Consolidated Modules Flashcards
What is a corporation?
An artificial being created by the operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incidental to its existence.
What law governs corporations?
Corporation Code
What is the lifespan of a corporation?
50 years
Where must a corporation file its charter or articles of incorporation?
Securities and Exchange Commission (SEC)
What are the parties involved in the Articles of Incorporation?
State and Corporation, Stockholders and State, Stockholders and Corporation
What should be included in the Articles of Incorporation?
Name of corporation, Location of corporate headquarters, Names and addresses of incorporators, Purposes and nature of corporation, Authorized capital stock, Names and addresses of BOD, Rights of stockholders
What sets the framework of the corporation?
Articles of Incorporation
What is the actual picture of what really happens in a corporation?
By-laws
What is a de jure corporation?
Created in strict compliance with all the legal requirements and its right to exist as a corporation cannot be successfully attacked.
What is a de facto corporation?
Defectively created but there is an exercise of corporate rights and franchise resulting from an attempt in good faith to incorporate.
What is a closed corporation?
All the corporation’s issued stocks of all classes shall be held of record by not more than a specified number of persons, not exceeding 20. All of the issued stocks of all classes shall be subject to one or more specified restrictions on transfer permitted by the corporation code. Not listed on any stock exchange or make any public offering of any of its stock of any class.
What is a public/listed corporation?
Listed on an exchange, with assets in excess of Php 50,000,000, has at least 200 shareholders which are holding at least 100 shares of a class of its equity securities.
What is the doctrine of corporate entity?
The “separate and distinct personality” of a corporation from that of the stockholders.
What are the fundamental principles in corporation law arising from the doctrine of corporate entity?
Stockholders/members of a corporation are not the same as the corporation itself, the property belonging to a corporation cannot be attached nor held answerable for the debt of the stockholders, personal transactions, obligations, and liabilities of a stockholder should not in any way affect the operations of the corporation.
Under what conditions may the principle of separate identity of a corporation from its stockholders be disregarded?
Used to defeat public convenience, justify wrong, protect or cover fraud, defend crime or work an injustice.
What is the right of succession?
A corporation has a continuity of corporate life during its term of existence stated in the articles of incorporation.
What are ultra vires acts of a corporation?
Corporations under the Corporation Code possessing or exercising any corporate powers beyond the Code.
What are intra vires acts of a corporation?
Corporations under the Corporation Code possessing or exercising any corporate powers within the Code.
What is the doctrine of corporate opportunity?
When a director acquires for himself a business opportunity which should belong to the corporation, he must account for all such profits derived by him from the said business opportunity by refunding the profits to the corporation.
What is the trust fund doctrine?
The capital stock and assets of the corporation are held in trust for the creditors. Accordingly, there shall be no distribution of assets to shareholders until the claims of creditors have been paid.
What is par value?
Nominal value of a stock at the time of issuing; generally from P0.01 to P100.00; Considered as book keeping item only and bears no relationship to share’s book value or market value.
What is book value?
Tangible net asset value per share; represents the total amount a company is worth if all its assets are sold and all the liabilities are paid back.
What is market value?
The price at which someone is willing to pay for each share; current price of a stock quoted on the exchange.
What is authorized capital stock?
The maximum number of shares that the corporation may issue.
What is subscribed capital stock?
The number of shares that have been subscribed to.
What is paid-up capital stock?
The number of shares that have been paid for.