratuitously or for hire
Private Carrier
Differentiate Private and Common carrier in terms of diligence required
extraordinary diligence for common carrier
ordinary diligence for private carrier
Differentiate Private and Common carrier in terms of presumption of negligence
common carrier - presumed negligent if lost, destroyed, deteriorated, death or injury
private carrier - no presumption of negligence
Reasons for the requirement of extraordinary diligence
- Nature of the business of common carrier which is public
service; - Public policy - the common carriers are supposed to serve the public interest and therefore, they have to exercise extraordinary diligence
Caso Fortuito includes
- The cause of the breach of the obligation must be
independent of the will of the debtor; - The event must be unforeseen or unavoidable;
- The event must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and - The debtor must be free from any participation in, or
aggravation of the injury to the creditor.
Should there be injury to or
death of passenger so that
Common Carrier will be liable?
No - Case of Singson and Cathay Pacific regarding the plane ticket
