MT Flashcards
when does doctrine of piercing the veil of corporate fiction?
in these instances
- defeats public convenience when corp used to **evade obligation
- fraud cases [or] when corp used to justify wrong, protect fraud, or defend crime
- Alter ego cases where corp is a mere alter ego of a person or adjunct to another corp.
3 tests to pierce corporate veil
- control
- fraud
- harm
Halley v. Printwell doctrine
- [fraud] corporate veil could be pierced when use to perpetrate fraud
- trust fund doctrine] capital, assets, and property of corp is a trust fund for creditors such that creditors can also go after unpaid subscriptions for the satisfaction of the obligation.
probative factors justifying piercing of corporate veil
- stock ownership is owned by one or common ownership
- keeping corporate books and records
- modus operandi of business is related to fraud
piercing veil
vs.
reverse piercing
reverse
- corp held liable for debt of a person behind corporation
Int. Academy of Management & Economics Incorp (IAME) v. Litton
- reverse piercing where atty hid his assets so they would not be attached
- can piercing apply to non-stock corps
A is incorporator & decides to sell his shares to his wife.
is wife a subscriber?
if it is already a secondary transfer, the wife who bought can no longer be considered a subscriber because a subscriber refers only to those original or unissued shares
can preferred share holders have a vote in the corp buying real property?
No, the general rule provides that holders of preference shares do not have voting rights
the exception provides is if it is the disposition of corporate property substantially all of it or all.
in the case, it refers to purchasing of real property which is not yet the corporate property and outside of the scope of disposition.
exc to exc - doctrine of equality of shares if AOI is silent on voting, then preferred shareholders can be considered
in practice, BOD conducts all business & control all properties. it would be a hassle to need vote of stockholders.
Bank A issued a NO PAR VALUE share for the stated value of 1peso per share.
SEC questions the issuance of Bank A of no par value. Is the SEC correct?
General Rule, No par value is discretionary on corporations.
Exc, par value is required for
- banks
- trusts
- insurance
- public utilities.
grounds when to reject AoI
- not substantially compliant to the Form
- purpose/s patently unconstitutional, illegal, immoral, or contrary to rules & regulation
- capital stock subscribed is false
- require % of Fil ownership is not complied
as SEC, what is proper action when you find a corp violating the coroporate name rule
- may summarily order a cease and desist
- require all corp to register new name
- shall cause removal of all visible signages bearing corp name
if corp violating name rule does not comply/ fail to?
- may hold BoD, Offcrs in contempt
- may hold them administratively, civilly, criminally liable
- may hold them liable under other laws
- may revoke registration
what is doctrine of centralized corporate management
& its exceptions
- exercise of powers
- conduct of all business
- and control of all properties
are granted by the BoD
EXC
- Executive Committee created by the BoD
-
what is an independent sirector?
an independent contractor, provided in sec. 22 is:
a person who, apart from receiving fees and shareholdings from the corporation,
- is independent of management & free from any business or other relationship
- which could, or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director
a person shall be disqualified from being BOD when?
within 5 years prior election
- convicted by final judgment
- offense exceeding 6 years
- violating of RCC
- violating 8799
- adminstratively liable for any offense involving fraudulent acts
- foreign court for violation of similar acts above
