Incorporation and Organization of Private Corporations Flashcards
RCCP Section 10
Any person, partnership, association or corporation, singly or jointly with others, but not more than 15, in number, may organize a corporation for any lawful purpose or purposes: Provided, that natural persons who are license to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allwoed to organize as a corporation unless otherwise provided under special laws. Incorporators who are natural persons must be of legal age.
Each incorporator of a stock corporation must own or be a subscriber toa at least one share of the capital stock.
A corporation with a single stockholder is considered a one eprson corporation
Maximum number of incorporators
15
Double Franchise Theory
Primary franchise is the certification given by the RCCP, it is given to the corporators giving them the right to incorporate
Second Franchise is the certification given to the corporation to exercise corporate powers ( can be sold or alienated)
WHat is a franchise?
special privilege or right affected with public interest, conferred by the state
Can a corporation be formed without a legislative authority?
No
What is required to incorporate a corporation?
It is required to file or acquire certificate of incorporation in the SEC.
What is required if the incorporator is a natural entity?
he must have legal capacity
What is required to become an incorporator?
Must own at least one or a subscriber of at least one capital stock
What is meant by the word association?
non-profit organizations being organized.
Rules with regard to a corporation being one of the incorporator.
1) it must be with the approval of the board of directors or trustees and the members/stockholders if the act is not directly related to the primary purpose
2) if investment is one with the primary purpose only the appraoval of the BOD or trustees is ened
can an incorporator be replaced?
an incorporator is an accomplished fact, which means he will always be an incorporator regardless of transferring of his interests
RCCP Section 17
No corporate name shall be allowed by the Commission if it is not distinguishable from that already reserved or registered for the use of another corporation or if such name is protected by law or when its use is contrary to existing law, rules and regulations.
A name is not distinguishable even if it contains one or more of the following.
a) the word corporation, compay, limited, limited liability, or an abbrevation of such words
b) punctuations, articles, conjunctions, contractions, prepositions, abbreviaitons, different tenses, spacing, or number of the same word or phrase.
The commission, upon determination that the corporate name is: 1) not distinguishable from a name already reserved or registered for the use of another corporation; 2) already protected by law; 3) contrary to the law, rules, and regulations, may summarily order the corporation to immediately cease and desist from using such name and require the corporation to register a new one. The commission shall also cause the removal of all visible signages, marks, advertisements, labels, rpint and other effects bearing such corporate name. Upon the approval of the new corporate name, the commission shall issue a certification of incorporation under the amended name.
If the corporation fails to comply with the commission’s order, the commission may hold the corporation and its responsible directors or officers in contempt and/or hold them administratively, civill and/or criminally liable under this code and other applicable laws and/orrevoke the registration of the corporation
3 rules to be followed in choosing a corporate name
1) it must be distinguishable from the other corporate names that are already registered, or reserved
2) it must be not be the same with the name protected by law
3) it must not be used to circumvent or should not be contrary to the existing laws, rules and regulations
Orders of the SEC if they find that Paragraph 1 of section 17 was violated.
1) register a new one
2) cease and desist from using the corporate name
3) remove the signanges, marks, advertisements, labels, print and other effects
4) reject the articles of incorporation
Consequences of not following the Sec orders
administrative, criminal, civil liability
contempt
revocation of the registration of the corporation
What must be proved by the person opposing the corporate name of the other?
1) acquisition of a prior right over the name
2) rccp section 17 paragraph 1
Distinguishibility Test
Such principle proceeds upon the theory that it is a fraud on the corporation which has acquired a right to that name and
carried on its business thereunder, that another would attempt to use the same name, or the same name with slight variation in such a way as to induce persons to deal with it in the belief that they are dealing with the corporation which has given a reputation to the name
identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or [is] patently deceptive, confusingly similar or contrary to existing laws.”
Dominancy Test
Under the dominancy test that is incorporated in the IPC, there will be infringement if the mark contains the dominant feautre of the mark of a trademark belonging to another. This rule applies to corporate names. Thus, the name cannot be used if the name indicated in the Articles of incorporation adopts the dominant feature of an existing corporate name or even atrademark belonging to another. The name cannot likewise be used if it is essential and distinguishing feature of another corporation’s registered and protected corporate name.
Purpose of the corporate name
1) the avoidance of fraud from the public which would have occasion to deal with the entity concerned
2) evasion of the legal obligations and duties
3) reduction of difficulties of administration and supervision over corporations.
Doctrine of Secondary meaning
word or phrase, which is originally incapable of exclusive appropriation because the word or phrase is geographic or otherwise descriptive, might nevertheless have been used for so long and so exclusively by one producer with reference to an article and the purchasing public has considered the word or pgrase ass associated to his product
Thus, if a corporate name, though descriptive, has been used for so long and exclusively by one corporation and has become associated with that corporation alone in the mind of the public, another corporation cannot register said name as a corporate name.
Priority Adoption Rule
corporation that first adopts a corporation name has the right thereto and a subsequent corporation cannot use the same name
can a corporation use a name of an unregistered corporation?
no
1) corporate name
2) One Person Corporation
3) Partnership
4) Foundation
5) Non-stock,Non-Profit Corporations including non-governmental organizations and foundations engaging in microfinance activities
1) corporation, incorporated, inc, corp
2) OPC -below at the end of its corporate name
3) Company, Co, Limited, Ltd/ Professional partnership (company, associates, partners)
4) foundation
5) microfinancing, microfinance
Descriptive terms in the names
1) priamry purpose
2) secondary purpose
cAn the name of a dissolved corporation be used ?
the name of a corporation or partnership that has been dissolved or whose registration has been revoked shall not be used by another corporation, within five years from the approval of dissultion or five years from revocation.
Change of name
the corporation is by no sense a new corporation, or the successor of the original one
it does not affect its right to bring an action on a note given to the corporation under its former name
