Preweek 2022
Preweek 2022
Preweek 2022
in
COMMERCIAL LAW
Corporation Law
• Kinds of corporations including corporation sole
• Composition
• Membership in the board
• Powers, duties and prerogatives of the board and stockholders
• Articles of incorporation and by-laws
KINDS OF CORPORATION
Classes of Corporation
1. Stock vs. non-stock
• The single stockholder shall be the sole director and president of the
OPC.
• The single stockholder may not be appointed as the corporate
secretary, but may assume the role of a Treasurer. The
stockholder/treasurer shall give a bond to the SEC.
• Bond is a continuing requirement for so long as the single stockholder
is the self-appointed treasurer of the OPC.
COMPOSITION OF CORPORATION
(Incorporators/Stockholders/Members
BOD/BOT/
Officers)
Incorporators
• Incorporators - stockholders or members mentioned in the AoI as originally
forming and composing the corporation and who are signatories thereof.
• Qualifications:
1. Any person, partnership, association or corporation, singly or jointly
with others
2. Not more than fifteen (15) in number; a corporation with a single
stockholder is considered OPC
3. Incorporators who are natural persons must be of legal age
4. Each incorporator of a stock corporation must own or be a subscriber
to at least one (1) share of the capital stock.
Incorporators
• Natural persons who are licensed to practice a profession,
partnerships or associations organized for the purpose of practicing a
profession, shall not be allowed to organize as a corporation unless
otherwise provided under special laws.
• The new law deleted the requirement of natural persons, the
minimum number of 5 incorporators as well as Philippine residency of
the majority of the incorporators.
BOD/BOT
• The BoD/BoT shall exercise the corporate powers, conduct all business, and
control all properties of the corporation.
• Directors shall be elected for a term of 1 year from among the holders of
stocks registered in the corporation’s books, while trustees shall be elected
for a term not exceeding 3 years (1 year old law) from among the members
of the corporation.
• Each director and trustee shall hold office until the successor is elected and
qualified. (Holdover Doctrine)
• A director who ceases to own at least one (1) share of stock or a trustee
who ceases to be a member of the corporation shall cease to be such.
What is material is the legal title to, not beneficial ownership of, the stock
as appearing on the books of the corporation. Lee vs. Court of Appeals,
G.R. No. 93695, February 4, 1992.
Independent directors
• Independent directors in corporations vested with public interest = at
least 20% of the board.
• An independent director is a person who, apart from shareholdings
and fees received from the corporation, is independent of
management and 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.
Independent directors
• These corporations are:
1. Corporations covered by Section 17.2 of Republic Act No. 8799,
otherwise known as “The Securities Regulation Code” - those whose
securities are registered with the SEC, corporations listed with an exchange
or with assets of at least P50M and having 200 or more holders of shares,
each holding at least 100 shares of a class of its equity shares;
2. Banks and quasi-banks, NSSLAs, pawnshops, corporations
engaged in money service business, preneed, trust and insurance companies,
and other financial intermediaries; and
3. Other corporations engaged in businesses vested with public
interest similar to the above, as may be determined by the SEC
Independent directors
• Independent directors must be elected by the shareholders present
or entitled to vote in absentia during the election of directors.
• Presence of independent directors in the Board is to ensure the
exercise of independent judgment on corporate affairs and proper
oversight of managerial performance, including prevention of conflict
of interests and balancing of competing demands of the corporation.
• 3-year employment ban; relationship ban; max 9 year term; must not
own more than 2% of the outstanding shares
Corporate officers – 2010 Bar
• The officers shall manage the corporation and perform such duties as
may be provided in the bylaws and/or as resolved by the BoD. The
minimum officers provided for are:
a. a president, who must be a director;
b. a treasurer, who must be a resident (NEW);
c. a secretary, who must be a citizen and resident of the
Philippines; and
d. such other officers as may be provided in the bylaws
e. a compliance officer (NEW), if the corporation is vested
with public interest
Corporate officers – 2010 Bar
• Treasurer - tasked with safekeeping of the corporate funds.
• Secretary - proper custodian of the books, minutes and official
records of a corporation
• The same person may hold 2 or more positions concurrently, except
that no one shall act as president and secretary or as president and
treasurer at the same time, unless otherwise allowed in this Code.
Compliance officer
A. Original Works
1. Books, pamphlets, articles and other writings
2. Periodicals and newspapers;
3. Lectures, sermons, addresses, dissertations prepared for oral
delivery, whether or not reduced in writing or other material form;
4. Letters;
5. Dramatic or dramatico-musical compositions; choreographic works
or entertainment in dumb shows;
6. Musical compositions, with or without words;
What can be copyrighted?
• Ching vs. Salinas, Sr. 462 SCRA 241, June 29, 2005 (spring and
bearing for cars are not works of applied art);
• Olano vs. Lim Eng Co, G.R. No. 195835, March 14, 2016 (Hatch
door is a useful article)
• Denicola test - if design elements of an article reflect merger of
aesthetic and functional considerations, the artistic aspects of the work
cannot be conceptually separable from the utilitarian aspects, the
article cannot be copyrighted
What can be copyrighted?
B. Derivative Works
1. Dramatizations, translations, adaptations, abridgments,
arrangements, and other alterations of literary or artistic works
2. Collections of literary, scholarly or artistic works, and
compilations of data and other materials which are original by reason
of the selection or coordination or arrangement of their contents
(Doctrine of Compilations)
What can be copyrighted?
Unprotected Works:
1. Any idea, procedure, system, method or operation, concept,
principle, discovery or mere data as such, even if they are expressed,
explained, illustrated or embodied in a work;
• Joaquin vs. Drilon, 302 SCRA 225, January 28, 1999
What can be copyrighted?
2. News of the day and other miscellaneous facts having the
character of mere items of press information;
• ABS-CBN Corporation vs. Gozon, 753 SCRA 1, March 11, 2015,
J. Leonen
What can be copyrighted?
2. When it must exist Must exist at the time Must exist both at the time
insurance takes effect but not insurance takes effect and at
when the loss occurs the time of loss, but need not
exist in the meantime