CORPORATION LAW AND BASIC SECURITIES

San Sebastian College – Recoletos

College of Law
Prof. Raoul C. Creencia

Course Description:

A study of the Corporation Code and other special laws governing

private corporations, including foreign corporation,
and the concept of doing business
in the Philippines. The course includes in-depth analysis of
the applicable common law and commercial principles
underlying the various relationships in the corporate setting,
with emphasis on the corporation being the medium for business enterprise
and a means of providing for the equity investment market.
The course includes the study of the Securities Regulations Code.

I. Introduction to Business Entities and Juridical Persons

A. Evolution of Philippine Corporate Law

• Spanish Code of Commerce (1888)

o Sociedades Anonimas (SA)
o SEC Memorandum Circular No. 1 series of 2021 [January 27, 2021]
• The Corporation Law or Act 1459 (1906)
• The Corporation Code of the Philippines – BP Blg.68 (1980)
• Revised Corporation Code - Republic Act 11232 (2019)

B. Juridical Persons and Business Organizations

• Juridical persons vis-à-vis natural persons

• Juridical persons in general
• Sole Proprietorship
• Business Trusts
• Partnerships
• Joint Accounts (Sociedad de Cuentas en Participacion)
▪ Bourns v. D.M. Carman, et al. (GR 2800, December 4, 1906)
• Joint Venture
▪ Aubach v. Sanitary Wares Mfg. Corp. (189 SCRA 130 [1989])
▪ Kilosbayan, Inc. v. Guingona, Jr. (232 SCRA 110 [1994])
• Cooperatives
 ▪ RA 9520 - The Philippine Cooperative Code of 2008
• Syndicate
• Homeowners’ Association
▪ RA 9904 Magna Carta for Homeowners and Homeowners
Association
▪ Department Order 2021-007, Series of 2021(15 September 2021)
• Corporations

II. Nature and Attributes of a Corporation

A. Definition and Theories of Formation

• Section 2, Revised Corporation Code (RCC)

• Theories on the Formation of a Corporation
▪ Theory of Concession – “creature of the State”
• Tayag v. Benguet Consolidated, Inc. (26 SCRA 242 [1968])
• Ang Pue v. Secretary of Commerce (5 SCRA 645 [1962])
• Torres v. Court of Appeals (278 SCRA 793 [1997
▪ Theory of Enterprise Entity
▪ Contract Theory
▪ Genossenschaft Theory
• Tayag vs. Benguet Consolidated, Inc. (1968)

B. Attributes and Core Characteristics of a Corporation

• Attributes:

1) Artificial being -- A corporation is granted a juridical capacity

to own properties, to contract and to enter into legal
relationships.

o Vazquez v. Borja (74 Phil. 560 [1944])

o Int’l Express Travel and Tour Services v. Court of
Appeals (343 SCRA 674 [2000])
o Manacop vs. Equitable PCI Bank (GR 162814, 25
August 2005)

• Nationality and Citizenship

o Section 140 (RCC)
o Narra Nickel Mining & Development Corporation vs.
Redmont Consolidated Mines (GR 195580; April 2014
& January 2015)
 o The Test of Controlling Ownership – applicable and
relevant in industries and business activities that
are reserved (wholly or partially) to Filipino
Citizens:

a) Exploitation of Natural Resources

• Sec. 140; Sec. 2, Article XII, 1987
Constitution
• Roman Catholic Apostolic Administrator
of Davao, Inc. v. The LRC and the
Register of Deeds of Davao, 102 Phil. 596
[1957]).
• Register of Deeds of Rizal v. Ung Sui Si
Temple, 97 Phil. 58 (1955)

b) Public Utilities
• Sec. 11, Article XII, 1987 Constitution
• Republic Act 11659 – Public Service
Act (Amending Commonwealth Act
146)
• People v. Quasha, 93 Phil. 333 [1953])
• J.R.S. Business Corp. v. Imperial
Insurance (11 SCRA 634 [1964])
• Tatad v. Garcia, Jr. (243 SCRA 436
[1995])
• Philippine Long Distance Telephone Co.
v. National Telecommunications
Commission (190 SCRA 717, 732
[1990])

• Corporation’s Constitutional Rights

o Entitled to due process - Smith Bell & Co. v.

Natividad, 40 Phil. 136, 144 [1919]).
o Equal protection clause - (Smith Bell & Co. v.
Natividad)
o Unreasonable Searches and Seizure - Stonehill v.
Diokno, 20 SCRA 383 [1967])
o But a corporation is not entitled to privilege against
self-incrimination - Bataan Shipyard & Engineering
Co v. PCGG, 150 SCRA 181, 234-235 (1987).

• Liability for Torts

 o PNB v. CA ( 83 SCRA 237 [1978])
o Sergio F. Naguiat v. NLRC (269 SCRA 564 [1997])
o Philippine Commercial International Bank vs. Court of
Appeals (G.R. No. 121413, 29 January 2001)

• Criminal Liability of a Corporation:

o Alicia Fernandez, et al. v. People of the Philippines [GR
249606; 06 July 2022]
o West Coast Life Ins. Co. v. Hurd (27 Phil. 401 [1914])
o People v. Tan Boon Kong (54 Phil. 607 [1930])
o Sia v. CA (121 SCRA 655 [1983])
o Articles 102 and 103, Revised Penal Code
o Times, Inc. v. Reyes (39 SCRA 303 [1971])
o People v. Concepcion (44 Phil. 129 [1922])
o Alfredo Ching v. Secretary of Justice, et.al. [GR 164317;
06 February 2006]
o Securities and Exchange Commission v. Price
Richardson Corporation [GR 197032; 26 July 2017]
o
• Recovery of Moral Damages and Other Damages:
o Mambulao Lumber Co. v. Philippine National Bank (22
SCRA 359 [1968])
o Prime White Cement Corp. v. Intermediate Appellate
Court (220 SCRA 103, 113-114 [1993])
o LBC Express, Inc. v. Court of Appeals (236 SCRA 602
[1994])
o Acme Shoe, Rubber & Plastic Corp. v. Court of Appeals
(260 SCRA 714 [1996])
o Solid Homes, Inc. v. Court of Appeals (275 SCRA 267
[1997])
o Asset Privatization Trust v. Court of Appeals (300
SCRA 579 [1998])
o ABS-CBN Broadcasting Corp. v. Court of Appeals (301
SCRA 589 [1999])
o Cometa v. Court of Appeals (301 SCRA 459 [1999]).

2) Creature of law -- Each corporation is created by operation

of law pursuant to a covenant to pursue a business
enterprise.
o AGO Realty & Development Corporation (ARDC), et
al. v. Dr. Angelita F. Ago, et al.
[GR 210906; 16 October 2019]
o Dr. Angelita F. Ago v. AGO Realty & Development
Corporation (ARDC), et al.
 [GR 211203; 16 October 2019]

3) Right of Succession -- A corporation has a juridical

personality separate and distinct from its stockholder or
members, officers and directors or trustees. It also has the
advantage of non-dependence on the lives of those who
compose it, even as it enjoys certain rights and conducts
activities of natural persons.

• Reynoso IV v. CA (345 SCRA 335 [2000])

• Wensha Spa Center, Inc. v. Yung (628 SCRA 311 [2010])

4) Creature of limited powers, attributes, and properties -- A

corporation has only such powers, attributes and properties
as are expressly authorized by law or incident to its
existence. A corporation has no powers except for those that
are expressly conferred on it by the Revised Corporation
Code, and those found in its charter, and are implied by or
are incidental to its existence. It exercises its powers through
its Board of Directors and/or its duly authorized officers
and agents.

- Section 44 RCC
- Monfort Hermanos Agricultural Dev. Corp. v. Monfort III
(434 SCRA 27 [2004])
- Pascual and Santos, Inc. v. Members of the Tramo Wakas
Neighborhood Assn., Inc. (442 SCRA 438 [2004])

• Core Characteristics of a Corporation

i. Separate Legal personality

1. Linden Suites, Inc. v. Meridien Far East
Properties, Inc. (G.R. 211969, 4 October
2021)
2. Stradcom Corporation v. Orpilla (G.R.
206800, 2 July 2018)
3. Tumagan v. Kairuz (G.R. 198124, 12
September 2018)
4. Union Bank versus Spouses Ong (G.R.
152347; 21 June 2006)
 5. Philippine Overseas Telecommunications
Corp. vs. Sandiganbayan (G.R. 174462, 2
February 2016)
6. Lafarge Cement Phils., Inc. v. Continental
Cement Corp. (443 SCRA 522 [2004])
7. Doctrine of Separate Property
a. Litonjua vs. Eternit (G.R. 144805; 8
June 2006)

ii. Limited liability

1. Piercing the veil of corporate fiction

• Luis Juan L. Virata and UEM-MARA
Philippines Corporation (Now known as
Cavitex Infrastructure Corporation) v.
Alejandro Ng Wee, et al. (G.R. 220926
and all related cases G.R. 221058,
221109, 221135, and 221218, 21
March 2018)
• Maricalum Mining Corporation v. Ely
G. Florentino, et al. (G.R. 221813, 23
July 2018)
• Lanuza, Jr. v. BF Corp. (G.R. 174938, 1
October 2014)
• Philippine National Bank v. Andrada
Electric and Engineering Co. (381
SCRA 244 [2002])
• Lim vs. CA (323 SCRA 102 [2000])
• Francisco Motors vs. Court of Appeals
(G.R. 100812, June 25, 1999)
• General Credit Corporation vs. Alsons
Development and Investment
Corporation (G.R. 154975; January 29,
2007)
• WPM vs. Labayen (G.R. 182770;
September 2014)
• Nuccio Saverio and NS International
Nuccio Saverio and NS
International, Inc. vs. Alfonso G.
Puyat (GR 186433, November
2013)
• Sunio v. NLRC (127 SCRA 390 [1984])
 • LBC v. CA (364 SCRA 375 [2001])
• Marubeni v. Lirag (362 SCRA 620
[2001])
• Bank of Commerce v. Marilyn Nite
(G.R. 211535, 15 July 2015]

2. When piercing occurs:

a. Fraud Cases
o Toledo Construction Corp.
Employees’ Association ADLO-
KMU v. Toledo Construction
Corp., Dumaguete Builders and
Equipment Corp., Castleweb
Trading and Development Corp.,
et al. [G.R. 204868; 07
December 2022]
o Enriquez Security Services, Inc.
vs. Cabotaje (G.R. No. 147993.
July 21, 2006)
o Koppel vs. Yatco (G.R. L-47673,
July 2015)
o Tan Boon Bee & Co. vs. Jarencio
(G.R. L-41337; June 1988)

b. Instrumentality Rule / Alter-Ego

Doctrine
o Philippine National Bank v.
Hydro Resources Contractors
Corporation (G.R. 167530
13 March 2013)
o Asset Privatization Trust v.
Hydro Resources Contractors
Corporation (G.R. No. 167561)
o Development Bank of the
Philippines v. Hydro Resources
Contractors Corporation (G.R.
167603)
o Concept Builders, Inc. vs. NLRC
(257 SCRA, 149)
o Kukan International Corporation
vs. Hon. Amor Reyes (G.R.
182729; Sept. 2010)
c. Equity Cases
 d. Identity Doctrine
o Liddell & Co., Inc. vs. CIR (G.R.
No. L-9687, 30 June 1961)

3. Reverse piercing
o I/AME vs. Litton and Company
(G.R. 191525, 13 December
2017)
4. Need to acquire jurisdiction
o Ronnie Adriano Amoroso and
Vicente Constantino, Jr. v.
Vantage Drilling International
and Group of Companies, et al.
[G.R. 238477; 08 August 2022]

5. Wrongdoing must be convincingly

proven.

o Januaria Rivera v. United

Laboratories, Inc. [G.R. 155639;
22 April 2009]
o Maricalum Mining Corporation
v. Ely Florentino, et al.
[G.R. 221813, 23 July 2018]

Transferability of Shares
Delegated Management
Investor Ownership

- Advantages / Disadvantages of the Corporate Form

C. Classes of Corporations

• In relation to the State

- Public and Private
- Public Corporations
o National Coal Co. v. CIR (46 Phil. 584 [1924])
o Cervantes v. Auditor-General (91 Phil. 359 [1952])
o Philippine Society for the Prevention of Cruelty to
Animals v. COA (534 SCRA 112 [2007])
o Boy Scouts of the Philippines v. NLRC
 (196 SCRA 176 [1991])
o MIAA v. CA (495 SCRA 591 [2006])
o BCDA v. CIR (G.R. 205925 [20 June 2018])
o Benguet Electric Cooperative, Inc. v. NLRC (209
SCRA 55 [1992])
o GSIS Family Bank Employees Union v.Villanueva
(G.R. 210773, 23 January 2019)

• As to place of Incorporation

o Domestic and Foreign Corporations

• As to legal status

o De Jure and De Facto Corporations

▪ Missionary Sisters of our Lady of Fatima v.
Amando Alzona (G.R. No. 224307, 6 August
2018)

o Corporation by Estoppel
▪ Lim vs. Philippine Fishing Gear Industries, Inc.
(GR 136448, 3 November 1999)
▪ The Missionary Sisters of Our Lady of Fatima
v. Amando V. Alzona, et al. (GR 224307; 06
August 2018)

• As to existence of shares of stocks

o Stock and Non-Stock Corporations

▪ Bases Conversion and Development Authority
v. Commissioner of Internal Revenue (G.R.
205925, 20 June 2018)
▪ CIR v. Club Filipino (5 SCRA 321 [2016])
▪ Sections 86 and 87 (RCC)

Stocks and Stockholders (Title VII, RCC)

o Vicente Ponce v. Alsons Cement Corporation (393

SCRA 602, 10 December 2002)
o Andaya v. Rural Bank of Cabadbaran, Inc. (G.R.
188769, 3 August 2016)
o Batangas Laguna Tayabas Bus Co. v. Bitanga (362
SCRA 635 [2001])
 Non-Stock Corporations (Title XI, RCC)

o Republic v. Sunlife Assurance Company of Canada

(473 SCRA 129 [2005])
o SEC Opinion, 19 September 1988
o SEC Opinion, 24 February 1989

• As to relationship of management and control

o Parent and Holding Company
o Affiliate Company
o Parent and Subsidiary Companies

III. Incorporation: The Birth of the Corporate Person

A. Name and Purpose

1. Section 17 (RCC)
2. SEC MC 13, Series of 2019
3. De La Salle Montessori International of Malolos, Inc. v. De La Salle Brothers, Inc.
et al. (G.R. 205548, 7 February 2018)
4. Securities and Exchange Commission v. AZ 17/31 Realty, Inc. (G.R. 240888; 06
July 2022); Azucena Locsin-Garcia v. AZ 17/31 Realty, Inc. (GR 240888; 06
July 2022)

B. Term

1. Section 11 (RCC)

C. Incorporators and Capital Stock

1. Section 10 (RCC)
2. Section 12 (RCC)

D. Registration and Contents of the Articles of Incorporation

1. Contents: Section 13 (RCC)
2. Form: Section 14 (RCC)
3. Amendments: Section 15 (RCC)
4. Sections 18 to 21 (RCC)
• Marc II Marketing vs. Joson (G.R. 171993, 12 December 2011)

E. The Governing Rules and By-Laws

 1. Contractual significance of By-Laws –
• Fleischer v. Botica Nolasco, Co. (47 Phil 583 [1925])
• Pena v. CA (193 SCRA 717 [1991])
• Yaokasin Trading v. CA (209 SCRA 763 [1992])
• China Banking Corporation v. CA (270 SCRA 503 [1997])
• PMI Colleges v. NLRC (277 SCRA 462 [1997])
• Bernas v. Cinco (761 SCRA 104 [2015])

2. Characteristics of By-Laws:

• Loyola Grand Villas Homeowners’ (South) Association, Inc. v. CA

(G.R. 117188; 7 August 1997)
• Government of Philippine Island v. El Hogar Filipino (50 Phil. 430-
431 [1927])
• Grace Christian High School v. CA (281 SCRA 133 [1997])
• Salafranca v. Philamlife (Pamplona) Village Homeowners Association
(300 SCRA 469, 479 [1998])
• Gokongwei, Jr. v. SEC (89 SCRA 336 [1979])
• San Miguel Corporation v. Mandaue Packing Products Union-FFW
(467 SCRA 107 [2005])

F. Corporate Powers

a. Express Powers of a Corporation - Section 35 (RCC)

• Power to amend the Articles of Incorporation

• Power to adopt BL
• Power to adopt and use a corporate seal
• Power to have perpetual existence
o SEC MC 23, Series of 2019
• Power to sue and be sued:
o Jorgenetics Swine Improvement Corporation v. Thin Agri-Products,
Inc. (G.R. 201044, 5 May 2021)
o Tam Wing Tak v. Makasiar (350 SCRA 475 [2001])
o EB Villarosa & Partners Co., Ltd v. Benito (G.R. 136426, 6 August
1999)
o South Cotabato Communications Corporation v. Sto. Tomas (G.R.
217575, 15 June 2016)
• Power to enter into loans
• Power to enter into a partnership of joint venture
• Power to Extend or Shorten Corporate Life
• Power to Increase/Decrease Capital Stock
 o Central Textile Mills, Inc. v. National Wages and Productivity
Commission (260 SCRA 368 [1996])
• Power to Deny Preemptive Rights
o Majority Stockholders of Ruby Industrial Corporation v. Lim (G.R.
165887; 6 June 2011)
• Power to Dispose Properties
o Firme v. Bukal Enterprises and Development Corporation (414 SCRA
190 [2003])
o Edward J. Nell Co. v. Pacific Farms, Inc. (G.R. L-20850 [1965])
• Power to make donations
o Pirovano v. De la Rama Steamship Co. (40 Phil. 335 [1954])
o Premium White Cement Corp. v. IAC (220 SCRA 103 [1993])
• Power to acquire own shares
• Power to Invest
o SEC Opinion dated 21 August 1995
• Power to declare dividends
• Power to enter into Management Contract

b. Implied and Incidental Powers –

c. Ultra Vires Doctrine

• Section 44 (RCC)
• University of Mindanao v. Banko Sentral ng Pilipinas (G.R. 194964-65, 11
January 2016)
• Montelibano v. Bacolod-Murcia Milling Co., Inc. (5 SCRA 36 [1962])
• Carlos v. Mindoro Sugar Co. (57 Phil. 343 [1932])
• Harden v. Benguet Consolidated Mining Co. (58 Phil, 140 [1933])

d. Trust Fund Doctrine

• Securities and Exchange Commission (SEC) and Insurance Commission (IC)

v. College Assurance Plan Philippines, Inc. (G.R. 202052, 7 March 2018)

IV. Persons inside the Corporate Entity

A. Directors
• UCPB v. Antiporda and Carreon (G.R. 209601, 12 January 2021)
• Eizmendi, Jr. et al. v. Fernandez (G.R. 215280, 5 September 2018)
• Valle Verde Country Club, Inc. vs. Africa (G.R. 151969, 4 September 2009)
• Grace Christian High School vs. Court of Appeals (G.R. 108905, 23 October
1997)
B. Trustees

C. Officers

• Colegio Medicofarmaceutico de Filipinas, Inc. v. Lily Lim (G.R. 212034, 2

July 2018)
• Ellao v. BATELEC I, et al. (G.R. 209166, 9 July 2018)
• Matling Industrial and Commercial Corporation v. Coros (G.R. 157802, 13
October 2010)
• WPP Marketing Communications v. Jocelyn Galera (G.R. 169207, 169239,
25 March 2010)

• Business judgment rule:

o Metroplex Berhard and Paxell Investment Limited v. Sinophil

Corporation, et al. (G.R. 208281, 28 June 2021)
o Presidential Commission on Good Government v. Gutierrez (G.R.
189800, 9 July 2018)
o Ayala Land, Inc. v. ASB Realty Corp. (G.R. 210043, 26 September
2018)
o Metroheights Subdivision Homeowners Association, Inc. v. CMS
Construction and Development Corp. (G.R. 209359, 17 October
2018)

• Doctrine of Corporate Opportunity

o Total Office Products and Services (TOPROS), Inc. v. John

Charles Chang, Jr., et al. [GR 200070-71; 7 December 2021]

• Doctrine of Apparent Authority

o Agro Food and Processing Corporation v. Vitarich Corporation

[GR 217454; 11 January 2021]

D. Stockholders

• Who are Stockholders

• Rights of Stockholders
o Right to Attend Meetings / Vote
o Right to Dividends
o Appraisal Right - Section 80 (RCC)
 • Carolina Que-Villongco, et al. v. Cecilia Que-Yabut, et al. (G.R. 225022, 5
February 2018) Cecilia Que-Yabut, et al. v. Carolina Que-Villongco (G.R.
225024, 5 February 2018)
• Florete, Sr., et al. v. Florete, Jr. and Muyco (G.R. 223321, 2 April 2018)

E. Members

• Chapter 1, Title XI (RCC)

• Right to Vote – Section 88 (RCC)
o Ao-As v. CA (491 SCRA [2006])
• Nature of Membership in a Corporation – Section 89 (RCC)
o Cebu Country Club, Inc. v. Elizagaque (542 SCRA 65 [2008])
o Calatagan Golf Club, Inc. v. Clemente, Jr. (585 SCRA 300 [2009])
o Valley Golf and Country Club v. Vda de Caram (585 SCRA 218
[2009])
o Tan v. Sycip (499 SCRA 216 [2006])
• Termination of membership – Section 90 (RCC)

F. Intra-corporate disputes

• Cacho, et al. v. Balagtas (G.R. 202974, 7 February 2018)

• Ellao v. Batangas 1 Electric Cooperative, Inc. (G.R. 2019166, 9 July 2018)
• Ku v. RCBC Securities, Inc. (G.R. 219491, 17 October 2018)
• Malcaba v. ProHealth Pharma Philippines, Inc. (G.R. 209085, 6 June 2018)

V. Corporate Meetings and Records

- Meetings - Title VI (RCC)

• Regular and Special Meetings

• Board and Stockholders’/Members’ Meetings
• Quorum
o Carolina Que-Villongco, et al. v. Cecilia Que-Yabut, et al. (G.R.
225022, 5 February 2018) Cecilia Que-Yabut, et al. v. Carolina Que-
Villongco (G.R. 225024, 5 February 2018)

- Corporate Books and Records - Title VIII (RCC)

o Tee Ling Kiat v. Ayala Corporation (substituted by Bienvenido B.M.
Amora, Jr.) G.R. 192530, 7 March 2018
o Torres, Jr. v. CA (278 SCRA 793 [1997])
o Batangas Laguna Tayabas Bus Co. v. Bitanga (362 SCRA 635 [2001])
o Ponce v. Alsons Cement Corp. (393 SCRA 602 [2002])
o Lao v. Lao (567 SCRA 558 [2008])
 o Interport Resources Corp. v. Securities Specialists, Inc. (792 SCRA
155 [2016])
o W.G. Philpotts v Philippine Manufacturing Corporation (40 Phil. 471
[1919])
o Pardo v. Hercules Lumber Co. (89 SCRA 336 [1979])

VI. The Corporate Set-Up

- Capital Structures

- Acquisitions and Mergers - Title IX (RCC)

• Spouses Ong v. BPI Family Savings Bank, Inc. (G.R. 208638, 24 January
2018)
• Edward J. Nell Co. v. Pacific Farms, Inc. (15 SCRA 415 [1965])
• Y-I Leisure Phils., Inc. v. Yu (770 SCRA 56)
• Sundowner Development Corporation v. Drilon (180 SCRA 14 [1989])
• Sunio v. NLRC (127 SCRA 390 [1984])
• Central Azucarera del Danao v. CA (137 SCRA 295 [1985])
• PNB v. Andrada Electric and Engineering Co. (381 SCRA 244 [2002])
• Poliand Industrial Ltd. v. NDC (467 SCRA 500 [2005])
• Associated Bank v. CA (291 SCRA 511 [1998])
• Global Business Holdings, Inc. v. Surecompsoftware, BV (633 SCRA 94
[2010])

VII. Classes of Corporations

A. Stock Corporations (see Title VII, RCC)

Shares
Consideration for Shares (Section 61)
Issuance of Stock Certificates
Watered Stocks
Unpaid Subscription
Delinquency Sale

B. Non-Stock Corporations (see Title XI, RCC)

Republic v. Sunlife Assurance Company of Canada (473 SCRA 129 [2005])

SEC Opinion, 19 September 1988; SEC Opinion, 24 February 1989

VIII. Special Corporations

 a) Close Corporations (Title XII)

• Bustos v. Millians Shoe, Inc. (G.R. 185024, 4 April 2017)

b) Educational Corporations (Title XIII, Chapter 1, RCC)

• Education Act of 1982 – only organized as non-stock and non-profit

• Republic Act 7798 (1994)
• Barayuga v. Adventist University of the Philippines (655 SCRA 640)

c) Religious Corporations (Title XIII, Chapter 2, RCC)

• Corporation sole
o Roman Catholic Apostolic Administrator of Davao v. Land
Registration Commission (102 Phil. 596; 1957)
• Religious Societies

d) One-Person Corporation (Title XIII, RCC)

• SEC Memorandum Circular 7, s. 2019 (29 April 2019)

e) Foreign Corporation (Title XV, RCC)

• The Incorporation Test

• Policy of Reciprocity / Doctrine of State Comity
• Resident Agent
• Expertravel & Tours v. CA (459 SCRA 147 [2005])
• Modes of Doing Business
• Section 3(par. d) of RA 7042, as amended by RA 8176 (Foreign
Investments Act of 1991)
• Commissioner of Internal Revenue v. Interpublic Group of Companies
(G.R. 207039, 14 August 2019)
• Cargill, Inc. v. Intra Strata Assurance Corporation (615 SCRA 304
[2010])
• Columbia Pictures v. CA (261 SCRA 144 [1996])

IX. Ending a Juridical Life: Dissolution and Liquidation (Title XIV, RCC)

• Methods of Dissolution

• Voluntary
• Involuntary
 • Dissolution by shortening corporate term – Section 136 (RCC)

• SEC Opinion, 5 July 1979

• SEC Opinion 06-20, 13 March 2006

• Corporate Liquidation - Section 139 (RCC)

• Aguirre II v. FQB+7, Inc. (688 SCRA 242 [2013])

• Tan Tiong Bio v. Commissioner (100 Phil. 86; 1956)
• De Guzman v. NLRC (211 SCRA 723; 1992)

• Effects of dissolution and liquidation

• Buenaflor v. Camarines Sur Industry Corporation (G.R. L-14991-

94, 30 May 1960)
• Clemente v. CA (242 SCRA 717; 1995)
• Gelano v. CA (103 SCRA 90)

X. The SEC’s Power to Investigate and Impose Penalties (see Title XVI, RCC)

XI. Rehabilitating a Distressed Corporation

• Republic Act 10142 -- Financial Rehabilitation and Insolvency Act

(FRIA) of 2010
• FRIA Rules of Procedure (A.M. No. 12-12-11-SC)

Corporate Rehabilitation (Section 4 (gg), FRIA 2010)

• Bureau of Internal Revenue v. Lepanto Ceramics, Inc. (184 SCRA 125 [2017])
• Philippine Asset Growth Two, Inc. v. Fastech Synergy Philippines, Inc. (794
SCRA 625, [2016])
• Metropolitan Bank and Trust Co. v. Fortuna Paper Mill and Packaging
Corporation (G.R. 190800, 7 November 2018)

Rehabilitation Plan

Rehabilitation versus Liquidation

• Philippine Veterans Bank Employees Union-NUBE v. Vega (360 SCRA 33, 39
[2001])

Rehabilitation Proceedings
 • Viva Shipping Lines, Inc. v. Keppel Mining Philippines, Inc., et al. (G.R.
177382, 17 February 2016)
• Allied Banking v. In the Matter of the Petition to Have Steel Corp place under
Corporate Rehabilitation (G.R. 191939, 14 March 2018)
• Kinds of Proceedings
• Procedure
• Commencement Order
• Malayan Insurance Company, Inc. v. Victorias Milling Company,
Inc. (586 SCRA 45, [2009])
• Sps. Sobrejuanite v. ASB Development Corporation (471 SCRA 763,
[2005])
• Castillo v. Uniwide (G.R. 169725, 30 April 2010)
• (Tyson’s Super Concrete, Inc. vs. Court of Appeals (461 SCRA 69
[2005])
• Abrera vs. Barza (599 SCRA 534 [2009])
• Metropolitan Bank and Trust Company vs. Liberty Corrugated Boxes
Manufacturing Corporation (815 SCRA 458 [2017])

Rehabilitation Receiver

• Qualifications
• Duties
• Compensation
• Conflict of Interest

XII. Securities Regulation

• Republic Act 8799 - Securities Regulations Code

• Supreme Court: AM 01-02-04, March 2001
• SEC Resolution 494, series of 2015 -- 2015 IRR
• Republic Act 9267 – Securitization Act of 2004

• Kinds of Securities (Section 3.1 of SRC)

• Investment Contracts
• Power Homes Unlimited Corporation v. SEC (G.R. 164182, 26 February 2008)
– concept of investment contracts discussed, citing SEC v. W.J. Howey “The
Howey Test”)
• Gun Jumping - Timeshare Realty Corporation v. Cesar Lao, et al. (GR 158941,
11 February 2008)
• Malpractices and manipulation of security prices
• SEC v. Interport Resources Corporation (G.R. 135808, October 6, 2008)
• Abacus v. Tabujara (G.R. 197624, 23 July 2018)