Buslaw Reviewer Partnership and Corpo

Business Laws and Regulations: Module 1
Law on Partnerships
ARTICLE 1767. By the contract of partnership two or more persons bind themselves to contribute
money, property, or industry to a common fund, with the intention of dividing the profits among
themselves.
Two or more persons may also form a partnership for the exercise of a profession.
● two or more persons — hindi ka pwedeng bumuo ng partnership kung mag-isa ka lang. Pwedeng
100 yung partners mo dahil “or more”
● Ano ang mga maaari ipangakong ibigay ng isang partner?
○ He can either contribute money, property or industry to a common fund.
● Dividing the profits among themselves — kaya ka pumapasok sa isang partnership ay para
kumita
● Maaaring gumawa ng partnership for the exercise of a profession katulad ng law firms,
accounting firms.
○ Partnership engaged in the exercise of profession: GENERAL PROFESSIONAL
PARTNERSHIP
A profession has been defined as “a group of men pursuing a learned art as a common calling in the spirit
of public service — no less a public service because it may incidentally be a means of livelihood.” Strictly
speaking, the practice of a profession is not a business or an enterprise for profit. However, the law allows
the joint pursuit thereof by two or more persons as partners. In such case, it is the individual partners, and
not the partnership, who engage in the practice of the profession and are responsible for their own acts as
such. The law does not allow individuals to practice a profession as a corporate entity. Personal
qualifications for such practice cannot be possessed by a corporation.
Characteristic Elements of Partnership

The contract of partnership is:
(1) Consensual, because it is perfected by mere consent, that is, upon the express or implied agreement of
two or more persons;
● Can a contract of partnership be perfected orally or it must always be in writing?
○ A contract of partnership can be perfected orally (by mere consent).
○ Tumungo or mag-handshake lang kayo as long as may consent ng parties, you can be
considered as partners na.
■ Although there are certain forms of partnership na dapat written.
(2) Nominate, because it has a special name or designation in our law;
● May naibigay na pangalan ang batas sa partnership: CONTRACT OF PARTNERSHIP
(3) Bilateral, because it is entered into by two or more persons and the rights and obligations arising
therefrom are always reciprocal;
● Bilateral - dalawa o mahigit na tao
(4) Onerous, because each of the parties aspires to procure for himself a benefit through the giving of
something;
● Ang pagsali sa isang partnership ay onerous or burdensome.
○ Bago ka tanggapin sa isang partnership, kailangan mo munang may ibigay o
mag-contribute ng money, property, industry or services. Kapag wala kang maibigay
hindi ka pwedeng sumali sa isang partnership.
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(5) Commutative, because the undertaking of each of the partners is considered as the equivalent of that
of the others;
● The contribution of each partnership is considered as equivalent (equal or enough na) of the
contribution of the other partners
(6) Principal, because it does not depend for its existence or validity upon some other contracts; and
● Hindi kailangan mag depend ng contract of partnership sa iba pang kontrata. Hindi ito accessory
contract.
(7) Preparatory, because it is entered into as a means to an end, i.e., to engage in business or specific
venture for the realization of profits with the view of dividing them among the contracting parties.
● Other partners enter the contract of partnership as a way or in preparation to enter another
contract
Essential Features of Partnership

The following are the essential features of a partnership contract:
(1) There must be a valid contract;
(2) The parties (two or more persons) must have legal capacity to enter into the contract;
(3) There must be a mutual contribution of money, property, or industry to a common fund;
(4) The object must be lawful; and
(5) The primary purpose must be to obtain profits and to divide the same among the parties.
It is also required that the articles of partnership must not be kept secret among the members; otherwise,
the association shall have no legal personality and shall be governed by the provisions of the Civil Code
relating to co-ownership.
- Ang tawag sa contract ng partners ay ARTICLES OF PARTNERSHIP or ARTICLES OF
CO-OWNERSHIP
Existence of a Valid Contract

(1) Partnership relation fundamentally contractual. — Partnership is a voluntary relation created by
agreement of the parties. It excludes from its concept all other associations which do not have their origin
in a contract, express or implied. There is no such thing as a partnership created by law or by operation or
implication of law alone. Religious societies, conjugal partnerships, and others of a similar nature are not,
therefore, included as they are not created by the express or implied contract of the parties.
Actually, the partnership relation is not the contract itself, but the result of the contract.
(a) Form. — The relation is evidenced by the terms of the contract which may be oral or written,
express or implied from the acts and declarations of the parties, subject to the provisions of
Articles 1771 to 1773 and to the Statute of Frauds. (infra.) Thus, an election to become a member
of a partnership was held sufficient to render a member a “partner,” there being no necessity that
the member should sign any articles of partnership.
(b) Articles of Partnership. — While the partnership relation may be informally created and its
existence proved by manifestations of the parties, it is customary to embody the terms of the
association in a written document known as “Articles of Partnership” stating the name, nature or
purpose and location of the firm, and defining, among others, the powers, rights, duties, and
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liabilities of the partners among themselves, their contributions, the manner by which the profits
and losses are to be shared, and the procedure for dissolving the partnership.
(c) Requisites. — Since partnership is fundamentally contractual, all the essentials of a valid
contract must be present. Under the law, the following requisites must concur:
1) Consent and capacity of the contracting parties;
2) Object which is the subject matter of the contract; and
3) Cause which is established.
Obviously, a person cannot enter into a contract of partnership solely with himself; there must be at least
two competent parties.
As in other cases of contracts, in order to make an agreement for a partnership valid, there must be a valid
consideration existing as between the partners. Each partner surrenders to the partnership an interest in his
property, labor, skill, or energy, in accordance with the express or implied stipulations of their mutual
agreement.
(2) Partnership relation fiduciary in nature. — Partnership is a form of voluntary association entered into
by the associates. It is a personal relation in which the element of delectus personae exists, involving as
it does trust and confidence between the partners.
● Delectus Personae: choice of the person, may kakayahan at karapatan kang piliin kung sino ang
gusto mo maging ka-partner.
○ Hindi ka pwedeng pilitin na maging ka-partner ang isang tao kung wala kang tiwala sa
kanya dahil ang ginagawa ng isang partner ay maaring makaapekto sa kapwa partner
niya.
(a) Right to choose co-partners. — Unless otherwise provided in the partnership agreement, no
one can become a member of the partnership association without the consent of all the other
associates. The fiduciary nature of the partnership relation and the liability of each partner for the
acts of the others within the scope of the partnership business require that each person be granted
the right to choose with whom he will be associated in the firm.
(b) Power to dissolve partnership. — Neither would the presence of a period for its specific
duration or the statement of a particular purpose for its creation prevent the dissolution of any
partnership by an act or will of a partner. Among partners, mutual agency arises and the doctrine
of delectus personae allows them to have the power, although not necessarily the right, to dissolve
the partnership. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution of
the partnership at will. He must, however, act in good faith, not that the attendance of bad faith
can prevent the dissolution of the partnership but that it can result in a liability for damages.
(c) Application of principles of estoppel. — A partnership liability may be imposed upon a person
under principles of estoppel where he holds himself out, or permits himself to be held out, as a
partner in an enterprise. In such cases, there is no actual or legal partnership relation but merely a
partnership liability imposed by law in favor of third persons.
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Legal Capacity of the Parties to Enter into the Contract

(1) Individuals. — Before there can be a valid contract of partnership, it is essential that the contracting
parties have the necessary legal capacity to enter into the contract. As a general rule, any person may be a
partner who is capable of entering into contractual relations. Consequently, any person who cannot give
consent to a contract cannot be a partner. Hence, the following cannot give their consent to a contract of
partnership:
(a) Unemancipated minors; (Dapat at least 18 years old)
(b) Insane or demented persons; (Mga baliw at nasisiraan ng ulo)
(c) Deaf-mutes who do not know how to write;
(d) Persons who are suffering from civil interdiction; and (Civil interdiction: karagdagang parusa
sa mga nakukulong, hindi nila pwedeng i-manage yung mga assets nila sa labas ng kulungan)
(e) Incompetents who are under guardianship.
Under Article 1782, persons who are prohibited from giving each other any donation or advantage cannot
enter into a universal partnership.
A married woman may enter into a contract of partnership even without her husband’s consent, but the
latter may object under certain conditions.
(2) Partnerships. — There is no prohibition against a partnership being a partner in another partnership.
When two or more partnerships combine with each other (or with a natural person or persons) creating a
distinct partnership, say, partnership X, all the members of the constituent partnerships will be
individually liable to the creditors of partnership X.
(3) Corporations. — The doctrine adopted by our Supreme Court is that, unless authorized by statute or
by its charter, a corporation is without capacity or power to enter into a contract of partnership.
ARTICLE 1768. The partnership has a juridical personality separate and distinct from that of each of the
partners, even in case of failure to comply with the requirements of article 1772, first paragraph.
● Once mag-invest ka ng property sa isang partnership, yung property na iyon ay pag mamay-ari na
ng partnership at hindi mo na ito personal property.
ARTICLE 1769. In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by article 1825, persons who are not partners as to each other are not partners as to
third persons;
(2) Co-ownership or co-possession does not of itself establish a partnership, whether such-co-owners or
co-possessors do or do not share any profits made by the use of the property;
● Co-ownership: Dalawa kayong may-ari sa isang bagay.
○ Reasons bakit nagkakaroon ng co-ownership — nag-aambagan para makabili ng isang
bagay (not necessary na partners na kayo) or may ipinamang bagay yung magulang mo sa
inyong magkakapatid (co-owner kayo nung bagay na iyon)
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○ Ex. Ipinama sa inyo ay isang apartment at after mamatay ng magulang mo ay kayong

magkakapatid na ang kumukuha ng renta amounting to 60k, kaya may kita kayo na tig
20,000.
■ Question: Dahil ba pinaghahatian niyo na ang kita ng apartment na ipinama sa
inyo, maari niyo na bang i-consider na may partnership kayong magkakapatid?
NO, mere distribution nung kita ng property is not sufficient proof that a
partnership was already established. At most, co-ownership lang ang meron sila
dahil itinutuloy lang nila ang nasimulan ng magulang nila.
■ Kelan ito maaring maging isang partnership? Kapag nag-decide yung
magkakapatid na mag-contribute ng additional money at magdagdag ng isang
floor sa apartment to earn more profit.
(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons
sharing them have a joint or common right or interest in any property from which the returns are derived;
(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a
partner in the business, but no such inference shall be drawn if such profits were received in payment:
(a) As a debt by installments or otherwise;
(b) As wages of an employee or rent to a landlord;
(c) As an annuity to a widow or representative of a deceased partner;
(d) As interest on a loan, though the amount of payment vary with the profits of the business;
(e) As the consideration for the sale of a goodwill of a business or other property by installments
or otherwise.
ARTICLE 1770. A partnership must have a lawful object or purpose, and must be established for the
common benefit or interest of the partners.
When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of
the State, without prejudice to the provisions of the Penal Code governing the confiscation of the
instruments and effects of a crime.
● Bawal gumawa ng partnership para gumawa ng mga illegal na bagay.
● Common benefit or interest: lahat ng partners ay may share sa kita
ARTICLE 1771. A partnership may be constituted in any form, except where immovable property or real
rights are contributed thereto, in which case a public instrument shall be necessary.
● A partnership is consensual because it can be perfected by mere consent, pwedeng oral (in any
form).
● Except pag nag-contribute ng immovable objects such as building or land, kailangan in the form
of written contract at dapat public instrument — dapat notarized yung contract of partnership
niyo.
ARTICLE 1772. Every contract of partnership having a capital of three thousand pesos or more, in
money or property, shall appear in a public instrument, which must be recorded in the Office of the
Securities and Exchange Commission.
Failure to comply with the requirements of the preceding paragraph shall not affect the liability of the
partnership and the members thereof to third persons.
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- mababa yung total dahil itong article ay ginawa pa noong 1950 kung saan mataas na ang value ng
3k
● Hindi maapektuhan ang liability or utang ng partnership sa third persons kahit hindi nila
magawang in public instrument yung contract nila.
ARTICLE 1773. A contract of partnership is void, whenever immovable property is contributed thereto,
if an inventory of said property is not made, signed by the parties, and attached to the public instrument.
● Nagiging void ang contract of partnership kapag walang inventory ng mga immovable property
na binigay ng isang partner at kung hindi ito napirmahan ng parties at hindi naka-attach sa public
instrument
ARTICLE 1774. Any immovable property or an interest therein may be acquired in the partnership
name. Title so acquired can be conveyed only in the partnership name.
● A partnership has a personality, distinct and separate from the partners
● Being a juridical entity kaya niyang mag-acquire ng property or pumasok sa ibang contract under
its name
ARTICLE 1775. Associations and societies, whose articles are kept secret among the members, and
wherein any one of the members may contract in his own name with third persons, shall have no juridical
personality, and shall be governed by the provisions relating to co-ownership.
ARTICLE 1776. As to its object, a partnership is either universal or particular.

As regards the liability of the partners, a partnership may be general or limited.
Classifications of Partnership
As to object:
● Two kinds of Universal Partnership:
○ Universal Partnership of all present property
■ All the present property belonging to the partners at the time of constitution
are contributed to the partnership which become the common property of all
partners
■ The contributions of the partners here are the ff:
● All properties actually belonging to the partners
● The profits acquired with said properties
○ Universal Partnership of profits
■ Only the usufruct (use of and fruits) of the properties of the partners
become common property of all the partners and the partnership
As to liability of partners
● General Partnership: consists of general partners who are liable pro rata and subsidiarily and
sometimes solidarily with their separate property for partnership debts
○ ALL are general partners
○ General Partners - liable up to the extent of their personal property (pwedeng habulin
hanggang sa kanilang sari-sariling arian)
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● Limited partnership: one formed by 2 or more persons having as members one or more general
partners and one or more limited partners, the latter not being personally liable for the obligations
of the partnership
○ Dapat may at least isang general partner
○ Limited partner - liable up to the extent of their investment to the partnership
As to duration
● Partnership at will: one in which no time is specified and is not formed for a particular
undertaking or venture which may be terminated anytime by mutual agreement
● Partnership with a fixed term: term for which the partnership is to exist is fixed or agreed upon
or one formed for a particular undertaking
As to legality of existence
● De Jure Partnership: one which has complied with all the legal requirements for its
establishment
● De Facto: one which has failed to comply with all the legal requirements for its establishment
As to representation to others
● Ordinary or Real Partnership: one which actually exists among the partners and also as to 3rd
persons
○ Meron talagang partnership at ipinapaalam niyo sa iabng tao na partners kayo
● Ostensible or Partnership by estoppel: one which in reality is not a partnership but is
considered a partnership only in relation to those who, by their conduct or omission, are
precluded to deny or disprove its existence
○ Hindi talaga kayo partners pero nagpapakilala kayo as such
As to publicity
● Secret Partnership: one wherein the existence of certain persons as partners is not avowed or
made known to the public by any of the partners
○ May mga partners kayo na hindi niyo ipinapaalam sa ibang tao na kasama niyo
● Open of Notorious Partnership: one whose existence is avowed or made known to the public by
the members of the firm
○ Alam ng public kung sino ang mga partners
As to purpose
● Commercial or Trading Partnership: one formed for the transaction of business
● Professional or Non trading Partnership: one formed for the exercise of a profession
Kinds of Partners
1. Capitalist - one who contributes money or property to the common fund
2. Industrial - one who contributes only his industry or personal service
● Capitalist-Industrial Partner: nag-invest ka ng pera at service
3. General - one whose liability to 3rd persons extends to his separate property
4. Limited or Special - one whose liability to 3rd persons is limited to his capital contribution (up
to his investment only)
5. Managing - one who manages the affairs or business of the partnership
6. Liquidating - one who takes charge of the winding up of partnership affairs upon dissolution
(ikaw ay naatasan na mag benta ng assets ng partnership kapag nalugi kayo)
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7. Real Partners - partners in an existing legal partnership

8. Partners by Estoppel or Quasi Partner- one who is not really a partner but is liable as a partner
for the protection of innocent 3rd persons (hindi ka talaga partner pero nagpapakilala ka as a
partner)
9. Continuing Partner- one who continues the business of a partnership after it has been dissolved
by reason of the admission of a new partner, retirement, death or expulsion of one of the partners
10. Surviving Partner - one who remains after a partnership has been dissolved by death of any
partner
11. Subpartner - one who is not a member of the partnership who contracts with a partner with
reference to the latter's share in the partnership
12. Ostensible - one who takes active part and known to the public as partner in the business
13. Secret - one who takes active part in the business but is not known to be a partner by outside
parties (hindi nagpapakilala)
14. Silent - one who does not take any active part in the business although he may be known to be a
partner (kilala siya bilang partner pero hindi siya tumutulong)
15. Dormant - one who does not take active part in the business and is not known or held out as a
partner (hindi siya nagpapakilala biglang partner at hindi pa siya tumutulong, both secret and
silent)
16. Original Partner - members from the time of constitution (sa simula pa lang nandoon na siya)
17. Incoming Partner - became members after its establishment
18. Retiring Partner - those who withdraw from the partnership (aalis)
19. Majority Partners - whose contribution represents majority or controlling interest
20. Nominal Partners - contribution to the partnership represents minority interest
reference: https://subaylawco23.weebly.com/partnership.html
https://www.studocu.com/ph/document/xavier-university-ateneo-de-cagayan/accountancy/lecture-notes/title-i-partnership-partnership-law/8772010/view
ARTICLE 1777. A universal partnership may refer to all the present property or to all the profits.
● Universal partnership of all present property: Lahat ng pag-aari ko at lahat ng pag-aari mo ay
pagsasamahin natin upang ito ay maging capital nang gagawing negosyo. Consequently, lahat ng
kikitain natin together sa negosyo ay magiging sating dalawa.
ARTICLE 1778. A partnership of all present property is that in which the partners contribute all the
property which actually belongs to them to a common fund, with the intention of dividing the same
among themselves, as well as all the profits which they may acquire therewith.
● kapag napalago niyo yung properties na kinontribute niyo the profits of those properties belong to
the partnership
ARTICLE 1779. In a universal partnership of all present property, the property which belonged to each
of the partners at the time of the constitution of the partnership, becomes the common property of all the
partners, as well as all the profits which they may acquire therewith.
● kung ano yung sayo o kung ano yung sakin, kapag nagsama tayo sa iisang partnership magiging
common property na nating dalawa
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A stipulation for the common enjoyment of any other profits may also be made; but the property which
the partners may acquire subsequently by inheritance, legacy, or donation cannot be included in such
stipulation, except the fruits thereof.
● Properties acquired by inheritance, legacy or donation ay hindi pwede maging common property
sa partnership, yung fruits lang ng mga ito ang pwede
ARTICLE 1780. A universal partnership of profits comprises all that the partners may acquire by their
industry or work during the existence of the partnership.
● mas restricted yung assets involved sa universal partnership of profits
● Ang magiging common property lang ng mga partners ay yung mga ma-aacquire nila kapag sila
ay magkapartner na
Movable or immovable property which each of the partners may possess at the time of the celebration of
the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership.
● EXCLUSIVE property pa rin ng bawat partners are mga movable at immovable property nila,
only the usage and fruits ang mapupunta sa partnership
ARTICLE 1781. Articles of universal partnership, entered into without specification of its nature, only
constitute a universal partnership of profits.
● Question: kapag pumasok kayo sa isang universal partnership and hindi niyo inindicate kung
universal partnership of all present property or of profits, anong kind ng universal partnership ang
pinasok niyo? Under the law, ang partnership na pinasok niyo ay UNIVERSAL PARTNERSHIP
OF PROFITS
○ This applies the concept of Conservatism - dahil mas limited ang assets na involved sa
universal partnership of profits (lesser transmission of rights, mas safe dahil wala naman
talagang napag-usapan)
In terms of marriage:
● Property regimes of husband and wife:
○ Absolute community of property - kung ano ang pagmamay-ari mo noong dalaga ka at
kung ano ang pagmamay-ari ko noong binata ako. Kapag naging mag-asawa na tayo ay
magiging sa ating dalawa ang mga iyon, at magiging sa ating dalawa rin ang lahat ng
mabibili natin together
○ Conjugal partnership of gains - kung ano ang mga kinita mo noong dalaga ka ay sayo pa
rin iyon, kung ano ang kinita ko noong binata ako ay sa akin pa rin yon. Kapag naging
mag-asawa na tayo ang magiging common property lang natin ay yung mga kikitain at
bibilhin natin together
○ Complete separation of property - kung anong sayo noong dalaga ka ay sayo lang, kung
anong akin noong binata ako ay akin lang. Kapag naging mag-asawa na tayo ay kanya
kanya pa ring property, ang magiging sating dalawa lang ay pagdating sa gastos, hati
kayo sa mga gastusin niyo
● Absolute community of property is somehow similar sa concept ng universal partnership of all
present property
● Conjugal partnership of gains is somehow similar sa concept ng universal partnership of profits
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ARTICLE 1782. Persons who are prohibited from giving each other any donation or advantage cannot
enter into universal partnership.
● Ang mga taong bawal magbigay ng donasyon sa isa’t isa ay hindi pwedeng pumasok sa isang
universal partnership,
○ Article 87 of Family Code: Every donation or grant of gratuitous advantage, direct or
indirect, between the spouses during the marriage shall be void, except moderate gifts
which the spouses may give each other on the occasion of any family rejoicing.
○ Bawal magbigay ng regalo ang mag-asawa maliban sa malilit o moderate na regalo kung
may occasion. (Moderate gifts: nakadepende sa financial standing of the family)
○ Once makapag decide kung anong property regime niyo, irrevocable na ito o bawal na
palitan.— to prevent abuses or to protect the weaker spouse
■ Ex. Complete separation of property kayo and kapag allowed kayong magdonate
sa isa’t isa, (yung exclusive property ko pwede i-donate sayo anytime and yung
mga kinita mo nung dalaga ka ay pwede na pala ibigay sakin anytime). Ang
effect nito ay parang binaliktad (circumvent) mo yung provision dahil in
declaration complete separation of property kayo, pero in essence absolute
community of property ang ginagawa niyo.
● Bawal magdonate ang mag-asawa sa isa’t isa dahil possible na based on
their choice of property regime ay hindi dapat sila nagsshare ng
properties.
○ Bawal sila pumasok sa isang universal partnership dahil sa partnership na iyon may
common property ang mga partners. Kung naka complete separation sila and may
magiging common property sila sa universal partnership, indirectly they exercise absolute
community of property.
ARTICLE 1783. A particular partnership has for its object determinate things, their use or fruits, or a
specific undertaking, or the exercise of a profession or vocation.
- pwedeng pumasok sa isang particular partnership ang mag-asawa dahil hindi naman required
i-invest lahat ng property na meron sila
Obligations of the Partners Among Themselves

ARTICLE 1784. A partnership begins from the moment of the execution of the contract, unless it is
otherwise stipulated.
● Question: Kailan nagsisimula ang buhay ng isang partnership? Nagsisimula ang buhay ng isang
partnership FROM THE MOMENT NA-EXECUTE YUNG PARTNERSHIP CONTRACT
(Articles of Partnership or Articles of Co-Partnership) specifically yung DATE KUNG KAILAN
GINAWA O IN-EXECUTE YUNG CONTRACT unless may contrary stipulation
○ Kapag walang napag-usapan kung kailan magsisimula ang buhay ng partnership —- kung
kailan ginawa yung contract yon ang start
○ Unless nag state ang parties ng specific date sa contract kung kailan ang start ng
partnership
ARTICLE 1785. When a partnership for a fixed term or particular undertaking is continued after the
termination of such term or particular undertaking without any express agreement, the rights and duties of
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the partners remain the same as they were at such termination, so far as is consistent with a partnership at
will.
A continuation of the business by the partners or such of them as habitually acted therein during the term,
without any settlement or liquidation of the partnership affairs, is prima facie evidence of a continuation
of the partnership.
- may mga partnership with a fixed term or with a particular undertaking na tapos na yung fixed
period or undertaking nila pero gusto pa nilang ituloy
- from partnership with a particular undertaking nagiging partnership at will
● Partnership with a fixed term - may duration yung length ng partnership (ex. Good for 2 years)
● Partnership with a particular undertaking - ex. Partnership para magbenta during UAAP games,
kapag tapos na yung UAAP games hindi na sila magpartner
● Partnership at will - hanggang gusto nila na magkapartner sila
ARTICLE 1786. Every partner is a debtor of the partnership for whatever he may have promised to
contribute thereto.
He shall also be bound for warranty in case of eviction with regard to specific and determinate things
which he may have contributed to the partnership, in the same cases and in the same manner as the vendor
is bound with respect to the vendee. He shall also be liable for the fruits thereof from the time they should
have been delivered, without the need of any demand.
● si Partner A nangakong mag-iinvest sya ng 100,000 and deadline niya is January 1. Pero
December 30 na wala pa ring investment. Kahit mismong partner si A sa partnership, for the time
being na hindi pa niya naibibigay yung ipinangakong investment niya siya ay considered a debtor
(may utang sa sariling partnership)
● Kapag na-evict yung partnership sa mismong kinontribute niyang property, sasagutin ng mismong
partner yon
● Liable rin siya sa fruits from the time they should have been delivered —- kailangan niyang
i-remit sa partnership lalo na kapag late niyang naibigay yung pinapangako niyang investment
ARTICLE 1787. When the capital or a part thereof which a partner is bound to contribute consists of
goods, their appraisal must be made in the manner prescribed in the contract of partnership, and in the
absence of stipulation, it shall be made by experts chosen by the partners, and according to current prices,
the subsequent changes thereof being for account of the partnership.
● in absence of stipulation, appraisal should be made by valuation experts or according to fair
market value
● All investments made by partners should be recorded at its fair market value
ARTICLE 1788. A partner who has undertaken to contribute a sum of money and fails to do so becomes
a debtor for the interest and damages from the time he should have complied with his obligation.
The same rule applies to any amount he may have taken from the partnership coffers, and his liability
shall begin from the time he converted the amount to his own use.
● kahit ikaw ay mismong partner pwede ka i-consider as debtor kapag hindi mo agad binigay yung
ipinangako mong investment and liable ka pa for interest and damages sa mismong partnership
niyo
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○ May receivable yung partnership sa mismong partner na yon (payable ni partner sa

partnership)
ARTICLE 1789. An industrial partner cannot engage in business for himself, unless the partnership
expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him from
the firm or avail themselves of the benefits which he may have obtained in violation of this provision,
with a right to damages in either case.
● Industrial partner - contributes services to the partnership
○ Ex. Chef, may dalawang option na pwedeng salihan na business: Business of the same
kind (food industry din) or business not of the same kind (ex. barbershop)
■ Question: Ang isang chef (being an industrial partner) ba ng isang restaurant ay
pwede pa maging chef ng isa pang restaurant? As a general rule, NO. Maari
siyang pagbawalan ng kanyang partners na sumali o magbuo ulit ng isa pang
restaurant because there will be a conflict of interest. Bilang industrial partner at
chef may access ka to trade secrets at hindi maiiwasan na madala mo yung
business practices niyo sa isa pang partnership o restaurant which will negatively
affect your first partnership. UNLESS THE PARTNERSHIP EXPRESSLY
PERMITS HIM TO DO SO
■ Question: Ang isa pang option niya ay business not of the same kind. As an
industrial partner and chef pwede ba siyang sumali o bumuo ng isa pang
partnership (barbershop)? Pwede ba siyang pagbawalan ng mga capitalist
partners niya? YES because as an industrial partner you are expected to devote
your full time and effort to the partnership. Kung mag-eengage ka sa dalawang
negosyo, pwede maka-affect ito sa pag-contribute ng services mo. UNLESS THE
PARTNERSHIP EXPRESSLY PERMITS HIM TO DO SO
● General rule either business of the same kind or different business pwede ka nilang pagbawalan
unless the partnership expressly permits him to do so
○ Question: What if pinagbawalan si industrial partner na mag-engage to another business
pero pinilit niya pa rin? The capitalist partner may exclude him from the firm (pwede
siyang tanggalin sa partnership) or avail themselves of the benefits (kung ano man ang
kinita niya sa kabilang business ay required siyang i-share sa kanyang capitalist partners)
with the right to damages in either case dahil na-violate niya ang partnership contract.
ARTICLE 1790. Unless there is a stipulation to the contrary, the partners shall contribute equal shares to
the capital of the partnership.
● Question: ABC Partnership ay nangangailangan ng 3,000,000 na capital at wala pang
napag-uusapan ang partners kung paano nila paghahatian yung capital. Kung walang
napag-usapan ang partners with regards sa shares sa capital, they shall contribute equal shares.
Each partner shall contribute 1,000,000.
○ Unless there is a stipulation to the contrary. Ex. Partner A- ½, Partner B- ¼, Partner C- ¼
ARTICLE 1791. If there is no agreement to the contrary, in case of an imminent loss of the business of
the partnership, any partner who refuses to contribute an additional share to the capital, except an
industrial partner, to save the venture, shall be obliged to sell his interest to the other partners.
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● Unless may agreement to the contrary, if there is an imminent loss (palugi na yung business) kung
sino mang capitalist partner ang ayaw na mag-ambag ng additional capital para mailigtas ang
partnership, pwede siyang pilitin ng iba na ibenta ang kanyang interest sa ibang partners
○ A, B, C are partners at lahat sila ay required na mag-ambag ng additional capital. Pero
ayaw na ni A, pwede siyang pilitin ni B and C na i-bbuy out si A — ibebenta yung shares
ni A kay B and C para mailigtas yung partnership.
○ Delectus personae (mutual trust and confidence ng partners sa isa’t isa): yung hindi mo
pag-effort na mag-ambag para mailigtas ang partnership ay sign na you and the other
partners are no longer in the same page
● Question: A, B, C, D are partners. D is an industrial partner. Bakit kapag hindi na
makapag-ambag si D upang iligtas yung partnership ay hindi parin siya pwedeng tanggalin?
Because of the nature of an industrial partner —- hindi nag-ccontribute ng capital, only services
ARTICLE 1792. If a partner authorized to manage collects a demandable sum which was owed to him in
his own name, from a person who owed the partnership another sum also demandable, the sum thus
collected shall be applied to the two credits in proportion to their amounts, even though he may have
given a receipt for his own credit only; but should he have given it for the account of the partnership
credit, the amount shall be fully applied to the latter.
The provisions of this article are understood to be without prejudice to the right granted to the other
debtor by article 1252, but only if the personal credit of the partner should be more onerous to him.
● At the same time yung taong may utang sa partnership ay may utang din sa mismong managing
partner in charge of collection.
○ Question: Si Mr. X ay may utang na 5,000 kay partner A personally and may utang na
10,000 sa ABC partnership. Both debts are due. Noong nakasalubong ni partner A (also
the partner in charge of collection) si Mr. X, nagbayad lang ng siya ng 3,000. Paano
paghahatian yung binayad ni Mr. X between partner A and ABC partnership?
Nakadepende kung paano niresibuhan ni partner A si Mr. X.
■ Tinanggap ni Mr. A yung 3,000 at nilagay niyang “received the amount of 3,000
bilang kabayaran ni X sa akin” Hindi pwedeng ibigay kay Mr. A alone yung
3,000 kahit ang nakalagay sa resibo ay bayad ito ni X kay A. IT SHOULD IN
PROPORTION TO THE AMOUNTS. For Mr. A (3,000/15,000 x 5,000) = 1,000.
For ABC Partnership (3,000/15,000 x 10,000) = 4,000
■ If ang nakalagay sa resibo ay “received the amount of 3,000 as payment of Mr. X
to his liability to ABC partnership” Paano ang hatian? THE WHOLE AMOUNT
SHOULD GO TO THE ABC PARTNERSHIP. Mr. A = 0, ABC partnership =
3,000
ARTICLE 1793. A partner who has received, in whole or in part, his share of a partnership credit, when
the other partners have not collected theirs, shall be obliged, if the debtor should thereafter become
insolvent, to bring to the partnership capital what he received even though he may have given receipt for
his share only.
● Kung ikaw ay nakakolekta ng partnership credit mula sa inyong partnership pero hindi pa
nakakolekta yung ibang partners and bigla naging insolvent yung kokolektahan niyong tao. Hindi
mo pwedeng solohin yung nakolekta mo required kang ilagay ito sa partnership capital. Sa isang
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partnership dapat hati-hati kayo, kapag ikaw lang ang nakakolekta dapat ay hatiin mo ito para sa
ibang partners.
ARTICLE 1794. Every partner is responsible to the partnership for damages suffered by it through his
fault, and he cannot compensate them with the profits and benefits which he may have earned for the
partnership by his industry. However, the courts may equitably lessen this responsibility if through the
partner's extraordinary efforts in other activities of the partnership, unusual profits have been realized.
● Ex. Grab business - A & B are capitalist partners, C is an industrial partner. Dahil sa negligence ni
C, siya ay nakasagasa ng isang tao. Naospital yung tao at gumastos ng 90,000. Among the
partners, sino ang liable and for how much? Si C lang ang required magbayad nang buong
90,000. He cannot compensate them with the profits and benefits which he may have earned for
the partnership. As an industrial partner, service lang ang kanyang ambag kaya kung nakasagasa
siya dahil sa service niya (contribution niya), siya lang ang dapat managot dito at hindi niya
pwedeng pilitin ang ibang partners na tulungan siya.
● Ex. Nakabundol yung driver at 2 am which is over na sa required time niya para mas kumita sila
ng malaki —- Dahil sa extraordinary effort ni C ay merong unusual profits yung partnership, kaya
kapag nakadisgrasya siya pwedeng bawasan ng korte yung obligation ni C, required siyang
tulungan ng mga partners niya (EXTRAORDINARY EFFORTS RESULTING TO UNUSUAL
PROFITS)
ARTICLE 1795. The risk of specific and determinate things, which are not fungible, contributed to the
partnership so that only their use and fruits may be for the common benefit, shall be borne by the partner
who owns them.
If the things contributed are fungible, or cannot be kept without deteriorating, or if they were contributed
to be sold, the risk shall be borne by the partnership. In the absence of stipulation, the risk of the things
brought and appraised in the inventory, shall also be borne by the partnership, and in such case the claim
shall be limited to the value at which they were appraised.
● Yung risk ng specific and determinate objects na kasama sa use and fruits na kinontribute sa
partnership shall be borne by the partner who owns them
● Things contributed are fungible/ interchangeable or if they are contributed to be sold, the risk
shall be borne by the partnership (dahil hindi lang use and fruits ang kinontribute, yung mismong
ownership ng bagay na yon ang kinontribute sa partnership)
ARTICLE 1796. The partnership shall be responsible to every partner for the amounts he may have
disbursed on behalf of the partnership and for the corresponding interest, from the time the expense are
made; it shall also answer to each partner for the obligations he may have contracted in good faith in the
interest of the partnership business, and for risks in consequence of its management.
● Yung partnership ay may utang kay partner (nagpapaluwal si partner para sa gastos dapat ng
partnership), pwedeng magkaroon ng corresponding interest from the time the expense were
made
ARTICLE 1797. The losses and profits shall be distributed in conformity with the agreement. If only the
share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the
same proportion.
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In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to
what he may have contributed, but the industrial partner shall not be liable for the losses. As for the
profits, the industrial partner shall receive such share as may be just and equitable under the
circumstances. If besides his services he has contributed capital, he shall also receive a share in the profits
in proportion to his capital.
● Question: Paano pinaghahatian ang kita at lugi ng isang partnership? General rule: Based on
agreed stipulation, kung ano ang naging usapan iyon ang mangyayaring hatian. (Ex. 1:1, 7,3
profit and loss ratio)
○ Kapag ang napag-usapan lang ay ang hatian sa kita, magiging ganon na rin ang hatian sa
pagkalugi (ex. hatian sa profits ay 3:2 at walang napag-usapan sa hatian sa losses
magiging 3:2 na rin ang hatian sa losses)
○ Kapag wala talagang napag-usapan ang hatian sa kita at pagkalugi ay based sa
na-contribute nila sa partnership (ex. A contributed 400k, B contributed 600k, ang hatian
sa kita at lugi ay 2:8 —- ito ay isang agreed stipulation) if wala yung agreed stipulation,
magiging based sa contribution nila which is 4:6
■ Si C ay industrial partner. Kapag walang agreed stipulation regarding sa profits
and losses, wala dapat share ang isang industrial partner sa losses. Technically
walang nawawalang money kay industrial partner kapag may losses, pero
nawawalan siya ng efforts exerted niya during an accounting period na hindi na
masusuklian o mababayaran. But pag sa profits dapat maka-receive siya ng share
na “just and equitable” (case to case basis). If hindi ma-quantify yung just and
equitable, the industrial partner shall receive the same share as the capitalist
partner receiving the smallest share. —— same kay A which is the partner
receiving the smallest share, ratio is 4:6:4
■ If si C ay isang capitalist-industrial partner, he shall receive a share in proportion
sa na-contribute nyang capital. Mababayaran siya as a capitalist partner based sa
capital niya and as an industrial partner based sa efforts niya.
ARTICLE 1798. If the partners have agreed to intrust to a third person the designation of the share of
each one in the profits and losses, such designation may be impugned only when it is manifestly
inequitable. In no case may a partner who has begun to execute the decision of the third person, or who
has not impugned the same within a period of three months from the time he had knowledge thereof,
complain of such decision.
The designation of losses and profits cannot be intrusted to one of the partners.
● General rule: Bawal na i-entrust ang pag set up ng profit loss ratio sa kahit sinong partner dahil
prone of taking advantage of others.
● You could entrust it to a third person. But make sure the profit loss ratio is fair. Kasi if it is
inequitable pwede itong ma-question or i-impugn. If the profit loss ratio is not fair, dapat itong
i-question agad -- WITHIN THE PERIOD OF THREE MONTHS FROM THE TIME HE HAD
KNOWLEDGE THEREOF.
○ If hindi kayo nagreklamo within three months or pagnapaghatian niyo na agad yung pera,
you could no longer complain or else estopped ka na (wala ka nang karapatan
magreklamo dahil yung hindi mo pagreklamo in time is a sign na okay lang sayo yung
ratio)
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ARTICLE 1799. A stipulation which excludes one or more partners from any share in the profits or
losses is void.
● Question: ABC Partnership and si A ay isang billionaire. Maaring bang i-stipulate na porket
billionaire na si A ay wala na siyang share sa profit? NO, hindi pwedeng wala siyang share. The
partnership was established for the common benefit of the partners.
● Ex. Si C ang pinakamahirap kaya pag nalugi ay wala na siyang share. Bawal din ito dahil as a
partner bawal siya ma-exclude sa losses.
○ Unless siya ay isang industrial partner which is exempted sa share ng losses
ARTICLE 1800. The partner who has been appointed manager in the articles of partnership may execute
all acts of administration despite the opposition of his partners, unless he should act in bad faith; and his
power is irrevocable without just or lawful cause. The vote of the partners representing the controlling
interest shall be necessary for such revocation of power.
A power granted after the partnership has been constituted may be revoked at any time.
● managing partner: namamahala sa partnership, having the authority to act on behalf of the
company
○ Kelan na-aappoint ang isang managing partner?
■ HABANG GINAGAWA ANG ARTICLES OF CO-PARTNERSHIP: Pwede
kang ma-appoint as managing partner on the time na ginagawa pa lang yung
Articles of Co-partnership (binubuo pa lang yung partnership pinag-uusapan niyo
na kung sino ang managing partner at doon pa lang masusulat na sa articles kung
sino ang managing partner)
■ AFTER MAGAWA YUNG CO-PARTNERSHIP: Pwede namang i-appoint ka as
a managing partner after ma-execute ang Articles of Co-partnership (yung
pangalan mo wala sa mismong contract dahil in-appoint ka after magawa yung
contract)
● Question: Aling time ang mas favorable sa managing partner in terms of security of tenure (hindi
basta basta matatanggal sa position)? Mas secure yung ma-appoint as managing partner in the
Articles of Partnership dahil his power is irrevocable without just or lawful cause. Kailangan din
na yung vote ng partners represent the controlling intererest para ma-revoke yung power ng
managing partner.
■ Nalagay na yung pangalan mo sa Articles of Partnership as a managing partner at
para matanggal ka sa position mo kailangan mangyari ang dalawang bagay:
1. May nagawa kang mali (just and lawful cause)
2. Hindi na masaya yung partners sa pamumuno mo representing the controlling
interest (majority of the partners) 50% +1 ang hindi na masaya sa pamumuno
pwede ka nilang tanggalin
KAILANGAN SABAY ITONG MANGYARI. Kung hindi na sila masaya pero wala ka namang
ginawang mali, hindi ka nila matatanggal. At kung may just and lawful cause pero masaya pa sila
sa pamumuno mo, or ikaw mismo ang nag-rrepresent ng controlling interest (ikaw yung may 51%
share) hindi ka rin nila maaaring tanggalin.
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● If ikaw naman ay na-appoint after ng paggawa ng Articles of Partnership, the rule

is that as long as hindi na masaya sayo yung partners representing the controlling
interest you could be removed as a partner even without just and lawful cause.
ARTICLE 1801. If two or more partners have been intrusted with the management of the partnership
without specification of their respective duties, or without a stipulation that one of them shall not act
without the consent of all the others, each one may separately execute all acts of administration, but if any
of them should oppose the acts of the others, the decision of the majority shall prevail. In case of a tie, the
matter shall be decided by the partners owning the controlling interest.
Decision making: Bibili ba ng truck o bibili ng van?

Managing Partners
Scenario 1 Scenario 2
A=60% Truck Truck
B=10% Van Truck
C=15% Van Van
D=15% Van Van
The decision of the majority shall In case of a tie, the matter shall be
prevail. Basehan is yung number of decided by the partners owning the
heads. 1 vs 3 Ang mabibili ay ang Van controlling interest. 70% vs 30% Ang
mabibili ay ang Truck
● Question: As a general rule, may compensation or sweldo ba ang mga partners? Wala, partners
are generally not entitled to compensation. But in some instances, binibigyan ang ibang partners
ng salary.
ARTICLE 1802. In case it should have been stipulated that none of the managing partners shall act
without the consent of the others, the concurrence of all shall be necessary for the validity of the acts, and
the absence or disability of any one of them cannot be alleged, unless there is imminent danger of grave
or irreparable injury to the partnership.
● Dapat pumayag lahat bago mag-act ang mga managing partners unless kailangan mag-decide para
hindi malagay sa alanganin ang partnership. Kailangan hintayin yung concurrence of all lalo na
kung napag-usapan na bawal ka magsarili sa pamamalakad ng partnership.
ARTICLE 1803. When the manner of management has not been agreed upon, the following rules shall
be observed:
(1) All the partners shall be considered agents and whatever any one of them may do alone shall bind the
partnership, without prejudice to the provisions of article 1801.
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● Mutual agency is the legal relationship between partners in a partnership where each partner has
authorization powers and the ability to enter the partnership into business contracts. —- Anuman
ang gagawin ng isa ay magiging binding sa buong partnership
(2) None of the partners may, without the consent of the others, make any important alteration in the
immovable property of the partnership, even if it may be useful to the partnership. But if the refusal of
consent by the other partners is manifestly prejudicial to the interest of the partnership, the court's
intervention may be sought.
● Immovable property: building, kahit useful sa partnership ang magdagdag ng isa pang floor, hindi
pwedeng mag-decide ka nang sarili mo lang nang walang consent ng ibang partners. The only
time na pwede kang humingi ng tulong sa korte, is kapag yung refusal ng isang partner na
pumayag sa alteration ay wala na sa lugar (unfair sa partnership kapag hindi natuloy yung
alteration)
ARTICLE 1804. Every partner may associate another person with him in his share, but the associate
shall not be admitted into the partnership without the consent of all the other partners, even if the partner
having an associate should be a manager.
● Ex. A= 100,000 (yung investment niya sa partnership ang natatanging asset niya) Unfortunately
bigla kinailangan ni A ng pera at naisip niyang kunin yung pera sa partnership at nagkaroon na
gipit ang partnership kaya hindi maibibigay yung pera niya. Then pumunta siya kay B and C para
ibenta yung share niya pero wala rin silang pera.
○ Question: Paano niya gagawing pera ang investment niya sa partnership kung pati yung
buong partnership ay walang pondo? Pwede siyang kumuha ng Associate. I-aassign niya
sa ibang tao yung share niya. Kakausap siya ng third person, si Mr. X, para bigyan siya
ng 100,000 katumbas ng share niya sa partnership. Magiging “assignee” or “sub partner”
si Mr. X. Hindi siya full pledged partner dahil wala pang approval ni B and C yung
pagiging partner niya.
■ Ang benefit ni X as an assignee or a sub partner ay pwede siyang makakuha ng
share sa profit (yung mismong share ni A) dahil pa siya pwede makielam sa
partnership kasi hindi pa full pledged partner.
ARTICLE 1805. The partnership books shall be kept, subject to any agreement between the partners, at
the principal place of business of the partnership, and every partner shall at any reasonable hour have
access to and may inspect and copy any of them.
● to show na may transparency ang partnership dapat may access ang bawat isa sa partnership
books (accounting books)
ARTICLE 1806. Partners shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner or of any partner under legal
disability.
● Dapat ipaalam lahat ng information na nakakaapekto sa partnership sa bawat partner.
ARTICLE 1807. Every partner must account to the partnership for any benefit, and hold as trustee for it
any profits derived by him without the consent of the other partners from any transaction connected with
the formation, conduct, or liquidation of the partnership or from any use by him of its property.
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● Dapat i-inform ang mga partner kapag may nakuha kang benefit na dapat ay para sa partnership
(for trust and confidence)
ARTICLE 1808. The capitalist partners cannot engage for their own account in any operation which is of
the kind of business in which the partnership is engaged, unless there is a stipulation to the contrary.
Any capitalist partner violating this prohibition shall bring to the common funds any profits accruing to
him from his transactions, and shall personally bear all the losses.
● Ang isang industrial partner ay pwedeng pagbawalan na mag engage sa business of the same kind
or sa different kind of business
● Question: ang capitalist partner ba sa isang restaurant ay pwedeng pigilan ng ibang partners na
magtayo pa ng ibang restaurant? YES, because of conflict of interest (pwedeng madala ang trade
secrets ng isang partnership)
○ Kapag pinagbawalan ang isang capitalist partner na magtayo ng same business at ginawa
niya pa rin, dapat ibigay niya sa partnership yung kinita niya kabilang negosyo at kapag
nalugi siya sa kabilang business niya he shall bear all the losses.
● Question: ang capitalist partner ba sa isang restaurant ay pwedeng pigilan ng ibang partners na
mag-engage sa different kind of business? NO, dahil wala nang conflict of interest at walang
expectation sa capitalist partner (unlike sa industrial partner) na i-ddevote niya ang buong oras
niya sa partnership, as long as naibigay na ni capitalist partner ang expected capital sa kanya.
ARTICLE 1809. Any partner shall have the right to a formal account as to partnership affairs:
(1) If he is wrongfully excluded from the partnership business or possession of its property by his
co-partners;
(2) If the right exists under the terms of any agreement;
(3) As provided by article 1807;
(4) Whenever other circumstances render it just and reasonable.
● Formal Accounting must detail all assets and justify all expenses.
Property Rights of a Partner

ARTICLE 1810. The property rights of a partner are:
(1) His rights in specific partnership property;
(2) His interest in the partnership; and
(3) His right to participate in the management.
● As a partner, may karapatan ka sa mga properties na na-invest sa partnership
ARTICLE 1811. A partner is co-owner with his partners of specific partnership property. The incidents
of this co-ownership are such that:
● Initially, ikaw ang owner ng property pero once na ma-invest mo ito sa partnership, magiging
co-owner na kayong lahat ng partners
(1) A partner, subject to the provisions of this Title and to any agreement between the partners, has an
equal right with his partners to possess specific partnership property for partnership purposes; but he has
no right to possess such property for any other purpose without the consent of his partners;
● Kahit hindi pantay-pantay ang investment niyo, pantay-pantay ang karapatan niyo sa mga
properties
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● Kung ano ang napag-usapang purpose ng property, yon lang ang gamit ng property. Kahit ikaw
ang nag-invest, hindi mo ito pwedeng basta gamitin for personal purposes lalo na kung walang
consent ng ibang partners
(2) A partner’s right in specific partnership property is not assignable except in connection with the
assignment of rights of all the partners in the same property;
● Assignment: transfer of a property right or title to some particular person under an agreement,
usually in writing (ililipat mo yung certain property mo)
○ You cannot assign your right to a certain property dahil hindi lang ikaw ang
nagmamay-ari non, dapat kayong lahat ng partners sabay-sabay niyo i-aassign yung
rights niyo to a property
(3) A partner’s right in specific partnership property is not subject to attachment or execution, except on a
claim against the partnership. When partnership property is attached for a partnership debt the partners, or
any of them, or the representatives of a deceased partner, cannot claim any right under the homestead or
exemption laws;
● Ex. May utang ka sa ibang tao -- hindi ito basta pwedeng hilahin ng creditor dahil hindi lang ikaw
ang may-ari ng property, pag-aari din ito ng mga kasama mo
(4) A partner’s right in specific partnership property is not subject to legal support under article 291.
● Article 291: The following are obliged to support each other to the whole extent set forth in the
preceding article: Brothers and sisters owe their legitimate and natural brothers and sisters,
although they are only of the half-blood, the necessaries for life, when by a physical or mental
defect, or any other cause not imputable to the recipients, the latter cannot secure their
subsistence. This assistance includes, in a proper case, expenses necessary for elementary
education and for professional or vocational training.
ARTICLE 1812. A partner’s interest in the partnership is his share of the profits and surplus.
● Interest: partner's ownership interest
● Profit: the excess of returns over expenditure in a transaction or series of transactions; or the net
income of the partnership or given period of time.
● Surplus: refers to the assets of the partnership after the partnership's debts and liabilities are paid
(assets na natira after liabilities are paid --- owner's equity)
● Owner's equity + bagong share sa profits = total owner's interest in the partnership
ARTICLE 1813. A conveyance by a partner of his whole interest in the partnership does not of itself
dissolve the partnership, or, as against the other partners in the absence of agreement, entitle the assignee,
during the continuance of the partnership, to interfere in the management or administration of the
partnership business or affairs, or to require any information or account of partnership transactions, or to
inspect the partnership books; but it merely entitles the assignee to receive in accordance with his contract
the profits to which the assigning partner would otherwise be entitled. However, in case of fraud in the
management of the partnership, the assignee may avail himself of the usual remedies.
In case of a dissolution of the partnership, the assignee is entitled to receive his assignor’s interest and
may require an account from the date only of the last account agreed to by all the partners.
● Pag inilipat ng isang partner yung whole interest niya sa ibang tao (assignee), it does not dissolve
the partnership or does it entitle the assignee to interfere in the management of the partnership, or
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to require any information or transactions or to inspect the partnership books but it only entitles
the assignee to receive the partnership's profit in accordance sa interest na nilipat sa kanya
● Ex. Kinapos ng pera si A so in-assign niya kay X yung ownership interest niya. Mr. X being a sub
partner sa partnership does not dissolve the partnership -- ABC partnership pa rin. (In relation sa
previous article) it does not also make him a managing partner kahit pa dapat siyang maging
manager but ang effect lang ng pagiging subpartner ni X ay yung profits na dapat kay A ay
mapupunta na kay X.
● In case of fraud, the assignee or sub partner may avail the usual remedies.
● In case of dissolution, kung ano ang dapat ma-receive ni assignor, kay assignee na mapupunta.
ARTICLE 1814. Without prejudice to the preferred rights of partnership creditors under article 1827, on
due application to a competent court by any judgment creditor of a partner, the court which entered the
judgment, or any other court, may charge the interest of the debtor partner with payment of the unsatisfied
amount of such judgment debt with interest thereon; and may then or later appoint a receiver of his share
of the profits, and of any other money due or to fall due to him in respect of the partnership, and make all
other orders, directions, accounts and inquiries which the debtor partner might have made, or which the
circumstances of the case may require.
● Ex. ABC are partners. Si B may utang na 200,000 kay Mr. J. Ano ang pwedeng remedies ni J as a
creditor?
○ Pwedeng mag-request si J na i-charge yung interest ni debtor partner (ano man ang
ownership interest ni B sa partnership, pwede itong i-request ni creditor J na i-charge
para doon siya makakuha ng payment)
The interest charged may be redeemed at any time before foreclosure, or in case of a sale being directed
by the court, may be purchased without thereby causing a dissolution:
(1) With separate property, by any one or more of the partners; or
(2) With partnership property, by any one or more of the partners with the consent of all the partners
whose interests are not so charged or sold.
Nothing in this Title shall be held to deprive a partner of his right, if any, under the exemption laws, as
regards his interest in the partnership.
● Charging Interest of a Partner
○ while a partner’s interest in the partnership may be charged or levied upon, his interest in
a specific firm property cannot as a rule be attached.
● Preferential Rights of Partnership Creditors
○ preference is given to partnership creditors in the partnership assets;
○ separate or individual creditors have preference in separate or individual properties
- It means that the claims of partnership creditors must be satisfied first before the separate
creditors of the partners can be paid out of the interest charged.
● Remedies of separate Judgment Creditor of a Partner
○ Application for the “charging order” after securing judgment on his credit
○ Availability of other remedies- The court may resort to other courses of action provided
in article 1814 if the judgment debt remains unsatisfied notwithstanding the issuance of
the charging order.
● Receivership
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○ when the charging order is applied for and granted, the court may at the same time or
later appoint a receiver of the partner’s share in the profits or money due him
○ the receiver appointed is entitled to any relief necessary to conserve the partnership
assets for partnership purposes
● Redemption of the Interest Charged
○ redemption- means the extinguishment of the charge or attachment on the partner’s
interest in the profits;
○ when redemption is made
■ any time before closure;
■ after closure, it may still be bought with separate property or with partnership
property
- The ownership interest of the debtor partner charged with the payment of the unsatisfied amount
of the judgment debt may be redeemed with partnership property with the consent of all the
partners whose interests are not so charged.
Obligations of the Partners with Regard to Third Persons

ARTICLE 1815. Every partnership shall operate under a firm name, which may or may not include the
name of one or more of the partners.
Those who, not being members of the partnership, include their names in the firm name, shall be subject
to the liability of a partner.
● Kahit sampu kayong partners hindi required na yung mga pangalan niyo ay nakalagay sa
pangalan ng partnership.
● Yung mga nagpapalagay ng pangalan nila sa name ng partnership pero hindi naman pala talagang
partner (partner by estoppel), shall be subject to the liability of a partner dahil pinapaniwala mo
yung ibang tao na partner ka pero hindi pala.
ARTICLE 1816. All partners, including industrial ones, shall be liable pro rata with all their property and
after all the partnership assets have been exhausted, for the contracts which may be entered into in the
name and for the account of the partnership, under its signature and by a person authorized to act for the
partnership. However, any partner may enter into a separate obligation to perform a partnership contract.
● Ex. ABC Partnership Assets = 1,000,000 Liabilities = 1,300,000 Owner's Equity= (300,000)
○ Lumalabas na abonado ang mga partners at pwedeng habulin ang kanilang personal
properties. They are liable pro rata --- jointly liable
○ Question: Magkano ang pwedeng habulin ng creditors kay A alone? 300,000 / 3=
100,000
○ Kahit ikaw ay isang industrial partner, required ka pa rin magbayad ng share mo kapag
kulang ang assets niyo para sa pambayad ng liabilities
ARTICLE 1817. Any stipulation against the liability laid down in the preceding article shall be void,
except as among the partners.
● Industrial partners are still liable to the unpaid liabilities of the partnership --- bawal magset ng
any stipulation exempting the industrial partner sa pagbabayad ng kanyang share sa unpaid
liabilities
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● What if during the formation of the partnership sinabi sa isang partner na sumali ka bilang
industrial partner at sagot ka namin kapag nalugi? This stipulation shall be VOID dahil bawal
mag-exempt ng partner sa pagbayad ng share sa unpaid liabilities. Pwede pa rin habulin ni
creditor si industrial partner hanggang sa personal property niya kapag nalugi ang partnership.
Kahit may usapan ang partners, need muna bayaran ni industrial partner si creditor and later on,
maningil na lang siya ng reimbursement sa partners niya.
○ The stipulation is void as to the third persons but the stipulation is valid between the
partners (yung i-rreimburse ni A and B yung share ni C)
ARTICLE 1818. Every partner is an agent of the partnership for the purpose of its business, and the act
of every partner, including the execution in the partnership name of any instrument, for apparently
carrying on in the usual way the business of the partnership of which he is a member binds the
partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular
matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.
An act of a partner which is not apparently for the carrying on of business of the partnership in the usual
way does not bind the partnership unless authorized by the other partners.
Except when authorized by the other partners or unless they have abandoned the business, one or more
but less than all the partners have no authority to:
(1) Assign the partnership property in trust for creditors or on the assignee’s promise to pay the debts of
the partnership;
(2) Dispose of the good-will of the business;
(3) Do any other act which would make it impossible to carry on the ordinary business of a partnership;
(4) Confess a judgment; (prejudicial to the partnership)
(5) Enter into a compromise concerning a partnership claim or liability;
(6) Submit a partnership claim or liability to arbitration; (cannot submit on your own)
(7) Renounce a claim of the partnership.
No act of a partner in contravention of a restriction on authority shall bind the partnership to persons
having knowledge of the restriction.
● CAN NOT DO IT ON YOUR OWN, Dapat lahat kayong partners ay mag-agree
● Agency of a partner
○ partnership is a contract of mutual agency
○ each partner acting as a principal on his own behalf and as an agent for his co-partners
or the firm
● When can a partner bind the partnership
Requisites:
a. when he is expressly authorized or impliedly authorized; and
b. when he acts in behalf and in the name of the partnership
● When will act not bind the partnership
A. when, although for apparently carrying on in the usual way the business of the partnership,”
still the partner has in fact NO AUTHORITY, and the third party knows that the partner has no
authority;
B. when the act is not for apparently carrying on in the usual way of the partnership and the
partner has no authority
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ARTICLE 1819. Where title to real property is in the partnership name, any partner may convey title to
such property by a conveyance executed in the partnership name; but the partnership may recover such
property unless the partner’s act binds the partnership under the provisions of the first paragraph of article
1818, or unless such property has been conveyed by the grantee or a person claiming through such
grantee to a holder for
value without knowledge that the partner, in making the conveyance, has exceeded his authority.
● Pwedeng yung mismong partnership under its own name ang mag may-ari ng mga properties pero
gagawa pa rin nito ay yung actual na partner
Where title to real property is in the name of the partnership, a conveyance executed by a partner, in his
own name, passes the equitable interest of the partnership, provided the act is one within the authority of
the partner under the provisions of the first paragraph of article 1818.
Where title to real property is in the name of one or more but not all the partners, and the record does not
disclose the right of the partnership, the partners in whose name the title stands may convey title to such
property, but the partnership may recover such property if the partners’ act does not bind the partnership
under the provisions of the first paragraph of article 1818, unless the purchaser or his assignee, is a holder
for value, without knowledge.
Where the title to real property is in the name of one or more or all the partners, or in a third person in
trust for the partnership, a conveyance executed by a partner in the partnership name, or in his own name,
passes the equitable interest of the partnership, provided the act is one within the authority of the partner
under the provisions of the first paragraph of article 1818.
Where the title to real property is in the names of all the partners a conveyance executed by all the
partners passes all their rights in such property.
● Conveyance of Real Property
○ the article speaks of “:to convey” or a conveyance
● real property may be registered or owned in the name of
○ the partnership
○ all the partners
○ one, some or not all the partners in trust for the partnership
reference: https://www.angelfire.com/me4/francute/partneragency.htm
ARTICLE 1820. An admission or representation made by any partner concerning partnership affairs
within the scope of his authority in accordance with this Title is evidence against the partnership.
● Dapat maging mapili sa mga kukunin na partners kung ano ang ginawa nila ay magiging binding
o magiging ebidensya laban sa partnership
ARTICLE 1821. Notice to any partner of any matter relating to partnership affairs, and the knowledge of
the partner acting in the particular matter, acquired while a partner or then present to his mind, and the
knowledge of any other partner who reasonably could and should have communicated it to the acting
partner, operate as notice to or knowledge of the partnership, except in the case of a fraud on the
partnership, committed by or with the consent of that partner.
● Anytime na ma-notify ang isang partner relating to the partnership affairs, is considered to be it
operates as a notice to the partnership.
○ Ex. A,B,C,D are partners. Si A lang ang sinabihan mo at nakaalam ng specific
information, under article 1821, in substance parang sinabihan mo na rin si B,C,D.
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■ Kung ano man ang nalaman mo tungkol sa partnership, bilang isang partner, may
obligation si A na ipaalam sa ibang partner ang kanyang mga nalalaman dahil
ang notice sayo ay notice sa lahat. Ano man ang nalaman mo habang ikaw ay
isang partner ay dapat i-share sa mga kapwa partner mo -- kung ano ang
knowledge mo ay knowledge ng lahat.
● Hindi mo pwedeng sisihin ang ibang tao na hindi pa alam ng kapwa
partner mo yung information dahil ang assumption ay pag nagsabi sila sa
iisang partner ay parang nagsabi na rin sila sa ibang partners.
ARTICLE 1822. Where, by any wrongful act or omission of any partner acting in the ordinary course of
the business of the partnership or with the authority of his co-partners, loss or injury is caused to any
person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor
to the same extent as the partner so acting or omitting to act.
● May solidary liability ang partnership — kailangan bayaran ng partnership yung damages dahil sa
wrongful act (pero subject naman ito sa reimbursement galing kay guilty partner)
ARTICLE 1823. The partnership is bound to make good the loss:

(1)Where one partner acting within the scope of his apparent authority receives money or property of a
third person and misapplies it; and
(2) Where the partnership in the course of its business receives money or property of a third person and
the money or property so received is misapplied by any partner while it is in the custody of the
partnership.
● namali ang isang partner sa paggamit ng money or property—liable ang partnership, kailangan
nilang abonohan o bayaran
ARTICLE 1824. All partners are liable solidarily with the partnership for everything chargeable to the
partnership under articles 1822 and 1823.
● Liable solidarily — liability arising from tort (quasi-delict): each is liable for the whole obligation
and each creditor is entitled to demand payment of the entire obligation.
● Liable jointly or pro rata — liability arising from contracts: each is liable only for a proportionate
portion of the debt
ARTICLE 1825. When a person, by words spoken or written or by conduct, represents himself, or
consents to another representing him to anyone, as a partner in an existing partnership or with one or more
persons not actual partners, he is liable to any such persons to whom such representation has been made,
who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he
has made such representation or consented to its being made in a public manner he is liable to such
person, whether the representation has or has not been made or communicated to such person so giving
credit by or with the knowledge of the apparent partner making the representation or consenting to its
being made:
(1) When a partnership liability results, he is liable as though he were an actual member of the
partnership;
(2) When no partnership liability results, he is liable pro rata with the other persons, if any, so consenting
to the contract or representation as to incur liability, otherwise separately.
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When a person has been thus represented to be a partner in an existing partnership, or with one or more
persons not actual partners, he is an agent of the persons consenting to such representation to bind them to
the same extent and in the same manner as though he were a partner in fact, with respect to persons who
rely upon the representation. When all the members of the existing partnership consent to the
representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation
of the person acting and the persons consenting to the representation.
● Partner by estoppel: nag-represent as partner kahit hindi naman talaga siya partner
● When Partnership Liability Results - if all the actual partners consented to the representation,
then the liability of the person who represented himself to be a partner or who consented to such
representation and the actual partners is considered a partnership liability.
○ If the firm had not consented, no partnership liability results but the deceiver is still
considered as partner by estoppel with all the obligations but not the rights of a partner
● When a person represents himself as a partner of a Non-existent partnership, no partnership
liability results but the deceiver and all persons who have aided him in misrepresentation are
liable pro rata or jointly liable.
● When estoppel does not apply - when although there is misrepresentation, the third party is not
deceived, the doctrine of estoppel does not apply
ARTICLE 1826. A person admitted as a partner into an existing partnership is liable for all the
obligations of the partnership arising before his admission as though he had been a partner when such
obligations were incurred, except that this liability shall be satisfied only out of partnership property,
unless there is a stipulation to the contrary.
● Ang isang tao na kakapasok pa lang bilang partner ay liable sa mga obligations ng partnership na
na-incur noong panahon na hindi pa siya nakakapasok. It is as if partner na siya simula pa lang
noong na-incur yung mga obligations na yon.
○ Ex. Bago pa lang pumasok si A may utang na yung partnership ng 200,000. Nang
pumasok na si A liable na rin siya sa 200,000 — as if partner na siya noong na-incur
yung utang. Pwede nang singilin o pagkuhanan yung investment ni A upang bayaran ng
partnership yung utang.
○ Ex. If nag-invest lang si A ng 100,000 pero bago siya pumasok may utang na 200,000
ang partnership (which is kulang pa para bayaran). General rule hindi ka pwedeng
i-require na magbayad in excess of what you invested. Hanggang sa amount lang ng
investment mo ang pwedeng kuhanin upang bayaran yung utang ng partnership bago ka
pa pumasok. Unless there is a stipulation to the contrary.
■ Knowing na may past utang at ang pagpasok mo sa partnership is an admission
na okay lang na gamitin yung investment mo pandagdag sa pambayad ng utang
ng partnership.
ARTICLE 1827. The creditors of the partnership shall be preferred to those of each partner as regards the
partnership property. Without prejudice to this right, the private creditors of each partner may ask the
attachment and public sale of the share of the latter in the partnership assets.
● Ex. May utang si ABC Partnership kay BDO. Pero si A may utang kay X, si B may utang kay Y,
si C may utang Z. (Four creditors in total) Question: Kung limited na lang ang assets ng
partnership, sino creditor ang mas may karapatan? Ang creditor ng partnership — BDO, ang may
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karapatan na unang makakolekta. Just in case may enough assets after makakolekta si BDO,
pwedeng ipa-attach ng private creditors sa korte yung mga natitirang assets ng partnership upang
ito ay hilahin at para makasingil si X,Y,Z.
Dissolution and Winding Up

ARTICLE 1828. The dissolution of a partnership is the change in the relation of the partners caused by
any partner ceasing to be associated in the carrying on as distinguished from the winding up of the
business.
● Dissolution: any partner na tumitigil ma-associate sa isang business
○ Hindi lang dati may umalis o namatay na partner, may dissolution din kapag may
na-admit o pumasok na bagong partner
○ Ex. AB partnership. Papasok si C magiging ABC partnership, na-dissolve yung AB
partnership.
ARTICLE 1829. On dissolution the partnership is not terminated, but continues until the winding up of
partnership affairs is completed.
● Winding up: the process of liquidating the assets of a partnership or corporation in order to pay
creditors and make distributions to partners or shareholders upon dissolution (pagbebenta ng
assets)
● Hindi lahat ng dissolution ay mapupunta sa liquidation. May mga partnership na na-dissolve
dahil mag-form ng panibagong partnership kasi may nadagdag na bagong partner.
● Question: All dissolution will lead to liquidation and all liquidation came from a valid
dissolution? FALSE, dahil may dissolution that results in the formation of a new partnership.
TRUE, specific type ng dissolution na mauuwi sa liquidation: RETIREMENT— retirement lahat
ng partner o namatay lahat ng partner — leads to liquidation. Kapag may natirang partner hindi
ito mag-lead sa liquidation, babalik ulit sa formation ng panibagong partnership.
ARTICLE 1830. Dissolution is caused:

(1) Without violation of the agreement between the partners:
(a) By the termination of the definite term or particular undertaking specified in the agreement;
● Nakaka dissolve ng partnership kapag tapos na yung definite term or yung particular
undertaking
● Definite term: Kapag napag-usapan niyo na yung partnership niyo is good for 2 years, at
ngayong araw na ito matatapos ang 2 years, after this day dissolved na ang partnership.
○ Ex. Ang partnership niyo ay one with a fixed term e.g. 5 years, pero kalagitnaan
pa lang ay umaayaw na yung partner mo. Question: Yung partner ba na gustong
umalis ay legally pwede mong pilitin na mag stay? NO, kahit 5 years ang usapan
niyo, hindi mo siya pwedeng pigilan na umalis. Dahil kapag pinilit mo ay isang
tao na ayaw na, this is tantamount/ equivalent to involuntary servitude. (slavery
or person laboring against that person's will to benefit another) This is against
our constitution especially on the right to involuntary servitude dahil para kang
trinatrato na alipin.
■ Hindi mo siya pwedeng pigilan umalis ngunit kapag umalis siya na hindi
pa tapos ang inyong kontrata, this is tantamount to bad faith which is
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considered a breach of contract. Magiging liable yung umalis na partner

for damages.
● Particular undertaking: Ang partnership niyo ay binuo para magbenta ng tickets sa Sea
games. After ng sea games, dissolved na rin ang partnership.
(b) By the express will of any partner, who must act in good faith, when no definite term or
particular undertaking is specified;
● Paano natatapos ang isang partnership at will— sila ay mag partners hanggang pareho pa
nilang gusto? Kapag ang isa ay umayaw na, ma-ddisolve na ang partnership, by the
express will of the partner.
● Sa isang partnership at will anytime pwede kang umalis, pero dapat in good faith yung
pag-alis mo.
○ Ex. Okay lang mag-initiate ng break-up (dissolution) kung talagang valid (in
good faith) yung rason mo sa pakikipaghiwalay such as focus sa sarili.
■ Ex. one in bad faith: Kaya ka pala nakikipaghiwalay ay may kapalit na
pala
○ Ex. In bad faith: During the course of your partnership, may nakita siyang greater
opportunity. Supposedly, kung magkapartner pa kayo yung kikitain sa sales niyo
ay dapat paghahatian niyo. Porket nalaman niya mag-isa yung offer, instead na
sabihin sayo yung transaction, humingi siya ng dissolution para maging sole
proprietorship at masolo ang kita.
■ Kapag napatunayan sa korte, na ang pag-alis mo sa partnership ay one in
bad faith, you could be liable for damages.
(c) By the express will of all the partners who have not assigned their interests or suffered them to
be charged for their separate debts, either before or after the termination of any specified term or
particular undertaking;
● Kapag nagkaayawan na lahat ng partners, dissolved na ang partnership
(d) By the expulsion of any partner from the business bona fide in accordance with such a power
conferred by the agreement between the partners;
● Ex. ABCD partnership. Si D na-expel dahil may kalokohang nagawa, from ABCD
partnership na na-dissolve, naging ABC partnership na lang.
(2) In contravention of the agreement between the partners, where the circumstances do not permit a
dissolution under any other provision of this article, by the express will of any partner at any time;
● Kinontra yung agreement/ yung napag-usapan.
● Ex. 5 years na partnership agreement niyo, pero 2 years palang gusto na umalis. Pwede umalis but
magiging liable for damages.
(3) By any event which makes it unlawful for the business of the partnership to be carried on or for the
members to carry it on in partnership;
● Ex. Bumuo kayo ng partnership na gumagawa ng motorcycle barrier. Pero dahil sa sunod-sunod
na aksidente dahil sa motorcycle barrier, naglabas bigla ng batas na bawal na magbenta ng
motorcycle barrier. Dahil ipinagbabawal na yung produkto ng partnership niyo, involuntarily
ma-ddissolve ang inyong partnership.
● Ex. Nagbebenta yung partnership niyo ng marijuana noong time na legal pa. Pero kasama na ito
sa ipinagbabawal na gamot, ang effect nito ay ma-dissolve ang partnership niyo dahil yung line of
business niyo is considered unlawful or illegal na.
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(4) When a specific thing, which a partner had promised to contribute to the partnership, perishes before
the delivery; in any case by the loss of the thing, when the partner who contributed it having reserved the
ownership thereof, has only transferred to the partnership the use or enjoyment of the same; but the
partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has acquired
the ownership thereof;
● Ex. ABC Partnership. Nangako si A na mag-invest ng specific na carabao. Bago niya
ma-icontribute yung specific carabao, tinamaan ito ng kidlat at namatay. Dahil specific thing at
wala nang maibigay na ganong carabao, the partnership will be dissolved dahil yung specific
thing na ipinangako ni A ay nag-perish na before niya pa ma-deliver. —- Natapos na bago pa
magsimula.
○ Dapat the specific thing perishes before the delivery, dahil kapag ito ay nawala o namatay
after ma-contribute sa partnership or the partnership has acquired the ownership, hindi
ma-dissolve ang partnership.
■ Ex. Na-deliver na yung specific carabao sa farm ng partnership at kinabukasan
namatay yung kalabaw. Ang nawalan na ay ang partnership, considered as loss of
the partnership. But hindi ito rason para ma-dissolve ang partnership.
(5) By the death of any partner;
● Kapag namatay may isang partner: from ABCD partnership, namatay si D kaya magiging ABC
partnership na lang dahil na-dissolve yung ABCD.
(6) By the insolvency of any partner or of the partnership;
● Insolvency: mas marami na ang personal liabilities mo kesa sa personal assets mo.
● It is deemed fit na tanggalin na sa isang partnership ang mga insolvent na partners kasi unfair para
sa partnership na manatili siya roon, para na rin sa proteksyon ng other partners and ng publiko.
○ Ex. ABCD partnership. Insolvent na si D yet hindi alam ng publiko. Si ABCD uutang sa
bangko at ang alam nila maganda ang credit standing ni D. Pero nung nalugi si ABCD,
hahabulin ang bawat isang partner lalo na si D dahil akala nila mayaman pa rin siya. Only
to find out, wala na palang masyadong personal assets dahil matagal na siyang insolvent.
To protect the public, sabi ng batas na tanggalin muna ang mga insolvent partners sa
partnership.
(7) By the civil interdiction of any partner;
● Civil interdiction: kawalan ng isang preso na mag-manage ng kanyang mga ari-arian
● Dahil siya ay nasa kulungan, walang paraan para ma-monitor niya ang assets niya. For the benefit
of everyone, habang nakakulong ka tinanggalan ka ng batas ng karapatan na i-manage ang assets
mo sa labas which includes yung share mo sa isang partnership.
(8) By decree of court under the following article.
ARTICLE 1831. On application by or for a partner the court shall decree a dissolution whenever:
(1) A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind;
● Legally, tanging ang judge lang ang pwedeng magsabi na baliw ng isang tao sa tulong ng mga
experts. Kinailangan pa ng tulong ng isang third person (si judge) para sabihin na ang isang
partner niyo ay baliw na at dapat itigil na yung partnership dahil hindi na siya fit maging partner.
(Kailangan ng third person dahil hindi massolve kapag within partners lang at mas natatauhan
kapag ibang tao ang nagsabi)
(2) A partner becomes in any other way incapable of performing his part of the partnership contract;
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● ex. Incapability to perform part: may happen when the partner enters the government service
which would prohibit him from participating in the firm, or when he will stay abroad for a long
time
(3) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the
business;
(4) A partner wilfully or persistently commits a breach of the partnership agreement, or otherwise so
conducts himself in matters relating to the partnership business that it is not reasonably practicable to
carry on the business in partnership with him;
(5) The business of the partnership can only be carried on at a loss;
● Sasabihin ni judge na itigil na ang partnership dahil kundi paulit-ulit lang na malulugi
(6) Other circumstances render a dissolution equitable.
On the application of the purchaser of a partner’s interest under article 1813 or 1814:
(1) After the termination of the specified term or particular undertaking;
(2) At any time if the partnership was a partnership at will when the interest was assigned or when the
charging order was issued.
● Time of Dissolution: a firm becomes a dissolved partnership at the time the judicial decree
becomes a final judgment
ARTICLE 1832. Except so far as may be necessary to wind up partnership affairs or to complete
transactions begun but not then finished, dissolution terminates all authority of any partner to act for the
partnership:
● Kapag na-dissolve ang partnership, nawawala ang lahat ng authority ng mga partner to act for the
partnership. Maliban na lang sa mga transactions to wind up, tapusin lahat ng affairs ng
partnership such as pagbenta ng mga assets at tapusin ang mga transactions na nasimulan pero
hindi pa natapos.
○ Once ma dissolve bawal na yung magbenta ng regular items niyo as if nag-ooperate pa
kayo normally, ang ibebenta na lang ay yung mga natitirang assets for liquidation.
(1) With respect to the partners,
(a) When the dissolution is not by the act, insolvency or death of a partner; or
(b) When the dissolution is by such act, insolvency or death of a partner, in cases where article
1833 so requires;
(2) With respect to persons not partners, as declared in article 1834.
ARTICLE 1833. Where the dissolution is caused by the act, death or insolvency of a partner, each partner is liable to his
co-partners for his share of any liability created by any partner acting for the partnership as if the partnership had not been
dissolved unless:
(1) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution; or
(2) The dissolution being by the death or insolvency of a partner, the partner acting for the partnership had knowledge or notice
of the death or insolvency.
● Kinds of Causes of Dissolution
○ Act-Insolvency-Death
○ Other things like termination
● Effect of AID
- all partners are still bound to each other generally, except:
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a. if the partner had knowledge (as distinguished by NOTICE without actual knowledge)
- if dissolution is caused by an act (e.g. withdrawing, retiring)
b. if the partner acting had knowledge or notice, if dissolution was caused by death or insolvency
● Right of partner to contribution from co-partners
○ when a partner enters into a new contract with a third person after dissolution, the new contract generally will
bind the partners (Art. 1834, par. 1). Each of them is liable for his share of any liability created by the acting
partner as if the partnership had not been dissolved.
ARTICLE 1834. After dissolution, a partner can bind the partnership, except as provided in the third paragraph of this article:
(1) By any act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution;
(2) By any transaction which would bind the partnership if dissolution had not taken place, provided the other party to the
transaction:
(a) Had extended credit to the partnership prior to dissolution and had no knowledge or notice of the dissolution; or
(b) Though he had not so extended credit, had nevertheless known of the partnership prior to dissolution, and, having
no knowledge or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general
circulation in the place (or in each place if more than one) at which the partnership business was regularly carried on.
The liability of a partner under the first paragraph, No. 2, shall be satisfied out of partnership assets alone when such partner had
been prior to dissolution:
(1) Unknown as a partner to the person with whom the contract is made; and
(2) So far unknown and inactive in partnership affairs that the business reputation of the partnership could not be said to have
been in any degree due to his connection with it.
The partnership is in no case bound by any act of a partner after dissolution:
(1) Where the partnership is dissolved because it is unlawful to carry on the business, unless the act is appropriate for winding up
partnership affairs; or
(2) Where the partner has become insolvent; or ewIisi
(3) Where the partner has no authority to wind up partnership affairs; except by a transaction with one who:
(a) Had extended credit to the partnership prior to dissolution and had no knowledge or notice of his want of authority;
or
(b) Had not extended credit to the partnership prior to dissolution, and, having no knowledge or notice of his want of
authority, the fact of his want of authority has not been advertised in the manner provided for advertising the fact of
dissolution in the first paragraph, No. 2 (b).
Nothing in this article shall affect the liability under article 1825 of any person who after dissolution represents himself or
consents to another representing him as a partner in a partnership engaged in carrying on business.
● Article speaks of 2 possibilities:
a. when the partnership is bound to strangers; and
b. when the partnership is not bound to strangers
● When Partnership is bound: (a partnership liability is created)
a. business is for winding up;
b. business is to complete unfinished transactions; and
c. completely new business with third parties considered innocent
● When firm is not bound:
a. in all cases not included when partnership is bound;
b. when the firm was discharged because it was unlawful to carry on the business; except when the act is winding up;
c. where the partner had acted in the transaction has become insolvent;
d. where the partner is unauthorized to wind up
except: if the transaction is with a customer in good faith
Note: it is understood that if after dissolution a stranger will represent himself as a partner although he is not one, he will be a
partner by estoppel
ARTICLE 1835. The dissolution of the partnership does not of itself discharge the existing liability of any partner. A partner is
discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between himself, the
partnership creditor and the person or partnership continuing the business; and such agreement may be inferred from the course
of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business.
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The individual property of a deceased partner shall be liable for all obligations of the partnership incurred while he was a partner,
but subject to the prior payment of his separate debts.
Dissolution ordinarily does not discharge existing liability of partners, otherwise, creditors would be prejudiced, particularly if a
partner will just withdraw anytime from the firm
● How a Partner’s liability is discharged
- the following must agree:
a. the partner concerned;
b. the other partners; and
c. the creditors
● Effect of death on pending action

- An action for accounting against a managing partner should be discontinued if he dies during the pendency of the
action;
- The suit must be conducted in the settlement proceedings of the deceased’s estate, particularly if this is the desire of
his administration;
- Thus, it is wrong to just continue the action for accounting and substitute the dead defendant with his heirs
Reference: https://www.angelfire.com/me4/francute/partneragency.htm
ARTICLE 1836. Unless otherwise agreed, the partners who have not wrongfully dissolved the
partnership or the legal representative of the last surviving partner, not insolvent, has the right to wind up
the partnership affairs, provided, however, that any partner, his legal representative or his assignee, upon
cause shown, may obtain winding up by the court.
● Sino ang may karapatan mamahala sa pagtatapos ng partnership? Yung partner na hindi
siya ang dahilan kung bakit na wrongfully dissolved yung partnership— innocent partner,
or yung legal representative ng last surviving partner (assuming namatay na yung iba)
ARTICLE 1837. When dissolution is caused in any way, except in contravention of the partnership agreement, each partner, as
against his co-partners and all persons claiming through them in respect of their interests in the partnership, unless otherwise
agreed, may have the partnership property applied to discharge its liabilities, and the surplus applied to pay in cash the net
amount owing to the respective partners. But if dissolution is caused by expulsion of a partner, bona fide under the partnership
agreement and if the expelled partner is discharged from all partnership liabilities, either by payment or agreement under the
second paragraph of article 1835, he shall receive in cash only the net amount due him from the partnership.
When dissolution is caused in contravention of the partnership agreement the rights of the partners shall be as follows:
(1) Each partner who has not caused dissolution wrongfully shall have:
(a) All the rights specified in the first paragraph of this article, and
(b)The right, as against each partner who has caused the dissolution wrongfully, to damages for breach of the
agreement.
(2) The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name
either by themselves or jointly with others, may do so, during the agreed term for the partnership and for that purpose may
possess the partnership property, provided they secure the payment by bond approved by the court, or pay any partner who has
caused the dissolution wrongfully, the value of his interest in the partnership at the dissolution, less any damages recoverable
under the second paragraph, No. 1 (b) of this article, and in like manner indemnify him against all present or future partnership
liabilities.
(3) A partner who has caused the dissolution wrongfully shall have:
(a) If the business is not continued under the provisions of the second paragraph, No. 2, all the rights of a partner under
the first paragraph, subject to liability for damages in the second paragraph, No. 1 (b), of this article.
(b) If the business is continued under the second paragraph, No. 2, of this article, the right as against his co-partners and
all claiming through them in respect of their interests in the partnership, to have the value of his interest in the
partnership, less any damage caused to his co-partners by the dissolution, ascertained and paid to him in cash, or the
payment secured by a bond approved by the court, and to be released from all existing liabilities of the partnership; but
in ascertaining the value of the partner’s interest the value of the good-will of the business shall not be considered.
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● Dissolution may be caused:

a. although the partnership contract is not violated;
b. because the partnership contract is violated
● Innocent Partners:
○ have better rights than guilty partners;
○ may continue the business (new partnership);
○ rights of the guilty partners are safeguarded by a:
a. bond approved by the court
b. payment of interest at the time of dissolution minus damages
● Right to get cash: in case of non-continuance of the business, the interest of the partner should, if he desires, be given in
CASH
● A guilty partner, in ascertaining the value of his interest is not entitled to a proportionate share of the value of the
GOOD WILL
● Partner wrongfully excluded
○ he should be considered an innocent party;
○ the other partner must account not only for what is due to him at the date of the dissolution but also for
damages or for his share of the profits realized from the appreciation of the partnership business and good
will (provided the excluded partner had not substantially broken the partnership agreement)
● Division of Losses: rule on losses must apply, provided that their real market values at the time of liquidation are the
values considered
ARTICLE 1838. Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties
thereto, the party entitled to rescind is, without prejudice to any other right, entitled:
(1) To a lien on, or right of retention of, the surplus of the partnership property after satisfying the partnership liabilities to third
persons for any sum of money paid by him for the purchase of an interest in the partnership and for any capital or advances
contributed by him;
(2) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any
payments made by him in respect of the partnership liabilities; and
(3) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities of the
partnership.
● if the contract is annulled, the injured partner is entitled to restitution

○ Restitution: monetary payment that is imposed as a penalty to restore a loss.
● Rescission or annulment of partnership contract
○ fraud or misrepresentation violates the consent whereby the contract of partnership had been entered into,
hence, it is really also causante
● Three Rights (without prejudice to the other rights under other legal provisions)
a. right to lien or retention;
b. right of subrogation; and
c. right of indemnification
ARTICLE 1839. In settling accounts between the partners after dissolution, the following rules shall be
observed, subject to any agreement to the contrary:
(1) The assets of the partnership are:
(a) The partnership property,
(b) The contributions of the partners necessary for the payment of all the liabilities specified in
No. 2.
● natitirang property plus yung idadagdag
(2) The liabilities of the partnership shall rank in order of payment, as follows:
● Hierarchy kung paano ibabalik yung natitirang assets ng partnership, sino ang unang makakakuha
kapag magsasara na ang partnership? (General partnership)
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(a) Those owing to creditors other than partners,

● Third party creditors such as banks
(b) Those owing to partners other than for capital and profits,
● Ibabalik kung ano man ang utang ng partnership sa mga partners (loan from the partner)
— umutang yung partnership kay partner
(c) Those owing to partners in respect of capital,
● Kung ano man ang ininvest ni partner nung simula
(d) Those owing to partners in respect of profits.
● Share ng partner sa kita ng partnership
(3) The assets shall be applied in the order of their declaration in No. 1 of this article to the satisfaction of
the liabilities.
(4) The partners shall contribute, as provided by article 1797, the amount necessary to satisfy the
liabilities.
(5) An assignee for the benefit of creditors or any person appointed by the court shall have the right to
enforce the contributions specified in the preceding number.
(6) Any partner or his legal representative shall have the right to enforce the contributions specified in No.
4, to the extent of the amount which he has paid in excess of his share of the liability.
(7) The individual property of a deceased partner shall be liable for the contributions specified in No. 4.
(8) When partnership property and the individual properties of the partners are in possession of a court for
distribution, partnership creditors shall have priority on partnership property and separate creditors on
individual property, saving the rights of lien or secured creditors.
(9) Where a partner has become insolvent or his estate is insolvent, the claims against his separate
property shall rank in the following order:
(a) Those owing to separate creditors;
(b) Those owing to partnership creditors;
(c) Those owing to partners by way of contribution.
ARTICLE 1840. In the following cases creditors of the dissolved partnership are also creditors of the person or partnership
continuing the business:
(1) When any new partner is admitted into an existing partnership, or when any partner retires and assigns (or the representative
of the deceased partner assigns) his rights in partnership property to two or more of the partners, or to one or more of the partners
and one or more third persons, if the business is continued without liquidation of the partnership affairs;
(2) When all but one partner retire and assign (or the representative of a deceased partner assigns) their rights in partnership
property to the remaining partner, who continues the business without liquidation of partnership affairs, either alone or with
others;
(3) When any partner retires or dies and the business of the dissolved partnership is continued as set forth in Nos. 1 and 2 of this
article, with the consent of the retired partners or the representative of the deceased partner, but without any assignment of his
right in partnership property;
(4) When all the partners or their representatives assign their rights in partnership property to one or more third persons who
promise to pay the debts and who continue the business of the dissolved partnership;
(5) When any partner wrongfully causes a dissolution and the remaining partners continue the business under the provisions of
article 1837, second paragraph, No. 2, either alone or with others, and without liquidation of the partnership affairs;
(6) When a partner is expelled and the remaining partners continue the business either alone or with others without liquidation of
the partnership affairs.
The liability of a third person becoming a partner in the partnership continuing the business, under this article, to the creditors of
the dissolved partnership shall be satisfied out of the partnership property only, unless there is a stipulation to the contrary.
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When the business of a partnership after dissolution is continued under any conditions set forth in this article the creditors of the
dissolved partnership, as against the separate creditors of the retiring or deceased partner or the representative of the deceased
partner, have a prior right to any claim of the retired partner or the representative of the deceased partner against the person or
partnership continuing the business, on account of the retired or deceased partner’s interest in the dissolved partnership or on
account of any consideration promised for such interest or for his right in partnership property.
Nothing in this article shall be held to modify any right of creditors to set aside any assignment on the ground of fraud. The use
by the person or partnership continuing the business of the partnership name, or the name of a deceased partner as part thereof,
shall not of itself make the individual property of the deceased partner liable for any debts contracted by such person or
partnership.
● Dissolution of Partnership by Change in Membership
a. a new partner is admitted;
b. when a partner dies, retires, expelled or withdraws;
c. when the other partners assign their rights to the sole remaining partner;
d. when all the partners assign their rights in partnership property to third persons
● Rights of creditors of dissolved partnership which is continued
1. equal rights of dissolved and new partnership creditors
2. liability of persons continuing business (see par. 2 and par. 1, no.4)
3. prior right of dissolved partnership as against purchaser
- without a final settlement with creditors of the partnership
● Why are the old creditors considered creditors of the new firm?
○ the reason for the law (in making creditors of the dissolved firm also creditors of the person or partnership
continuing the business) is for said creditors not to loss their preferential rights as creditors to the partnership
property
ARTICLE 1841. When any partner retires or dies, and the business is continued under any of the conditions set forth in the
preceding article, or in article 1837, second paragraph, No. 2, without any settlement of accounts as between him or his estate and
the person or partnership continuing the business, unless otherwise agreed, he or his legal representative as against such person or
partnership may have the value of his interest at the date of dissolution ascertained, and shall receive as an ordinary creditor an
amount equal to the value of his interest in the dissolved partnership with interest, or, at his option or at the option of his legal
representative, in lieu of interest, the profits attributable to the use of his right in the property of the dissolved partnership;
provided that the creditors of the dissolved partnership as against the separate creditors, or the representative of the retired or
deceased partner, shall have priority on any claim arising under this article, as provided by article 1840, third paragraph.
● General Rule:
○ when a partner retires from the firm he is entitled to the payment of what may be due him after liquidation
○ but no liquidation is needed when there already is a settlement as to what the retiring partner shall receive
ARTICLE 1842. The right to an account of his interest shall accrue to any partner, or his legal
representative as against the winding up partners or the surviving partners or the person or partnership
continuing the business, at the date of dissolution, in the absence of any agreement to the contrary.
● Dapat mag-compute kung magkano ang matatanggap ng bawat isa
● right of the partner to demand an accounting for his interest(the return of his capital and profits)
in the partnership, if there is no agreement to the contrary.
● Rule: the right to demand an accounting of his interest will commence after the dissolution of
partnership.
Limited Partnership
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ARTICLE 1843. A limited partnership is one formed by two or more persons under the provisions of the
following article, having as members one or more general partners and one or more limited partners. The
limited partners as such shall not be bound by the obligations of the partnership.
● if the problem is silent, assumption is General Partnership yon
● Question: Lahat ng kasali sa isang General Partnership ay puro general partner? TRUE
● Question: Lahat ng kasali sa isang Limited Partnership ay puro limited partner? FALSE, dapat
may one or more general partners and one or more limited partners
● A limited partnership is composed of limited partners with at least one general partner.
○ Bakit kailangan may isang general partner? Para yung general partner ang sumagot ng
posibleng liability ng partnership if ever hindi enough yung assets. Kailangan ng kahit
isang tao na may unlimited liability — pwedeng habulin ng creditors ang kanyang
personal assets. Dahil ang limited partners ay may limited liability lang na ang pwedeng
mawala lang sa kanila ay hanggang sa investment nila sa partnership.
ARTICLE 1844. Two or more persons desiring to form a limited partnership shall:
(1) Sign and swear to a certificate, which shall state —
(a) The name of the partnership, adding thereto the word “Limited”;
● ex. ABC Partnership Limited — kailangan may salitang Limited to remind the public na
may certain partners sa partnership na ang classification ay limited partners.
○ Sort of a warning sa publiko na huwag ka mag-expect na lahat ng partners ay
pwede mong habulin to the extent of their personal assets, dahil ang ibang
partners dito ay hanggang investment lang nila ang pwede mong habulin.
(b) The character of the business;
(c) The location of the principal place of business;
(d) The name and place of residence of each member, general and limited partners being
respectively designated;
● kailangan nakalagay bawat member kung siya ba ay general or limited partner
(e) The term for which the partnership is to exist;
● Gaano lang katagal ang partnership
(f) The amount of cash and a description of and the agreed value of the other property contributed
by each limited partner;
(g) The additional contributions, if any, to be made by each limited partner and the times at which
or events on the happening of which they shall be made;
(h) The time, if agreed upon, when the contribution of each limited partner is to be returned;
(i) The share of the profits or the other compensation by way of income which each limited
partner shall receive by reason of his contribution;
● Magkano ang matatanggap ng limited partner in terms of profits
(j) The right, if given, of a limited partner to substitute an assignee as contributor in his place, and
the terms and conditions of the substitution;
(k) The right, if given, of the partners to admit additional limited partners;
(l) The right, if given, of one or more of the limited partners to priority over other limited
partners, as to contributions or as to compensation by way of income, and the nature of such
priority;
● kung sinong limited partner ang mas priority in terms of contributions or income
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(m) The right, if given, of the remaining general partner or partners to continue the business on
the death, retirement, civil interdiction, insanity or insolvency of a general partner; and
(n) The right, if given, of a limited partner to demand and receive property other than cash in
return for his contribution.
(2) File for record the certificate in the Office of the Securities and Exchange Commission.
A limited partnership is formed if there has been substantial compliance in good faith with the foregoing
requirements.
ARTICLE 1845. The contributions of a limited partner may be cash or property, but not services.
● Ang pwedeng maibigay lang ng limited partner ay cash or property. Pwede lang siyang maging
capitalist partner but not industrial partner. Kapag ikaw ay isang industrial partner, hindi
maiiwasan na ikaw ay may importanteng role sa business.
○ Ex. Sa isang restaurant ang industrial partner ay yung chef at minsan nakikilala ang isang
restaurant sa kung sino ang chef niya. Ang chef ang magiging mukha ng business. Ang
mga industrial partner tulad ng isang chef ay hindi pwedeng maging isang limited partner
lamang, kasi iniiwasan nila ang sitwasyon na baka isipin ng publiko na yung industrial
partner na iyon ay isang general partner and within comes the impression na siya ay
magiging liable to the extent of his personal assets. At kapag maganda ang credit standing
ni chef, papautangin ang partnership ng mga creditors dahil akala nila pwede nila itong
mahabol hanggang sa sariling ari-arian nito, when in reality siya ay isang limited partner
lamang. Unfair ito sa publiko kaya bawal maging industrial partner ang isang limited
partner.
ARTICLE 1846. The surname of a limited partner shall not appear in the partnership name unless:
(1) It is also the surname of a general partner, or
(2) Prior to the time when the limited partner became such, the business had been carried on under a name
in which his surname appeared.
A limited partner whose surname appears in a partnership name contrary to the provisions of the first
paragraph is liable as a general partner to partnership creditors who extend credit to the partnership
without actual knowledge that he is not a general partner.
● General rule: Ang mga apelyido ng mga limited partners ay hindi dapat lumabas sa pangalan ng
partnership.
○ Ex. ABC are general partners and DE are limited partners. Hindi dapat itong tawagin na
ABCDE Partnership Limited. Dapat ay ABC Partnership Limited lang, dahil kapag
nilagay ang surname ng limited partner sa pangalan ng partnership, hindi mo pwedeng
sisihin ang publiko kung habulin ka nila to the extent of your personal assets dahil akala
nila general partner ka.
● Maaari din naman na mailagay ang surname mo sa pangalan ng partnership (kung may
ka-apelyido kang general partner)
○ Ex. Acosta Bautista Cruz Partnership Limited. Nagkataon na ang pangalan ng limited
partner ay M. Cruz. Pwedeng maging ganyan ang pangalan ng partnership kung mayroon
pang isang partner na Cruz din ang apelyido — S. Cruz na general partner. In the future,
kapag hinabol si M.Cruz ng creditors to the extent of his personal assets dahil ang
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assumption nila ay siya yung general partner, pwede niyang sabihin na hindi siya ang
Cruz na general partner at hindi dapat siya habulin hanggang sa personal assets niya.
● Business had been carried on under a name in which his surname appeared, bago pa man
pumasok yung limited partner na may kaparehas na surname.
○ Ex. SGV Partnership. Bagong pasok si J.Velayo sa partnership at siya ay isang limited
partner. Kung habulin man si J. Velayo to the extent of his personal assets, he could
always argue na bago pa lang siya pumasok ay ganoon na ang pangalan ng partnership.
● Question: Namatay na yung tunay na SGV pero bakit parang hindi na dissolve ang partnership?
General rule: Kailangan tanggalin yung pangalan ng namayapang partner para hindi ma-deceive
yung public at creditors na buhay pa siya. Hindi iniba ang pangalan dahil gusto nilang i-maintain
yung good will ng business at dahil hindi naman mangyayari sa SGV na isipin ng publiko na
buhay pa sila at magkamali yung creditors kung papautangin yung entity dahil it is of common
public knowledge na silang tatlo ay namatay na.
ARTICLE 1847. If the certificate contains a false statement, one who suffers loss by reliance on such
statement may hold liable any party to the certificate who knew the statement to be false:
(1) At the time he signed the certificate, or
(2) Subsequently, but within a sufficient time before the statement was relied upon to enable him to cancel
or amend the certificate, or to file a petition for its cancellation or amendment as provided in article 1865.
● One who suffers loss by reliance sa false statement, pwede niyang habulin kung sino man ang
nakakaalam na mali ang nakalagay sa certificate
ARTICLE 1848. A limited partner shall not become liable as a general partner unless, in addition to the
exercise of his rights and powers as a limited partner, he takes part in the control of the business.
● Hindi magiging liable as a general partner ang isang limited partner unless he takes part in the
control. Bawal para sa isang limited partner na maging isang managing partner, para ma-prevent
ang misconception na dahil siya ay isang managing partner, baka isipin ng publiko na siya ay
isang general partner.
ARTICLE 1849. After the formation of a limited partnership, additional limited partners may be
admitted upon filing an amendment to the original certificate in accordance with the requirements of
article 1865.
● Pwedeng dagdagan pa ng mga limited partners even after the formation of a limited partnership,
provided that there is proper amendment to the certificate. (failure to amend the certificate does
not necessarily mean the dissolution of the limited partnership)
ARTICLE 1850. A general partner shall have all the rights and powers and be subject to all the
restrictions and liabilities of a partner in a partnership without limited partners. However, without the
written consent or ratification of the specific act by all the limited partners, a general partner or all of the
general partners have no authority to:
● Kung ano ang karapatan o kapangyarihan ng isang general partner sa isang general partnership,
ganoon din ang kanyang karapatan sa isang limited partnership. However, kung may mga certains
actions na kailangan kunin muna ang consent ng lahat ng limited partner.
(1) Do any act in contravention of the certificate;
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(2) Do any act which would make it impossible to carry on the ordinary business of the partnership;
(3) Confess a judgment against the partnership;
● Aamin sa isang bagay na pwedeng maka-affect sa partnership
(4) Possess partnership property, or assign their rights in specific partnership property, for other than a
partnership purpose;
● Kapag lumalayo sa napag-usapan sa Articles of Partnership tungkol sa property or rights,
kailangan kunin ang consent ng limited partners tungkol dito
(5) Admit a person as a general partner;
● Kailangan kunin ang consent ng lahat kapag mag-aadmit ng ibang partner
(6) Admit a person as a limited partner, unless the right so to do is given in the certificate;
(7) Continue the business with partnership property on the death, retirement, insanity, civil interdiction or
insolvency of a general partner, unless the right to do so is given in the certificate.
● Rights, powers and liabilities of a general partner

○ right of control/unlimited personal liability
○ acts of administration/acts of strict dominion
○ other limitations:
■ no power to bind the limited partners beyond the latter’s investment
■ no power to act for the firm beyond the purpose and scope of the partnership
■ no authority to change the nature of the business without the consent of the
limited partners
● Under the acts enumerated (under Art. 1850), the general partners (even if unanimous) must still
get the written consent of all the limited partners.
● If a general partner in a limited partnership goes abroad, his capacity to bind the firm is
governed by the law of the place where the limited partnership was formed.
ARTICLE 1851. A limited partner shall have the same rights as a general partner to:
(1) Have the partnership books kept at the principal place of business of the partnership, and at a
reasonable hour to inspect and copy any of them;
● Maaaring i-require ng mga limited partner na ang mga partnership books or accounting books na
nasa place ng business
● Pwede rin nila itong i-check or kopyahin at a reasonable hour
(2) Have on demand true and full information of all things affecting the partnership, and a formal account
of partnership affairs whenever circumstances render it just and reasonable; and
(3) Have dissolution and winding up by decree of court.
A limited partner shall have the right to receive a share of the profits or other compensation by way of
income, and to the return of his contribution as provided in articles 1856 and 1857.
● Kahit limited partner ka lang dapat may share ka pa rin sa profits or other compensations
ARTICLE 1852. Without prejudice to the provisions of article 1848, a person who has contributed to the capital of a business
conducted by a person or partnership erroneously believing that he has become a limited partner in a limited partnership, is not,
by reason of his exercise of the rights of a limited partner, a general partner with the person or in the partnership carrying on the
business, or bound by the obligations of such person or partnership; provided that on ascertaining the mistake he promptly
renounces his interest in the profits of the business, or other compensation by way of income.
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● a contributor who erroneously believes he has become a limited partner and thereupon exercises the rights of a limited
partner, he should not be considered as a general partner
○ Inakala niya na siya ay isang limited partner at umakto siya bilang limited partner kung saan wala siyang
kontrol sa management, pero later on, nalaman niyang hindi pala talaga siya limited partner kaya tinalikuran
niya yung kita or other compensations na matatanggap niya
● however, he can be held liable as a general partner:
○ unless in ascertaining the mistake, he promptly renounces his interest in the profits of the business or other
compensation by way of income;
○ unless, even if no such renouncing is made, partnership creditors are not prejudiced
ARTICLE 1853. A person may be a general partner and a limited partner in the same partnership at the
same time, provided that this fact shall be stated in the certificate provided for in article 1844.
A person who is a general, and also at the same time a limited partner, shall have all the rights and powers
and be subject to all the restrictions of a general partner; except that, in respect to his contribution, he
shall have the rights against the other members which he would have had if he were not also a general
partner.
● Question: A capitalist partner can be an industrial partner at the same time. TRUE —
capitalist-industrial partner
● A person can be a general partner and a limited partner at the same time. TRUE — general
limited partnership
○ The person is considered a general partner as to third persons or creditors. But he is
considered a limited partner as to the partners. Kung sakaling malugi ang partnership, the
third persons creditors can go after the personal assets of that partner dahil ang trato nila
sa kanya ay general partner. But kung magkano man ang inabono niya mula sa kanyang
personal assets to pay the liabilities of the partnership, pwede niyang ihingi ng
reimbursement sa iba pang general partner. Dahil yung inabonohan niya ay pwedeng
ipa-reimburse sa ibang general partner, in essence parang wala siyang inabonohan,
parang hindi siya kumuha ng pambayad sa personal assets niya — in essence limited
partner pa rin siya.
ARTICLE 1854. A limited partner also may loan money to and transact other business with the partnership, and, unless he is also
a general partner, receive on account of resulting claims against the partnership, with general creditors, a pro rata share of the
assets. No limited partner shall in respect to any such claim:
(1) Receive or hold as collateral security any partnership property, or
(2) Receive from a general partner or the partnership any payment, conveyance, or release from liability, if at the time the assets
of the partnership are not sufficient to discharge partnership liabilities to persons not claiming as general or limited partners.
The receiving of collateral security, or payment, conveyance, or release in violation of the foregoing provisions is a fraud on the
creditors of the partnership.
● Right of a limited partner to lend money and transact other business with the firm
○ the parties are always given preferential rights insofar as the firm’s assets are concerned
○ while a limited partner, in the case of claims referred to in the article, is prohibited to receive or hold as
collateral security any partnership property, still he is not prohibited to purchase partnership assets which are
used to satisfy partnership obligations towards third parties
● Allowable transactions
○ granting loans to the partnership;
○ transacting other business with it; and
○ receiving a pro rata share of the partnership assets with general creditors if he is not also a general partner
● Prohibited transactions
○ receiving or holding collateral security any partnership property
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○ receiving any payment, conveyance, or release from liability if it will prejudice the right of third persons
ARTICLE 1855. Where there are several limited partners the members may agree that one or more of the
limited partners shall have a priority over other limited partners as to the return of their contributions, as
to their compensation by way of income, or as to any other matter. If such an agreement is made it shall
be stated in the certificate, and in the absence of such a statement all the limited partners shall stand upon
equal footing.
● May hierarchy over limited partners. Preference involves return of contribution, compensation by
way of income or other matters.
● But pag walang nakasulat sa certificate, they will be treated with equal footing.
ARTICLE 1856. A limited partner may receive from the partnership the share of the profits or the compensation by way of
income stipulated for in the certificate; provided, that after such payment is made, whether from the property of the partnership or
that of a general partner, the partnership assets are in excess of all liabilities of the partnership except liabilities to limited partners
on account of their contributions and to general partners.
ARTICLE 1857. A limited partner shall not receive from a general partner or out of partnership property any part of his
contributions until:
(1) All liabilities of the partnership, except liabilities to general partners and to limited partners on account of their contributions,
have been paid or there remains property of the partnership sufficient to pay them;
(2) The consent of all members is had, unless the return of the contribution may be rightfully demanded under the provisions of
the second paragraph; and
(3) The certificate is cancelled or so amended as to set forth the withdrawal or reduction.
Subject to the provisions of the first paragraph, a limited partner may rightfully demand the return of his contribution:
(1) On the dissolution of a partnership, or
(2) When the date specified in the certificate for its return has arrived, or
(3) After he has given six months’ notice in writing to all other members, if no time is specified in the certificate, either for the
return of the contribution or for the dissolution of the partnership.
In the absence of any statement in the certificate to the contrary or the consent of all members, a limited partner, irrespective of
the nature of his contribution, has only the right to demand and receive cash in return for his contribution.
A limited partner may have the partnership dissolved and its affairs wound up when:
(1) He rightfully but unsuccessfully demands the return of his contribution, or
(2) The other liabilities of the partnership have not been paid, or the partnership property is insufficient for their payment as
required by the first paragraph, No. 1, and the limited partner would otherwise be entitled to the return of his contribution.
● Requisites for return of contribution of limited partner
○ all liabilities of the partnership have been paid or if they have not yet been paid, the assets of the partnership
are sufficient to pay such liabilities
○ the consent of all the members has been obtained except when the return may be rightfully demanded; and
○ the certificate is cancelled or so amended as to set forth the withdrawal or reduction of the contribution
ARTICLE 1858. A limited partner is liable to the partnership:

(1) For the difference between his contribution as actually made and that stated in the certificate as having
been made, and
(2) For any unpaid contribution which he agreed in the certificate to make in the future at the time and on
the conditions stated in the certificate.
A limited partner holds as trustee for the partnership:
(1) Specific property stated in the certificate as contributed by him, but which was not contributed or
which has been wrongfully returned, and
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(2) Money or other property wrongfully paid or conveyed to him on account of his contribution.
The liabilities of a limited partner as set forth in this article can be waived or compromised only by the
consent of all members; but a waiver or compromise shall not affect the right of a creditor of a partnership
who extended credit or whose claim arose after the filing and before a cancellation or amendment of the
certificate, to enforce such liabilities.
When a contributor has rightfully received the return in whole or in part of the capital of his contribution,
he is nevertheless liable to the partnership for any sum, not in excess of such return with interest,
necessary to discharge its liabilities to all creditors who extended credit or whose claims arose before such
return.
ARTICLE 1859. A limited partner’s interest is assignable.

A substituted limited partner is a person admitted to all the rights of a limited partner who has died or has
assigned his interest in a partnership.
An assignee, who does not become a substituted limited partner, has no right to require any information or
account of the partnership transactions or to inspect the partnership books; he is only entitled to receive
the share of the profits or other compensation by way of income, or the return of his contribution, to
which his assignor would otherwise be entitled.
An assignee shall have the right to become a substituted limited partner if all the members consent thereto
or if the assignor, being thereunto empowered by the certificate, gives the assignee that right.
An assignee becomes a substituted limited partner when the certificate is appropriately amended in
accordance with article 1865.
The substituted limited partner has all the rights and powers, and is subject to all the restrictions and
liabilities of his assignor, except those liabilities of which he was ignorant at the time he became a limited
partner and which could not be ascertained from the certificate.
The substitution of the assignee as a limited partner does not release the assignor from liability to the
partnership under articles 1847 and 1858.
● Pwede mong ilipat or i-assign yung interest ng isang limited partner, assignee is called substituted
limited partner. Siya na ang kukuha ng mga karapatan ng limited partner.
● Kapag pinayagan yung assignee ng all partners, he shall be considered a substituted limited
partner and is subject sa lahat ng liabilities and restrictions ng kanyang assignor, yung limited
partner na naglipat ng interest, except sa liabilities na hindi niya alam at the time he became a
limited partner and which could not be ascertained from the certificate.
● However, kapag hindi niya nakuha ang consent ng lahat, he does not become a substituted limited
partner and may karapatan pa rin siya makuha ang share niya sa kita and other compensation or
return of contribution pero wala siyang karapatan malaman ang information or transactions ng
partnership pati na rin makita ang accounting books ng partnership.
ARTICLE 1860. The retirement, death, insolvency, insanity or civil interdiction of a general partner
dissolves the partnership, unless the business is continued by the remaining general partners:
(1) Under a right so to do stated in the certificate, or
(2) With the consent of all members.
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ARTICLE 1861. On the death of a limited partner his executor or administrator shall have all the rights
of a limited partner for the purpose of settling his estate, and such power as the deceased had to constitute
his assignee a substituted limited partner.
The estate of a deceased limited partner shall be liable for all his liabilities as a limited partner.
● The executor or administrator shall have all the rights of a limited partner para sa pag-settle ng
kanyang estate at may karapatan siyang i-constitute yung assignee ni decedent limited partner as
substituted limited partner (only if the deceased partner was empowered to do so in the
certificate)
ARTICLE 1862. On due application to a court of competent jurisdiction by any creditor of a limited partner, the court may charge
the interest of the indebted limited partner with payment of the unsatisfied amount of such claim, and may appoint a receiver, and
make all other orders, directions, and inquiries which the circumstances of the case may require.
The interest may be redeemed with the separate property of any general partner, but may not be redeemed with partnership
property.
The remedies conferred by the first paragraph shall not be deemed exclusive of others which may exist.
Nothing in this Chapter shall be held to deprive a limited partner of his statutory exemption.
● Rights of Creditors of Limited Partners
○ The creditor may apply to the proper court for an order charging the limited partner’s interest in the
partnership for the payment of any unsatisfied amount of his claim.
○ The court may appoint a receiver, and make all other orders, directions and inquiries which the circumstances
of the case may require
Reference:https://www.scribd.com/document/401812671/Article-1860-1867-Partnership
ARTICLE 1863. In settling accounts after dissolution the liabilities of the partnership shall be entitled to
payment in the following order:
● Hierarchy o pagkakasunod-sunod ng dapat bayaran kapag nag-liquidation na ang isang limited
partnership
(1) Those to creditors, in the order of priority as provided by law, except those to limited partners on
account of their contributions, and to general partners;
● Utang to outside creditors — Accounts Payable
● And utang sa limited partners — Limited Partner Loans
(2) Those to limited partners in respect to their share of the profits and other compensation by way of
income on their contributions;
● Share ng limited partners sa profits and other compensations
(3) Those to limited partners in respect to the capital of their contributions;
● Limited partners in respect of their capital or investment
(4) Those to general partners other than for capital and profits;
● Utang sa general partners —- General Partner Loans
(5) Those to general partners in respect to profits;
● Share ng general partner sa profits
(6) Those to general partners in respect to capital.
● General partners in respect of their capital or investment
Subject to any statement in the certificate or to subsequent agreement, limited partners share in the
partnership assets in respect to their claims for capital, and in respect to their claims for profits or for
compensation by way of income on their contribution respectively, in proportion to the respective
amounts of such claims.
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Hierarchy kung sino ang dapat unang bayaran:

Liquidation of a General Partnership Liquidation of a Limited Partnership
1. Utang sa third person creditors — 1. Utang sa outside credits and utang sa

Accounts Payable limited partners — Accounts Payable +
Loan payable to Limited Partners
2. Utang sa general partners — General 2. Limited partners in respect to their share

Partner Loan of the profits and other compensation by
way of income on their contributions
3. General partners in respect of their capital 3. Limited partners in respect to the capital
4. General partners in respect of profits 4. Utang sa general partners
5. General partners in respect of profits
6. General partners in respect of their capital
Questions:
● In the liquidation of a general partnership, which among the following is considered as the top
priority? Accounts Payable to outside creditors
● In the liquidation of a general partnership, which among the following is considered as the least
priority? General partners in respect of profits
● In the liquidation of a limited partnership, which among the following is considered as the top
priority? Accounts payable to outside creditors and loan payable to limited partners
● In the liquidation of a limited partnership, which among the following is considered as the least
priority? General partners in respect of their capital
● In the liquidation of a limited partnership, who among is the more priority limited partners in
respect of profits or limited partners in respect of capital? Limited partners in respect of profits
Similarities:
● In both sides, ang utang sa third person creditors ay laging nasa taas, sila ang una.
● Sa limited partnership, ka-level ng outside creditors ang loans sa limited partners.
● Sa limited partnership, mas priority ang limited partners sa balikan o bayaran kesa sa general
partner. (Dahil minsan ang trato sa limited partners ay parang silang mga creditor)
● In both sides, mas prinopriotize ang mga loans kesa sa capital or profits.
Differences:
● Sa general partnership, ibabalik muna ang capital bago ang profits. (Clue: Capital before Profits,
C before P — alphabetical)
● Sa limited partnership, una muna ang profits bago ang capital. (Clue: kabaligtaran ng general
partner, P before C)
ARTICLE 1864. The certificate shall be cancelled when the partnership is dissolved or all limited partners cease to be such.
A certificate shall be amended when:
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(1) There is a change in the name of the partnership or in the amount or character of the contribution of any limited partner;
(2) A person is substituted as a limited partner;
(3) An additional limited partner is admitted;
(4) A person is admitted as a general partner;
(5) A general partner retires, dies, becomes insolvent or insane, or is sentenced to civil interdiction and the business is continued
under article 1860;
(6) There is a change in the character of the business of the partnership; (7) There is a false or erroneous statement in the
certificate;
(8) There is a change in the time as stated in the certificate for the dissolution of the partnership or for the return of a
contribution;
(9) A time is fixed for the dissolution of the partnership, or the return of a contribution, no time having been specified in the
certificate, or
(10) The members desire to make a change in any other statement in the certificate in order that it shall accurately represent the
agreement among them.
ARTICLE 1865. The writing to amend a certificate shall:

(1) Conform to the requirements of article 1844 as far as necessary to set forth clearly the change in the certificate which it is
desired to make; and
(2) Be signed and sworn to by all members, and an amendment substituting a limited partner or adding a limited or general
partner shall be signed also by the member to be substituted or added, and when a limited partner is to be substituted, the
amendment shall also be signed by the assigning limited partner.
The writing to cancel a certificate shall be signed by all members.
A person desiring the cancellation or amendment of a certificate, if any person designated in the first and second paragraphs as a
person who must execute the writing refuses to do so, may petition the court to order a cancellation or amendment thereof.
If the court finds that the petitioner has a right to have the writing executed by a person who refuses to do so, it shall order the
Office of the Securities and Exchange Commission where the certificate is recorded to record the cancellation or amendment of
the certificate; and when the certificate is to be amended, the court shall also cause to be filed for record in said office a certified
copy of its decree setting forth the amendment.
A certificate is amended or cancelled when there is filed for record in the Office of the Securities and Exchange Commission,
where the certificate is recorded:
(1) A writing in accordance with the provisions of the first or second paragraph, or
(2) A certified copy of the order of court in accordance with the provisions of the fourth paragraph;
(3) After the certificate is duly amended in accordance with this article, the amended certificate shall thereafter be for all
purposes the certificate provided for in this Chapter.
● Requirements to amend a certificate:
1. must be in writing
2. signed and sworn to by all members including the new members, and the assigning limited partner in case of
substitution or addition of a limited or general partner
3. must be filed for record in the SEC
ARTICLE 1866. A contributor, unless he is a general partner, is not a proper party to proceedings by or against a partnership,
except where the object is to enforce a limited partner’s right against or liability to the partnership.
ARTICLE 1867. A limited partnership formed under the law prior to the effectivity of this Code, may become a limited
partnership under this Chapter by complying with the provisions of article 1844, provided the certificate sets forth:
(1) The amount of the original contribution of each limited partner, and the time when the contribution was made; and
(2) That the property of the partnership exceeds the amount sufficient to discharge its liabilities to persons not claiming as general
or limited partners by an amount greater than the sum of the contributions of its limited partners.
A limited partnership formed under the law prior to the effectivity of this Code, until or unless it becomes a limited partnership
under this Chapter, shall continue to be governed by the provisions of the old law.
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Law on Corporations
Republic Act No. 11232: An Act Providing for the Revised Corporation Code of the Philippines
revised version ng Batas Pambansa Bilang 68
TITLE I: GENERAL PROVISIONS
Section 1. Title of the Code. This Code shall be known as the "Revised Corporation Code of the
Philippines".
Section 2. Corporation Defined. - 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.
● Artificial being: to differentiate from a natural being. Ito ay ginawa ng batas (created by
operation of law) at ito ay may separate juridical entity — kaya niyang mag-acquire ng assets
under its own name.
● Created by operation of law: Anong ahensya ng gobyerno ang nangangasiwa sa mga
corporations sa Pilipinas? SECURITIES AND EXCHANGE COMMISSIONS
● Right of succession: Hindi gaano naaapektuhan ang isang corporation kahit mayroon na
mangyaring masama to its stockholders. Kapag namatay ang isang stockholders, napupunta ang
kanyang shares of stock sa kanyang heir o tagapagmana. Kapag may gusto naman umalis,
ibebenta niya lang ang kanyang stocks at mapupunta sa ibang owner. Hindi na-ddissolve ang
isang corporation just because of other factors na nangyayari sa mga stockholders. Unlike sa
partnership na kapag may namatay o umalis na partner, na-dissolve ang partnership.
Doctrine of Piercing the Veil of Corporate Fiction: Being a mere creature of the law, a corporation may
be allowed to exist solely for lawful purpose But where the fiction of corporate entity is being used as a
cloak or cover for fraud or illegality, this fiction will be disregarded and the individuals composing it will
be treated as identical.
● General rule: a corporation is a distinct and separate entity from its stockholders.
● Exception to the rule: In some instances, the corporate and the stockholders will be treated as
one and the same, if that corporation is being used as a cloak or cover for fraud or illegality.
○ Kapag napatunayan ng korte na ginawa lang ang isang corporation para makapangloko o
para sa illegal na bagay, i-ddisregard ang corporation fiction concept — na ang
corporation at stockholders ay iiba.
○ May mga tao na gustong i-take advantage ang Business Entity Theory. Instead na bumuo
ng isang Sole proprietorship or Partnership, ang itatayo nilang entity ay isang
Corporation upang makapangloko ng tao, as a separate entity, yung corporation ang
gagamitin nila to transact sa mga kalokohan nila.
■ Ex. Instead of borrowing money from the bank while using their own name,
gagamitin nila ang pangalan ng corporation upang umutang at kapag nakuha na
nila yung pera ay gagamitin nila ito sa maling paraan. In the end, malulugi ang
corporation at kapag naghabol ang banko sa corporation, under the concept of
Mariel Enriquez & Winona Zuniga

Business Entity Theory of concept of corporate fiction, hindi pwedeng habulin ng

bangko ang mga shareholders dahil they are two different entities. In effect,
nakuha ng mga loko-lokong shareholder yung pera pero hindi sila pwedeng
habulin up to their own financial capacity (because of Business Entity Principle
and of Limited Liability.)
■ Kapag napatunayan sa korte na ginawang lamang ang corporation para
makapangloko, the court would not hesitate to pierce the veil (belo o ang takip
ng corporation) na naghihiwalay sa corporation and sa mga stockholders. Kapag
napunit na ang veil, wala nang maghihiwalay sa kanilang dalawa, kaya i-ttreat na
ang corporation and its shareholders as one and the same. Ang effect nito ay
ang utang ng corporation ay maaari nang singilin sa mga shareholders.
● Kailangan munang ma-prove na ginawa ang corporation upang manloko.
Distinctions of a Partnership from a Corporation

1. Manner of creation: A corporation is created by law, but a partnership can be created by mere
agreement only. Hindi pwedeng orally lang ang pagbuo ng corporation, kailangan mag-apply sa
SEC.
2. Number of incorporators: In a partnership, there should be at least TWO incorporators, but in a
corporation, there should be at least FIVE.
3. Commencement of juridical personality (kelan nagsisimula ang buhay): Partnership
commences to acquire juridical personality from the moment of the execution of the partnership
contract— from the time na ginawang ang partnership contract. While the life of a corporation
starts from the time of issuance of the Certificate of Incorporation. Pag nag-apply sa SEC, the
application form is called Articles of Incorporation, kapag na-approve ka ang ibibigay sayo ay
Certificate of Incorporation (ito ang parang birth certificate ng Corporation) at ang nakalagay na
date dito, ang siyang date kung kelan nagstart mag-exist ang corporation.
4. Powers: A partnership may exercise any power authorized by the partnership. A corporation can
also exercise the powers granted to it by law.
5. Management (Sino ang namamahala): Sa Partnership ang namamahala ay ang managing
partner, pero kung walang na-appoint, every partner is an agent of the partnership. Sa
Corporation, ang nagpapatakbo naman ay ang Board of Directors or Board of Trustees.
6. Effect of Mismanagement: Kapag nagkaroon ng problema, pwedeng idemanda ang co-partner.
Samantalang sa corporation, pwede rin idemanda ang member ng Board of Directors or Board of
Trustees.
7. Right of Succession: Walang ganito sa partnership dahil dissolved ang partnership kapag may
namatay o umalis. Hindi pwedeng kunin ng isang anak na namatay na partner ang position ng
kanyang ama, unless makuha ang consent ng lahat ng partners. Sa corporation naman, kapag
namatay ka yung anak mo ang magiging stockholder ng company.
8. Extent of Liability to Third Persons: In a partnership, kapag general partner ka, unlimited liability
mo to third persons and pag limited partner ka, limited liability. While in a corporation, ang mga
stockholders ay mayroong limited liability lamang.

9. Transferability of Interest: Sa partnership, hindi mo pwedeng basta-basta ilipat ang share mo,
dapat yung paglilipatan mo ay may consent ng ibang partners (delectus personae). Samantalang
sa corporation, walang pakialam ang ibang shareholders kung ibebenta mo ang shares mo, hindi
mo kailangan kuhanin ang consent ng ibang shareholders.
10. Term of Existence: A partnership can be established for any period of time, while a corporation
has a perpetual existence, unlimited na ang buhay nito.
11. Firm Name: Kapag limited ang partnership kailangan may “Ltd.” Kapag gumawa ang name ang
isang corporation, it should adopt any firm name na hindi identical or katulad ng iba pang
corporation.
12. Dissolution: Na-ddisolve ang isang partnership anytime as long as gusto na ng partners
i-dissolve. While a corporation will be dissolved upon approval by the SEC, kapag nag-apply ng
dissolution.
13. Laws that will govern: Ang nag-ggovern na batas sa partnership ay ang New Civil Code at sa
corporation naman ay ang Revised Corporation Code.
Similarities of Partnership and Corporation

1. Both have Juridical Personality na distinct and separate mula sa mga individuals na bumubuo
nito (exception to the rule sa Corporation may Doctrine of Piercing the Veil of Corporation
Fiction)
2. A partnership and a corporation can only act through its agents. Partnership can act through the
partners. While a corporation can act through its Board of Directors.
3. Both are composed of groups of individuals.
4. Parehas na pinaghahati-hatian ng mga members ang kita
5. Nabubuo lamang ang partnership at corporation kapag may batas na nag-aauthroize ng kanyang
organization
6. Parehas silang pinapatawan ng tax.
Advantages of Corporation
1. Has a legal capacity to act
2. Has continuity of existence (hindi basta-basta nagsasarado o na-ddissolve)
3. Its credit standing is strengthen dahil hindi nga basta basta na-ddissolve
○ Kung ikaw ay isang bank at ang umuutang ay isang corporation, mas tiwala ka compared
sa isang partnership na kapag may umalis na partner ay dissolved.
4. Management is more centralized.
○ Unlike sa partnership na pwedeng lahat ng partners ay managing partner, sa corporation
pili lang ang pwedeng magpatakbo o mamahala — Board of Directors.
5. Its creation, organization, management and dissolution is standardized (hindi magulo)
6. Has limited liability
7. Shares of stock can be transferred without consent of others
Disadvantages of Corporation
1. Formation of a corporation is complicated. Kailangan sundin ang rules ng SEC.

2. High cost of formation and operations. Malaking capital ang kailangan upang makabuo ng isang
corporation
3. Stockholders having a limited liability affects the credit standing
4. Walang personal element when it comes to transferability of shares. Hindi natatanong ang ibang
shareholders kung kanino dapat ibenta ang shares.
5. Hostile takeover — hindi napapansin ng corporation na dahan-dahan na silang napapasok ng
kabilang company (dahil hindi kontralado kung kanino pwedeng ibenta ang shares)
6. Subject to strict government intervention
7. Shareholders have little voice in the management of the firm. Walang boses ang mga minority
shareholders.
Section 3. Classes of Corporations. - Corporations formed or organized under this Code may be stock or
nonstock corporations. Stock corporations are those which have capital stock divided into shares and are
authorized to distribute to the holders of such shares, dividends, or allotments of the surplus profits on
the basis of the shares held. All other corporations are nonstock corporations.
● Stock Corporation: ginawa para kumita
○ Stockholders - tawag sa mga kasali sa isang stock corporation
● Nonstock Corporation: ginawa for religious, social, literary, scientific, civic and political
organizations
○ Members - tawag sa mga kasali sa nonstock corporation
Section 4. Corporations Create by Special Laws or Charters. - Corporations created by special laws or
charters shall be governed primarily by the provisions of the special law or charter creating them or
applicable to them, supplemented by the provisions of this Code, insofar as they are applicable.
● Government owned and controlled corporations - nabuo dahil sa mga special laws or charters.
○ Ex. National Food Authority, National Electrification Administration, Manila Water Works
and Sewage System, Local Water Utilities Administration, Philippine National Railway,
Light Railway Transit Authority
Different types/ classifications of Corporations

1. As to the number of persons who compose them
a. Corporation aggregate: legal entity formed two or more persons for a lawful purpose
and whose membership consists of at least two persons
b. Corporation sole or a religious corporation which consists of one member or corporator
only and his successor, such as a bishop. (Ex. Roman Catholic Church: Pope ang head)
2. As to whether they are for a religious purpose or not
a. Ecclesiastical: incorporated for the purpose of establishing any church organization for
the purpose of teaching and spreading their religious beliefs and principles. Ginawa for
religious purpose
b. Lay Corporation: One organized for a purpose other than for religion. It may either be
eleemosynary or civil. It is also composed of laymen, and existing for secular or business
purposes.

3. As to whether they are for charitable purposes or not:

a. Eleemosynary Corporation: Established for charitable purposes
b. Civil Corporation: Established for business or profit
4. As to state or country under or by whose laws they have been created:
a. Domestic Corporation: incorporated under the laws of the Philippines
b. Foreign Corporation: formed, organized, or existing under any laws other than those of
the Philippines
5. As to their legal right to corporate existence
a. De Jure Corporation: existing in fact and law; Complied with all the rules of SEC
b. De Facto Corporation: existing in fact but not in law; hindi kumpleto ang requirements
ng batas
6. As to whether they are open to the public or not:
a. Closed Corporation: one which is limited to selected persons or members of a family
b. Open Corporation: one which is open to any person who may wish to become a
stockholder or a member thereto (kahit sino ay pwedeng bumili ng shares o pwedeng
maging member)
7. As to their relation to another corporation:
a. Parent or holding Corporation: one which is so related to another corporation that it has
the power either, directly or indirectly to, elect the majority of the directors of such other
corporation (may kapangyarihan kontrolin ang activities ng isa pang corporation)
b. Subsidiary Corporation: one who is so related to another corporation that the majority
of its directors can be elected either, directly or indirectly, by such other corporations
(kinokontrol ng parent corporation)
8. As to whether they are corporations in a true sense or only in a limited sense:
a. True Corporation: one which exists by statutory authority
b. Quasi Public Corporation: one which exists without formal legislative grant. It is an
exception to the general rule that a corporation can exist only by authority of law (these
are now those which have accepted from the state the grant of a franchise involving the
rendition or performance of some public duty — public utility companies. Private talaga
siya pero ang nirerender niyang service ay for the public. Ex. Electric companies, water
companies, telephone companies, transportation companies)
i. Corporation by prescription: one which has exercised corporate powers for an
indefinite period without interference on the part of the sovereign power and
which by fiction of law, is given the status of a corporation (Ex. Roman Catholic
Church has been recognized as a corporation by prescription having acted as
such and assumed corporate powers for a long period of time).
ii. Corporation by estoppel: one which in reality is not a corporation, either de jure
or de facto, because it is so defectively formed, but is considered a corporation in
relation to those only who, by reason of their acts or admission, are precluded
from asserting that it is not a corporation.
9. As to whether they are for public (government) or private purpose:

a. Public Corporation: those formed or organized for the government or for a portion of the
state (Ex. Province, city, municipality, barangay)
b. Private Corporation: those formed for some private purpose, benefit, or end; it may be
either a stock or non-stock corporation, government-owned or -controlled corporation or
quasi-public corporation (Ex. San Miguel Corporation, Ayala, Globe, Smart)
Section 5. Corporators and Incorporators, Stockholders and Members. - Corporators are those who
compose a corporation, whether as stockholders or shareholders in a stock corporation or as members
in a nonstock corporation. Incorporators are those stockholders or members mentioned in the articles of
incorporation as originally forming and composing the corporation and who are signatories thereof.
● Corporators: lahat ng kasali sa isang corporation
● Incorporators: corporator na ikaw ang nagpasimuno sa pagbuo ng entity
● Stockholders or members: after matayo ang corporation, tyaka ka lang bumili o pumasok
● Promoter: persons who cause to bring about the formation and organization of a corporation.
They lay the groundwork for corporate existence
● Subscriber: mga bibili ng shares, persons who have agreed to take and to pay for the original
unissued shares
● Underwiter: investment bankers who has agreed to buy at stated terms an entire issue of
securities, has guaranteed the sale of an issue and has offered for sale the stock he has
purchased from a controlling stockholder
Section 6. Classification of Shares. - The classification of shares, their corresponding rights, priviledges,
restrictions, and their stated par value, if any, must be indicated in the articles of incorporations. Each
share shall be equal in all respects to every other share, except as otherwise provided in the articles of
incorporation. Each share shall be equal in all respects to every other share, except as otherwise
provided in the articles of incorporation and in the certificate of stock.
● Two kinds of shares: common stock or ordinary stock, preferred stock or preference share
○ Preferred shares: may mga additional rights and privileges siya na hindi na-eenjoy ng
ordinary shares. It is given preference in terms of distribution of dividends and to the
distribution of assets just in case of liquidation of the corporation
○ Common share: usual share
The share stock corporations may be divided into classes or series of shares, or both. No share may be
deprived of voting rights except those classified and issued as "preferred" or "redeemable" shares,
unless otherwise provided in this Code: Provided, That there shall be a class or series of shares with
complete voting rights.
● Advantage of common share: gives the ability to vote.
● Hindi mo pwedeng i-deprive of voting rights ang common shares, pero pwede sa preferred
shares
● Not in all cases na hindi kayo makakaboto kapag nonvoting shares ang hawak niyo, may mga
important cases na even the nonvoting shares are entitled to vote. Kapag ang mga ito ang
pagbobotohan, kahit ang mga non voting shares ay pwedeng bumoto.

Holders of nonvoting shares shall nevertheless be entitled to vote on the following matters;
(a) Amendment of the articles of incorporation;
(b) Adoption and amendment of bylaws;
(c) Sale, lease, echange, mortgage, pledge, or other disposition of all or substantially all of the corporate
property;
(d) Incurring, creating, or increasing bonded indebtedness;
(e) Increase or decrease of authorized capital stock;
(f) Merger or consolidation of the corporation with another corporation or other corporations;
(g) Investment of corporate funds in another corporation or business in accordance with this Code; and
(h) Dissolution of the corporation.
Except as provided in the immediately preceding paragraph, the vote required under this Code to
approve a particular corporate act shall be deemed to refer only to stocks with voting rights.
The shares or series of shares may or may not have a par value: Provided, That banks, trust, insurance,
and preneed companies, public utilities, building and loan associations, and other corporations
authorized to obtain or access funds from the public whether publicly listed or not, shall not be
permitted to issue no-par value shares of stock.
● Par value shares ang dapat i-issue ng banks, trust, insurance and preneed companies, etc.
Preferred shares of stock issued by a corporation may be given preference in the distribution of
dividends and in the distribution of corporate assets in case of liquidation, or such other preferences:
Provided, That preferred shares of stock may be issued only with a stated par value. The board of
directors, where authorized in the articles of incorporation, may fix the terms and conditions of
preferred shares of stock or any series thereof: Provided, further, That such terms and conditions shall be
effective upon filing of a certificate thereof with the Securities and Exchange Commission, hereinafter
referred to as the "Commission".
● Bawal sa mga preferred shares of stock ang no par value or stated value
Shares of capital stock issued without par value shall be deemed fully paid and nonassessable and the
holder of such shares shall not be liable to the corporation or to its creditors in respect thereto:
Provided, That no-par value shares must be issued for a consideration of at least Five pesos (₱5.00) per
share: Provided, further, That the entire consideration received by the corporation for its no-par value
shares shall be treated as (legal capital) capital and shall not be available for distribution as dividends.
● Pag no par values shares, also known as, stated value shares, bawal itong i-issue nang mas
mababa sa 5 pesos
● Par value shares can be issued as low as 1 centavo.
A corporation may further classify its shares for the purpose of ensuring compliance with constitutional
or legal requirements.

Classes of shares
1. Par value share: one with a specific money value fixed in the articles of incorporation and
appearing in the certificate of stock for each share of stock of the same issue (makikita mo from
the face of the certificate, yung halaga niya. Nakasulat ang par values sa actual stock certificates)
2. No par value shares or stated value shares: one without any stated or par value appearing on
the face of the certificate of stock. In other words, it is a stock which does not state how much
money it represents (Walang nakasulat sa actual stock certificate, ang halaga ay binibigay lang)
3. Voting share: share with the right to vote; it is generally customary to give the right to vote to
the common stock and to withhold it from the preferred.
4. Non-voting share: share without the right to vote.
5. Common share of stock: stock which entitles the holder thereof to pro rata division of the profits,
if there are any, without any preference or advantage in that respect over other stockholder or
class of stockholders. It is so-called because it is the stock which private corporations ordinarily
issue.
6. Preferred share of stock: stock which entitles the holder thereof to certain preferences over the
holders of common stock. The preferences may consist in the payment of dividends or the
distribution of the assets of a corporation in case of its dissolution, or such other preferences as
may be stated in the articles of incorporation which are not violative of the provisions of the code
a. Cumulative preferred shares: these are those which are entitled not only to the
payment of current dividends but also to dividends in arrears. Hindi lang sila entitled sa
mga dividends coming from this period but also entitled sila sa dapat kinita nila sa prior
years
b. Non cumulative preferred shares: shares that provide the shareholder fixed dividend
amount each year from the company's net profit but in case the company fails to pay the
dividend on such preference share to the shareholder in any year then such dividend
cannot be claimed by the shareholder in future.
c. Participating preferred shares: aside from the basic dividends, entitled pa sila to a
certain portion of excess dividends
d. Non participating preferred shares: preferred stock that specifically limits the amount of
dividends paid to its holders.
7. Promotion share: share issued to promoters, or those in some way interested in the company, for
incorporating the company, or for services rendered in launching or promoting the welfare of the
company, such as advancing the fees for incorporating, advertising, attorney’s fees, surveying,
etc
8. Share in escrow: share subject to an agreement by virtue of which the share is deposited by the
grantor of his agent with a third person to be kept by the depositary until the performance of a
certain condition or the happening of a certain event contained in the agreement
9. Convertible stock: stock which is convertible or changeable by the stockholder from one class to
another class, such as from preferred to common, at the conversion ratio, i.e., the price at which
the common is to be valued as against the preferred.

Section 7. Founders' Shares. - Founders' shares may be given certain rights and privileges not enjoyed by
the owners of other stock. Where the exclusive right to vote and be voted for in the election of directors
is granted, it must be for a limited period not to exceed five (5) years from the date of incorporation:
Provided, That such exclusive right shall not be allowed if its exercise will violate Commonwealth Act No.
108, otherwise known as the "Anti-Dummy Law"; Republic Act No. 7042, otherwise known as the
"Foreign Investments Act of 1991"; and otherwise known as "Foreign Investments Act of 1991"; and
other pertinent laws.
● Founders’ shares: binibigay sa mga nagtayo ng corporation (incorporators)
● Kapag ikaw ay founder o nagtayo ng corporation, may expectation na initially kayo ang
mamumuno, kaya may privilege kayo na exclusive right to vote and be voted for in the election
of directors. But this exclusivity can only be exercised in a limited period not to exceed five years
from the date of Incorporation.
Section 8. Redeemable Shares. - Redeemable shares may be issued by the corporation when expressly
provided in the articles of incorporation. They are shares which may be purchased by the corporation.
They are shares which may be purchased by the corporation from the holders of such shares upon the
expiration of a fixed period, regardless of the existence of unrestricted retained earnings in the books of
the corporation, and upon such other terms and conditions stated in the articles of incorporation and
the certificate of stock representing the shares, subject to rules and regulations issued by the
Commission.
● Sa simula pa lang, naka indicate nang there could be a point in time (after 2 or 3 years) na i-bbuy
back ng corporation ang shares. Pagka-redeem, ibabalik naman ng corporation ang investment
or book value
● Kapag nakabili ka ng redeemable shares, pwede itong i-buy back ng corporation anytime. At
redemption date, wala kang magagawa kailangan itong ibalik sa corporation at ibabalik naman
yung pera mo
Section 9. Treasury Shares. - Treasury shares are shares of stock which have been issued and fully paid
for, but subsequently reacquired by the issuing corporation through purchase, redemption, donation, or
some other lawful means. Such shares may again be disposed of for a reasonable price fixed by the
board of directors.
● Redeemable shares: Pagka-buy back ni-rretire ito or i-ddiscard. Binabuy back with the intention
of hindi na ito i-reissue — retirement of shares. Wala ka nang intention na ibenta.
● Treasury shares: Binabuy back or i-subsequently reacquire with the intention of issuing it again
at a future certain time. May intention kang ibenta ulit.
TITLE II: INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS
Section 10. Number and Qualifications of Incorporators. - Any person, partnership, association or
corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a
corporation for any lawful purpose or purposes: Provided, That natural persons who are licensed to
practice a profession, and 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. Incorporators who are natural persons must be of legal age.
Each incorporator of a stock corporation must own or be a subscriber to at least one (1) share of the
capital stock.
A corporation with a single stockholder is considered a One Person Corporation as described in Title XIII,
Chapter III of this Code.
● Sa lumang Corporation code, any number of natural persons are pwedeng gumawa ng
corporation — not less than 5 but not more than 15.
● Sa bagong Corporation code, kahit isang tao lang ay pwede na gumawa ng Corporation.
● Kapag natural person ka at gusto mo magpractice ng profession, bawal kayo maging corporation.
— General Professional Partnership ang dapat buoin
● Bago masabing incorporator ka dapat ay bumili ka kahit isang share.
Three steps in the creation of a Corporation

1. Promotion: pag-promote para dumami ang gustong sumali
2. Incorporation: Application in SEC
3. Formal organization and commencement of business operation: Mangyayari ito kapag na-issue
na ng SEC ang Articles of Incorporation
Section 11. Corporate Term. - A corporation shall have perpetual existence unless its articles of
incorporation provides otherwise.
● Kapag nag apply ka SEC, at hindi mo nabanggit kung gaano katagal ang inyong Corporation, the
presumption is that your Corporation has perpetual existence — indefinite term, walang
hangganan. Unless ilagay mo sa Articles of Incorporation na hanggang 20 years (or kung ilang
years niyo lang gusto)
Corporations with certificates of incorporation issued prior to the effectivity of this Code and which
continue to exist shall have perpetual existence, unless the corporation, upon a vote of its stockholders
representing a majority of its articles of incorporation: Provided, That any change in the corporate right
of dissenting stockholders in accordance with the provisions of this Code.
● General rule: Yung mga natayong Corporation prior 2019, revision of the Corporation code, shall
now have perpetual existence.
○ Unless, majority of its stockholders representing majority kapag nagbotohan ay hindi
sang-ayon sa perpetual existence. (Gusto nila i-maintain yung natitirang corporate life)
A corporate term for a specific period may be extended or shortened by amending the articles of
incorporation: Provided, That no extension may be made earlier than three (3) years prior to the original
or subsequent expiry date(s) unless there are justifiable reasons for an earlier extension as may be
determined by the Commission: Provided, further, That such extension of the corporate term shall take
effect only on the day following the original or subsequent expiry date(s).

● A corporation has perpetual existence unless sabihin ng parties na may specific term lang sila.
Ang term nila ay pwedeng bawasan o dagdagan at hindi pwedeng earlier than three years kapag
mag-papaextend unless may justifiable reason.
A corporation whose term has expired may apply for revival of its corporate existence, together with all
the rights and privileges under its certificate of incorporation and subject to all of its duties, debts and
liabilities existing prior to its revival. Upon approval by the Commission, the corporation shall be deemed
revived and a certificate of revival of corporate existence shall be issued, giving it perpetual existence,
unless its application for revival provides otherwise.
● Sa lumang code, since hanggang 50 years lang ang life ng corporation, may mga companies na
nakakalimutan na due date, nakakalimutan i-apply sa SEC ang renewal, in effect ma-ddissolve
ang corporation.
● Sa bagong code, ang corporation na nag-expire ang term, may apply for revival of its corporate
existence.
○ Ang isang corporation na patay na ay pwede pang mabuhay muli at ito ay pwedeng
magkaroon ng unlimited life or perpetual existence. Unless ayaw ng perpetual existence
according sa kanilang application.
No application for revival of certificate of incorporation of banks, banking and quasi-banking institutions,
preneed, insurance and trust companies, non-stock savings and loan associations (NSSLAs), pawnshops,
corporations engaged in money service business, and other financial intermediaries shall be approved by
the Commission unless accompanied by a favorable recommendation of the appropriate government
agency.
● Hindi pwedeng ma-issuehan ng revival of certificate of incorporation ang mga banks unless may
favorable recommendation of the appropriate government agency. (Bank — Banko Sentral ng
Pilipinas)
Section 12. Minimum Capital Stock Not Required of Stock Corporations. - Stock corporations shall not be
required to have minimum capital stock, except as otherwise specially provided by special law.
● Wala nang requirement ng minimum capital stock
Section 13. Contents of the Articles of Incorporation. - All corporations shall file with the Commission
articles of incorporation in any of the official languages, duly signed and acknowledged or authenticated,
in such form and manner as may be allowed by the Commission, containing substantially the following
matters, except as otherwise prescribed by this Code or by special law:
(a) The name of corporation;
(b) The specific purpose or purposes for which the corporation is being formed. Where a corporation has
more than one stated purpose, the articles of incorporation shall indicate the primary purpose and the
secondary purpose or purposes: Provided, That a nonstock corporation may not include a purpose which
would change or contradict its nature as such;
● pwedeng more than one ang purpose

(c) The place where the principal office of the corporation is to be located, which must be within the
Philippines;
(d) The term for which the corporation is to exist, if the corporation has not elected perpetual existence;
● Kapag wala kang binanggit about sa term, perpetual existence ang magiging buhay ng
corporation. Pero kung ayaw mo ng perpetual existence, ilagay niyo kung gaano katagal niyo
gusto mag-exist
(e) The names, nationalities, and residence addresses of the incorporators;
(f) The number of directors, which shall not be more than fifteen (15) or the number of trustees which
may be more than fifteen (15);
● Directors not more than 15— stock corporation.
● Trustees may be more than 15— nonstock corporation
(g) The names, nationalities, and residence addresses of persons who shall act as directors or trustees
until the first regular directors or trustees are duly elected and qualified in accordance with this Code;
● kapag nag-apply sa SEC, required maglagay ng temporary directors or trustees
(h) If it be a stock corporation, the amount of its authorized capital stock, number of shares into which it
is divided, the par value of each, names, nationalities, and subscribers, amount subscribed and paid by
each on the subscription, and a statement that some or all of the shares are without par value, if
applicable;
● Authorized capital stock: total number of shares multiplied by par value. Total amount of capital
na gusto nilang ma-raise sa corporation
(i) If it be a nonstock corporation, the amount of its capital, the names, nationalities, and residence
addresses of the contributors, and amount contributed by each; and
(j) Such other matters consistent with law and which the incorporators may deem necessary and
convenient.
An arbitration agreement may be provided in the articles of incorporation pursuant to Section 181 of this
Code.
● Just in case, magkaroon magkaroon ng dispute ang corporation, imbes na pumunta pa sa korte,
aayusin ito through an arbitration proceeding. — extrajudicial. Hindi ito sa korte at may i-appoint
na arbitrator.
The Articles of incorporation and applications for amendments thereto may be filed with the
Commission in the form of an electronic document, in accordance with the Commission's rule and
regulations on electronic filing.
Section 14. Form of Articles of Incorporation. - Unless otherwise prescribed by special law, the articles of
incorporation of all domestic corporations shall comply substantially with the following form:


● Tenth: pinapangako mong iibahin niyo ang pangalan ng corporation when the name is contrary
to law, public morals, goods customs, or public policy, etc.
● Eleventh: Nationalized Activity - industries that are reserved for Filipinos. May certain
percentage na dapat nakalaan for Filipino ownership. Ex. Media: dapat 100% Filipino owned,
Mining: dapat 60% Filipino owned
Section 15. Amendment of Articles of Incorporation. - Unless otherwise prescribed by this Code or by
special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation
may be amended by a majority vote of the board of directors or trustees and the vote or written assent
of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without
prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code.
The articles of incorporation of a nonstock corporation may be amended by the vote or written assent of
majority of the trustees and at least two-thirds (2/3) of the members.
● Articles of Incorporation: parang personality ng corporation.
○ If subject to amendment, kailangan mameet ang majority vote ng Board of Directors
plus ⅔ ng stockholders.
○ If non stock corporation, kailangan ng vote ng atleast ⅔ ng members
The original and amended articles together shall contain all provisions required by law to be set out in
the articles of incorporation. Amendments to the articles shall be indicated by underscoring the change
or changes made, and a copy thereof duly certified under oath by the corporate secretary and a majority
of the directors or trustees, with a statement that the amendments have been duly approved by the
required vote of the stockholders or members, shall be submitted to the Commission.
The amendments shall take effect upon their approval by the Commission or from the date of filing with
the said Commission if not acted upon within six (6) months from the date of filing for a cause not
attributable to the corporation.
Section 16. Grounds When Articles of Incorporation or Amendment May be Disapproved. The
Commission may disapprove the articles of incorporation or any amendment thereto if the same is not
compliant with the requirements of this Code: Provided, That the Commission shall give the
incorporators, directors, trustees, or officers as reasonable time from receipt of the disapproval within
which to modify the objectionable portions of the articles or amendment. The following are ground for
such disapproval:
(a) The articles of incorporation or any amendment thereto is not substantially in accordance with the
form prescribed herein;
● Hindi naayon sa form of Articles of Incorporation
(b) The purpose or purposes of the corporation are patently unconstitutional, illegal, immoral or contrary
to government rules and regulations;
(c) The certification concerning the amount of capital stock subscribed and/or paid is false; and
● Walang maipakitang certificate yung Treasurer or hindi naman talaga na-deposit yung amount ng
capital stock sa banko

(d) The required percentage of Filipino ownership of the capital stock under existing laws or the
Constitution has not been complied with.
● Ex. Media company pero 80% Filipino owned lang, dapat 100% Filipino owned
No articles of incorporation or amendment to articles of incorporation of banks, banking and

quasi-banking institutions, preneed, insurance and trust companies, NSSLAs, pawnshops and other
financial intermediaries shall be approved by the Commission unless accompanied by a favorable
recommendation of the appropriate government agency to the effect that such articles or amendment is
in accordance with law.
Section 17. Corporation Name. - No corporate name shall be allowed by the Commission if it is not
distinguishable from that already reserved or registered for the use if another corporation, or if such
name is already protected by law, rules and regulations.
● Bawal gumamit ng pangalan ng corporation na nagamit nang iba
A name is not distinguishable even if it contains one or more of the following:

(a) The word "corporation", "company", incorporated", "limited", "limited liability", or an abbreviation of
one if such words; and
(b) Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different tenses,
spacing, or number of the same word or phrase.
● Hindi nakakapang distinguish ito kahit dagdagan mo ng corporation, company, incorporated
The Commission upon determination that the corporate name is:

(1) not distinguishable from a name already reserved or registered for the use of another corporation;
(2) already protected by law; or
(3) contrary to law, rules and regulations, may summarily order the corporation to immediately cease
and desist from using such name and require the corporation to register a new one. The Commission
shall also cause the removal of all visible signages, marks, advertisements, labels prints and other effects
bearing such corporate name. Upon the approval of the new corporate name, the Commission shall
issue a certificate of incorporation under the amended name.
● Kapag naaprubahan yung bagong pangalan, SEC will issue a new certificate of incorporation for
If the corporation fails to comply with the Commission's order, the Commission may hold the corporation
and its responsible directors or officers in contempt and/or hold them administratively, civilly and/or
criminally liable under this Code and other applicable laws and/or revoke the registration of the
corporation.
● kapag hindi mo sinunod ang SEC or inignore mo yung utos nila na palitan ang inyong pangalan,
may power of contempt ito, pwede ka niyang kasuhan
Section 18. Registration, Incorporation and Commencement of Corporation Existence. - A person or

group of persons desiring to incorporate shall submit the intended corporate name to the Commission
for verification. If the Commission finds that the name is distinguishable from a name already reserved

or registered for the use of another corporation, not protected by law and is not contrary to law, rules
and regulation, the name shall be reserved in favor of the incorporators. The incorporators shall then
submit their articles of incorporation and bylaws to the Commission.
● First step is to choose a name then pa-verify mo. Kung okay naman at walang ibang nakuna,
reserve the name then pass the articles of incorporation and bylaws to SEC.
● Bylaws: internal rules and regulations
If the Commission finds that the submitted documents and information are fully compliant with the
requirements of this Code, other relevant laws, rules and regulations, the Commission shall issue the
certificate of incorporation.
● Application form is called Articles of Incorporation, kapag pasado ito, bibigyan ka ng SEC ng
Certificate of Incorporation
A private corporation organized under this Code commences its corporate existence and juridical
personality from the date the Commission issues the certificate of incorporation under its official seal
thereupon the incorporators, stockholders/members and their successors shall constitute a body
corporate under the name stated in the articles of incorporation for the period of time mentioned
therein, unless said period is extended or the corporation is sooner dissolved in accordance with law.
● Nagsisimula ang buhay ng corporation on the date the Commission issues the certificate of
incorporation.
● Sa partnership, nagsisimula ang buhay nito on the date of execution ang partnership contract,
unless otherwise stated. — parties ang nag-ddecide kung kailan nila gustong magsimula
Section 19. De facto Corporations. - The due incorporation of any corporation claiming in good faith to
be a corporation under this Code, and its right to exercise corporate powers, shall not be inquired into
collaterally in any private suit to which such corporation may be a party. Such inquiry may be made by
the Solicitor General in a quo warranto proceeding.
● De Facto Corporation: walang substantial compliance.
● Hindi niyo pwedeng i-bring up ang pagiging De Facto or De Jure ng isang corporation sa isang
private suit.
○ Ex. Magkalaban si ABC Corporation at DEF Corporation. Si ABC ay hindi nakapagbayad
kay DEF at makatakas sa kanyang obligation may nakapagsabi kay ABC na i-bring up niyo
as defense of atakihin niyo sa trial yung pagiging De Facto ni DEF. “Judge walang
karapatan si DEF na magsampa ng kaso laban sa amin dahil hindi po sila legit na
corporation.” According to Section 19, bawal i-bring up ang pagiging De Facto ni DEF sa
isang kaso na hindi naman ang pagiging legit ni DEF ang issue.
○ Ang pagiging De Facto or De Jure ng isang corporation ay napaka importanteng usapin
kaya ang pwede lang mag-inquire o mag-question kung De Jure o De Facto ang isang
corporation ay ang Solicitor General lamang. (Solicitor General: tumatayong abogado ng
gobyerno) Ang Solicitor General lang ang pwede mag question sa isang corporation kung
De Jure or De Facto ba siya sa isang quo warranto proceeding.

○ Sa quo warranto, matatanggal ka dahil hindi mo possessed ang dapat na requirements.

Quo warranto is a special form of legal action used to resolve a dispute over whether a
specific person has the legal right to hold the public office that he or she occupies.
Section 20. Corporation by Estoppel. - All persons who assume to act as a corporation knowing it to be
without the authority to do so shall be liable as general partners for all debts, liabilities and damages
incurred or arising as a result thereof: Provided, however, That when any such ostensible corporation is
sued on any transaction entered by its as a corporation or on any tort committed by it as such, it shall
not be allowed to use on any its lack of corporate personality as a defense. Anyone who assumes an
obligation to an ostensible corporation as such cannot resist performance thereof on the ground that
there was in fact no corporation.
● May mga group of persons na nagpapakilala bilang corporation sila, when in reality hindi naman
talaga — Corporation by Estoppel. I-ttreat kayo as general partners
Section 21. Effects of Non-Use of Corporate Charter and Continuous Inoperation. - If a corporation does
not formally organize and commence its business within five (5) year from the date of its incorporation,
its certificate of incorporation shall be deemed revoked as of the day following the end of the five
(5)-year period.
● Once ma-issue ang inyong Articles of Incorporation, kayo ay bibigyan lang ng palugit na 5 years
upang umpisahan na ang pagpapatakbo ng company
● Pag lumapas ng 5 years at hindi pa kayo nakakapagsimula, the certificate shall be deemed
revoked.
However, if a corporation has commenced its business but subsequently becomes inoperative for a
period of at least five (5) consecutive years, the Commission may, after due notice and hearing, place the
corporation under delinquent status.
● Na-issue na ang certificate at nakapagsimula na mag-operate at bigla kayong napatigil. Yung
pagtigil niyo ay hindi dapat lumagpas ng 5 consecutive years or else kapag lumagpas ang pagtigil
ng operations, your corporation may be placed under delinquent status.
A delinquent corporation shall have a period of two (2) years to resume operations and comply with all
requirements that the Commission shall prescribe. Upon the compliance by the corporation, the
Commission shall issue an order lifting the delinquent status. Failure to comply with the requirements
and resume operations within the period given by the Commission shall cause the revocation of the
corporation's certificate of incorporation.
● Kapag nagstop kayo, hindi dapat lumagpas ng 5 years. Pero kung lumagpas ng 5 years, binibigyan
kayo ng palugit pa na 2 years to resume operations.
The Commission shall give reasonable notice to, and coordinate with the appropriate regulatory agency
prior to the suspension or revocation of the certificate of incorporation of companies under their special
regulatory jurisdiction.

TITLE III: BOARD OF DIRECTORS/ TRUSTEE AND OFFICERS
Section 22. The Board of Directors or Trustees of a Corporation; Qualifications and Term - Unless
otherwise provided in this Code, the board of directors or trustees shall exercise the corporate powers,
conduct all business and control all properties of the corporation.
● Board of Directors- stock corporation; Board of Trustees- non stock corporation
○ They are elected by the stockholders and in a way, sila ang nagpapatakbo ng corporation
Directors shall be elected for a term of one (1) year from among the holders of stocks registered in the
corporation’s book while trustees shall be elected for a term not exceeding three (3) years from among
the members of the corporation. Each director and trustee shall hold office until the successor is elected
and qualified. 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.
● Hold over capacity
○ Upon failure of a quorum at any meeting of the stockholders or members called for an
election, the directorate naturally holds over and continues to function until another
directorate is chosen and qualified. The failure to elect does not terminate the terms of
incumbent officers nor dissolve the corporation.
○ Example: Yung first set of directors ng stock corporation, ang term nila ay from January
1, 2021 to December 31, 2021. Hindi naman agad agad ay magkakaroon ng stockholders
meeting for election at magkakaroon ng bagong directors on January 1, 2022 kaya
mananatili muna ang old or papalitan na board of directors hanggang sa magkaroon na
ng bago. This is to make sure na hindi magkaroon ng vacuum or vacancy ang corporation
dahil kailangan may gumagawa ng decision dito.
● Sa last sentence, sinasabi lang na kapag ikaw ay director, dapat owner ka ng at least one (1)
share of stock. Dapat ay member ka ng corporation kasi paano mo illead ang corporation kung
ikaw mismo ay hindi naka-invest dito.
The board of the following corporations vested with public interest shall have independent directors
constituting at least twenty percent (20%) of such board:
○ Independent director: mga director na hindi directly naka asa sa corporation at
usually mga outsider na elected; at least 20% ng board ay independent director
para hindi sila naka-rely nang todo or totally invested sa corporation - the reason
behind this is gusto natin na makapag decide sila nang freely o tama for the
corporation
A. Corporations covered by Section 17.2 of Republic Act No. 8799, otherwise known as “The
Securities Regulation Code”, namely those whose securities are registered with the Commission,
corporations listed with an exchange or with assets of at least Fifty million pesos (50,000,000)
and having two hundred (200) or more holders of shares, each holding at least one hundred
(100) shares of a class of its equity shares;
B. Banks and quasi-banks, NSSLAs, pawnshops, corporations engaged in money service business,
preneed, trust and insurance companies and other financial intermediaries; and

C. Other corporations engaged in business vested with public interest similar to the above, as may
be determined by the Commission, after taking into account relevant factors with are germane
to the objective and purpose of requiring the election of an independent director, such as the
extent of minority ownership, type of financial products or securities issued or offered to
investors, public interest involved in the nature of business operations, and other analogous
factors.
An independent director is a person who apart from shareholdings and fees received from any business
or other relationship which could or could reasonably be received to materially interfere with the
exercise of independent judgement in carrying out the responsibilities as a director.
Independent directors must be elected by the shareholders present or entitled to vote in absentia during
the election of directors. Independent directors shall be subject to rules and regulations governing their
qualifications, disqualifications, voting requirements, duration of term and term limit, maximum number
of board membership and other requirements that the Commission will prescribe to strengthen their
independence and align with international best practices.
Section 23. Election of Directors or Trustees - Except when the exclusive right is reserved for holders of
founders’ shares under Section 7 of this Code, each stockholder or member shall have the right to
nominate any director or trustee who possesses all of the qualifications and non of the disqualifications
set forth in this Code.
● Bawat stockholder or member pwede mag nominate ng gusto niyang tumakbo na director or
trustee
At all elections of directors or trustees, there must be present, either in person or through a
representative authorized to act by written proxy, the owners of majority of the outstanding capital
stock, or if there be no capital stock, a majority of the members entitled to vote. When so authorized in
the by-laws or by a majority of the board of directors, the stockholders or members may also vote
through remote communication or in absentia: Provided, That the right to vote through such modes may
be exercised in corporations vested with public interest, notwithstanding the absence of a provision in
the bylaws of such corporations.
● “Owners of majority of the outstanding capital stock”- 50% +1
● “When so authorized in the by-laws or by a majority of the board of directors, the stockholders
or members may also vote through remote communication or in absentia”- The revised
corporation code acknowledged the physical limitations na hindi laging magkakasama ang
stockolders or members kapag may stockholders meeting or during the election of the directors
& trustees kaya to overcome this, pwede mag vote through emote communication or in absentia
as long as it is authorized in the by-laws or by a majority of the board of directors
A stockholder or member who participates through remote communication or in absentia, shall be

deemed present for purposes of quorum. The election must be by ballot if requested by any voting
stockholder or member.

● Quorum- required number of people sa meeting para masabing natuloy yung meeting
In stock corporations, stockholders entitled to vote shall have the right to vote the number of shares of
stock standing in their own names in the stock books of the corporation at the time fixed in the bylaws or
where the bylaws are silent at the time of the election. The said stockholder may:
A. Vote such number of shares for as many persons as there are directors to be elected
○ Example: 1 share of stock x 5 BOD = 5 votes (1 vote for Mr. A, 1 vote for Mr. B, 1 vote for
Mr. C, 1 vote for Mr. D, and 1 vote for Mr. E)
B. Cumulate said shares and give one (1) candidate as many votes as the number of directors to be
elected multiplied by the number of shares owned
○ Example: 1 share of stock x 5 BOD = 5 votes (5 votes for Mr. A)
C. Distribute them on the same principle among as many candidates as may be seen fit
○ Example: 1 share of stock x 5 BOD = 5 votes (2 votes for Mr. A kasi mabait siya, 2 vote for
Mr. B kasi matulungin siya, and 1 vote for Mr. C kasi cute siya)
● Most favorable voting methods for minorities stockholder- letter B
● Least favorable voting methods for minorities stockholder- letter A
Provided, That the total number of votes cast shall not exceed the number of shares owned by the
stockholders as shown in the books of the corporation multiplied by the whole number of directors to be
elected: Provided, however, That no delinquent stock shall be voted. Unless otherwise provided in the
articles of incorporation or in the bylaws, members of nonstock corporations may cast as many votes as
there are trustees to be elected by may not cast more than (1) vote for (1) candidate. Nominees for
directors or trustees receiving the highest number of votes shall be declared elected.
● Delinquent stock- shares na hindi pa bayad; walang karapatan bumoto sa election ng Board of
Directors
If no election is held, or the owners of majority of the outstanding capital stock or majority of the
members entitled to vote are not present in person, by proxy, or through remote communication or not
voting in absentia at the meeting, such meeting may be adjourned and the corporation shall proceed in
accordance with Section 25 of this Code.
● Kapag wala yung majority sa meeting, adjourn or cancel muna ang meeting
The directors or trustees shall perform their duties as prescribed by laws, rules of good corporate
governance, and by laws of the corporation.
Section 24. Corporate Officers - Immediately after their election, the directors of a corporation must
formally organize an elect: (a) A president, who must be a director; (b) A treasurer, who must be a
resident; (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. If the corporation is vested with public interest, the board
shall also elect a compliance officer. The same person may hold two (2) or more positions concurrently,
except that no one shall act as a president and secretary or as a president and treasurer at the same
time, unless otherwise allowed in this Code.

● Kapag na-elect na ang Board of Directors, sila naman ang magbobotohan para ma-appoint ang
officers. Ang board of directors ang nagdedecide sa mga policy kung ano ang gagawin o
direksyon ng company tapos ang corporate officers ang mag iimplement o araw araw na
nagpapatakbo ng corporation
● “No one shall act as a president and secretary or as a president and treasurer at the same time”-
reason: conflict of interest
The officers shall manage the corporation and perform such duties as may be provided in the bylaws
and/or as resolved by the board of directors.
Section 25. Report of Election of Directors, Trustees and Officers, Non-holding of Election and Cessation
form Office- Within thirty (30) dyas after the election of the directors, trustees, and officers of the
corporation, the secretary, or any other officer of the corporation, shall submit to the Commission, the
names, nationalities, shareholdings, and residence addresses of the directors, trustees and officers
elected.
● This provision is to make sure na hindi nila sinasadya patagalin yung pag-elect ng bagong board
of directors. Baka kasi yung iba masyado na-eenjoy yung hold over capacity kaya ayaw na mag
election, bawal yun.
The non-holding of elections and the reasons therefore shall be reported to the Commission within thirty
(30) days from the date of the scheduled election. The report shall specify a new date for the election,
which shall not be later than sixty (60) days from the scheduled date.
● Kailangan i-report sa SEC at kailangan may valid reason kung bakit hindi agad nakapaghold ng
election
If no new date has been designated, or if the rescheduled election is likewise not held, the Commission
may, upon the application of a stockholder, member, director or trustee, and after verification of the
unjustifiable non-holding election, summarily order that an election be held. The Commission shall have
the power to issue such orders as may be appropriate, including other directing the issuance of a notice
stating the time and place of election, designated presiding officer, and the record date or dates for the
determination of stockholders or members entitled to vote.
● This is to avoid yung pang-aabuso sa concept ng hold over capacity
Notwithstanding any provision of the articles of incorporation or by laws to the contrary, the shares of
stock or membership represented at such meeting and entitled to vote shall constitute a quorum for
purposes of conducting an election under this section.
Should a director, trustee or officer die, resign or in any manner case to hold office, the secretary or the
director, trustee or officer of the corporation, shall, within seven (7) days form knowledge thereof, report
in writing such fact to the Commission.

Section 26. Disqualification of Directors, Trustees or Officers. - A person shall be disqualified from being a
director, trustee or officer of any corporation if, within five (5) years prior to the election or appointment
as such, the person was:
A. Convicted by final judgment:
● Unfortunately may mga tao na hindi pwedeng maging director if may nagawa na silang
gantong bagay
1. Of an offense punishable by imprisonment for a period exceeding six (6) years;
2. For violating this Code; and
3. For violating Republic Act No. 8799, otherwise known as "The Securities
Regulation Code";
B. Found administratively liable for any offense involving fraudulent acts; and
C. By a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct
similar to those enumerated in paragraphs (a) and (b) above.
The foregoing is without prejudice to qualifications or other disqualifications, which the Commission, the
primary regulatory agency, or Philippine Competition Commission may impose in its promotion of good
corporate governance or as a sanction in its administrative proceedings.
Section 27. Removal of Director or Trustees. - Any director or trustee of a corporation may be removed
from office by vote of the stockholders holding or representing at least two-thirds (2/3) of the
outstanding capital stock, or in a nonstock corporation, by a vote of at least two-thirds (2/3) of the
member entitled to vote: Provided, That such removal shall take place either at a regular meeting of the
corporation or at a special meeting called for the purpose, and in either case, after previous notice to
stockholders or members of the corporation of the intention to propose such removal at the meeting. A
special meeting of the stockholders or members for the purpose of removing any director or trustee
must be called by the secretary on order of the president, or upon written demand of stockholders
representing or holding at least a majority of the outstanding capital stock, or a majority of the members
entitled to vote.
● Any director or trustee of the corporation may be removed after ma-elect. He/she can still be
removed from the office via vote of the stockholders holding or representing at least two-thirds
(2/3) of the outstanding capital stock, or in a nonstock corporation, by a vote of at least
two-thirds (2/3) of the member entitled to vote
If there is no secretary, or the secretary, despite demand, fails or refuses to call the special meeting or to
give notice thereof, the stockholder or member of the corporation signing the demand may call the
special meeting or to give notice thereof, the stockholder or member of the corporation signing the
demand may call for the meeting by directly addressing the stockholders or members. Notice of the time
and place of such meeting, as well as of the intention to propose such removal, must be given by
publication or by written notice prescribed in this Code. Removal may be with or without cause:
Provided, That removal without cause may not be used to deprive minority stockholders or members of
the right representation to which they may be entitled under Section 23 of this Code.

The Commission shall, motu propio or upon verified complaint, and after due notice and hearing, order
the removal of a director or trustee elected despite the disqualification, or whose disqualification arose
or is discovered subsequent to an election. The removal of a disqualified director shall be without
prejudice to other sanctions that the Commission may impose on the board of directors or trustees who,
with knowledge of the disqualification, failed to remove such director or trustee.
Section 28. Vacancies in the Office of Director or Trustee; Emergency Board. - Any vacancy occurring in
the board of directors or trustees other that by removal or expiration of term may be filled by the vote of
at least a majority of the remaining directors or trustees, if still constituting a quorum; otherwise, said
vacancies must be filled by the stockholders or members in a regular or special meeting called for that
purpose.
● Kapag may vacancy in the board of directors or trustees, maliban sa removal or expiration of
term, maaaring ang mga natirang directors or trustees ang mamili ng kapalit, as long as nagc
constitute pa din ng quorum yung remaining number ng BOD
○ Kapag removal or expiration of term, ang dapat na boboto dun ay stockholders
● Example: may 10 members ng BOD at 3 ang namatay. Ang 7 members ay considered na may
quorum. Ang seven na natitirang board of directors ay pwedeng mamili or mag-elect ng 3
members.
● Example: may 10 members ng BOD at 5 ang namatay. Ang 5 members ay hindi considered na
may quorum. The vacancies must be filled by the stockholders or members in a regular or special
meeting called for that purpose.
When the vacancy is due to term expiration, the election shall be held no later that the day of such
expiration at a meeting called for that purpose. When the vacancy arises as a result of removal by the
stockholders or members, the election may be held on the same day of the meeting authorizing the
removal and this fact must be so stated in the agenda and notice of said meeting. In all other cases, the
election must be held no later than forty-five (45) days from the time the vacancy arose. A director or
trustee elected to fill a vacancy shall be referred to as replacement director or trustee elected to fill a
vacancy shall be referred to as replacement director or trustee and shall serve only for the unexpired
term of the predecessor in office.
● Example: May 1 BOD na namatay nung November at yung term niya ay dapat from January to
December, papalitan siya ng replacement director or trustee for the unexpired term lang, hindi
one whole year.
However, when the vacancy prevents the remaining directors from constituting a quorum and
emergency action is required to prevent grave, substantial, and irreparable loss or damage to the
corporation, the vacancy may be temporarily filled from among the officers of the corporation by
unanimous vote of the remaining directors or trustees. The action by the designated director or trustee
shall be limited to the emergency action necessary, and the term shall cease within a reasonable time
form the termination of the emergency or upon election of the replacement director or trustee,
whichever comes earlier. The corporation must notify the Commission within three (3) days from the
creation of the emergency board, stating therein the reason for its creation.

● Emergency board kasi may biglaang dinagdag na officer sa Board of Directors or Trustees
Any directorship or trusteeship to be filled by a reason of an increase in the number of directors or

trustees shall be filled only by an election at a regular or at a special meeting of stockholders or
members duly called for the purpose, or in the same meeting authorizing the increase of directors or
trustees if so stated in the notice of the meeting.
● 3 important reasons bakit nagkakaroon ng vacancy sa Board of Directors: Increase in the number
of directors, Removal of directors, Expiration of the term
● The only way para mapunan ang vacancy ay pag elect ng stockholders
In all elections to fill vacancies under this section, the procedure set forth in Section 23 and 25 of this
Code shall apply.
Section 29. Compensation of Directors or Trustees. - In the absence of any provision in the bylaws fixing
their compensation, the directors or trustees shall not received any compensation in their capacity as
such, except for reasonable per diems: Provided, however, That the stockholders representing at least a
majority of the outstanding capital stock or majority of the members may grant directors or trustees
with compensation and approve the amount thereof at a regular or special meeting.
● Walang sahod ang pagiging director or trustee, maliban na lang sa reasonable per diem
(allowance per day) pero pwede silang bigyan ng majority of the members ng compensation and
approved amount thereof at a regular or special meeting.
In no case shall the total yearly compensation of directors exceed ten percent (10%) of the net income
before income tax of the corporation during the preceding year.
● Kung walang limit, may tendency na maabuso o masyado malaki ang ibigay. Kawawa naman ang
minority stockholder kung lahat ng kikitain ng company ay naging sahod
Directors or trustees shall not participate in the determination of their own per diems or compensation.
● Ang mga directors or trustees na ito ay hindi dapat sumali sa meeting na pag-uusapan kung
magkano ang kanilang sasahurin. There will be conflict of interest kasi syempre gusto nila na
mataas ang kanilang makuha.
Corporations vested with public interest shall submit to their shareholders and the Commission, an
annual report of the total compensation of each of their directors or trustees.
● Dapat nakalagay sa annual report to let the stockholders and SEC know kung magkano ang
sinasahod ng directors and trustees - for full disclosure
Section 30. Liability of Directors, Trustees or Officers. - Directors or trustees who willfully and knowingly
vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or
bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages
resulting therefrom suffered by the corporation, its stockholders or members and other persons.
● Solidarily liable ang mga directors and trustees na:

○ papayag at boboto sa mga patently unlawful acts o illegal na bagay

○ guilty of gross negligence or masyadong pagpapabaya
○ In bad faith ang gagawin na desisyon
○ acquire any personal or pecuniary interest in conflict with their duty- aagawin nila ang
opportunity na dapat ay para sa corporation; gagawin nilang personal transaction para
sila lang ang makikinabang
A director, trustee or officer shall not attempt to acquire, or any interest adverse to the corporation in
respect of any matter which has been reposed in them in confidence, and upon which, equity imposes a
disability upon themselves to deal in their own behalf; otherwise, the said director, trustee or officer
shall be liable as a trustee for the corporation and must account for the profits which otherwise would
have accrued to the corporation.
● Wag mag acquire ng interest na kontra sa corporation
● Wag mo agawan ang sarili mong corporation
○ Otherwise, kung magkano man ang kinita mo mula sa inagaw mo na opportunity sa
corporation, you must account for that amount at ibigay mo yun sa corporation
Section 31. Dealings of Directors, Trustees or Officers with the Corporation. - A contract of the
corporation with one (1) or more of its directors, trustees, officers or their spouses and relatives within
the fourth civil degree of consanguinity or affinity is voidable, at the option of such corporation, unless
all the following conditions are present:
● Sarili mong director, trustees, or officers ang nakikipag deal with the corporation - also
known as self dealing directors
● Minsan maiisipan mo ng masama na sarili mong director nakikipag deal with the
corporation kasi nandun yung fear of conflict of interest pero hindi naman sa lahat ng
pagkakataon ay masama o void na agad ang transaction. Kailangan muna i-analyze ang
scenario para malaman ang classification ng transaction.
● Voidable- valid until annulled
A. The presence of such director or trustee in the board meeting in which the contract was
approved was not necessary to constitute a quorum for such meeting;
B. The vote of such director or trustee was not necessary for the approval of the contract;
Example: Sa ABC Corporation, ang isa sa kanyang director ay si Mr. A. Since kailangan ng
corporation ng car, nagkaroon ng sale worth P2,000,000 si ABC Corporation with one of its
director, si Mr. A.
● 10 BOD, 7 nag attend (including Mr. A) at 5 nag agree (including Mr. A)- VALID
○ Valid kasi kahit na wala si Mr. A, 6 ang present sa meeting and nagcconstitute pa
din ito ng quorum (50% +1). Also, kahit na mag disagree si Mr. A, 4 out of 7 pa
din ang nagbigay ng approval.
● 10 BOD, 6 nag attend (including Mr. A) at 4 nag agree (including Mr. A)- VOIDABLE

○ Voidable kasi kapag wala si Mr. A, 5 na lang ang present sa meeting and hindi na
ito nagcconstitute ng quorum (50% +1). Also, kapag nag disagree si Mr. A, 3 out
of 7 na lang ang nagbigay ng approval.
C. The contract is fair and reasonable under the circumstances;

D. In case of corporations vested with public interest, material contracts are approved by at least a
majority of the independent directors voting to approved the material contract; and
E. In case of an officer, the contract has been previously authorized by the board of directors.
Where any of the first three (3) conditions set forth in the preceding paragraph is absent, in the case of a
contract with a director or trustee, such contract may be ratified by the vote of the stockholders
representing at least two-thirds (2/3) of the outstanding capital stock or of at least two-thirds (2/3) of
the members in a meeting called for the purpose: Provided, That full disclosure of the adverse interest of
the directors or trustees involved is made at such meeting and the contract is fair and reasonable under
the circumstances.
● Sa 1st scenario na nag valid (10 BOD, 7 nag attend at 5 nag agree), tuloy na yon. Walang problem
kasi ang dating nun hindi kinailangan gamitin ng self dealing director ang kanyang influence o
ang kanyang position para matuloy ang deal. Kung nalugi man dahil don ang corporation, hindi
lang siya ang dapat sisihin kasi kontrolado naman yun ng ibang umattend
● Sa 2nd scenario (10 BOD, 6 nag attend at 4 nag agree), voidable kasi maaring tingin nila tina-take
advantage o inuutakan sila ni Mr. A. Kapag initially ang naging hatol ay voidable, pwede pa itong
masagip ng mga stockholders (pwede pa ito maging valid), kung 2/3 sa kanila ay papayag.
Section 32. Contracts Between Corporations with Interlocking Directors. - Except in cases of fraud, and
provided the contract is fair and reasonable under the circumstances a contract between two (2) or
more corporations having interlocking directors shall not be invalidated on that ground alone: Provided,
That if the interest of the interlocking director in one (1) corporation is substantial and the interest in the
other corporation or corporations is merely nominal, the contract shall be subject to the provisions of
the preceding section insofar as the latter corporation or corporations are concerned.
● Example: Si Mr. X ay director sa ABC Corporation and XYZ Corporation, so ang lumalabas ay may
investment siya sa both corporations. Kapag may sale, nagkakaroon ng meeting ang Board of
Directors. Kung si Mr. X ay director sa parehong corporation, kakabahan ang both sides kasi baka
maging biased ang decision ni Mr X. May risk na pumabor si Mr. X sa isang corporation na mas
malaki ang kanyang investment.
○ A contract between two (2) or more corporations having interlocking directors shall not
be invalidated on that ground alone - kailangan lang maging mausisa kapag substantial
ang investment sa isang corporation at nominal ang investment sa isa pang corporation.
Kung substantial sa pareho o nominal sa pareho, okay lang yun kasi walang nalulugi dun.
Stockholding exceeding twenty percent (20%) of the outstanding capital stock shall be considered
substantial for purposes of interlocking directors.
● More than 20%- substantial
● 20% and below- nominal

Section 33. Disloyalty of a Director. - Where a director, by virtue of such office, acquires a business
opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such
corporation, the director must account for and refund to the latter all such profits, unless the act has
been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the
outstanding capital stock. This provision shall be applicable, notwithstanding the fact that the director
risked one's own funds in the venture.
● Kapag inagawan ng project or opportunity ang corporation, kailangan niya ibalik, unless sabihin
ng mga stockholders (at least 2/3) na okay lang
Section 34. Executive Management, and Other Special Committees. - If the bylaws so provide, the board
may create an executive committee composed of at least three (3) directors. Said committee may act, by
majority of vote of all its members, on such specific matters within the competence of the board, as may
be delegated to it in the bylaws or by majority vote of the board, except with respect to the:
A. approval of any action for which shareholders' approval is also required;
B. filing of vacancies in the board;
C. amendment or repeal of bylaws or the adoption of new bylaws;
D. amendment or term is not amendable or repealable; and
E. distribution of cash dividends to the shareholders.
The board of directors may create special committees of temporary or permanent nature and determine
the members' term, composition, compensation, powers, and responsibilities.
● Ang executive committee ay parang mini board of directors na pwedeng magdecide sa
mga simple o maliliit na bagay kasi mahirap ipunin ang board of directors
TITLE IV: POWERS OF THE CORPORATIONS
Section 35. Corporate Powers and Capacity. - Every corporation incorporated under this Code has the
power and capacity:
● Ang isang corporation, bilang isang juridical entity, hindi lahat ng bagay ay pwede niyang
gawin, limited lamang ito. Dapat either expressed, implied, or incidental yung power ng
corporation. Ang isang bagay na ginagawa ng corporation na hindi naman expressly
nabanggit impliedly or incidentally kailangan sa pagiging corporation, pag ginawa yung
action na yun, it is called an ultra vires act (unauthorized act).
○ Example: Ang pinaalam sa SEC ay magbebenta ang corporation niyo ng condo
pero ang ginagwa niyo pala ay nagbebenta kayo ng damit.
A. To sue and be sued in its corporate name;
● Dahil ang corporation ay isang juridical entity, pwede siyang mag file ng case laban sa
ibang tao or ibang corporation pero pwede din siyang mademanda. Kapag natalo ang
case, magbabayad ng damages. Kapag may criminal aspect naman, dahil hindi possible
makulong ang corporation, ang makukulong ay kung sino ang involved.
B. To have perpetual existence unless the certificate of incorporation provides otherwise;
● Kaya o mayroong karapatan ang isang corporation na magkaroon ng perpetual existence

● Kapag walang sinabi, edi perpetual existence. Unless stated na 20 years, edi 20 years.
C. To adopt and use a corporate seal;
● Ang mga company ay may naka-design na corporate seal at authorized sila na gamitin
D. To amend its articles of incorporation in accordance with the provisions of this Code;
● Kapag nag-apply kayo sa SEC, magpapasa kayo ng articles of incorporation. Kaya naman
kapag naramdaman niyo na may kailangan baguhin, pwede niyong i-ammend.
E. To adopt bylaws, not contrary to law, morals or public policy, and to amend or repeal the same in
accordance with this Code;
● Bylaws- internal rules and regulation ng isang company kung paano ito papatakbuhin
○ Pwede mag adapt nito or palitan kapag tingin mo hindi na updated
F. In case of stock corporations, to issue or sell stocks to subscribers and to sell treasury stocks in
accordance with the provisions of this Code; and to admit members to the corporation if it be a
nonstock corporation;
● This is already self explanatory and given but it is still explicitly stated in the Corporation
Code (para hindi i-assume lang)
G. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage, and otherwise
deal with such real and personal property, including securities and bonds of other corporations,
as the transaction of the lawful business of the corporation may reasonably and necessarily
require, subject to the limitations prescribed by law and the constitution;
H. To enter into a partnership, joint venture, merger, consolidation, or any other commercial
agreement with natural and juridical persons;
I. To make reasonable donations, including those for the public welfare or for hospital, charitable,
cultural, scientific, civic, or similar purposes: Provided, That no foreign corporation shall give
donations in aid of any political party or candidate or for purpose s of partisan political activity;
● Part ng kanilang CSR: Corporate Social Responsibility- pagtulong sa community
● Bawal mag donate or umambag ang isang foreign corporation sa kahit na anong political
party dahil ayaw natin na mag suffer ang independence ng ating bansa
J. To establish pension, retirement, and other plans for the benefit of its directors, trustees,
officers, and employees; and
K. To exercise such other powers as may be essential or necessary to carry out its purpose or
purposes as stated in the articles of incorporation.
● Basta connected sa inapply ng corporation na primary or secondary purpose
Section 36. Power to Extend or Shorten Corporate Term. - A private corporation may extend or shorten
its term as stated in the articles of incorporation when approved by a majority vote of the board of
directors or trustees, and ratified at a meeting by the stockholders or members representing at least
two-thirds (2/3) of the outstanding capital stock or of its members.
● For corporations na limited lang o hindi pinili ang perpetual existence
Written notice of the proposed action and the time and place of the meeting shall be sent to the
stockholders or members at their respective place of residence as shown in the books of the corporation,
and must be deposited to the addressee in the post office with postage prepaid, served personally, or

when allowed in the bylaws or done with the consent of the stockholder, sent electronically in
accordance with the rules and regulations of the Commission on the use of electronic data messages. In
case of extension of corporate term, a dissenting stockholder may exercise the right of appraisal under
the conditions provided in this Code.
● Written notice- mahalaga na masabihan ang mga stockholders
● Appraisal right of dissenting stockholders: right of such stockholder in the cases provided by law
to demand payment of the fair value of his shares “in case of an extension of corporate term”.
Such right should also be available to a dissenting stockholder if the corporate term is shortened.
○ Ex: Ako ay isang minority stockholder at nung nag-invest ako sa corporation na ito ay
nakalagay sa articles of incorporation na 10 years lang ang buhay nito. Ineexpect ko na
after 10 years ay babalik na ang pera ko pero noong malapit na matapos ang 10 years,
biglang sinabi ng majority na gusto nilang gawin na 50 years ang buhay ng Corporation.
Ang tawag sa akin sa sitwasyon na ito ay dissenting stockholder (hindi pabor sa gagawin
ng mga majority) at pwede kong gamitin ang right of appraisal.
■ Sa right of appraisal, ang isang dissenting stockholder na hindi pabor sa gagawin
na importanteng desisyon ng corporation tulad ng pagpapahaba ng term, ay
pwedeng umalis sa corporation. Pwede niyang irequire ang corporation na
bayaran ang fair market value ng shares niya kapag aalis siya. Pwede din naman
na umalis na lang siya basta at ibenta na lang ang shares sa labas pero mataas
ang chance na malugi siya kapag ganon. With the right of appraisal, guaranteed
ng batas na bibilhin ng corporation ang kanyang shares at its fair market value.
Kaya sigurado na aalis siya ng corporation na hindi lugi.
Section 37. Power to increase or Decrease Capital Stock; Incur, Create or Increase Bonded Indebtedness.
- No corporation shall increase or decrease its capital stock or incur, create or increase any bonded
indebtedness unless approved by a majority vote of the board of directors and by two-thirds (2/3) of the
outstanding capital stock at a stockholders' meeting duly called for the purpose.
● Pwedeng pataasin o pababain ang investment ng stockholders
● Ang corporation ay pwede mag-incur ng liability through bonds payable
● PERO dahil malaking obligasyon ang mga ito, kailangan ng majority vote ng board of directors at
two-thirds (2/3) of the outstanding capital stock
Written notice of the time and place of the stockholders' meeting and the purpose for said meeting must
be sent to the stockholders at their places of residence as shown in the books of the corporation served
on the stockholders personally, or through electronic means recognized in the corporation's bylaws
and/or the Commission's rules as a valid mode for service of notices.
A certificate must be signed by a majority of the directors of the corporation and countersigned by the
chairperson and secretary of the stockholders' meeting, setting forth:
A. That the requirements of this section have been complied with;
B. The amount of the increase or decrease of the capital stock;

C. In case of an increase of the capital stock, the amount of capital stock or number of shares of
no-par stock thereof actually subscribed, the names nationalities and addresses of the persons
subscribing, the amount of capital stock or number of no-par stock subscribed, the names,
nationalities and addresses of the persons subscribing, the amount of capital stock or number of
no-par stock subscribed by each, and the amount paid by each on the subscription in cash or
property, or the amount of capital stock or number of shares of no-par stock allotted to each
stockholder if such increase is for the purpose of making effective stock dividend therefor
authorized;
D. Any bonded indebtedness to be incurred, created or increased;
E. The amount of stock represented at the meeting; and
F. The vote authorizing the increase or decrease of capital stock, or incurring, creating or increasing
of bonded indebtedness.
Any increase or decrease in the capital stock or the incurring, creating or increasing of any bonded
indebtedness shall require prior approval of the Commission and where appropriate, of the Philippine
Competition Commission. The application with the Commission shall be made within six (6) months from
the date of approval of the board of directors and stockholders, which period may be extended for
justifiable reasons.
Copies of the certificate shall be kept on file in the office of the corporation and filed with the
Commission and attached to the original articles of incorporation. After approval by the Commission and
the issuance by the Commission of its certificate of filing may declare: Provided, That the Commission
shall not accept for filing any certificate of increase of capital stock unless accompanied by a sworn
statement of the treasurer of the corporation accompanied by a sworn statement of the treasurer of the
corporation lawfully holding office at the time of the filing of the certificate, showing that at least
twenty-five percent (25%) of the increase in capital stock has been subscribed and that at least
twenty-five percent (25%) of the amount subscribed has been paid in actual cash to the corporation or
that property, the valuation of which is equal to twenty-five percent (25%) of the subscription, has been
transferred to the corporation: Provided, further, That no decrease in capital stock shall be approved by
the Commission if its effect shall prejudice the rights of corporate creditors.
Nonstock corporations may incur, create or increase bonded indebtedness when approved by a majority
of the board of trustees and of at least two-thirds (2/3) of the members in a meeting duly called for the
purpose.
Bonds issued by a corporation shall be registered with the Commission, which shall have the authority to
determine the sufficiency of the terms thereof.
Section 38. Power to Deny Preemptive Right. - All stockholders of a stock corporation shall enjoy
preemptive right to subscribe to all issues or disposition of shares of any class, in proportion to their
respective shareholdings, unless such right is denied by the articles of incorporation or an amendment
thereto: Provided, That such preemptive right shall not extend to shares issued in compliance with laws

requiring stock offerings or minimum stock ownership by the public; or to shares issued in good faith
with the approval of the stockholders representing two-thirds (2/3) of the outstanding capital stock in
exchange for property needed for corporate purposes or in payment of previously contracted debt.
● Preemptive right: Ex. Sa isang corporation, may naka issue na 1000 shares. Sa 1000 shares na
naka-issue, 200 shares ang nabili mo kaya you’re 20% owner of the corporation. Sinasabi sa
concept ng preemptive right na kapag gusto magbenta ng corporation ng additional na 3000
shares, kailangan muna ito i-alok sa mga dating stockholders (current owners ng 1000 shares).
The goal is that, through the exercise of preemptive right, kung ano yung percentage of
ownership mo before the increase, yun pa din sana yung percentage of ownership mo after the
increase. Kung wala ang concept ng preemptive right, magugulat ka na lang na 5% (200 out of
4000 shares) na lang ang ownership mo sa corporation. Big deal to kasi maapektuhan ang
dividends mo o share sa kita ng corporation.
○ Kapag silent sa articles of incorporation, you have the preemptive right, pero kung sinabi
na “for this corporation, the preemptive right of our common shares is denied”, wala
kang magagawa kung iaalok ang additional 3000 shares sa iba.
Section 39. Sale or Other Disposition of Assets. - Subject to the provisions of Republic Act No. 10667,
otherwise known as the "Philippine Competition Act", and other related laws a corporation may, by a
majority vote of its board of directors or trustees, sell, lease, exchange, mortgage, pledge, or otherwise
dispose of its property and assets, upon such terms and conditions and for such consideration, which
may be money, stock, bonds, or other instruments for the payment of money or other property or
consideration, as its board of directors or trustees may deem expedient.
A sale of all or substantially all of the corporation's properties and assets, including its goodwill, must be
authorized by the vote of stockholders representing at least two-thirds (2/3) of the outstanding capital
stock, or at least two-thirds (2/3) of the members, meeting duly called for the purpose.
In nonstock corporations where there are no members with voting rights, the vote of at least a majority
of the trustees in office will be sufficient authorization for the corporation to enter into any transaction
authorized by this section.
The determination of whether or not the sale involves all or substantially all of the corporation's
properties and assets must be computed based on its net asset value, as shown in its latest financial
statements. A sale or other disposition shall be deemed to cover substantially all the corporate property
and assets if thereby the corporation would be rendered incapable of continuing the business or
accomplishing the purpose of which it was incorporated.
● Considered na substantially all: hindi kailangan na 100% ng assets ang ibebenta, yung enough
lang na kapag binenta mo ay mapipilay/ hindi na makakapag-operate ang company
Written notice of the proposed action and of the time and place for the meeting shall be addressed to
stockholders or members at their places of residence as shown in the books of the corporation and
deposited to the addressee in the post office with postage prepaid, served personally, or when allowed

by the bylaws or done with the consent of the stockholder, sent electronically: Provided, That any
dissenting stockholder may exercise the right of appraisal under the conditions provided in this Code.
After such authorization or approval by the stockholders or members, the board of directors or trustees
may, nevertheless, in its discretion, abandon such sale, lease, exchange, mortgage, pledge, or other
disposition of property and assets, subject to the rights of third parties under any contract relating
thereto, without further action or approval by the stockholders or members.
Nothing in this section is intended to restrict the power of any corporation, without the authorization by
the stockholders or members, to sell, lease, exchange, mortgage, pledge, or otherwise dispose of any of
its property and assets if the same is necessary in the usual and regular course of business of the
corporation or if the proceeds of the sale or other disposition of such property and assets shall be
appropriated for the conduct of its remaining business.
Section 40. Power to Acquire Own Shares. - Provided, That the corporation has unrestricted retained
earnings in its books to cover the shares to be purchased or acquired, a stock corporation shall have the
power to purchased or acquired, a stock corporation shall have the power to purchase or acquire its own
shares for a legitimate corporate purpose or purposes, including the following cases:
● The corporation could acquire the so called “treasury shares”- mga shares na inissure
mo dati and for one reason among the 3 reasons stated below, ibbuy back mo siya
● “What are the requirements needed by law bago ang isang company ay makapag buy
back ng sarili niyang shares?”
○ It has to have sufficient balance in their unrestricted retained earnings (kita ng
company; unrestricted kasi hindi naka-allot for one purpose; If the company is
going to buy P10,000 worth of treasury shares, the company must at least have
P10,000 worth of unrestricted retained earnings)
A. To eliminate fractional shares arising out of stock dividends;
○ Example: You have 750 shares and namigay yung corporation ng 1% stock dividend so as
a stockholder, you are entitled to 7.5 shares (fractional shares)
■ Ang panget ng may butal kaya what the corporation usually does is ibuy back
ang shares para maging whole number o matanggal yung butal
B. To collect or compromise an indebtedness to the corporation, arising out of unpaid subscription,
in a delinquency sale, and to purchase delinquent shares sold during said sale; and
○ Nagbbuy back para makasingil sa unpaid subscription
○ Kapag hindi nabayaran ang share, tatawagan ang “may-ari” at magiging delinquent share
ito then kapag walang nakabili nito sa auction sale, the only way para mabawi yun ng
company is to consider those delinquent shares as treasury shares. Kaya parang ang
nangyari ay binuy back ng corporation ang shares sa delinquent stockholder.
C. To pay dissenting or withdrawing stockholders entitled to payment for their shares under the
provisions of this Code.
○ Kapag ang mga dissenting or withdrawing stockholders ay aalis na dahil hindi masaya sa
nagawang decision, the corporation needs to pay them back.

Section 41. Power to Invest Corporate Funds in Another Corporation or Business or for Any Other
Purpose. - Subject to the provisions of this Code, a private corporation may invest its funds in any other
corporation, business, or for any purpose other than the primary purpose for which it was organized,
when approved by a majority of the board of directors or trustees and ratified by the stockholders
representing at least two-thirds (2/3) of the outstanding capital stock, or by at least two-thirds (2/3) of
the outstanding capital stock, or by at least two-thirds (2/3) of the members in the case of nonstock
corporations at a meeting duly called for the purpose.
● Kapag may excess funds pa ang corporation, they could invest some of their assets sa ibang
corporation para mas mapataas ang kanilang kita.
Notice of the proposed investment and the time place of residence as shown in the books of the
corporation and deposited to the addressee in the post office with the postage prepaid. Served
personally, or sent electronically in accordance with the rules and regulations of the Commission on the
use of electronic data message, when allowed by the bylaws or done with the consent of the
stockholders:
Provided, That any dissenting stockholder shall have appraisal right as provided in this Code: Provided,
however, That where the investment by the corporation is reasonably necessary to accomplish its
primary purpose as stated in the articles of incorporation, the approval of the stockholders or members
shall not be necessary.
Section 42. Power to Declare Dividends. - The board of directors of a stock corporation may declare
dividends out of the unrestricted retained earnings which shall be payable in cash, property, or in stock
to all stockholders on the basis of outstanding stock held by them: Provided, That any cash dividends due
on delinquent stock shall be first be applied to the unpaid balance on the subscription plus costs and
expenses, while stock holders until their unpaid subscription is fully paid: Provided, further, That no stock
dividend shall be issued without the approval of stockholders representing at least two-thirds (2/3)of the
outstanding capital stock at a regular or special meeting duly called for the purpose.
● The reason why stockholders would want to invest in a corporation is to earn dividends.
● The board of directors has the power to declare dividends.
● Dividends are payable through cash, property or stock.
○ Stock dividends ay stock mismo ng corporation niyo kapag stock ng ibang corporation
ang ipamimigay, iyon ay considered as property dividends.
● Delinquent stockholders are still entitled to dividends pero yung amount of dividends ay hindi
nila agad makukuha, ibabawas muna sa unpaid balance.
Stock corporations are prohibited from restraining surplus profits in excess of one hundred percent
(100%) of their paid-in capital stock, except: (a) when justified by the definite corporate expansion
projects or programs approved by the board of directors; or (b) when the corporation is prohibited under
any loan agreement with financial institutions or creditors, whether local or foreign, from declaring
dividends without their consent, and such consent has not yet been secured; or (c) when it can be clearly

shown that such retention is necessary under special circumstances obtaining in the corporation, such as
when there is need for special reserve for probable contingencies.
● “prohibited from restraining surplus profits in excess of one hundred percent of their paid-in
capital stock”- the concept of the so called “IAET” or Improperly Accumulated Earnings Tax
○ The reason for investing in a corporation is kumita through dividends so the worst
possible thing that could happen is kahit kumikita ang corporation, ayaw nito mamigay
ng dividends. Under this provision, it is said that stock corporations are prohibited from
restraining surplus profits. Bawal mag-imbak ng sobrang dami na retained earnings na
lalagpas sa 100% ng kanilang paid-in capital stock, or else mattax-an sila ng 10%
● Question: Who declares the dividends? THE BOARD OF DIRECTORS
○ Are they always required to declare dividends? No. Hindi required na magbigay ng
dividends every year. Ang pagbibigay ng dividends ay based on the wise discretion of the
board of directors.
● If ever discretion ng board of directors kung magbibigay ng dividends, pwede bang hindi na sila
magbigay ng dividends forever? No. Bawal, kapag hindi sila nagbigay when they have so much
unrestricted retained earnings, mag-apply sa kanila ang 10% Improperly Accumulated Earnings
Tax.
○ Dahil sa pagdadamot na magbigay ng dividends mapapatawan kayo ng buwis
● If may extra sa 100% ng paid-in capital, you should declare dividends, unless may valid reason
kayo why you hold that amount of retained earnings — restricted retained earnings.
○ Pwedeng hindi muna mamigay ng dividends at hindi mapatawan ng buwis when it is
justified by definite corporate expansion projects — account titles such as retained
earnings restricted for plant expansion and retained earnings restricted for bond sinking
fund redemption
○ You cannot just place a certain portion of your retained earnings to restricted if wala
naman talang valid reason para i-restrict. Kapag nalaman ng BIR na dinadaya ninyo using
the account titles pero wala naman talagang corporate expansion, papatawan pa rin
kayo ng 10% IAET.
Section 43. Power to Enter into Management Contract. - No corporation shall conclude a management
contract with another corporation unless such contract is approved by the board of directors and by the
stockholders owning at least the majority of the outstanding capital stock, or by at least a majority of the
members in the case of a nonstock corporation, or both the managing and the managed corporation, at
a meeting duly called for the purpose: Provided, That (a) where a stockholder or stockholders
representing the same interest of both the managing and the managed corporations own or control
more than one-third (1/3) of the total outstanding capital stock entitled to vote of the managing
corporation; or (b) where a majority if the members of the board of directors of the managing
corporation also constitute a majority of the members of the board of directors of the managed
corporation, then the management contract must be approved by the stockholders of the managed
corporation owning at least two-thirds (2/3) of the total outstanding capital stock entitled to vote, or by
at least two-thirds (2/3) of the members in the case of a nonstock corporation.

● Kailangan ng approval ng board of directors and ng stockholders owning at least the majority of
the outstanding capital
These shall apply to any contract whereby a corporation undertakes to manage or operate all or
substantially all of the called services contracts, operating agreements or otherwise: Provided, however,
That such service contracts or operating agreements which relate to the exploration, development
exploitation or utilization of natural resources may entered into such periods as may be provided by the
pertinent laws or regulations.
No management contracts shall be entered into for a period longer than five (5) years for any one term.
● Hanggang 5 years lang dapat ang mga management contracts
Section 44. Ultra Vires Acts of the Corporations. - No corporation shall possess or exercise corporate
powers other than those conferred by this Code or by its articles of incorporation and except as
necessary or incidental to the exercise of the powers conferred.
● Fully expressed in this code ang powers ng Corporation (in some cases may express, implied or
incidental to its existence). Acts of a corporation that is not stated in this code is called ULTRA
VIRES ACTS OF THE CORPORATION.
TITLE V: BYLAWS
Section 45. Adoption of Bylaws. - For the adoption of bylaws by the corporation, the affirmative vote of
the stockholders representing at least a majority of the outstanding capital stock, or of at least a majority
of the members in case of nonstock corporations, shall be necessary. The bylaws shall be signed by the
stockholders or members voting for them and shall be kept in the principal office of the corporation,
subject to the inspection of the stockholders or members during office hours. A copy thereof, duly
certified by a majority of the directors or trustees and countersigned by the secretary of the corporation,
shall be filed with the Commission and attached to the original articles of incorporation.
file sa SEC ● 2 important documents of a corporation:
○ Articles of Incorporation: application form of the corporation papuntang SEC

○ Bylaws: internal rules and regulations of the corporation
■ Although mahalaga din ang bylaws, hindi ito ganun ka big deal o hindi same level
maganda kung both na ipapasa ng articles of incorporation; kapag articles of incorporation dapat at least
two-thirds (2/3) of the outstanding capital stock pero kapag bylaws dapat at
least a majority of the outstanding capital stock lang
● Madalas magkasama ang dalawang documents na ito
Notwithstanding the provisions of the preceding paragraph, bylaws may be adopted and filed prior to
incorporation; in such case, such bylaws shall be approved and signed by all incorporators and submitted
to the Commission, together with the articles of incorporation.
● Sa unang paragraph ginawa ang bylaws noong nakatayo na ang corporation pero sinasabi sa
paragraph na to na pwede na magkaroon ng bylaws kahit na nag-aapply pa lang sa SEC or

incorporators pa lang ang meron (wala pang stockholders) - such bylaws shall be approved and
signed by all incorporators and submitted to the Commission, together with the articles of
incorporation.
● Sa umpisa pa lang pwede na isabay ang bylaws sa articles of incorporation pero pwede din
naman na to follow
In all cases, bylaws shall be effective only upon the issuance by the Commission of a certification that the
bylaws are in accordance with this Code.
The Commission shall not accept for filing the bylaws or any amendment thereto of any bank, banking
institution, building and loan association, trust company, insurance company, public utility, educational
institution, or any other corporations governed by special laws, unless accompanied by a certificate of
the appropriate government agency to the effect that such by laws or amendments are in accordance
with law.
● Ayaw ng commission na magkaroon ng bylaws na nakaka violate ng batas
Section 46. Contents of Bylaws. - A private corporation may provide the following in its bylaws;
A. The time, place and manner of calling and conducting regular or special meetings of the
directors or trustees;
meeting ng director ● Every once in a while nagkakaroon ng meetings ang directors or trustees; nakalagay sa
bylaws kung kailan, saan, at paano mag meeting ang directors or trustees
B. The time and manner of calling and conducting regular or special meetings and mode of
notifying the stockholders or members thereof; meeting ng stockholders
● Kailan, saan, at paano mag meeting ang stockholders or members
C. The required quorum in meetings of stockholders or members and the manner of voting therein;
D. The modes by which a stockholder, member, director or trustees may attend meetings and cast
their votes; modes kung paano makakaboto
● May ganitong option na dahil hindi na lang basta physical ang mode ng pag-attend ng
meeting, pwedeng electronic, digital or virtual na
E. The form for proxies of stockholders and members and the manner of voting them;
● Kapag hindi makaka-attend ng meeting ang isang stockholder or member, pwede siya
magpadala ng proxy
F. The directors' or trustees' qualifications, duties and responsibilities, the guidelines for setting the
compensation of directors or trustees and officers, and the maximum number of other board
sahod, number of board representations that an independent director or trustee may have which shall, in no case, be
more than the number prescribed by the Commission;

G. The time for holding the annual election of directors or trustees and the mode or manner of
giving notice thereof;
● Once a year nangyayari; nakalagay kung paano at kailan ang botohan
H. The manner of election or appointment and the term of officers other than directors or trustees;
● Officers such as the president, vice president, corporate secretary, and treasurer
I. The penalties for violation of the bylaws;

J. In the case of stock corporations, the manner of issuing stock certificates; and
K. Such other matters as may be necessary for the proper or convenient transaction of its corporate
affairs for the promotion of good governance and anti-graft and corruption measures.
maayos na pagpapatakbo ng corporation
An arbitration agreement may be provided in the bylaws pursuant to Section 181 of this Code.
● Nilalagay rin sa bylaws ang provisions for arbitration agreement para hindi na kailangan pumunta
sa korte, kahit na sila sila na lang maayos ang gusot or problem na maeencounter in the future
first batch bylaws : majority ng outstanding capital stock
second batch: majority ng bod AT stockholders
Section 47. Amendment to Bylaws. - A majority of the board of directors or trustees, and the owners of
at least a majority of the outstanding capital stock, or at least a majority of the members of a nonstock
corporation, at a regular or special meeting duly called for the purpose, may amend or repeal the bylaws
or adopt new bylaws. The owner of two-thirds (2/3) of the outstanding capital stock or two-third (2/3) of
the members in a nonstock corporation may delegate to the board of directors or trustees the power to
amend or repeal the bylaws or adopt new bylaws: Provided, That any power delegated to the board of
directors or trustee to amend or repeal the bylaws or adopt new bylaws shall be considered as revoke
whenever stockholders owning or representing a majority of the outstanding capital stock or majority of
the members shall so vote at a regular or special meeting.
● Kung nakakapag amend ng articles of incorporation, pwede din na magkaroon ng amendment ng
bylaws. Syempre sa umpisa noong binubuo pa lang ang corporation, onti pa lang sila o
incorporators pa lang ang meron kaya may mga bagay na hindi nila na-forsee or napaghandaan
at hindi nila nailagay sa bylaws.
○ Amendment to bylaws: Kapag habang tumatakbo ang corporation, marrealize na may
mga dapat baguhin sa bylaws
● Bago maapprove or masubmit sa SEC ang mga babaguhin o amendements sa bylaws, dapat
muna may approval within the corporation - A majority of the board of directors or trustees, and
the owners of at least a majority of the outstanding capital stock may amend or repeal the
bylaws or adopt new bylaws
● The owner of two-thirds (2/3) of the outstanding capital stock or two-third (2/3) of the members
in a nonstock corporation may delegate to the board of directors or trustees the power to
amend or repeal the bylaws or adopt new bylaws
○ If there is one group of people na higit na nakakaalam kung paano ang tamang
pagpapatakbo ng company, that is the Board of Directors or Board of Trustees. Sila ang
policy making bodies kaya compared to stockholders, mas alam nila kung ano ang dapat
gawin sa company.
○ If the stockholders feel na mas magiging efficient ang company kapag laging updated ang
bylaws, maaaring i-delegate o ibigay ng stockholders ang kanilang kapangyarihan na mag
attend o repeal ng bylaws sa board of directors.
■ However, with great power comes great responsibility. Too much power can
corrupt the minds of the board of directors and pwedeng ang gagawin nila ay
kung ano ang pabor sa kanila.
■ As a safeguard, kailangan pumayag muna ang two-third ng stockholders bago
nila ibigay o give-up ang kapangyarihan o kakayahan na mag amend o repeal ng

bylaws. Kapag pumayag ang two-third ng stockholders, it is enough proof na

may tiwala sila sa board of directors na ang gagawin nilang amendment sa
bylaws ay tama o nararapat.
■ Kapag nakita ng stockholders na ang ginagawang amendment sa bylaws ng
Board of Directors or Board of Trustees ay nakakasama sa company o para sa
sarili nilang kapakanan, pwede bawiin o i-revoke ang kapangyarihan na ibinigay
● To give the power: two-thirds (2/3)
● To revoke the power: majority
Whenever the bylaws are amended or new bylaws are adopted, the corporation shall file with the
Commission such amended or new bylaws and, if applicable, the stockholders' or members' resolution
authorizing the delegation of the power to amend and/or adopt new bylaws, duly certified under oath
by the corporate secretary and majority of the directors or trustees.
The amended or new bylaws shall only be effective upon the issuance by the Commission of certification
that the same is in accordance with this Code and other relevant laws.
TITLE VI: MEETINGS
Section 48. Kinds of Meetings. Meetings of the directors, trustees, stockholders, or members may be
regular or special.
● Kailangan ng meetings dahil kailangan mag usap o maplano nang maayos ang goals at direction
ng corporation
● Two kinds of meetings:
○ Regular meetings: beforehand pa may naka-schedule na ganitong meeting
○ Special meetings: nagkakaroon lang ng ganitong meeting dahil sa exigency
Section 49. Regular and Special Meetings of Stockholders or Members. Regular meetings of stockholders
or members shall be held annually on a date fixed in the bylaws, or if not so fixed in the bylaws, or if not
so fixed, on any date After April 15 of every year as determined by the board of directors or trustees:
Provided, further, That written notice of regular meetings may be sent to all stockholders or members of
record through electronic mail or such other manner as the Commission shall allow under its guidelines.
● Gaano kadalas magkaroon ng regular meeting? Annually; Dapat once a year
magkaroon ng regular meeting ang stockholders para maupdate sila sa nangyari
sa corporation noong nakaraang taon at mangyayari sa papasok na taon
● Kailan ginaganap ang regular meeting? On a date fixed in the bylaws, or if not so
fixed in the bylaws, on any date after April 15 of every year
○ April 15: Deadline ng BIR sa pagbabayad ng income tax; mag meeting na
pag nauna kasi meeting tas nagkaron lang after April 15 para yung final version ng mga financial statements
ng change sa fs diba panget pag ang maipapakita at maddiscuss sa shareholders; Earliest April 16
ganon

At each regular meeting of stockholders or members, the board of directors or trustees shall endeavor to
present to stockholders or members the following:
A. The minutes of the most recent regular meeting which shall include, among others:
1. A description of the voting and the vote tabulation procedures used in the previous
meetings;
2. A description of the opportunity given to stockholders or members to ask questions and
kung ano nangyari
sa meeting record of the questions asked and answers given;
3. The matters discussed and resolutions reached;
4. A record of the voting results for each agenda item;
5. A list of the director or trustees, officers and stockholders or members who attended the
meeting; and
6. Such other items that the Commission may require in the interest of good corporate
governance and protection of minority stockholders;
B. A members' list for nonstock corporations and, for stock corporations, material information on
the current stockholders, and their voting rights;
C. A detailed, descriptive, balanced and comprehensible assessment of the corporation's
performance, which shall include information on any material change in the corporation's
business strategy, and other affairs;
D. A financial report for the preceding year, which shall include financial statements duly signed
and certified in accordance with this Code and the rules and the Commission may prescribe, a
statement on the adequacy of the corporation's internal controls or risk management systems,
and a statement of all external audit and non-audit fees;
E. An explanation of the dividend policy and the fact of payment of dividends or the reasons for
nonpayment thereof;
F. Director or trustee profiles which shall include, among others, their qualifications and relevant
experience, length of service in the corporation, trainings and continuing education attended,
and their board representation in other corporations;
G. A director or trustee attendance report, indicating the attendance of each of the meetings of the
board and its committees and in regular or special stockholder meetings;
H. Appraisals and performance reports for the board and the criteria and procedure for
assessment;
I. A director or trustee compensation report prepared in accordance with this Code and the rules
the Commission may prescribe;
J. Director disclosures on self-dealings and related party transactions; and/or
K. The profiles of directors nominated or seeking election or reelection.
A director, trustee, stockholder, or member may propose any other matter for inclusion in the agenda at
may regular meeting of stockholders or members.
Special meetings of stockholders or members shall be held at any time deemed necessary or as provided
in the bylaws: Provided, however, That at least one (1) week written notice shall be sent to all
stockholders or members, unless a different period is provided in the bylaws, law or regulation.

● Special meetings shall be held at any time pero kailangan may at least one week written notice
sa mga shareholders para naman may makapunta o mapaghandaan
A stockholder or member may propose the holding of a special meeting and items to be included in the
agenda.
Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member: Provided,
That general waivers of notice in the articles of incorporation or the bylaws shall not be allowed:
Provided, further, That attendance at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
● For a meeting to be valid, kailangan masabihan lahat ng aattend pero yung notice requirement
na iyon pwede i-waive o ipagsawalang bahala, expressly or impliedly.
yung sa simula pa
lang sinasabi mo na ○ Expressly- okay lang kahit hindi niyo na ako sabihan na may meeting
wag mo akong ○ Impliedly- okay lang kahit hindi ako nasabihan na may meeting kung lumitaw o umattend
sabihan regarding sa
meeting ka sa meeting na iyon
● General waivers of notice in the articles of incorporation or the bylaws shall not be allowed
○ Hindi pwede na nakalagay sa bylaws na okay lang kahit hindi masabihan ang
shareholders na may meeting kasi this is for their protection, lalo na sa mga minority
stockholders
○ May mga pagkakataon na sinasadya ng major stockholders na hindi imbitahan ang
minority stockholders para walang kontrabida o matanong sa meeting, bawal iyon
○ Pwede i-waive on a permitting basis pero hindi pang lahatan
● Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
○ As a general rule, kapag impliedly, kahit hindi ka nasabihan na may meeting tapos
kapag umattend ka kahit di ka lumitaw o umattend ka sa meeting na iyon, it is considered na okay lang sayo kahit hindi
nasabihan, ibig sabihin okay lang ka nasabihan dahil umattend ka pa din naman.
sayo yon so valid ang meeting.
hindi valid ang meeting kung ○ It is considered lang na hindi valid ang meeting kapag nagpunta o umattend ka lang sa
pumunta ka don para
langsabihinin na di valid ang meeting para sabihin na hindi valid yung meeting dahil hindi ka nila sinabihan.
meeting kasi di ka sinabihan ○ Kaya dapat sa simula pa lang, sinasabihan ang lahat ng stockholders na may meeting
para hindi masasayang ang meeting.
Whenever for any cause, there is no person authorized or the person authorized unjustly refuses to call a
meeting, the Commission, upon petition of a stockholder or member on a showing of good cause
therefor, may issue an order, directing the petitioning stockholder or member to call a meeting of the
corporation by giving proper notice required by this Code or the bylaws. The petitioning stockholder or
member shall preside thereat until at least a majority of the stockholders or members present have
chosen from among themselves, a presiding officer.

Unless the bylaws provide for a longer period, the stock and transfer book or membership book shall be
closed at least twenty (20) days for regular meetings and seven (7) days for special meetings before the
scheduled date of the meeting.
● Cut off para makaattend ng shareholder sa meeting: at least twenty (20) days for regular
meetings and seven (7) days for special meetings
kasi nadadagdagan and
nababawasan yung mga ○ Kaya kapag bagong shareholder ka lang or kahapon ka lang bumili ng shares, wag ka mag
kasli sa meeting so need ng
cut off
expect na kasama ka na agad sa meeting today
In case of postponement of stockholders' or members' regular meetings, written notice thereof and the
reason therefor shall be sent to all stockholders or members of record at least two (2) weeks prior to the
date of the meeting, unless a different period is required under the bylaws, law or regulation.
The right to vote of stockholders or members may be exercised in person, through remote
communication or in absentia. The Commission shall issue the rules and regulations governing
participation and voting through remote communication or in absentia, taking into account the
company’s scale, number of stockholders or members, structure, and other factors consistent with the
protection and promotion of shareholders' or members' meetings.
Section 50. Place and Time of Meetings of Stockholders or Members. Stockholders' or members'
meetings, whether regular or special, shall be held in the principal office of the corporation as set forth
in the articles of incorporation, or if not practicable, in the city or municipality where the principal office
of the corporation is located: Provided, That any city of municipality in Metro Manila, Metro Cebu, Metro
Davao, and other Metropolitan areas shall, for purposes of this section, be considered a city or
municipality.
● Saan ang possible venues para sa paparating na stockholders meeting?
○ Ang principal office ng ABC Corporation ay nasa Pacific Star Building in Makati City.
■ Ang stockholders meeting ay dapat na ganapin sa principal office ng ABC
Corporation o sa Pacific Star Building dahil ito ang supposedly alam ng lahat ng
stockholders o madali nilang mapupuntahan/ hindi sila maliligaw.
■ If not practicable (madami ang stockholders pero maliit lang ang principal
office), anywhere in Makati City (any venue or restaurant), pwede maging valid
location for the meeting ng ABC Corporation
● Metro Manila, Metro Cebu, Metro Davao, and other Metropolitan area
pwede ka magpameeting sa Metro Manila kasi are considered/counted as one city - in effect, kapag ang principal office
counted as one city or municipality sila. Bawal ng ABC Corporation ay nasa Makati City, hindi lang limited sa Makati City
sila magpameeting sa Bulaca, Dasmarinas, etc.
ang valid venue for their meeting
Notice of meetings shall be sent through the means of communication provided in the bylaws, which
notice shall state the time, place and purpose of the meetings.
Each notice of meeting shall further be accompanied by the following:

A. The agenda for the meeting;

B. A proxy which shall be submitted to the corporate secretary within a reasonable time prior to
the meeting;
C. When attendance, participation, and voting are allowed by remote communication or in
absentia, the requirements and procedures to be followed when a stockholder or member elects
either option; and
D. When the meeting is for the election of directors or trustees, the requirements and procedure
for nomination and election.
All proceedings and any business transacted at a meeting of the stockholders or members, if within the
powers or authority of the corporation, shall be valid even if the meeting is improperly held or called:
Provided, That all the stockholders or members of the corporation are present or duly represented at the
meeting and not one of them expressly states at the beginning of the meeting that the purpose of their
attendance is to object to the transaction of any business because the meeting is not lawfully called or
convened.
● Kapag umattend ka ng meeting at hindi ka naman nagreklamo noong araw na nag-attend ka,
no reklamo = parang sinabi mo na din na okay lang sayo ang kung ano man ang napag-usapan niyo sa meeting
valid meeting
na iyon o ano man ang mga problem na na-encounter niyo sa meeting na iyon
○ Kapag hindi ka nagreklamo within the day of the meeting, magiging valid ang meeting
gaano kadami Section 51. Quorum in Meetings. Unless otherwise provided in this Code or in the bylaws, a quorum
ang aattend
para masabing
shall consist of the stockholders representing a majority of the outstanding capital stock or a majority of
valid yung the members in the case of nonstock corporations.
meeting
● Hindi tinitignan ang number of heads, ang important ay ang pag-attend ng stockholders
representing a majority of the outstanding capital stock.
○ Kapag may 100 members, hindi kailangan umattend ang 51 members, unless equal na
pinakatinitingnan ay yung may isang share lang ang bawat member. Okay lang kahit na 10 lang ang umattend
halaga nung shares mo
basta nasa kanila ang 50% + 1 na ownership ng corporation.
Section 52. Regular and Special Meetings of Directors or Trustees; Quorum. Unless the articles of
incorporation or the bylaws provides for a greater majority, a majority of the directors or trustees as
stated in the articles of incorporation shall constitute a quorum to transact corporate business, and
every decision reached by at least a majority of the directors or trustees constituting a quorum, except
for the election of officers which shall require the vote of a majority of all the members of the board,
shall be valid as a corporate act.
● Example: Sa 15 na directors, ilan ang dapat na umattend para masabi na may quorum? 8 ang
majority nga kasi dapat na umattend ng meeting, hindi pwede na 7 lang kasi dapat 50% +1
○ Kapag may gagawin na decision, kailangan 5 out of 8 ang mag yes, hindi pwede na 4 lang
○ Kapag ang gagawin ay election of officers, dapat 8 out 8 na umattend ang yes sa pagboto
election of members = kabuoan dahil ang required ay vote of majority of all the members of the board
ng board hindi ng umattend
lamang. so if 15 members at 8 ■ If may 15 directors at 11 ang umattend ng meeting, 8 pa din ang dapat na mag
ang ang umattend, dapat 8 ang
mag yes instead na 5 kasi ayon yes na vote dahil ito ang majority (50% +1) of all the members of the board
ang majority ng 15 ■ This is only an exception to the rule - kapag election of officers lang
decision = majority ng umattend

election = majority ng members Mariel Enriquez & Winona Zuniga
stockholders = anually (once a year)

Regular meetings of the board of directors or trustees of every corporation shall be held monthly, unless
the bylaws provide otherwise.
stockholders = anytime
Special meetings of the board of directors or trustees may be held at any time upon the call of the
president or as provided in the bylaws.
stockholders = principal office or city/municipality
Meetings of directors or trustees of corporations may be held anywhere in or outside the Philippines,
unless the bylaws provide otherwise. Notice of regular or special meetings stating the date, time and
place of the meeting must be sent to every director or trustee at least two (2) days prior to the
scheduled meeting, unless a longer time is provided in the bylaws. A director or trustee may waive this
requirement, either expressly or impliedly. stockholders postponement of meeting:
regular = 2 weeks notice
Directors or trustees who cannot physically attend or vote at board meetings can participate and vote
through remote communication such as videoconferencing, teleconferencing, or other alternative modes
of communication that allow them reasonable opportunities to participate. Directors or trustees cannot
attend or vote by proxy at board meetings.
stockholder = ● Kapag director or trustee ka, hindi pwede na ibang tao o proxy lang ang umattend para sayo.
pwedeng ibang tao
umattend fofr you Umattend ka kahit na through remote communication (zoom, viber, google meet) lang.
pero sa BOT/BOD di ○ Ganito dahil binoto ka ng mga stockholders as a director because of your own personal
pwede
qualifications (education, work experience, etc.).
○ Sa board of directors meeting, ikaw ang dapat mag-attend pero kung sa shareholders
meeting lang pwede na proxy ang mag attend para sayo.
● Kapag stockholder ka lang, pwede magkaroon ng proxy o ibang tao ang umattend para sayo.
A director or trustee who has a potential interest in any related party transaction must recuse from
voting on the approval of the related party transaction without prejudice to compliance with the
requirements of Section 31 of this Code.
Section 53. Who Shall Preside at Meetings. The chairman or, in his absence, the president shall preside
at all meetings of the directors or trustees as well as of the stockholders or members, unless the bylaws
provide otherwise.
Section 54. Right to Vote of Secured Creditors and Administrators. In case a stockholder grants security
interest in his or her shares in stock corporations, the stockholder-grantor shall have the right to attend
and vote at meetings of stockholders, unless the secured creditor is expressly given by the
stockholder-grantor such right in writing which is recorded in the appropriate corporate books.
● Kapag nakasanla ang isang shares of stock, sino ang may right to attend the meeting?
○ Ang may karapatan pa din na umattend ng meeting ay ang stockholder, unless
specifically sinabi niya sa pinagsanlaan niya ng shares na ang creditor na ang aattend.
Executors, administrators, receivers, and other legal representatives duly appointed by the court may
attend and vote on behalf of the stockholders or members without need of any written proxy.

Section 55. Voting in Case of Joint Ownership of Stock. The consent of all the co-owners shall be
necessary in voting shares of stock owned jointly by two (2) or more persons, unless there is a written
proxy, signed by all the co-owners, authorizing one (1) or some of them or any other person to vote such
share or shares: Provided, That when the shares are owned in an "and/or" capacity by the holders
thereof, any one of the joint owners can vote said shares or appoint a proxy therefor.
Section 56. Voting Right for Treasury Shares. Treasury shares shall have no voting right as long as such
shares remain in the Treasury.
● Treasury shares- binuy back natin from stockholders
● Walang voting right ang treasury shares
Section 57. Manner of Voting; Proxies. Stockholders and members may vote in person or proxy in all
meetings of stockholders or members
sa stockholder to ah kasi bawal ang proxy sa BOD at BOT
When so authorized in the bylaws or by a majority of the board of directors, the stockholders or
members of corporations may also vote through remote communication or in absentia: Provided, That
the votes are received before the corporation finishes the tally of votes.
A stockholder or member who participates through remote communication or in absentia shall be

deemed present for purposes of quorum.
The corporation shall establish the appropriate requirements and procedures for voting through remote
communication and in absentia, taking into account the company's scale, number of shareholders or
members, structure and other factors consistent with the basic right of corporate suffrage.
Proxies shall be in writing, signed and filed, by the stockholder or member, in any form authorized in the
bylaws and received by the corporate secretary within a reasonable time before the scheduled meeting.
Unless otherwise provided in the proxy form, it shall be valid only for the meeting for which it is
intended. No proxy shall be valid and effective for a period longer than five (5) years at any one time.
one proxy form = ● May proxy form na kailangan i-fill up ng stockholder - ilalagay niya kung sino ang aattend ng
one meeting only
unless aalis ka meeting on his behalf. The stockholder needs to submit this proxy form to the corporate
nang matagal,
pwede ka
secretary within a reasonable time before the scheduled meeting. This proxy form is only valid
gumawa ng for 1 meeting - the meeting for which it is intended.
proxy form na
vaid for a perion ○ Kapag kailangan umalis ng bansa ang stockholder at matagal siyang mawawala, a proxy
NO LONGER form shall be valid and effective for a period no longer than five (5) years.
THAN 5 YEARS
Section 58. Voting Trusts. One or more stockholders of stock corporation may create a voting trust for
the purpose of conferring upon a trustee or trustees the right to vote and other rights pertaining to the
shares for a period not exceeding five (5) years at any time: Provided, That in the case of a voting trust
specially required as a condition in a loan agreement, said voting trust may be for a period exceeding five
(5) years but shall automatically expire upon full payment of the load. A voting trust agreement must be
in writing and notarized, and shall specify the terms and conditions thereof.

● Nagkakaroon ng voting trust kapag ang isang stockholder ay gagamitin ang kanyang shares of
stock para maka-utang. Ang ibang bangko ay ginagamit na collateral ang shares of stock at
kasama nito, hihingi rin sila ng contract na tinatawag na voting trust agreement.
○ Usually ang aattend pa rin ay ang stockholder pero kapag may voting trust agreement,
trustor = stockholder
trustee = bangko ni-request ng bangko na maging pansamantala siya na trustee ng stockholder.
○ Isang representative ng bangko ang attend ng meeting on the stockholders behalf
hanggang sa mabayaran ang kanyang utang.
A certified copy of such agreement shall be filed with the corporation and with the Commission;
otherwise, the agreement is ineffective and unenforceable. The certificate or certificates of stock
covered by the voting trust agreement shall be cancelled and new ones shall be issued pursuant to said
agreement. The books of the corporation shall state that the transfer in the name of the trustee or
trustees is made pursuant to the voting trust agreement.
● Nag rerequest ang bangko ng voting trust agreement dahil most likely ang kanilang gagawin na
voting trust agreement = decision ay para sa kapakanan ng corporation dahil ang kanilang kakayahan na maka kolekta ay
bangko ang makikivote doon
sa corporation naka depende sa value ng corporation.
The trustee or trustees shall execute and deliver to the transferors, voting trust certificates, which shall
be transferable in the same manner and with the same effect as certificates of stock.
The voting trust agreement filed with the corporation shall be subject to examination by any stockholder
of the corporation in the same manner as any other corporate book or record: Provided, That both the
trustor and the trustee or trustees may exercise the right of inspection of all corporate books and
records in accordance with the provisions of this Code.
Any other stockholder may transfer the shares to the same trustee or trustees upon the term and
conditions stated in the voting trust agreement, and thereupon shall be bound by all the provisions of
said agreement.
No voting trust agreement shall be entered into for purposes of circumventing the laws against
anti-competitive agreements, abuse of dominant position, anti-competitive mergers and acquisitions,
violation of nationality and capital requirements, or for the perpetuation of fraud.
Unless expressly renewed, all rights granted in a voting trust agreement shall automatically expire at the
end of the agreed period. The voting trust certificates as well as the certificate of stock in the name of
the trustees shall thereby be deemed cancelled and new certificates of stock shall be reissued in the
name of the trustors.
The voting trustee or trustees may vote by proxy or in any manner authorized under the bylaws unless
the agreement provides otherwise.
● Difference ng proxy and voting trustee (pareho na iba ang aattend ng meeting)
○ Si proxy ay gagawin o iboboto kung ano ang inutos ng stockholder sa kanya
proxy = sunod sa utos ng stockholder

voting trustee = pwede gumawa sarili desisyon Mariel Enriquez & Winona Zuniga
○ Ang voting trustee o trustee ay hindi necessarily required na sumunod sa utos ng

stockholder. Ang voting trustee o tauhan ng bangko ay boboto ayon sa tingin niya kung
ano nararapat o required vote needed para protektahan ang kanyang interest.
TITLE VI: STOCKS AND STOCKHOLDERS

Section 59. Subscription Contract. – Any contract for the acquisition of unissued stock in an
existing corporation or a corporation still to be formed shall be deemed a subscription within the
meaning of this Title, notwithstanding the fact that the parties refer to it as a purchase or some
other contract.
● Ownership is denominated by stocks: mas marami, mas malaki yung capability mo to earn
subscribe sa shares dividends
● Stockholders: someone who has shares in a company. Someone who owns a piece of that
company.
● Paano nagiging stockholder ang isang tao? Nagsisimula ito sa pamamamagitan ng subscription
contract -- unang proseso sa pag-subscribe to shares.
Section 60. Pre-incorporation Subscription. – A subscription of shares in a corporation still

to be formed shall be irrevocable for a period of at least six (6) months from the date of
subscription, unless all of the other subscribers consent to the revocation, or the corporation fails to
incorporate within the same period or within a longer period stipulated in the contract of
subscription. No pre-incorporation subscription may be revoked after the articles of incorporation is
submitted to the Commission.
● Bago pa lang pumunta sa SEC, pwede na mangalap ang mga promoters ng mga gustong
mag-subscribe sa corporation.
● Hindi mo pwedeng bawiin for a period of at least 6 months, unless pumayag yung ibang
subscribers o hindi agad nakapag-incorporate yung corporation within the period stated in
contract of subscription dahil kapag nag-back out ka as a subscriber pwede itong makaapekto sa
incorporation procedures (such as may expected number of subscriber ang corporation bago sila
magfile sa SEC)
Section 61. Consideration for Stocks. – Stocks shall not be issued for a consideration less than the par or
issued price thereof. Consideration for the issuance of stock may be:
● Bawal ibenta ang shares less than its par value
● Watered stock is shares in a corporation that are sold at a price higher than the value of the
underlying assets. -- shares na inissue mo for the first time at less than its par value
○ Par value is 100, but you sold it at P98
mga pwedeng
(a) Actual cash paid to the corporation;
kapalit pag (b) Property, tangible or intangible, actually received by the corporation and necessary or
nag issue ka
ng stock convenient for its use and lawful purposes at a fair valuation equal to the par or issued value of the stock
issued; ---- measured at FAIR VALUE
(c) Labor performed for or services actually rendered to the corporation;
services already rendered

● Ex. lawyers and accountants na tumulong at the start, kapag limited pa ang cash ng corporation,
minsan pumapayag sila na ang bayad sa kanilang trabaho nung nag-incorporate ay ang shares
(d) Previously incurred indebtedness of the corporation;
● May utang yung corporation sa isang tao at ang ibabayad sa kanya ang yung shares
(e) Amounts transferred from unrestricted retained earnings to stated capital;
(f) Outstanding shares exchanged for stocks in the event of reclassification or conversion;
● Reclassification from ordinary shares to preferred shares
(g) Shares of stock in another corporation; and/or
(h) Other generally accepted form of consideration.
Where the consideration is other than actual cash, or consists of intangible property such as
patents or copyrights, the valuation thereof shall initially be determined by the stockholders or the
board of directors, subject to the approval of the Commission. -- FAIR MARKET VALUE
Shares of stock shall not be issued in exchange for promissory notes or future service. The
same considerations provided in this section, insofar as applicable, may be used for the issuance of
bonds by the corporation.
● Bawal na ang tatanggapin mong kapalit ng shares ay promissory notes -- mga receivable, dahil ito
ay risky (ex. Hindi mabayaran)
● Shares of stock may be exchanged for services already rendered pero hindi pwedeng ang future
service
The issued price of no-par value shares may be fixed in the articles of incorporation or by
the board of directors pursuant to authority conferred by the articles of incorporation or the bylaws, or if
not so fixed, by the stockholders representing at least a majority of the outstanding capital stock at a
meeting duly called for the purpose.
● Par value shares - nakalagay sa certificate of stock yung amount
● No-par value share- walang nakalagay na amount sa certificate of stock. Ito ay nakalagay either
also known as sa Articles of Incorporation or sasabihin ng Board of Directors. But kung hindi pa rin maibigay ng
stated value
shares BoD, stockholders representing at least a majority of the outstanding capital stock ang
magsasabi ng starting price ng no-par value share.
tangible Section 62. Certificate of Stock and Transfer of Shares. – The capital stock of corporations shall be
divided into shares for which certificates signed by the president or vice president, countersigned by the
secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance
shares of
stock are with the bylaws. Shares of stock so issued are personal property and may be transferred by delivery of
personal the certificate or certificates indorsed by the owner, his attorney in-fact, or any other person legally
property
authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until
the transfer is recorded in the books of the corporation showing the names of the parties to the
transaction, the date of the transfer, the number of the certificate or certificates, and the number of
shares transferred. The Commission may require corporations whose securities are traded in trading
markets and which can reasonably demonstrate their capability to do so to issue their securities or
shares of stocks in uncertificated or scripless form in accordance with the rules of the Commission.

● Nagkabentahan kayo ni Mr. X ng shares, between the two of you it is a valid sale pero hindi ito
valid sa mata ng corporation unless i-inform niyo ang corporation. Dapat pati sa Stock and
Transfer book, nakalagay kung sino na ang current owner ng shares, date kung kelan kayo
nagkabentahan, number ng certificate at kung ilan ang inilipat mong shares.
No shares of stock against which the corporation holds any unpaid claim shall be transferable in the
books of the corporation.
● Kailangan fully paid muna bago mailipat yung sharessa ibang tao
Section 63. Issuance of Stock Certificates. – No certificate of stock shall be issued to a subscriber until
the full amount of the subscription together with interest and expenses (in case of delinquent shares), if
any is due, has been paid.
● Indivisibility of subscription: stockholder shall only be entitled to the issuance of his certificate of
stock upon payment of the full amount of his subscription plus interest and expenses in case of
need mabayaran
muna in full bago delinquent shares. Kapag ikaw ay bumili or nag-subscribe to 1,000 shares at its par value P20.
ka ma-issuehan Ang total na dapat bayaran mo ay P20,000. Pero paano kung ang pera mo lang ay P5,000, ilang
ng shares
number of shares ang dapat maibigay sayo? ZERO SHARES.
○ Wala ka dapat ibigay kahit isang share sa isang tao kapag hindi niya na fully paid yung
amount na dapat niyang bayaran sa bibilhin nyang shares. Hindi pwedeng partial
payment.
no-par value
Section 64. Liability of Directors for Watered Stocks. – A director or officer of a corporation who:
(a) consents to the issuance of stocks for a consideration less than its par or issued value;
(b) consents to the issuance of stocks for a consideration other than cash, valued in excess of its fair
value; or
KAPAG PUMAYAG SIYA NA KULANG
(c) having knowledge of the insufficient consideration, does not file a written objection with the
corporate secretary, shall be liable to the corporation or its creditors, solidarily with the stockholder
concerned for the difference between the value received at the time of issuance of the stock and the par
or issued value of the same.
● Par value nung share ay 100 pero binenta lang ng 95 (issued for a consideration less than its par
sino dapat
magabono? value) Ang kulang na P5 ay liability ng director. Kung sino mang director ang pumayag sa
DIRECTOR and disadvantage transaction ay magiging liable to the corporation solidarily with the stockholder for
STOCKHOLDER kasi
magkaconchaba sila the difference between value received and par value.
Section 65. Interest on Unpaid Subscriptions. – Subscribers to stocks shall be liable to the corporation for
interest on all unpaid subscriptions from the date of subscription, if so required by and at the rate of
interest fixed in the subscription contract. If no rate of interest is fixed in the subscription contract, the
prevailing legal rate shall apply.
● Kapag walang readily available cash ang isang subscriber -- called subscription receivable sa
books ng corporation. Kapag inabot na ng due date at hindi pa rin nababayaran ang unpaid
subscription, pwedeng mapatawan ng additional interest based on the interest based on
subscription contract, but if walang rate na nakalagay basis ay yung prevailing legal rate.

Section 66. Payment of Balance of Subscription. – Subject to the provisions of the subscription contract,
the board of directors may, at any time, declare due and payable to the corporation unpaid subscriptions
and may collect the same or such percentage thereof, in either case, with accrued interest, if any, as it
may deem necessary. maniningil na
● Pwedeng i-declare anytime ng BoD na due and payable na ang unpaid subscriptions.
Payment of unpaid subscription or any percentage thereof, together with any interest accrued shall be
made on the date specified in the subscription contract or on the date stated in the call made by the
board. Failure to pay on such date shall render the entire balance due and payable and shall make the
stockholder liable for interest at the legal rate on such balance, unless a different interest rate is
provided in the subscription contract. The interest shall be computed from the date specified, until full
payment of the subscription. If no payment is made within thirty (30) days from the said date, all stocks
covered by the subscription shall thereupon become delinquent and shall be subject to sale as
hereinafter provided, unless the board of directors orders otherwise.
● Kapag dumating na date specified in the subscription contract at hindi pa nakakapagbayad,
delinquent shares ay
binebenta sa auction magiging liable na siya for interest at the legal rate unless may nakalagay na interest rate sa
subscription contract.
● If within 30 days ay hindi pa rin nakakapagbayad, shares covered by that subscription will
become delinquent.
○ Failure to pay the due amount within 30 days from the date specified, shall render the
delinquent share to be sold at a public auction.
Section 67. Delinquency Sale. – The board of directors may, by resolution, order the sale of delinquent
stock and shall specifically state the amount due on each subscription plus all accrued interest, and the
date, time and place of the sale which shall not be less than thirty (30) days nor more than sixty (60)
days from the date the stocks become delinquent.
● Kung magkano pa yung subscription receivable plus accrued interest, ito ang magiging due from
the highest bidder
Notice of the sale, with a copy of the resolution, shall be sent to every delinquent stockholder either
personally, by registered mail, or through other means provided in the bylaws. The same shall be
published once a week for two (2) consecutive weeks in a newspaper of general circulation in the
province or city where the principal office of the corporation is located.
pag di nadeliver on time, ibebenta na sa ibang tao
Unless the delinquent stockholder pays to the corporation, on or before the date specified for the sale of
the delinquent stock, the balance due on the former’s subscription, plus accrued interest, costs of
advertisement and expenses of sale, or unless the board of directors otherwise orders, said delinquent
stock shall be sold at a public auction to such bidder who shall offer to pay the full amount of the
balance on the subscription together with accrued interest, costs of advertisement and expenses of sale,
for the smallest number of shares or fraction of a share. The stock so purchased shall be transferred to
such purchaser in the books of the corporation and a certificate for such stock shall be issued in the

purchaser’s favor. The remaining shares, if any, shall be credited in favor of the delinquent stockholder
who shall likewise be entitled to the issuance of a certificate of stock covering such shares.
● Highest bidder: Siya yung taong willing bayaran yung total ng subscription receivable plus
interest plus expenses (lahat ng kulang ni delinquent subscriber) na ang kapalit ay
pinakamababang number of shares.
○ Sa auction sale ng delinquent shares, hindi pataas ng babayaran, dapat willing kang
bayaran yung total due amount at willing kang tumanggap ng pinakamababang number
of shares.
■ Due from delinquent subscriber ay P10,000 (supposedly 1,000 shares ito). Sa
unlike sa normal auction na auction, may bid na sa P10,000 tatanggap ito ng 900 shares, 850 or 800. Ang
pataasan, dito baliktad highest bidder ay yung willing magbayad ng 10,000 plus expenses kapalit ng 800
shares.
● Kapag hindi ka nakapagbayad ng lahat ng subscription receivable mo, ibebenta sa delinquency
sale yung mga subscribed mong shares. Pero hindi necessarily na wala kang matatanggap na
shares as a delinquent subscriber. Kapag 1,000 yung delinquent at yung winning bidder ay 800
shares lang ang kapalit, yung natitirang 200 shares ay mapupunta sa delinquent stockholder.
● But often, talo si delinquent stockholder, dahil bakit ka mag-bid sa delinquent shares na
babayaran mo yung total due at ang kapalit ay mababang number ng shares, unless sobrang taas
ng price ng shares at wala nang available shares sa labas.
Should there be no bidder at the public auction who offers to pay the full amount of the balance on the
subscription together with accrued interest, costs of advertisement, and expenses of sale, for the
smallest number of shares or fraction of a share, the corporation may, subject to the provisions of this
Code, bid for the same, and the total amount due shall be credited as fully paid in the books of the
corporation. Title to all the shares of stock covered by the subscription shall be vested in the corporation
as treasury shares and may be disposed of by said corporation in accordance with the provisions of this
Code.
● Kapag sa isang auction sale ay walang gustong magbid, yung halaga ng unissued ordinary shares
ay ililipat sa ordinary stock (credited as fully paid). Yung delinquent shares na hindi nabayaran ni
delinquent stockholder ay i-issue sa pangalan ng corporation.
● Entry kapag may nag subscribe ng share:
Subscription Receivable
Subscribed ordinary share
-- Kapag walang nagbid ang magiging entry is
Subscribed ordinary share
Ordinary Share ang dating ay parang naging treasury shares siya
Treasury Share
Subscription Receivable
Section 68. When Sale May be Questioned. - No action to recover delinquent stock sold can be sustained
upon the ground of irregularity or defect in the notice of sale, or in the sale itself of the delinquent stock,
unless the party seeking to maintain such action first pays or tenders to the party holding the sum for

which the same was sold with interest from the date of sale at the legal rate. No such action shall be
maintained unless a complaint is filed within six (6) months from the date of sale.
● Kapag may gustong i-recover na nabentang delinquent stock, kailangan itong barayan sa nakabili
yung sum for which the same was sold with interest
Section 69. Court Action to Recover Unpaid Subscription. - Nothing in this Code shall prevent the
corporation for collecting through court action, the amount due on any unpaid subscription, with
accrued interest, costs and expenses. wag bibili kung hindi naman kaya bayaran
Section 70. Effect of Delinquency. - No delinquent stock shall be voted for, be entitled to vote, or be
represented at any stockholder's meeting, nor shall the holder thereof be entitled to any of the rights of
a stockholder except the right to dividends in accordance with the provisions of this Code, until and
unless payment is made by the holder of such delinquent stock for the amount due on the distribution
with accrued interest, and the costs and expenses of advertisement, if any.
dividends lang ● Habang delinquent pa ang isang share (hindi pa na-ddispose sa ibang tao), hindi ito pwedeng
karapatan mo kung bumoto, o iboto o maka-attend at any stockholder’s meeting dahil hindi ka pa bayad
di ka pa fully paid
and yon ay dahil ● Kapag isa kang delinquent stockholder, wala kang ibang karapatan kundi right to dividends
nakasubscribe ka
○ Ang pagkakaroon ng right to dividends ay hindi dahil fully paid ka na kundi dahil
nagsubscribe ka ng shares
Section 71. Rights of Unpaid Shares, Nondelinquent. - Holders of subscribed shares not fully paid which
are not delinquent shall have all the rights of a stockholder.
● Pag nag subscribe ka, after 30 days from the date stated in the subscription contract at hindi ka
pag delinquent wala ka nakapagbayad tyaka lang magiging delinquent yung shares mo. Pero between that date and the
karapatan hanggat di ka
fully paid but if di ka 30 days period, ikaw ay considered not fully paid and not delinquent, kaya you have all the rights
delinquent pero not fully
paid, may karapatan ka pa
of a stockholder pa. kapag nasa 30 days period ka pa lang
rin
Section 72. Lost or Destroyed Certificates. The following procedure shall be followed by a corporation in
issuing new certificates of stock in lieu of those which have been lost, stolen or destroyed:
(a) The registered owner of a certificate of stock in a corporation or such person's legal representative
shall file with the corporation an affidavit in triplicate setting forth, if possible, the circumstances as to
how the certificate was lost, stolen or destroyed, the number of shares represented by such certificate,
affidavit of loss the serial number of the certificate and the name of the corporation which issued the same. The owner
kung pano nawala
yung certificate of such certificate of stock shall also submit such other information and evidence as may be deemed
necessary; and
● Owner of the certificate of stock shall file an affidavit (of loss) stating kung paano nawala o
nasira, stated yung number ng shares, serial number ng certificate, name ng corporation.
(b) After verifying the affidavit and other information and evidence with the books of the corporation
shall publish a notice in a newspaper of general circulation in the place where the corporation has its
principal office, once a week for three (3) consecutive weeks at the expense of the registered owner of
the certificate of stock which has been lost, stolen or destroyed. The notice shall state the name of the
corporation, the name of the registered owner, the serial number of the certificate, the number of

shares represented by such certificate, and shall state that after the expiration of one (1) year from the
date of the last publication, if no contest has been presented to the corporation regarding the certificate
of stock, the right to make such contest shall be barred and the corporation shall cancel the lost,
destroyed or stolen certificate of stock, the right to make such contest shall be barred and the
corporation shall cancel the lost, destroyed or stolen certificate of stock in its books. In lieu thereof, the
corporation shall issue a new certificate of stock, unless the registered owner files a bond or other
security as may be required, effective for a period of one (1) year, for such amount and in such form and
with such sureties as may be satisfactory to the board of directors, in which case a new certificate may
be issued even before the expiration of one (1) year period provided herein.
● Kailangan ng publication sa newspaper dahil may mga stockholder na nangloloko lang, kunyari
nawala o nasira yung certificate pero ang totoo nasanla pala sa iba. Paano malalaman ng
corporation na nakasanla kung hindi nila kilala? Kaya may publication para ipaalam sa publiko.
○ That one year period is to give a chance doon sa may mismong may hawak ng certificate
of stock to contest yung nagrerequest na stockholder. Ito ay para maiwasan na
mag-issue ulit ng panibagong certificate yung corporation at mag double copy yung
certificate.
● Pero kung siguradong nawala o nasira yung certificate of stock, you could file a bond stating na
“mag-issue na kayo ng panibagong certificate of stock pero just in case may lumabas na tao
claiming that nasa kanya pala yung original certificate, pwedeng habulin ng corporation yung
bond for the value of the shares na pina-reprint ko.”
○ Kahit wala pa yung one year period pwede na agad ma reprint yung certificate dahil sa
pagfile ng bond.
If a contest has been presented to the corporation or if an action is pending in court regarding the
ownership of the certificate of stock which has been lost, stolen in lieu thereof shall be suspended until
the court renders a final decision regarding the ownership of the certificate of stock which has been lost,
stolen or destroyed.
● Kapag may nag contest, hihintayin muna ang desisyon ng korte bago mag-issue ulit ng certificate
of stock
Except in case of fraud, bad faith, or negligence on the part of the corporation and its officers, no action
may be brought against any corporation which shall have issued a certificate of stock in lieu of those lost,
stolen or destroyed pursuant to the procedure above-described.
● Assuming that the corporation is in good faith at nag-issue sila ng panibagong certificate of stock
na hindi naman pala nawala o nasira, no action may be brought against any corporation, hindi
sila pwedeng makasuhan.
○ Unless negligent ang corporation sa pag verify kung nawala o nasira ba talaga or unless
kasama yung stockholders or corporation sa pag-commit ng fraud

TITLE VIII: CORPORATE BOOKS AND RECORDS

Section 73. Books to be Kept; Stock Transfer Agent. - Every corporation shall keep and carefully preserve
at its principal office all information relating to the corporation including, but not limited to:
(a) The articles of incorporation and bylaws of the corporation and all their amendments;
books or records ● Articles of incorporation stating its name, principal office, primary and secondary purpose
na dapat ● Bylaw: internal rules and regulations
minementain ng
isang tao ● Dapat may kopya ang corporation para anytime na may gustong tumingin na authorized person
(b) The current ownership structure and voting rights of the corporation, including lists of stockholders
or members group structures, intra-group relations, ownership data, and beneficial ownership.
(c) The names and addresses of all the members of the board of directors or trustees and the executive
officers;
(d) A record of all business transactions;
(e) A record of the resolutions of the board of directors or trustees and of the stockholders or members;
(f) Copies of the latest reportorial requirements submitted to the Commission; and
(g) The minutes of all meetings of stockholders or members, or of the board of directors or trustees.
Such minutes shall set forth in detail among others; the time and the place of the meeting held, how it
was authorized, the notice given, the agenda therefore, whether the meeting was regular or special, its
object if special, those present and absent, and every act done or ordered done at the meeting. Upon
the demand of a director trustee, stockholder or member, the time when any director, trustee,
stockholder or member entered or left the meeting must be noted in the minutes; and on a similar
demand, the yeas and nays must be taken on any motion or proposition, and a record thereof carefully
made. The protest of a director, trustee, stockholder or member on any action or proposed action must
be recorded in full upon their demand.
● Minutes of the meeting are notes that are recorded during a meeting. They highlight the key
issues that are discussed, motions proposed or voted on, and activities to be undertaken.
○ Summary or transcript of the meeting held
Corporate records, regardless of the form in which they are stored, shall be open to inspection by any
director, trustee, stockholder or member of the corporation in person or by a representative at
reasonable hours on business days, and a demand in writing may be made by such director, trustee or
stockholder at their expense, for copies of such records or excerpts from said records. The inspecting or
reproducing party shall remain bound by confidentiality rules under prevailing laws, such as the rules on
trade secrets or processes under Republic Act No. 8293, otherwise known as the "Intellectual Property
Code of the Philippines", as amended, Republic Act No. 10173, otherwise known as the "Data Privacy Act
of 2012" Republic Act No. 8799, otherwise known as "The Securities Regulation Code", and the Rules of
Court.
● Pwede mong tignan anytime ang mga corporate records basta at reasonable hours
● Kung gusto mo makakuha ng kopya ng mga corporate records, a demand in writing may be made
● Hindi mo basta pwedeng ipagkalat ang mga nalalaman mo sa corporation dahil it violates certain
laws like Intellectual Property Code, Data Privacy Act and the Securities Regulation Code

A requesting party who is not a stockholder or member of record, or is a competitor, director, officer,
controlling stockholder or otherwise represents the interests of a competitor shall have no right to
inspect or demand reproduction of corporate records.
Any stockholder who shall abuse the rights granted under this section shall be penalized under Section
158 of this Code, without prejudice to the provisions of Republic Act No. 8293, otherwise known as the
"Intellectual Property Code of the Philippines", as amended, and Republic Act No. 10173, otherwise
known as the "Data Privacy Act of 2012".
Any officer or agent of the corporation who shall refuse to allow the inspection and/or reproduction of
records in accordance with the provisions of this Code shall be liable to such director, trustee,
stockholder or member for damages, and in addition, shall be guilty of an offense which shall be
punishable under Section 161 of this Code:
● Yung director, trustee, stockholder or member na nag-refuse na makita ng iba ang corporation
records ay liable for damages dahil inaagrabyado nito ang karapatan niya na makita at mag
reproduce ng information
Provided, That if such refusal is made pursuant to a resolution or order of the board of directors or
trustees, the liability under this section for such action shall be imposed upon the directors or trustees
who voted for such refusal:
● Kapag unjustified yung refusal, kung sinong director or trustee man ang nag-utos na huwag
bigyan ng access or kopya yung nanghihingi, siya ay magiging liable for damages
Provided, further, That it shall be a defense to any action under this section that the person demanding
to examine and copy excerpts from the corporation's record or minutes of such corporation or of any
other corporation, or was not acting in good faith or of any other corporation or was not acting in good
faith or for a legitimate purpose in making the demand to examine or reproduce corporate records or is
a competitor, director, officer, controlling stockholder or otherwise represents the interest of a
competitor.
If the corporation denies or does not act on a demand for inspection and/or reproduction, the aggrieved
party may report such denial or inaction to the Commission Within five (5) days from receipt of such
report, the Commission shall conduct a summary investigation and issue an order directing the
inspection or reproduction of the requested records.
● Yung na agrabyado director or trustee may report sa SEC yung denial sa pag inspect or reproduce
ng corporate records. Within five days pagtanggap ng report ay mag-conduct ng summary
investigation ang SEC at kapag nakita nilang hindi justified ang refusal ng corporation, the SEC
will issue an order directing the inspection or reproduction of the requested records.
Stock corporations must also keep a stock and transfer book, which shall contain a record of all stocks in
the names of the stockholders alphabetically arranged; the installments paid and unpaid on all stocks for
which subscription has been made, and the date of payment of any installment; a statement of every

alienation, sale or transfer of stock made, the date thereof, by and to whom made; and such other
entries as the bylaws may prescribed, The stock and transfer book shall be kept in the principal office of
the corporation or in the office of its stock transfer agent and shall be open or inspection by any director
or stockholder of the corporation at reasonable hours on business days.
● The stock and transfer book, or STB, is the registry of ownership in a corporation. It is the
quintessential record of all stockholders and their corresponding stockholdings in the
corporation. It is the official record of equity ownership, of stockholder status, and of those who
are entitled in vote in meetings.
● Naglalaman kung sino-sino ang mga stockholders (arranged alphabetically) and kung magkano
ang shares na binili mo, kailan mo binili, kailan o kanino mo binenta.
○ Logbook ng lahat ng stockholders and movement ng shares-- kung sino ang current na
may-ari ng shares.
tagabantay ng A stock transfer agent or one engaged principally in the business of registering transfers of stocks in
stock and
transfer book behalf of a stock corporation shall be allowed to operate in the Philippines upon securing a license from
(third party to) the Commission and the payment of a fee to be fixed by the Commission, which shall be renewable
pero pwedeng
corporate annually: Provided, That a stock corporation is not precluded from performing or making transfer of its
secretary na
lang or any
own stocks, in which case all the rules and regulations imposed on stock transfer agents, except the
officer sa payment of a license fee herein provided, shall be applicable: Provided, further, That the Commission
company if
maliit lang may require stock corporations which transfer and/or trade stocks in secondary markets to have an
company independent transfer agent. advisable na may independent agent (third party)
● Kapag maliit lang ang company, hindi naman ganun kadami ang transactions to the point na
kailangan pa ng services stock transfer agent, which is usually a third service party. -- Pwedeng
corporate secretary na lang or any director
Section 74. Right to Financial Statements. - A corporation shall furnish a stockholder or member, within
ten (10) days from receipt of their written request, its most recent financial statement, in the form and
substance of the financial reporting required by the Commission.
● Dapat ay makapagsupply ang corporation ng financial statements, wiithin 10 days from the date
of request
At the regular meeting of stockholders or members, the board of directors or trustees shall present to
such stockholders or members a financial report of the operations of the corporation for the preceding
year, which shall include financial statements, duly signed and certified in accordance with this Code,
and the rules the Commission may prescribe.
However, if the total assets or total liabilities of the corporation are less than Six hundred thousand
pesos (₱600,000.00), or such other amount as may be determined appropriate by the Department of
Finance, the financial statements may be certified under oath by the treasurer and the president.

TITLE IX: MERGER AND CONSOLIDATION

Section 75. Plan of Merger or Consolidation. - Two (2) or more corporations may merge into a single
corporation which shall be one of the constituent corporations or may consolidate into a new single
corporation which shall be the consolidated corporation.
● Si Company A sumama kay Company B kaya nabuo si Company C -- Consolidation
○ May nabubuong bagong corporation
● Company A ay sumama kay Company B at ang naiwan ay either si Company A or B -- Merger
○ Na-retain ang isa sa lumang entity
The board of directors or trustees of each corporation, party to the merger or consolidation, shall
approved a plan of merger or consolidation, shall approved a plan of merger or consolidation, shall
approve a plan of merger or consolidation setting forth the following:
(a) The names of the corporations proposing to merge or consolidate hereinafter referred to as the
constituent corporations;
(b) The terms of the merger or consolidation and the mode of carrying the same into effect;
(c) A statement of the changes, if any, in the articles of incorporation of the surviving corporation in case
of merger; and, in case of consolidation, all the statements required to be set forth in the articles of
incorporation for corporations organized under this Code; and
(d) Such other provisions with respect to the proposed merger or consolidation as are deemed necessary
or desirable.
Section 76. Stockholders' or Members' Approval. - Upon approval by a majority vote of each of the board
of directors or trustees of the constituent corporations of the plan of merger or consolidation, the same
shall be submitted for approval by the stockholders or members of each of such corporations at separate
corporate meetings duly called for the purpose. Notice of such meetings shall be given to all
stockholders or members of the respective corporations in the same manner as giving notice of regular
or special meetings under Section 49 of this Code. The notice shall state the purpose of the meeting and
include a copy or a summary of the plan of merger or consolidation.
● Magpapatawag ng separate meetings sii Company A and Company B upang magdecide kung
aaprubahan ba yung plano ng merger or consolidation
The affirmative vote of stockholders representing at least two-thirds (2/3) of the outstanding capital
stock of each corporation in the case of stock corporations or at least two-thirds (2/3) of the members in
the case of nonstock corporations shall be necessary for the approval of such plan. Any dissenting
stockholder may exercise the right of appraisal in accordance with this Code: Provided, That if after the
approval by the stockholders of such plan, the board of directors decides to abandon the plan, the right
of appraisal shall be extinguished.
● Kailangan ng boto ng ⅔ of the outstanding capital stock or ⅔ of the members para approve ang
plano ng merger and consolidation
Any amendment to the plan of merger or consolidation may be made: Provided, That such amendment
is approved by a majority vote of the respective boards of directors or trustees of all the constituents

majority vote ng BOD and 2/3 ng stockholders
corporations and ratified by the affirmative vote of stockholders representing at least two-thirds (2/3) of
the outstanding capital stock or of two-thirds (2/3) of the members of each of the constituents
corporations. Such plan, together with any amendment, shall be considered as the agreement of merger
or consolidation.
Section 77. Articles of Merger or Consolidation. - After the approval by the stockholders or members as
required by the preceding section, articles of merger or articles of consolidation shall be executed by
each of the constituent corporations, to be signed by the president or vice president and certified by the
secretary or assistant secretary of each corporation setting forth
(a) The plan of the merger or the plan of consolidation;
(b) As to stock corporations, the number of shares outstanding, or in the case of nonstock corporations,
the number of members;
(c) As to each corporation, the number of shares or members voting for or against such plan,
respectively;
(d) The carrying amounts and fair values of the assets and liabilities of the respective companies as of
the agreed cut-off date;
(e) The method to be used in the merger or consolidation of accounts of the companies;
(f) The provisional or pro forma values, as merged or consolidated, using the accounting method; and
(g) Such other information as may be prescribed by the Commission.
Section 78. Effectivity of Merger or Consolidation. - The articles of merger or of consolidation, signed
kailanagn and certified as required by this Code, shall be submitted to the Commission for its approval: Provided,
submitted to
SEC for
That in the case of merger or consolidation of banks or banking institutions, loan associations, trust
approval companies, insurance companies, public utilities, educational institutions, and other special corporations
and
appropriate governed by special laws, the favorable recommendation of the appropriate government agency shall
govt first be obtained. If the Commission is satisfied that the merger or consolidation of the corporations
agencies
kapag di concerned is consistent with the provisions of this Code and existing laws, it shall issue a certificate
corpo
approving the articles and plan or merger or of consolidation, at which time the merger or consolidation
shall be effective.
If upon investigation, the Commission has reason to believe that the proposed merger or consolidation is
contrary to or inconsistent with the provisions of this Code or existing laws, it shall set a hearing to give
the corporations concerned the opportunity to be heard. Written notice of the date, time, and place of
hearing shall be given to each constituent corporation at least two (2) weeks before said hearing. The
Commission shall thereafter proceed as provided in this Code.
● Kapag hindi pumayag yung Commission sa plan ng merger or consolidation, it shall set a hearing
para bigyan ng corporation ang pagkakataon na ipaliwanag yung plano
Section 79. Effects of Merger or Consolidation. - The merger of consolidation shall have the following
effects:

(a) The constituent corporations shall become a single corporation shall become a single corporation
which, in case of merger, shall be the surviving corporation designated in the plan of merger; and in case
of consolidation, shall be the consolidated corporation designated in the plan of consolidation;
● In case of merger kay A and B, isa lang ang matitira
● In case of consolidation, magiging isang corporation lang sila and makakabuo ng panibagong
corporation
(b) The separate existence of the constituent corporations shall cease, except that of the surviving or the
consolidated corporation;
● Mag stop na yung existence ng dalawang separate corporations dahil magiging isa na lang sila
(c) The surviving or the consolidated corporation shall possess all the right, privileges, immunities and
franchises of each constituent corporation; and all real or personal property, all receivables due on
whatever account, including subscriptions to shares and other choses in action, and every other interest
of, belonging to, or due to each constituents corporation, shall be deemed transferred to and vested in
such surviving or consolidated corporation as though such surviving or consolidated corporation had
itself incurred such liabilities or obligations; and any pending claim, action or proceeding brought by or
against any constituent corporation may be prosecuted by or against the surviving or consolidated
corporation. The rights of creditors or liens upon the property of such constituent corporations shall not
be impaired by the merger or consolidation.
● Yung natirang corporation and the consolidated corporation shall have all the rights of the both
the constituent corporations.
○ Mapupunta rin sa surviving and consolidated corporation yung assets, liabilities and
equity of each constituent corporation. Sasaluhin niya yung mga utang nung dalawang
nag-merge
■ The right of creditors or liens shall not be impaired. Hindi apektado yung mga
creditors sa merger or consolidation. Hindi nagbabago yung karapatan nilang
makakolekta kahit nag merge or consolidate yung corporations.
TITLE X: APPRAISAL RIGHT

Section 80. When the Right of Appraisal May Be Exercised. - Any stockholder of a corporation shall have
the right to dissent and demand payment of the fair value of the shares in the following instances:
● Appraisal right is the right of a dissenting stockholder to demand appraisal and payment of the
right to dissent = fair value of his stocks from the corporate. It allows a stockholder who dissents and votes against
kumontra a proposed corporate action to withdraw from the corporation by demanding payment of the
fair value of his shares.
● Pwedeng kumontra or pumalag kahit ang isang minority stockholder
● Right of appraisal- in-appraise ang value ng shares mo dahil nga hindi ka sang-ayon sa planong
gawin ng corporation, binibigyan ka ng Code ng isang alternative para makaalis sa corporation ng
matiwasay
○ Karapatan ng majority stockholders na mag-amend sa AoI, mag-merge or consolidate or
mag-invest ng corporate funds, pero karapatan din ng minority stockholder na i-exercise
ang Right of Appraisal

listahan na pwede kang mag disagree
(a) In case an amendment to the articles of incorporation has the effect of changing or restricting the
rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those
of outstanding shares of any class, or of extending or shortening the term of corporate existence;
● Ex. Nung simula kang mag-invest sa corporation, binasa mo ang articles of incorporation. Stated
doon na ang life lang ng corporation ay 10 years, upon seeing that nag-invest ka. Pero bago
matapos yung 10 years, nabalita mong i-amend daw ang Articles of Incorporation, kasama dito
ang amendment sa life ng corporation. From the original 10 years, gagawing plus 30 years. Bilang
isang stockholder, may expectation ka na sa simula pa lang, kaya ma-ddisappoint ka at kokontra
ka. Usual scenario is kapag hindi ka na masaya, aalis ka na sa corporation at ibebenta mo sa iba
yung shares mo. Kaso ang predicament mo dito ay ikaw na nga ang nag-umasa sa kanila at
ngayon binigo ka nila dahil nag-amend, ikaw pa ang kailangan umalis -- disadvantage mo is
posibleng mapuwersa ka ibenta yung shares sa murang halaga. (Ikaw na ang naloko, ikaw pa ang
nalugi.) Ang remedy dito ay dapat bayaran o i-buy back ng corporation yung shares ng
stockholder at its FAIR MARKET VALUE.
○ Nag-invest ka ng 100,000 at pagkaalis mo bibilhin din ito ng 100,000 ng corporation
(b) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially
all of the corporate property and assets as provided in this Code;
(c) In case of merger or consolidation; and
(d) In case of investment of corporate funds for any purpose other than the primary purpose of the
corporation.
Section 81. How Right is Exercised. - The dissenting stockholder who votes against a proposed corporate
action may exercise the right of appraisal by making a written demand on the corporation for the
payment of the fair value of shares held within thirty (30) days from the date on which the vote was
taken: Provided, That failure to make the demand within such period shall be deemed a waiver of the
appraisal right. If the proposed corporate action is implemented, the corporation shall pay the
stockholder, upon surrender of the certificate or certificates of stock representing the stockholder's
shares, the fair value thereof as of the day before the vote was taken excluding any appreciation or
depreciation in anticipation of such corporate action.
● From the time na malaman mong mag-merge or consolidate yung corporation at hindi ka payag
dito, 30 days from the date of the vote dapat magsabi ka na sa corporation na i-exercise mo na
ang right of appraisal.
● Kapag hindi mo agad sinabi within 30 days, hindi mo na ma-eexercise ang right of appraisal. Ang
surrender mo certificate
tas ibuy back nila hindi mo pagfile within 30 days is a sign na okay lang sayo ang plano ng corporation.
shares mo ● Pag na-implement na ang planong corporate action (amendment, merge or consolidation or
investment), kailangan nang i-surrender ang stock certificate and kailangan magbayad ng
corporation to the stockholders para sa shares niya at its FAIR MARKET VALUE
If, within sixty (60) days from the approval of the corporate action by the stockholders, the withdrawing
stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined and
appraised by three (3) disinterested persons, one of whom shall be named by the stockholder, another
by the corporation and the third by the two (2) thus chosen. The findings of the majority of the

appraisers shall be final, and their award shall be paid by the corporation within thirty (30) days after
such award is made: Provided, That no payment shall be made to any dissenting stockholder or unless
the corporation has unrestricted retained earnings in its books to cover such payment: Provided, further,
That upon payment by the corporation of the agreed or awarded price, the stockholder shall forthwith
transfer the shares to the corporation.
● Kapag hindi magkasundo ang corporation and stockholder sa fair value ng shares, it shall be
determined by three disinterested persons. Isang pinili ni stockholder, isang pinili ng corporation
at isang pinili nilang dalawa.
● Kailangan may unrestricted retained earnings muna ang corporation bago bayaran si dissenting
stockholder
● Upon payment, ibibigay na ni stockholder yung shares kay corporation
○ In essence para itong nagiging treasury shares. Bago makapag buy back ng shares ang
isang corporation, kailangan may sufficient amount of retained earnings to cover the
payment of the shares.
Section 82. Effect of Demand and Termination of Right. - From the time of demand for payment of the
fair value of a stockholder's shares until either the abandonment of the corporate action involved or the
purchase of the said shares by the corporation, all rights accruing to such shares, including voting and
dividend rights shall immediately be restored.
● From the time of demand until abandonment of the corporate action or purchase of the said
shares, all rights accruing to such shares shall be suspended, except the right to receive payment
for the fair value
● Babalik na yung voting and dividend rights ng shares immediately kapag hindi nabayan yung fair
value ng shares kay dissenting stockholder
Section 83. When Right to Payment Ceases. - No demand for payment under this Title may be withdrawn
unless the corporation consents thereto. If, however, such demand for payment is withdrawn with the
consent of the corporation, or if the proposed corporate action is abandoned or rescinded by the
corporation or disapproved by the Commission where such approval is necessary, or if the Commission
where such stockholder is not entitled to the appraisal right, then the right of the stockholder to be paid
the fair value of the shares shall cease, the status as the stockholder shall be restored, and all dividend
distributions which would have accrued on the shares shall be paid to the stockholder.
● Kapag hindi nagkasundo sa pagbabayad ng corporation or the stockholder is not entitled to
kung si sila nagkasundo,
balik si nagreklamo sa
appraisal right, lahat ng dividend distributions sa shares ni stockholder ay ibabayad sa kanya
pagiging regular ● Nagbago yung isip ni dissenting stockholder or hindi na siya kontra sa corporation, babalik yung
stockholder
status niya as regular stockholder at yung iba niyang karapatan as a stockholder
Section 84. Who Bears Costs of Appraisal. - The costs and expenses of appraisal shall be borne by the
corporation, unless the fair value ascertained by appraisers is approximately the same as the price which
the corporation may have offered to pay the stockholder, in which the corporation may have offered to
pay the stockholder, in which case they shall be borne by the latter. In the case of an action to recover
such fair value, all costs and expenses shall be assessed against the corporation, unless the refusal of the
stockholder or receive payment was unjustified.

● Yung tatlong piniling disinterested persons na appraisers ay may bayad. As a general rule, the
costs and expenses of appraisal shall be borne by the corporation, unless parehas ang fair value
na binigay ng appraisers at ni corporation, the costs and expenses of appraisal shall be borne by
the stockholder.
● Ex. Ang fair value ni corporation ay 25 pesos pero gusto ni dissenting stockholder ay 50 pesos.
Para mapag-usapan yung mismong fair value, kumuha na lang ng tatlong appraisers na may
sahod na 5,000 each. Sino ang magbabayad doon sa tatlo? As a general rule, the costs shall be
borne by the corporation dahil obligation ni corporation to prove na sinasabi niyang value ay yon
talaga ang fair market value ng shares. Si corporation ang magbabayad ng 15,000.
○ However, upon recommendation ng appraisers, 26 pesos yung fair value ng shares which
is totoo yung sinasabi ni corporation na around 25 pesos na lang yung fair value ng
shares. --- Unless fair value ascertained by appraisers is approximately the same as the
price which the corporation may have offered. -- Kapag totoo naman pala yung
sinasabing presyo ni corporation, ang magbabayad sa costs ng appraiser ay si
stockholder dahil ang dating nito ay kasalanan niya bakit kailangan pa gumastos ng
appraisers. Hindi sana ma-incur yung 15,000 na gastos kung sa simula pa lang ay
pumayag na yung dissenting stockholder sa fair value na ibinigay ni corporation.
● Kapag nagkaroon ng kasuhan to recover the fair value, all costs and expenses shall be borne by
the corporation unless unjustified yung pag-refuse ni stockholder sa pag receive ng payment
Section 85. Notation on Certificates; Rights of Transferee. - Within ten (10) days after demanding
payment for shares held, a dissenting stockholder shall submit the certificates of stock representing the
shares to the corporation for notation that such representing the shares to the corporation for notation
that such shares are dissenting shares. Failure to do so shall, at the option of the corporation, terminate
the rights under this Title. If shares represented by the certificates bearing such notation are transferred,
and the certificates consequently cancelled, the rights of the transferor as a dissenting stockholder under
this Title shall cease and the transferee shall have all the rights of a regular stockholder; and all dividend
distributions which would have accrued on such shares shall be paid to the transferee.
● Kapag hindi sinubmit ni dissenting stockholder yung certificate of stock, within 10 days after
demanding payment, ma-terminate yung right of appraisal.
● Kapag na-transfer na yung shares and the certificates are consequently cancelled, yung rights ni
dissenting stockholder ay mapupunta sa transferee as a regular stockholder and all dividend
distributions accrued sa shares ay mapupunta din sa transferee.
TITLE XI: NONSTOCK CORPORATION

Section 86. Definition. - For purposes of this Code and subject to its provisions on dissolution, a nonstock
corporation is one where no part of its income is distributable as dividends to its members, trustees, or
officers: Provided, That any profit which a nonstock corporation may obtain incidental to its operations
shall, whenever necessary or proper, be used for the furtherance of the purpose of purposes for which
the corporation was organized, subject to the provisions of this Title.
● A non-stock corporation is a corporation (either for-profit or non-profit) that does not issue
shares of stock.

● Hindi kumita ang intention ng corporation. Ex. UST: non-stock non-profit corporation. Kung ano
man ang kinikita ng UST ay ginagamit lang ulit para mas mapaganda yung school
The provisions governing the stock corporations, when pertinent, shall be applicable to nonstock
corporations except as may be covered by specific provisions of this Title.
Section 87. Purposes. - Nonstock corporations may be formed or organized for charitable, religious,
educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes.
like trade industry, agricultural and like chambers, or any combination thereof, subject to the special
provisions of this Title governing particular classes of nonstock corporations.
CHAPTER I: MEMBERS
Section 88. Right to Vote. - The right of the members of any class or classes to vote may be limited,
broadened, or denied to the extent specified in the articles of incorporation or the bylaws. Unless so
limited, broadened, or denied, each member, regardless of class, shall be entitled to one (1) vote.
● Sa stock corporation, ang boto mo ay nakadepende sa number of shares mo.
● Sa non-stock corporation, bawat member ay counted as one.
Unless otherwise provided in the articles of incorporation or the bylaws, a member may vote by proxy, in
accordance with the provisions of this Code. The bylaws may likewise authorize voting through remote
communication and/or in absentia.
Section 89. Non-transferability of Membership. - Membership in a nonstock corporation and all rights
arising therefrom are personal and nontransferable, unless the articles of incorporation or the bylaws
otherwise provide.
● Unlike sa isang stock corporation, pwede mong ibenta sa iba yung shares mo. Pero sa non-stock
corporation ang pagiging member mo is personal at hindi na-ttransfer sa iba unless nakalagay sa
Articles of Incorporation na pwede.
● Kapag may gustong maging member ng non-stock corporation, kailangan niyang personal na
mag-apply or pumasok sa corporation hindi pwedeng bibili lang ng shares nung dating member.
kasi wala naman iniissue na shares dito
Section 90. Termination of Membership. - Membership shall be terminated in the manner and for the
cause provided in the articles of incorporation or the bylaws. Termination of membership shall
extinguish all rights of a member in the corporation or in its property, unless otherwise provided in the
articles of incorporation or the bylaws.
CHAPTER II: TRUSTEES AND OFFICERS

Section 91. Election and Term of Trustees. - The number of trustees shall be fixed in the articles of
incorporation or bylaw which may or may not be more than fifteen (15). They shall hold office for not
more than three (3) years until their successors are elected and qualified. Trustees elected to fill
vacancies occurring before the expiration of a particular term shall hold office for the unexpired period.

● Pwedeng lagpas ng 15 yung number of trustees written in AoI

● Sa stock corporation, Directors hold office for not more than 1 year. Pero sa non-stock
corporation, Trustees hold office for not more than 3 years.
● Yung mga trustees na nag fill lang ng vacancies sa position, itutuloy lang nila yung unexpired
period.
Except with respect to independent trustees of nonstock corporation shall be elected as trustee.
Unless otherwise provided in the articles of incorporation or the bylaws, the members may directly elect
officers of a nonstock corporation.
Section 92. List of Members and Proxies, Place of Meetings. - The corporation shall, at all times, keep a
list of its members and their proxies of record twenty (20) days prior to any scheduled election. The
bylaws may provide that the members of a nonstock corporation may hold their regular or special
meetings at any place even outside the place where the principal office of the corporation is located:
Provided, That proper notice is sent to all members indicating the date, time, and place of meeting:
Provided, further, That the place of meeting shall be within the Philippine territory.
● Sa stock corporation, kapag nag meeting within sa principal office or within sa municipal or city
where the principal office is located such as Metro Manila, Metro Cebu, Metro Davao. Pero sa
non-stock corporation, pwede mag meeting even outside the place of principal office provided
that proper notice is sent to all members.
● Pwedeng kahit saan basta within the Philippines territory.
CHAPTER III: DISTRIBUTION OF ASSETS IN NON-STOCK CORPORATIONS

Section 93. Rules of Distribution. - The assets of a nonstock corporation undergoing the process of
dissolution for reasons other than those set forth in Section 139 of this Code shall be applied and
distributed as follows:
hierarchy (a) All liabilities and obligations of the corporation shall be paid, satisfied and discharged, or adequate
provision shall be made therefor:
(b) Assets held by the corporation upon a condition requiring return, transfer or conveyed in accordance
with such requirements;
● Assets na kailangan isoli
(c) Assets received and held by the corporation subject to limitations permitting their use only for
charitable religious, benevolent, educational or similar purpose, but not held upon a condition requiring
return, transfer or conveyance by reason of the dissolution, shall be transferred or conveyed to one (1)
or more corporations, societies or organizations engaged in activities in the Philippines substantially
similar to those of the dissolving corporation according to a plan of distribution adopted pursuant to this
Chapter;
(d) Assets other than those mentioned in the preceding paragraphs, if any, shall be distributed in
accordance with the provisions of the articles of incorporation or the bylaws, to the extent that the
articles of incorporation or the bylaws extent that the articles of incorporation or the bylaws determine
the distributive rights of members, or any class or classes of members, or provide for distribution; and

(e) In any other case, assets may be distributed to such person, societies, organizations or corporations,
whether or not organized for profit, as may be specified in a plan of distribution adopted pursuant to this
Chapter.
Section 94. Plan of Distribution of Assets. - A plan providing for the distribution of assets, consistent with
the provisions of this Title, may be adopted by a nonstock corporation in the process of dissolution in the
following manner:
(a) The board of trustees shall, by majority vote, adopt a resolution recommending a plan of distribution
and directing the submission thereof to a vote at a regular or special meeting of members having voting
rights;
(b) Each member entitled to vote shall be given a written notice setting forth the proposed plan of
distribution or summary thereof and the date, time and place of such meeting within the time and in the
manner provided in this Code for the giving of notice of meetings; and
(c) Such plan of distribution shall be adopted upon approval of at least two-thirds (2/3) of the members
having voting rights present or represented by proxy at such meeting.
TITLE XII: CLOSE CORPORATIONS

Section 95. Definition and Applicability of Title. - A close corporation, within the meaning of this Code, is
one whose articles of incorporation provides that: limited lang pwede makasali and usually members lang ng family
(a) all the corporation's issued stock of all classes, exclusive of treasury shares, shall be held of record by
not more than a specified number of persons, not exceeding twenty (20);
(b) all the issued stock of all classes shall be subject to one (1) or more specified restrictions on transfer
permitted by this Title; and
(c) the corporation shall not list in any stock exchange or make any public offering of its stocks of any
class. Nothwithstanding the foregoing, a corporation shall not be deemed a close corporation when at
least two-thirds (2/3) of its voting stock or voting rights is owned or controlled by another corporation
which is not a close corporation within the meaning of this Code.
● Sa open corporation, kahit sino pwedeng maging member. Pero sa close corporation, limited
lang ang pwedeng makasali, usually members ng isang family.
● Hindi pwedeng mag-exceed ng twenty ang members ng close corporation.
● Hindi ito considered close corporation when at least ⅔ of the voting stock is controlled by
another corporation na hindi naman din close corporation
Any corporation may be incorporated as a close corporation, except mining or oil companies, stock
exchanges, banks, insurance companies, public utilities, educational institutions and corporations
declared to be vested with public interest in accordance with the provisions of this Code.
The provisions of this Title shall primarily govern close corporations: Provided, That other Titles shall
primarily govern close corporations: Provided, That other Titles in this Code shall apply suppletorily,
except as otherwise provided under this Title.

Section 96. Articles of Incorporation. - The articles of incorporation of a close corporation may provide
for:
(a) A classification of shares or rights, the qualifications for owning or holding the same, and restrictions
on their transfers, subject to the provisions of the following section;
(b) A classification of director into one (1) or more classes, each of whom may be voted for and elected
solely by a particular class of stock; and
(c) Greater quorum or voting requirements in the meetings of stockholders or directors than those
provided in this Code.
stockholders
The articles of incorporation of a close corporation may provide that the business of the corporation may
kasi hello provide that the business of the corporation shall be managed by the stockholders of the corporation
maunti na
nga lang rather than by a board of directors. So long as this provision continues in effect, no meeting of
kayo stockholders need be called to elect directors: Provided, That the stockholders of the corporation shall
maglalagay
pa ng BOD be deemed to be directors for the purpose of applying the provisions of this Code, unless the context
clearly requires otherwise: Provided, further, That the stockholders of the corporation shall be subject to
all liabilities of directors.
● Pwede i-indicate sa Articles of Incorporation na yung mismong members na ng close corporation
ang mag-mmanage kesa mag-elect pa ng board of directors.
● Ang mga directors ay subject to liabilities and since sa close corporation kung sino ang
stockholders, siya na rin ang directors, sila na rin ang magiging liable.
The articles of incorporation may likewise provide that all officers ro employees or that specified officers
or employees shall be elected or appointed by the stockholders, instead of by the board of directors.
● Sa open corporation, stockholders elect board of directors and board of directors elect the
officers. But sa close corporation, lahat ng power nag-emanate sa stockholders. Since ang mga
stockholders ay directors na rin, sila na nag bahala mamili ng officers and employees.
Section 97. Validity of Restrictions on Transfer of Shares. - Restrictions on the right to transfer shares
must appear in the articles of incorporation, in the bylaws, as well as in the certificate of stock;
otherwise, the same shall not be binding on any purchaser in good faith. Said restrictions shall not be
more onerous than granting the existing stockholders or the corporation the option to purchase the
shares of the transferring stockholder may sell their shares to any third person.
● Nakalagay dapat sa Articles of Incorporation, Bylaws and sa Certificate of Stock yung restrictions
on the right to transfer shares, otherwise it would not be binding.
Section 98. Effects if Issuance or Transfer of Stock in Breach of Qualifying Conditions. -

(a) If a stock of a close corporation is issued or transferred to any person who is not eligible to be a
holder thereof under any provision of the articles of incorporation, and if the certificate for such stock
conspicuously shows the qualifications of the persons entitled to be holders of record thereof, such
person is conclusively presumed to have notice of the fact of the ineligibility to be a stockholder.
(b) If the articles of incorporation of a close corporation states the number of persons, not exceeding
twenty (20), who are entitled to be stockholders of record, and if the certificate for such stock

conspicuously states such number, and the issuance or transfer of stock to any person would cause the
stock to be held by more than such number of persons, the person to whom such stock is issued of
transferred is conclusively presumed to have notice of this fact.
aware sila
(c) If a stock certificate of a close corporation conspicuously shows a restriction on transfer of the
corporation has been issued or transferred has or is conclusively presumed to have notice of the fact
that the stock in violation of such restriction, the transferee is conclusively presumed to have notice of
the fact that the stock was acquired in violation of the restriction.
(d) Whenever a person to whom stock of a close corporation has been issued or transferred has or is
conclusively presumed under this section to have notice of:
(1) the person's ineligibility to be a stockholder of the corporation; or
(2) that the transfer of stock would cause the stock of the corporation to be held by more than
the number of persons permitted under its articles of incorporation ; or
(3) that the transfer violates a restriction on transfer of stock, the corporation may, at its option,
refuse to register the transfer in the name of the transferee.
(e) The provisions of subsection (d) shall not be applicable if the transfer of stock, though contrary to
subsections (a), (b) or (c), has been consented to by all stockholders of the close corporation, or if the
close corporation has amended its articles of incorporation in accordance with this Title.
(f) The term "transfer", as used in this section, is not limited to a transfeer for value.
(g) The provisions of this section shall not impair any right which the transferee may have to either
rescind the transfer or recover the stock under any express or implied warranty.
Section 99. Agreements by Stockholders. -

(a) Agreements duly signed and executed by and among all stockholders before the formation and
organization of a close corporation shall survive the incorporation and shall continue to be valid and
binding between such stockholders, if such be their intent, to the extent that such agreements are
consistent with the articles of incorporation, irrespective of where the provisions of such agreements are
contained except those required by this Title to be embodied in said articles of incorporation.
(b) A written agreement signed by two (2) or more stockholders may provide that in exercising any
voting right, the shares held by them shall be voted as provided or as agreed, or in accordance with a
procedure agreed upon by them.
(c) No provision in a written agreement signed by the stockholders, relating to any phase of corporate
affairs, shall be invalidated between the parties on the ground that its effect is to make them partners
among themselves.
(d) A written agreement among some or all the stockholders in a close corporation shall not be
invalidated on the ground that it relates to the conduct of the business and affairs of the corporation as
to restrict or interfere with the discretion or powers of the board of directors: Provided, That such
agreement shall impose on the stockholders who are parties thereto the liabilities for managerial acts
imposed on directors by this Code.
(e) Stockholders actively engaged in the management or operation of the business and affairs of a close
corporation shall be held to strict fiduciary duties to each other and among themselves. The

stockholders shall be personally liable for corporate torts unless the corporation has obtained reasonably
adequate liability insurance.
Section 100. When a Board Meeting is Unnecessary or Improperly Held. - Unless the bylaws provide
otherwise, any action taken by the directors of a close corporation without a meeting called properly and
with due notice shall nevertheless be deemed valid if:
(a) Before or after such action is taken, a written consent thereto is signed by all the directors; or
(b) All the stockholders have actual or implied knowledge of the action and make no prompt objection in
writing; or
(c) The directors are accustomed to take informal action with the express or implied acquiescence of all
the stockholders; or
(d) All the directors have express or implied knowledge of the action in question and none of them
makes prompt objection in writing.
An action within the corporate powers taken at a meeting held without proper call or notice is deemed
ratified by a director who failed to attend, unless after having knowledge thereof, the director promptly
files his written objection with the secretary of the corporation.
Section 101. Preemptive Right in Close Corporations. - The preemptive right of stockholders in close
corporations shall extend to all stock to be issued, including reissuance of services, or in payment or
corporate debts, unless the articles of incorporation provide otherwise.
● Preemptive rights give a shareholder the opportunity to buy additional shares in any future issue
of a company's common stock before the shares are made available to the general public.
○ Bago ialok sa iba, inaalok muna sa existing shareholders
Section 102. Amendment of Articles of Incorporation. - Any amendment to the articles of incorporation
which seeks to delete or remove any provision required by this Title or to reduce a quorum or voting
requirement stated in said articles of incorporation shall require affirmative vote of at least two-thirds
(2/3) of the outstanding capital, whether with or without voting rights, or of such greater proportion of
shares as may be specifically provided in the articles of incorporation for amending, deleting or removing
any of the aforesaid provisions, at a meeting duly called for this purpose.
● At least ⅔ ng outstanding capital ang kailangan para mag-amend ng Articles of incorporation
Section 103. Deadlocks. Nowithstanding any contrary provision in the close corporation's articles of
incorporation, bylaws, or stockholders' agreement, if the directors or stockholders are so divided on the
management of the corporation's business and affairs that the votes required for a corporate action
canot be obtained, with the consequence that the business and affairs that the votes required for that
the business of the corporation can lo longer be conducted to the advantage of the stockholders
generally, the Commission, upon written petition by any stockholder, shall have the power to arbitrate
the dispute. In the exercise o such power, the Commission shall have authority to make appropriate
orders, such as: (a) cancelling or altering any provision contained in the articles of incorporation, bylaws,
ot any stockholders' agreement; (b) cancelling, altering or enjoining a resolution or act of the

corporation or its board of directors, stockholders, officers, or other person party to the action; (d)
requiring the purchase at their fair value of shares of any stockholder, either by the corporation
regardless of the availability or unrestricted retained earnings in its, books or by the other stockholder;
(e) appointing a provisional director; (f) dissolving the corporation; or (g) granting such other relief as the
circumstances may warrant.
A provisional director shall be an impartial person who is neither a stockholder nor a creditor of the
corporation or any of its subsidiaries or affiliates, and whose further qualifications, if any, may be
determined by the Commission. A provisional director is not a receiver of the corporation and does not
have the title and powers of a custodian or receiver. A provisional director shall have all the rights and
powers of a duly elected director, including the right to be notified of and to vote at meetings of
directors until removed by order of the Commission pr by all the stockholders. The compensation of the
provisional director shall be determined by agreement between such provisional director and the
corporation.
Section 104. Withdrawal of Stockholder or Dissolution of Corporation. - In addition and without

prejudice to other rights and remedies available under this Title, any stockholder of a close corporation
may, for any reason, compel the corporation to purchase shares held at fair value, which shall not be less
than the par or issued value, when the corporation has sufficient assets in its books to cover its debts
and liabilities exclusive of capital stock: Provided, That any stockholder of a close corporation may, by
written petition to the Commission, compel the dissolution of such corporation whenever any acts of the
directors, officers or those in control whenever any acts of the directors, officers, or those in control of
the corporation are illegal, fraudulent, dishonest, oppressive or unfairly prejudicial to the corporation or
any stockholder, or whenever corporate assets are being misapplied or wasted.
TITLE XIII: SPECIAL CORPORATIONS
CHAPTER I : EDUCATIONAL CORPORATIONS
Section 105. Incorporation. - Education corporations shall be governed by special laws and by the
general provisions of this Code.
Section 106. Board of Trustees. - Trustees of educational institutions organized as nonstock corporations
shall not be less than five (5) nor more than fifteen (15): Provided, That the number of trustees shall be
in multiples of five (5).
● Ang pwedeng number of directors sa isang non-stock educational institution ay 5, 10 or 15
Unless otherwise provided in the articles of incorporation or bylaws, the board of trustees of
incorporated schools, colleges, or other institutions of learning shall, as soon as organized, so classify
themselves that the term of office of one-fifth (1/5) of their number shall expire every year. Trustees
thereafter elected to fill vacancies, occurring before the expiration of a particular term shall hold office

only for the unexpired period. Trustees elected thereafter to fill vacancies caused by expiration of term
shall hold office for five (5) years. A majority of the trustees shall constitute a quorum for the transaction
of business. The powers and authority of trustees shall be defined in the bylaws.
● Staggered terms concept: An arrangement whereby only a certain number of members of a
board of directors are elected in a given year. For example, a board of directors may have 10
members serving five year, staggered terms where two new members are elected each year.
● Trustees A to O. At first, fifteen were elected and by ranking iba iba ang terms nila. 1st group is
ABC na may 5 year term, 2nd group DEF na may 4 year term , 3rd is GHI, 4th is JKL, 5th MNO.
After one year magiging 4 years na lang term ni ABC and 0 na yung term ni MNO kaya papalitan
na sila, mag-eelect ng panibagong trustees. Sila PQR bibigyan ng buong 5 year term as newly
elected nga sila. After one year ulit, matatanggal naman si JKL at papalit si STQ na magkakaroon
din ulit ng 5 year term.
● Ginagamit ang staggered terms para hindi sabay-sabay ang pagtanggal sa Board of Trustees at
para may continuity, kesa sa bawat taon buong 15 silang natatanggal at mahihirapan magstart
yung panibagong group kasi walang mag-guide sa kanila. Samantalang kaya ⅕ lang ang
natatanggal, matuturuan ang mga bagong pasok na trustees.
For institutions organized as stock corporations, the number and term of directors shall be governed by
the provisions on stock corporations.
CHAPTER II: RELIGIOUS CORPORATIONS

Section 107. Classes of Religious Corporations. - Religious corporations may be incorporated by one (1)
or more persons. Such corporations may be classified into corporations sole and religious societies.
Religious corporations shall be governed by this Chapter and by the general provisions on nonstock
corporations insofar as applicable.
Section 108. Corporation Sole. - For the purpose of administering and managing, as trustee, the affairs,
property and temporalities of any religious denomination, sect or church, a corporation sole may be
formed by the chief archbishop, bishop, priest, minister, rabbi, or other presiding elder of such religious
denomination, sect or church.
Section 109. Articles of Incorporation. - In order to become a corporation sole, the chief archbishop,
bishop, priest, minister, rabbi, or presiding elder of any religious denomination, sect or church must file
with the Commission articles of incorporation setting forth the following:
(a) That the applicant chief archbishop, bishop, priest. Minister, rabbi, or presiding elder represents the
religious denomination, set or church which desires to become a corporation sole;
(b) That the rules, regulations and discipline of the religious denomination, sect or church are consistent
with becoming a corporation sole and do not forbid it;
(c) That such chief archbishop, bishop, priest, minister, rabbi or presiding elder is charged with the
administration of the temporalities and the management of the affairs, estate and properties of the

religious denomination, sect or church within the territorial jurisdiction, so described succinctly in the
articles of incorporation;
(d) The manner by which vacancy occurring in the office of chief archbishop, bishop, priest, rabbi or
presiding elder is required to be filled, according to the rules, regulations or discipline of the religious
denomination, sect or church; and
(e) The place where the principals office of the corporation sole is to be established and located, which
place must be within the territory of the Philippines.
The articles of incorporation may include any other provisions not contrary to law for the regulation of
the affairs of the corporation.
Section 110. Submission of the Articles of Incorporation. - The articles of the incorporation must be
verified, but affidavit or affirmation of the chief archbishop, bishop, priest, minister, rabbi, presiding
elder, as the case may be, and accompanied by a copy of the commission, certificate of election or letter
of appointment of such chief archbishop, bishop, priest, minister, rabbi or presiding elder, as the case
may be, and accompanied by a copy of the commission, certificate of election or letter of appointment
of such chief archbishop, bishop, priest, minister, rabbi, or presiding elder, duly certified to be correct by
any notary public.
From and after filing with the Commission of the said articles of incorporation, verified by affidavit or
affirmation, and accompanied by the documents mentioned in the preceding paragraph, such chief
archbishop, bishop, priest, minister, rabbi, or presiding elder shall become a corporation sole and all
temporalities, estate and properties of the religious denomination, sect or church heretofore
administered or manage as such chief archbishop, bishop, priest, minister, rabbi, or presiding elder shall
be personally held in trust as a corporation sole, for the use, purpose, exclusive benefit and on behalf of
the religious denomination, sect or church, including hospitals, schools, colleges, orphan asylums
parsonages, and cemeteries thereof.
Section 111. Acquisition and Alienation of Property. - A corporation sole may purchase and hold real
estate and personal property for each church, charitable, benevolent, or educational purposes, and may
received bequests or gifts for such purposes. Such corporation may sell or mortgage real property held
by it by obtaining an order for that purpose from the Regional Trial Court of the province where the
property is situated upon proof that the notice of the application for leave to sell or mortgage has been
made through publication or as directed by the Court, and that it is in the interest of the corporation that
leave to sell or mortgage be granted. The application for leave to sell or mortgage must be made by
petition, duly verified, by the chief archbishop, bishop, priest, minister, rabbi, or presiding elder acting as
corporation sole, and may be opposed by any member of the religious denomination, sect or church
represented by the corporation sole: Provided, That in cases where the rules, regulations, and discipline
of the religious denomination, set or church, religious society, or colder concerned represented by such
corporation sole regulate the method of acquiring, holding, selling, and mortgaging real estate and
personal property, such rules, regulations and discipline shall govern, and the intervention of the courts
shall not be necessary.

Section 112. Filling of Vacancies. - The successor in the office of any chief archbishop, bishop, priest,
minister, rabbi, or presiding elder in a corporation sole shall become the corporation sole on their
accession to office and shall be permitted to transact business as such upon filing a copy of their
commission, certificate of election, or letters of appointment, duly certified by any notary public with the
Commission.
During any vacancy in the office of chief archbishop, bishop, priest, minister, rabbi, or presiding elder of
any donomination, sect or church incorporated as a corporate sole, the person or persons authorized by
the rules, regulations or discipline of the religious denomination, sect or church represented by the
corporation sole to administer the temporalities and manage the affairs, estate, and properties of the
corporation sole shall exercise all the powers and authority of the corporation sole during such vacancy.
Section 113. Dissolution. - A corporation sole may be dissolve and its affairs settled voluntarily by
submitting to the Commission a verified declaration of dissolution, setting forth:
(a) The name of the corporation;
(b) The reason of dissolution and winding up;
(c) The authorization for the dissolution of the corporation by the particular religious denomination, sect
or church; and
(d) The names and addresses of the persons who are to supervise the winding up of the affairs of the
corporation.
Upon approval of such declaration of dissolution by the Commission, the corporation shall cease to carry
on its operations except for the purpose of winding up its affairs.
Section 114. Religious Societies. - Unless forbidden by the competent authority, the Constitution,
pertinent, rules, regulations, or discipline of the religious denomination, sect or church of which it is
part, any religious society, religious order, diocese, or synod, or district organization of any religious
denomination, sect or church, may, upon written consent and/or by an affirmative vote at a meeting
called for the purpose of at least two-thirds (2/3) of its membership, incorporate for the administration
of its temporalities or for the management of its affairs, properties, and estate by filing the management
of its affairs, properties, and estate by filing with the Commission, articles of incorporation verified by
the affidavit of the presiding elder, secretary, or clerk or other member of such religious society or
religious denomination, sect or church, setting forth the following:
(a) That the religious society or religious order, or diocese, synod, or district organization is a religious
organization of religious denomination, sect or church;
(b) That at least two-thirds (2/3) of its membership has given written consent or has voted to
incorporate, at a duly convened meeting of the body;
(c) That the incorporation of the religious society or religious order, or diocese, synod, or district
organization is not forbidden by competent, authority or by the Constitution, rules, regulations or
discipline of the religious denomination, sect or church of which it forms part;

(d) That the religious society or religious order, or diocese, synod, or district organization desires to
incorporate for the administration of its affairs, properties and estate;
(e) The place within the Philippines where the principal office of the corporation is to be established and
located; and
(f) The names, nationalities, and residence addresses of the trustees, not less than five (5) no more than
fifteen (15), elected by the religious society or religious order, or the diocese, synod or district
organization to serve for the first year or such other period as may be prescribed by the laws of the
religious society or religious order, or of the diocese, synod, or district organization.
CHAPTER III: ONE PERSON CORPORATIONS

Section 115. Applicability of Provisions to One Person Corporations. - The provisions of this Title shall
primarily apply to One Person Corporations. Other provisions of this Code apply suppletory, except as
otherwise provided in this Title.
Section 116. One Person Corporation. - A One Person Corporation is a corporation with a single
stockholder: Provided, That only a natural person, trust, or an estate may form a One Person
Corporation.
Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies, and
non-chartered government-owned and -controlled corporations may not incorporate as One Person
Corporations: Provided, further, That a natural person who is licensed to exercise a profession may not
organize as a One Person Corporation for the purpose of exercising such profession except as otherwise
provided under special laws.
● Ex. Lawyer gustong mag-exercise ng profession niya, hindi siya pwedeng gumawa ng one person
corporation, kundi dapat sole proprietorship or general professional partnership.
Section 117. Minimum Capital Stock Not Required for One Person Corporation. - A One Person
Corporation shall not be required to have a minimum authorized capital stock except as otherwise
provided by special law.
Section 118. Articles of Incorporation. A One Person Corporation shall file articles of incorporation in
accordance with the requirements under Section 14 of this Code. It shall likewise substantially contain
the following:
(a) If the single stockholder is a trust or an estate, the name, nationality, and residence of the trustee,
administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties
together with the proof of such authority to act on behalf of the trust or estate; and
(b) Name, nationality, residence of the nominee and alternate nominee, and the extent, coverage and
limitation of the authority.
● Nominee or alternate nominee- sila yung papalit pansamantala kapag may nangyaring masama
kay single stockholder

Section 119. Bylaws. - The One Person Corporation is not required to submit and file corporate bylaws.
● Bylaws ang tumatayong internal rules and regulations ng isang company. However, hindi ito
required sa One Person Corporation dahil ikaw lang naman mag-isa --- ikaw din gagawa ng rules,
ikaw din susunod o susuway
Section 120. Display of Corporate Name. - A One Person Corporation shall indicate the letters "OPC"
either below or at the end of its corporate name.
● Ex. Blackpink OPC
Section 121. Single Stockholder as Director, President. - The single stockholder shall be the sole director
and president of the One Person Corporation.
Section 122. Treasurer, Corporate Secretary, and Other Officers. - Within fifteen (15) days from the
issuance of its certificate or incorporation, the One Person Corporation shall appoint a treasurer,
corporate secretary, and other officers as it may deem necessary, and notify the Commission thereof
within five (5) days from appointment.
The single stockholder may not be appointed as the corporate secretary.

● One person corporation -- iisa lang ang may-ari pero hindi iisang tao lang yung buong
corporation
A single stockholder who is likewise the self-appointed treasurer of the corporation shall give a bond to
the Commission in such a sum as may be required: Provided, That the said stockholder/treasurer shall
undertake in writing to faithfully administer the One person Corporation's funds to be received as
treasurer, and to disburse and invest the same according to the articles of incorporation as approved by
the Commission. The bond shall be renewed every two (2) years or as often as may be required.
● Pwede i-appoint ni single stockholder yung sarili niya as treasurer pero bawal as corporate
secretary.
Section 123. Special Functions of the Corporate Secretary. - In addition to the functions designated by
the One Person Corporation, the corporate secretary shall:
(a) Be responsible for maintaining the minutes book and/or records of the corporation;
(b) Notify the nominee or alternate nominee of the death or incapacity of the single stockholder, which
notice shall be given no later than five (5) days from such occurrence;
(c) Notify the Commission of the death of the single stockholder within five (5) days from such
occurrence and stating in such notice he names, residence addresses, and contact details of all known
legal heirs; and
(d) Call the nominee or alternate nominee and the known legal heir to meeting and advise the legal heirs
with regard to, among others, the election of a new director, amendment of the articles of incorporation,
and other ancillary and/or consequential matters.

Section 124. Nominee and Alternate Nominee. - The single stockholder shall designate a nominee and
an alternate nominee who shall, in the event of the single stockholder's death or incapacity, take the
place of the single stockholder as director and shall manage the corporation's affairs.
● Para may assurance since mag-isa lang si single stockholder, kailangan niyang mag nominate ng
nominee (pamalit niya) and alternate nominee (kapalit ni nominee). Hindi ito ang heir ni single
stockholder kundi pansamantalang tagapamahala ng corporation kapag namatay or naging
incapacitated si single stockholder.
The articles of incorporation shall state the names, residence addresses and contact details of the
nominee and alternate nominee, as well as the extent and limitations of their authority in managing the
affairs of the One Person Corporation until the stockholder, by self determination, regains the capacity to
assume such duties.
In case of death or permanent incapacity of the single stockholder, the nominee shall sit as director and
manage the affairs of the One Person Corporation until the legal heirs of the single stockholder have
been lawfully determined, and the heirs have designated one of them or have agreed that the estate
shall be the single stockholder of the One Person Corporation.
The alternate nominee shall sit as director and manage the One Person Corporation in case of the
nominee's inability, incapacity, death, or refusal to discharge the functions as director and manager of
the corporation, and only for the same term and under the same conditions applicable to the nominee.
Section 126. Change of Nominee or Alternate Nominee. - The singe stockholder may, at any time, change
its nominee and alternate nominee by submitting to the Commission the names of the new nominees
and their corresponding written consent. For this purpose, the articles of incorporation need not be
amended.
● Habang buhay pa si single stockholder at any time pwede niyang palitan yung nominee and
alternate nominee
Section 127. Minutes Book. - A One Person Corporation shall maintain a minutes book which shall
contain all actions, decisions, and resolutions taken by the One Person Corporation.
Section 128. Records in Lieu of Meetings. - When action is needed on any matter, it shall be sufficient to
prepare a written resolution, signed and dated by the single stockholder; and recorded in the minutes
book of the One Person Corporation. The date of recording in the minutes for all purposes under this
Code.
● Since mag-isa ka lang director, pag may action na kailangan gawin, kailangan lang magsulat ng
written resolution, signed and dated by the single stockholder.
Section 129. Reportorial Requirements. - The One Person Corporation shall submit the following within
such period as the Commission may prescribe:
(a) Annual financial statements audited by an independent certified public accountant: Provided, That if
the total assets or total liabilities of the corporation are less than Six hundred thousand pesos

(₱600,000.00), the financial statements shall be certified under oath by the corporation's treasurer and
president;
(b) A report containing explanations or comments by the president on every qualification, reservation, or
adverse remark or disclaimer made by the auditor in the latter's report;
(c) A disclosure of all self-dealings and related party transactions entered into between the One Person
Corporation and the single stockholder; and
(d) Other reports as the Commission may require.
For the purpose of this provision, the fiscal year of a One Person Corporation shall be that set forth in its
articles of incorporation or, in the absence thereof, the calendar year.
The Commission may place the corporation fail to submit the reportorial requirements three (3) times,
consecutively or intermittently, within a period of five (5) years.
Section 130. Liability of Single Shareholder. - A sole shareholder claiming limited liability has the burden
of affirmatively showing that the corporation was adequately financed.
Where the single stockholder cannot prove that the property of the One Person Corporation is
independent of the stockholder's personal property, the stockholder shall be jointly and severally liable
for the debts and other liabilities of the One Person Corporation.
● General rule, limited liability din ang isang one person corporation unless it could be proven that
the corporation was made only to circumvent the rules.
The principles of piercing the corporate veil applies with equal force to One Person Corporations as with
other corporations.
● The single stockholder and the corporation will be treated as one and ang mga utang ng
corporation ay pwede na ring habulin kay single stockholder.
Section 131. Conversion from an Ordinary Corporation to a One Person Corporation. When a single
stockholder acquires all the stocks of an ordinary stock corporation, the latter may apply for conversion
into a One Person Corporation, subject to the submission of such documents as the Commission may
require. If the application for conversion is approved, the Commission shall issue a certificate of filing of
amended articles of incorporation reflecting the conversion. The One Person Corporation converted
from an ordinary stock corporation shall succeed the latter and be legally responsible for all the latter's
outstanding liabilities as of the date of conversion.
● Through this section, mabibigyan ng pagkakataon yung ibang corporation to convert into a one
person corporation by acquiring all the stocks of an ordinary stock ordinary by a single
stockholder.
Section 132. Conversion from One Person Corporation to an Ordinary Stock Corporation. - A One Person
Corporation may be converted into an ordinary stock corporation after due notice to the Commission of
such fact and of the circumstances leading to the conversion, and after compliance with all other
requirements for stock corporations under this Code and applicable rules. Such notice shall be filed with
the Commission within sixty (60) days from the occurrence of the circumstances leading to the

conversion into an ordinary stock corporation. If all requirements have been complied with, the
Commission shall issue a certificate of filing or amended articles of incorporation reflecting the
conversion.
In case of death if the single stockholder, the nominee or alternate nominee shall transfer the shares to
the duly designated legal heir or estate within seven (7) days from receipt of either an affidavit of
heirship or self-adjudication executed by a sole heir, or any other legal document declaring the legal heirs
of the single stockholder and notify the Commission of the transfer. Within sixty (60) days from the
transfer of the shares, the legal heirs shall notify the Commission of their decision to either wind up and
dissolve the One Person Corporation or convert it into an ordinary stock corporation.
The ordinary stock corporation converted from One Person Corporation shall succeed the latter and be
legally responsible for all the latter's outstanding liabilities as of the date of conversion.
TITLE XIV: DISSOLUTION

Section 133. Methods of Dissolution. - A corporation formed or organized under the provisions of this
Code may be dissolved voluntarily or involuntarily.
Section 134. Voluntarily Dissolution Where No Creditors are Affected. - If dissolution of a corporation
does not prejudice the rights of any creditor having a claim against it, the dissolution may be effected by
majority vote of the board of directors or trustees, and by a resolution adopted by the affirmative vote
of the stockholders owning at least majority of the outstanding capital stock or majority of the members
of a meeting to be held upon the call of the directors or trustees.
At least twenty (20) days prior to the meeting, notice shall be given to each shareholder or member of
record personally, by registered mail, or by any means authorized under its bylaws, whether or not
entitled to vote at the meeting, in the manner provided in Section 50 of this Code and shall state that the
purpose of the meeting is to vote on the dissolution of the corporation. Notice of the time, place and
object of the meeting shall be published once prior to the date of the meeting in a newspaper published
in the place where the principal office of said corporation is located, or if general circulation in the
Philippines.
A verified request for dissolution shall be filed with the Commission stating:
(a) the reason for the dissolution;
(b) the form, manner, and time when the notices were given;
(c) names of the stockholders and directors or members and trustees who approved the dissolution;
(d) the date, place, and time of the meeting in which the vote was made; and
(e) details of publication.
The corporation shall submit the following to the Commission:
(1) a copy of the resolution authorizing the dissolution, certified by a majority of the board of directors
or trustees and countersigned by the secretary of the corporation;

(2) proof of publication; and

(3) favorable recommendation form the appropriate regulatory agency, when necessary.
Within fifteen (15) days from receipt of the verified request for dissolution, and in the absence of any
withdrawal within said period, the Commission shall approve the request and issue the certificate of
dissolution. The dissolution shall take effect only upon the issuance by the Commission of certificate of
dissolution.
● Birth certificate of a corporation -- Articles of Incorporation
● Death certificate of a corporation -- Certificate of Dissolution
No application for dissolution of banks, banking and quasi-banking institutions, preneed, insurance and
trust companies, NSSLAs, pawnshops, and other financial intermediaries shall be approved by the
Commission unless accompanied by a favorable recommendation of the appropriate government
agency.
Section 135. Voluntary Dissolution Where Creditors are Affected; Procedure and Contents of Petition. -
Where the dissolution of a corporation may prejudice the rights of any creditor; a verified petition for
dissolution shall be filed with the Commission. The petition shall be signed by a majority of the
corporation's board of directors or trustees, verified by its president or secretary or one of its director or
trustees, and shall set forth all claims and demands against it, and that its dissolution was resolved upon
by the affirmative vote of the stockholders representing at least two-thirds (2/3) of the outstanding
capital stock or at least two-thirds (2/3) of the member at a meeting of its stockholder or members
called for that purpose. The petition shall likewise state: (a) the reason for the dissolution; (b) the form,
manner, and time when the notices where given; and (c) the date, place and time of the meeting in
which vote was made. The corporation shall submit to the Commission the following: (1) a copy of the
resolution authorizing the dissolution, certified by a majority of the board of directors or trustees and
countersigned by the secretary of the corporation; and (2) a list of all its creditors.
● Dissolution where no creditors are affected - majority of the board of directors or trustees and
affirmative vote of the majority of stockholders
● Dissolution where creditors are affected - majority of the board of directors or trustees and
affirmative vote of the stockholders representing ⅔ of the outstanding capital stock
If the petition is sufficient in form and substance, the Commission shall by an order reciting the purpose
of the petition, fix a deadline for filing objections to the petition which date shall not be less than thirty
(30) days nor more than sixty (60) days after the entry of the order. Before such date, a copy of the order
shall be published at least one week for three (3) consecutive weeks in a newspaper of general
circulation published in the municipality or city where the principal office of the corporation is situated,
or if there be no such newspaper, then in a newspaper of general circulation in the Philippines, and a
similar copy shall be posted for three (3) consecutive weeks in three (3) public places in such
municipality or city.

Upon five (5) days' notice given after the date on which the right to file objections as fixed in the order
has expired, the Commission shall proceed to hear the petition and try any issue raised in the objections
filed; and if no such objection is sufficient, and the material allegations of the petition are true, it shall
render judgment dissolving the corporation and directing such disposition of its assets as justice
requires, and may appoint a receiver to collect such assets and pay the debts of the corporation.
The dissolution shall take effect only upon the issuance by the Commission of a certificate of dissolution.
Section 136. Dissolution by Shortening Corporation Term. - A voluntary dissolution may be effected by
amending the articles of incorporation to shorten the corporate term pursuant to the provisions of this
Code. A copy of the amended articles of incorporation shall be submitted to the Commission in
accordance with this Code.
● Nakakadissolve din ng corporation ang pagpapaikli ng kanyang corporation term. Ex. From 30
years gagawin na lang 15 years.
Upon the expiration of the shortened term, as stated in the approved amended articles of incorporation,
the corporation shall be deemed dissolved without any further proceedings, subject to the provisions of
this Code on liquidation.
In the case of expiration of corporate term, dissolution shall automatically take effect on the day of the
following the last day of the corporate term stated in the articles of incorporation without the need for
the issuance by the Commission of a certificate of dissolution.
Section 137. Withdrawal of Request and Petition for Dissolution. - A withdrawal of the request for
dissolution shall be made in writing, duly verified by any incorporator, director, trustees, shareholder, or
member and signed by the same number of incorporators, directors, trustees, shareholder, or member
and signed by the same number of incorporators, directors, trustees, shareholders, or members
necessary to request for dissolution as set forth in the foregoing sections. The withdrawal shall be
submitted no later than fifteen (15) days from receipt by the Commission of the request for dissolution,
the Commission shall withhold action on the request for dissolution and shall, after investigation: (a)
make a pronouncement that the request for dissolution is deemed withdrawn; (b) direct joint meeting of
the board of directors or trustees and the stockholders or members for the purpose of ascertaining
whether to proceed with dissolution; or (c) issue such other orders as it may deem appropriate.
A withdrawal of the petition for dissolution shall be in the form of a motion and similar in substance to a
withdrawal of request for dissolution but shall be verified and filed prior to publication of the order
setting the deadline for filing objections to the petition.
Section 138. Involuntary Dissolution. - A corporation may be dissolved by the Commission motu propio
or upon filing of a verified complaint by any interested party.
● motu propio: at their own instance or on his own impulse
● Hindi kagustuhan ng company pero na-dissolve sila for certain reasons

The following may be grounds for dissolution of the corporation:

(a) None-use of corporate charter as provided under Section 21 of his Code;
● If a corporation does not formally organize and commence its business within five (5) year from
the date of its incorporation, its certificate of incorporation shall be deemed revoked as of the
day following the end of the five (5)-year period.
(b) Continuous inoperation of a corporation as provided under Section 21 of this Code;
● If a corporation has commenced its business but subsequently becomes inoperative for a period
of at least five (5) consecutive years, the Commission may, after due notice and hearing, place
the corporation under delinquent status.
● A delinquent corporation shall have a period of two (2) years to resume operations. Kapag hindi
pa rin nakapag-resume within two years, dissolved na yung corporation
(c) Upon receipt of a lawful court order dissolving the corporation;
(d) Upon finding by the final judgment that the corporation procured its incorporation through fraud;
(e) Upon finding by final judgment that the corporation:
(1) Was created for the purpose of committing, concealing or aiding the commission of securities
violation, smuggling, tax evasion, money laundering, or graft and corrupt practices;
(2) Committed or aided in the commission of securities violations, smuggling, tax evasion, money
laundering, or graft and corrupt practices, and its stockholders knew of the same; and
(3) Repeatedly and knowingly tolerated the commission of graft and corrupt practices or other
fraudulent or illegal acts by its directors, trustees, officers, or employees.
If the corporation is ordered dissolved by final judgment pursuant to the grounds set forth in
subparagraph (e) hereof, its assets, after payment of its liabilities, shall upon petition of the Commission
with the appropriate court, be forfeited in favor of the national government. Such forfeiture shall be
without prejudice to the rights of innocent stockholders and employees for services rendered, and to the
application for other penalty or sanction under this Code or other laws.
The Commission shall give reasonable notice to, and coordinate with, the appropriate regulatory agency
prior to the involuntary dissolution of companies under their special regulatory jurisdiction.
Section 139. Corporate Liquidation. - Except for banks, which shall be covered by the applicable
provisions of Republic Act No. 7653, otherwise known as "The New Central Bank Act", as amended, and
Republic Act No. 3591, otherwise known as the Philippine Deposit Insurance Corporation Charter, as
amended, every corporation whose charter expires pursuant to its article of incorporation is annulled by
forfeiture, or whose corporate existence is terminated in any other manner, shall nevertheless remain as
a body corporate for three (3) years after the effective date of dissolution, for the purpose of prosecuting
and defending suits by or against it and enabling it to settle and close its affairs, dispose of and convey its
property, and distribute its assets, but not for the purpose of continuing the business for which it was
established.
● Kapag nag-expire na ang charter ng corporation, kaya pang mabuhay ng corporation for three
years after date ng dissolution for the purpose of prosecuting and defending suits by or against it

and enabling it to settle and close its affairs, dispose of and convey its property, and distribute its
assets.
At any time during said three (3) years, the corporation is authorized and empowered to convey all of its
property to trustees for the benefit of stockholders, members, creditors, and other persons in interest.
After any such conveyance by the corporation of its property in trust for the benefit of its stockholders,
members, creditors and others in interest, all interest which the corporation had in the property
terminates, the legal interest vests in the trustees, and the beneficial interest in the stockholders,
members, creditors or other persons-in-interest.
Except as otherwise provided for in Section 93 and 94 of this Code, upon the winding up of corporate
affairs, any asset distributable to any creditor or stockholder or member who is unknown or cannot be
found shall be escheated in favor of the national government.
Except by decrease of capital stock and as otherwise allowed by this Code, no corporation shall distribute
any of its assets or property except upon lawful dissolution and after payment of all its debts and
liabilities.
● Priority ang payment ng debts and liabilities

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Business Laws and Regulations: Module 1

Characteristic Elements of Partnership

Essential Features of Partnership

Existence of a Valid Contract

Legal Capacity of the Parties to Enter into the Contract

○ Ex. Ipinama sa inyo ay isang apartment at after mamatay ng magulang mo ay kayong

ARTICLE 1776. As to its object, a partnership is either universal or particular.

7. Real Partners - partners in an existing legal partnership

Obligations of the Partners Among Themselves

○ May receivable yung partnership sa mismong partner na yon (payable ni partner sa

● If ikaw naman ay na-appoint after ng paggawa ng Articles of Partnership, the rule

Decision making: Bibili ba ng truck o bibili ng van?

A=60% Truck Truck

B=10% Van Truck

C=15% Van Van

D=15% Van Van

Property Rights of a Partner

Obligations of the Partners with Regard to Third Persons

ARTICLE 1823. The partnership is bound to make good the loss:

Dissolution and Winding Up

ARTICLE 1830. Dissolution is caused:

considered a breach of contract. Magiging liable yung umalis na partner

● Effect of death on pending action

● Dissolution may be caused:

● if the contract is annulled, the injured partner is entitled to restitution

(a) Those owing to creditors other than partners,

● Rights, powers and liabilities of a general partner

ARTICLE 1858. A limited partner is liable to the partnership:

ARTICLE 1859. A limited partner’s interest is assignable.

Hierarchy kung sino ang dapat unang bayaran:

1. Utang sa third person creditors — 1. Utang sa outside credits and utang sa

2. Utang sa general partners — General 2. Limited partners in respect to their share

4. General partners in respect of profits 4. Utang sa general partners

5. General partners in respect of profits

6. General partners in respect of their capital

ARTICLE 1865. The writing to amend a certificate shall:

TITLE I: GENERAL PROVISIONS

Mariel Enriquez & Winona Zuniga

Business Entity Theory of concept of corporate fiction, hindi pwedeng habulin ng

Distinctions of a Partnership from a Corporation

Mariel Enriquez & Winona Zuniga

Similarities of Partnership and Corporation

Mariel Enriquez & Winona Zuniga

Different types/ classifications of Corporations

Mariel Enriquez & Winona Zuniga

3. As to whether they are for charitable purposes or not:

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

TITLE II: INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS

Mariel Enriquez & Winona Zuniga

Three steps in the creation of a Corporation

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

Mariel Enriquez & Winona Zuniga

No articles of incorporation or amendment to articles of incorporation of banks, banking and