Classification of Corporation Flashcards
Classification of Corporation As to organizers
a. public – by State only; or
b. private – by private persons alone or with the
State.
Classification of Corporation As to functions
a. public - government of a portion of the State; or
b. private – usually for profit-making functions.
Classification of Corporation As to governing law
a. public – Special Laws and Local Government
Code; or
b. private – Law on Private Corporations
Classification of Corporation As to legal status
a. de jure corporation – corporation created in strict
or substantial conformity with the mandatory
statutory requirements for incorporation and the
right of which to exist as a corporation cannot be
successfully attacked or questioned by any party
even in a direct proceeding for that purpose by the
state; or
b. de facto corporation – organized with a colorable
compliance with the requirements of a valid law
and its existence cannot be inquired collaterally but
such inquiry may be made by the Solicitor General
in a quo warranto proceeding (Sec. 20).
The only difference between a de facto
corporation and a de jure corporation is that a
de jure corporation can successfully resist a
suit brought by the State challenging its
existence; a de facto corporation cannot
sustain its right to exist as against the State.
c. corporation by estoppel – group of persons that
assumes to act as a corporation knowing it to be
without authority to do so, and enters into a
transaction with a third person on the strength of
such appearance. It cannot be permitted to deny its
existence in an action under said transaction (Sec.
21). It is neither de jure nor de facto.
d. corporation by prescription – one which has
exercised corporate powers for an indefinite period
without interference on the part of the sovereign
power, e.g. Roman Catholic Church.
Classification of Corporation As to existence of stocks
stock corporation – a corporation which has
capital stock divided into shares and is authorized
to distribute to holders of such shares, dividends or
allotments of the surplus profits on the basis of the
shares held (Sec. 3); or
For a stock corporation to exist, the above
requisites must be complied with for even if there is not a stock corporation if dividends are not
supposed to be declared, i.e. there is no
distribution of retained earning (CIR vs. Club
Filipino, Inc. de Cebu, 5 SCRA 321).
b. non-stock corporation – a corporation which
does not issue stocks nor distribute dividends to
their members (Sec. 87).
Classification of Corporation As to laws of incorporation
a. domestic corporation – corporation formed,
organized or existing under Philippine laws; or
b. foreign corporation – a corporation formed,
organized or existing under any laws other than
those of the Philippines and whose laws allow
Filipino citizens and corporation to do business in
its own country or state.
Classification of Corporation As to whether they are open to the public or not:
a. open – one which is open to any person who may
wish to become a stockholder or member thereto;
or
b. close - those whose shares of stock are held by
limited number of persons like the family or other
closely-knit group (The Corporation Code of the
Philippines, Hector S. De Leon & Hector M. De
Leon, Jr., 2006 ed.)
Classification of Corporation As to relationship of management and control:
a. holding corporation - it is one which controls
another as a subsidiary by the power to elect
management. It is one that holds stocks in other
companies for purposes of control rather than for
mere investment.
b. subsidiary corporation – one which is so related
to another corporation that the majority of its
directors can be elected either directly or indirectly
by such other corporation. It is always controlled;
or
c. affiliate – one related to another by owning or
being owned by common management or by a
long-term lease of its properties or other control
device. It may be the controlled or controlling
corporation, or under common control; or
d. parent and subsidiary corporation – When a
corporation has a controlling financial interest in
one or more corporations , the one having control
is the parent corporation, and the others are the
subsidiary corporations (Philippine Corporate Law,
Cesar Villanueva, 2001 ed.).
Classification of Corporation As to number of persons who compose them:
a. aggregate corporation – a corporation consisting
of more than one person or member; or
b. corporation sole – a corporation consisting of only
one person or member; a special form
Classification of Corporation As to whether they are for religious purposes or
not:
a. ecclesiastical corporation – one organized for
religious purposes; or
b. lay corporation – one organized for a
purpose other than for religion.
Classification of Corporation As to whether they are for charitable purposes or
not:
a. eleemosynary corporation – one established for
or devoted to charitable purposes or those
supported by charity; or
b. civil corporation – one established for business or
profit.
what is the CONCEPT OF GOING PUBLIC AND GOING PRIVATE
A corporation is deemed to be “going public” when it
decides to list its shares in the stock exchange. These
include corporations that will make initial public offering of
its shares. A corporation is said to be “going private” when
it would restrict the shareholders to a certain group. In a
sense, these also include closed and closely held
corporation. (Philippine Corporate Law Compendium,
Timoteo Aquino, 2006 ed.)
what is the CONCEPT OF ONE-MAN CORPORATION
A corporation wherein all or substantially all of the stocks is
held directly or indirectly by one person. However, it
should still follow the formal requirements of a
corporation (e.g. number of incorporators, board of
directors composed of stockholders owning shares in
a nominal capacity) in order to validly enjoy the
attributes of the corporation, so as to avoid the
application of the doctrine of piercing the veil of
corporate entity.
