Untitled Deck

Question 1

What is the title of the Code?

Answer 1

This Code shall be known as the ‘Revised Corporation Code of the Philippines’.

Question 2

How is a corporation defined?

Answer 2

A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incidental to its existence.

Question 3

What are the classes of corporations under this Code?

Answer 3

Corporations may be stock or nonstock corporations. Stock corporations have capital stock divided into shares and can distribute dividends based on shares held.

Question 4

How are corporations created by special laws or charters governed?

Answer 4

They shall be governed primarily by the provisions of the special law or charter creating them, supplemented by the provisions of this Code, insofar as they are applicable.

Question 5

Who are corporators and incorporators?

Answer 5

Corporators are those who compose a corporation, while incorporators are stockholders or members mentioned in the articles of incorporation as originally forming the corporation.

Question 6

What must be indicated in the articles of incorporation regarding shares?

Answer 6

The classification of shares, their corresponding rights, privileges, restrictions, and their stated par value, if any, must be indicated.

Question 7

Can shares be classified into classes or series?

Answer 7

Yes, share stock corporations may be divided into classes or series of shares, or both.

Question 8

What voting rights do holders of nonvoting shares have?

Answer 8

Holders of nonvoting shares can vote on specific matters such as amendments to articles of incorporation, adoption of bylaws, and dissolution of the corporation.

Question 9

What is required for a corporate act to be approved under this Code?

Answer 9

The vote required shall refer only to stocks with voting rights, except as provided for nonvoting shares.

Question 10

Are there restrictions on issuing no-par value shares?

Answer 10

Yes, certain corporations such as banks and public utilities shall not be permitted to issue no-par value shares of stock.

Question 11

What are preferred shares of stock?

Answer 11

Preferred shares may have preference in dividends and corporate asset distribution during liquidation. They must have a stated par value.

Question 12

Who can fix the terms of preferred shares?

Answer 12

The board of directors can fix the terms and conditions of preferred shares if authorized in the articles of incorporation.

Question 13

What is the requirement for no-par value shares?

Answer 13

No-par value shares must be issued for at least Five pesos (₱5.00) each and are deemed fully paid and nonassessable.

Question 14

What are founders’ shares?

Answer 14

Founders’ shares may grant certain rights not enjoyed by other stock owners, including exclusive voting rights for a limited period.

Question 15

What are redeemable shares?

Answer 15

Redeemable shares can be purchased back by the corporation upon expiration of a fixed period, as stated in the articles of incorporation.

Question 16

What are treasury shares?

Answer 16

Treasury shares are previously issued shares reacquired by the corporation and can be disposed of at a price fixed by the board of directors.

Question 17

Who can organize a corporation?

Answer 17

Any person, partnership, association, or corporation, not exceeding fifteen (15) in number, can organize a corporation for lawful purposes.

Question 18

What is the corporate term?

Answer 18

A corporation has perpetual existence unless stated otherwise in its articles of incorporation.

Question 19

Is there a minimum capital stock requirement for stock corporations?

Answer 19

Stock corporations are not required to have minimum capital stock unless specified by special law.

Question 20

What must the articles of incorporation contain?

Answer 20

The articles must include the corporation’s name, purpose, principal office location, term, incorporators’ details, and authorized capital stock.

Question 21

What is the form of articles of incorporation?

Answer 21

The articles must comply with a prescribed form and include specific clauses regarding the corporation’s formation and structure.

Question 22

How can articles of incorporation be amended?

Answer 22

Amendments require a majority vote of the board and two-thirds (2/3) of stockholders, with changes indicated in the articles.

Question 23

What grounds can lead to disapproval of articles of incorporation?

Answer 23

Disapproval can occur if the articles are not compliant with the law, contain false capital stock certifications, or violate ownership requirements.

Question 24

What are the requirements for a corporate name?

Answer 24

A corporate name must be distinguishable from existing names and cannot be protected by law or contrary to regulations.

Question 25

What can the Commission do if a corporate name is not distinguishable from another?

Answer 25

The Commission may order the corporation to cease using the name and require it to register a new one.

This includes removing all visible signages and other effects bearing the corporate name.

Question 26

What happens if a corporation fails to comply with the Commission’s order?

Answer 26

The Commission may hold the corporation and its responsible directors or officers in contempt and/or liable under the Code and other applicable laws.

Question 27

What is required for a person or group to incorporate?

Answer 27

They must submit the intended corporate name to the Commission for verification.

Question 28

What happens if the Commission approves the corporate name?

Answer 28

The name shall be reserved for the incorporators, who must then submit their articles of incorporation and bylaws.

Question 29

When does a private corporation commence its corporate existence?

Answer 29

A private corporation commences its existence from the date the Commission issues the certificate of incorporation.

Question 30

What is a de facto corporation?

Answer 30

A corporation claiming in good faith to be incorporated under the Code, which does not need to prove its incorporation in private suits.

Such inquiries may be made by the Solicitor General in a quo warranto proceeding.

Question 31

What is the liability of persons acting as a corporation without authority?

Answer 31

They shall be liable as general partners for all debts and liabilities incurred as a result of acting as a corporation.

Question 32

What happens if a corporation does not commence business within five years?

Answer 32

Its certificate of incorporation shall be deemed revoked after the five-year period.

Question 33

What is the status of a corporation that becomes inoperative for five consecutive years?

Answer 33

The Commission may place the corporation under delinquent status after due notice and hearing.

Question 34

What must a delinquent corporation do to lift its status?

Answer 34

It must resume operations and comply with all requirements prescribed by the Commission within two years.

Question 35

What happens if a delinquent corporation fails to comply within the given period?

Answer 35

The corporation’s certificate of incorporation shall be revoked.

Question 36

What must the Commission do before suspending or revoking a certificate of incorporation?

Answer 36

The Commission shall give reasonable notice and coordinate with the appropriate regulatory agency.