Module 1 - Gen Provisions, Def'n, & Clsfctn Flashcards
what are the attributes of a corporation
- artificial being
- created by operation of law
- right to succession
- it has only the powers, attributes, and properties expressly
When do you apply the doctrine of piercing the veil of corporate fiction?
ALL must be present
- defeat of public convenience - when corporate fiction is used as a mean to evade an obligation
- fraud cases - when the corp justify a wrong, protect fraud, or defend crime
- alter ego cases - corp is a mere alter ego or business conduit of a person or supplement of another corp
ABC Corporation borrowed money from the bank to finance the expansion of its business. It executed a security agreement over its merchandize inventory as collateral for the loan. Due to the pandemic, ABC corporation suffered losses and could no longer pay the loan.
Assuming that the collateral has already been impaired, can the bank run after the owners of the corporation?
impaired collateral - ‘assets cannot pay for its obligation.’
Generally,
The Exemption,
If the court issues writ of execution against the property of a third party person (in the case of Guoz) what is the remedy of that third person?
Only served on the proper party–the defendant. The defendant can file a third party complaint when unlawfully subject to the writ of execution (such as when the stockholder properties are issued a writ of execution
LB: De Lima vs. Guez
De Lima v. Goez
Separate & Distinct Doctrine
Halley v Printwell
Trust Fund Doctrine
ABC Corp. borrowed money from the bank to finance the expansion of its operations. Instead of putting the money into the project, the Board of Directors divided the loan proceeds among themselves for their personal use. As a result, they were unable to pay the loan. Thereafter, the same directors formed XYZ Corporation to engage in a business similar to that of ABC corp.
Can the bank run after the XYZ corp?
Generally
The Exception
You have MFC who borrowed money from Solidbank. As is normally the case, when a corporation borrows money
The officers of the corporation (Mindanao Ferroalloy) were the ones who signed the loan agreement and promissory notes on behalf of the corporation. But the corporation eventually was not able to pay the loan. So Solidbank filed a case against the corporation and impleaded all the officers of the corporation. For instance, Solidbank impleaded the officer who approved loan contract as well as the
officers who signed the promissory note on behalf of the corporation. One of the officers was the one who negotiated for the loan, but did not sign the documents.
ISSUE: Issue: Will the case against the officers of the corporation prosper? Stated differently, can the bank make the corporation officers liable with their personal property for the loan of the corporation?
No,
Separate & Distinct Juridical Entity
indications/factors where piercing corporate fiction is justified
1.
2.
3.
4
Test to aid the court in determining won piercing the veil of corporate faction is applicable
3.
in practice & in order not to violate a corporation’s due process, how can the court pierce the corporate veil?
2.
How are corporations created?
1.
2. [w/ exc.]
how created > 2 > exc
Constitutional Basis of Corporations
what are the powers, attributes, and properties of a private corporation
can corporations be partners?
Generally
Exceptoin
elements of a STOCK corporation
- 2.
define “CORPORATORS”
define “SHARE OF STOCK”
define “STOCKHOLDER or SHAREHOLDER”
Other Classification of Corporation
1.
2.
As to whether they are for religious purposes or not
As to whether they are for charitable purposes or not
As to State under whose laws they have been created
As to their legal right to corporate existence
As to whether they are open to the public or not
As to their relation to another corporation:
As to whether they are for public (government) or private purpose
what are the 3 attributes of GOCC?
1
2
3
As to their relation to another corporation:
1.
2.
3.
As to whether they are for public (government) or private purpose
1
2
As to whether they are corporations in a true sense or only in a limited sense:
As to whether they are corporations in a true sense or only in a limited
sense:
A public or municipal corporation possesses two kinds of power:
z
Test in determining Nationality
- 3
Governing Laws for Corporation
1.
2.
3.
what is a corporator
what is an incorporator?
what is a stockholder?
what is a promoter?
what are the board of directors?
What is a SUBSCRIBER?
what is the trust fund doctrine?
It is established doctrine that subscriptions to the capital of a corporation constitute a fund to which creditors have a right to look for satisfaction of their claims and that the assignee in insolvency can maintain an action upon any unpaid stock subscription in order to realize assets for the payment of its
debts
TN: assignee in insolvency refers to a person appointed to settle the company’s debts
what is an underwriter ?
a
