LMG10 Syllabus 2011-05-19 (1)

THE DEPARTMENT OF LEGAL MANAGEMENTCollege of Arts & Sciences

San Beda College

Name: ______________________________________ I.D. No. _______________ Section ________Class Days: __________________________________ Time and Room: _________________________

COURSE TITLE: Corporation Law (LMG 10)2nd Semester, Academic Year 2011-2012

INSTRUCTOR'S NAME: Mari Jennifer BruceEMAIL ADDRESS: [email protected]: Saturday a.m. (by appointment) COURSE DESCRIPTION AND RATIONALE

An extensive survey of basic legal rules and principles concerning corporations; the nature, kinds, formation, operation and management, rights and obligations of the components and dissolution of a corporation; and the advantages and disadvantages of corporate form

COURSE GOAL AND OBJECTIVES

At the end of the course, students are expected:

1. to have a thorough understanding of the nature and significance of corporate form and other juridical persons; the fundamental concepts and general principles affecting the formation, operation and dissolution of corporations; and the rights and obligations of stockholders/members, directors/trustees and officers of a corporation;

2. to Identify the appropriate legal issues and give solutions to problems by applying the appropriate legal principles;

3. to have a working knowledge of the law on corporations and apply such know-how in the conduct of business; and

4. to make sound business decisions in accordance with the law on corporations.

The study of this course is intended, not only to teach students the law, but also to exhibit the values of integrity, propriety and social responsibility whenever a corporation is used as a format for business operations. Thereby, students are expected to identify their role as Bedans, Filipinos and Christians in applying business law in the Philippines.

COURSE OUTLINE

Week 1 TOPIC : INTRODUCTION AND REVIEW

A. Basis for Corporate Existence/Constitutional Provisions relating to

CorporationsB. Natural Person distinguished from Juridical PersonC. Common Business Forms/Other Juridical Persons (single

proprietorship, partnership, corporation, close corporation, trust, joint venture)

D. Corporations distinguished from Partnerships1. Definition and essential features2. Rules to determine existence of partnership3. Form of Partnership4. Kinds/classification of partners and partnerships5. Obligations and Rights of Partners

a. Obligations of partners among themselvesb. Property rights of partnersc. Obligations of partners to third persons

6. Dissolution and Winding Up7. Limited partnership

EXPECTED OUTCOME: Identify the nature of juridical persons and the essential features of a corporation

ACTIVITIES : Discussion, Lecture, Recitation

ASSIGNMENTOthers Laws : 1987 Constitution, Section 16, Article XII

Civil Code, Articles 44-45Required Text : pp 18-20, 29-38

Week 2-3 TOPIC : ATTRIBUTES OF CORPORATIONS

A. Attributes of Corporations and Corporate ExistenceB. Advantages and Disadvantages of Corporate FormC. Applicability of constitutional guarantees, moral damages, liability

for crimes and torts D. Nationality of CorporationsE. Classes of Corporations

EXPECTED OUTCOME : Identify the attributes of a corporation, and determine the advantages of corporate form, statutory requirements for corporations (e.g., nationality, investment) to engage in regulated undertakings, and the basic concepts, characteristics and classes of corporation


ASSIGNMENTA. Attributes of Corporations and Corporate Existence

Corporation Code : Section 2Required Text : pp 20-23

B. Advantages and Disadvantages of Corporate FormCorporation Code : Section 2Required Text : pp 23-29

C. Applicability of constitutional guarantees, and liability for crimes and torts Required Text : pp 38-56Case : Stonehill v. Diokno, 20 SCRA 383 (1967)

D. Nationality of CorporationsCorporation Code : Sections 123, 140Other Laws : 1987 Constitution, Sections 2, 3, 7, 11, Article XII

: 1987 Constitution, Section 11, Article XVI

: Executive Order 858 (2010)Required Text : pp 56-70Case : Filipinas Compaña de Seguros v. Christern, 89 Phil. 54 (1951)

E. Classes of CorporationsCorporation Code : Sections 3-4, 20, 21, 43, 87-88, 96, 106, 109-110, 123Required Text : pp 70-83

Week 3-4 TOPIC : THEORY OF CORPORATE ENTITY

A. Separate Juridical PersonalityB. Piercing the Veil of Corporate Fiction

EXPECTED OUTCOME: Discuss the basic theory of separate juridical personality of corporations and how it affects the liabilities of the corporation, its shareholders/members, directors/trustees, officers, and the relationship with other related juridical entities


ASSIGNMENTCorporation Code : Section 2Required Text : pp 86-140Cases :

1. Liddell and Co. v. Collector of Internal Revenue, 2 SCRA 632 (1961)2. Umali v. Court of Appeals, 189 SCRA 529 (1990)3. Tomas Lao Construction v. National Labor Relations Commission, 278 SCRA 716 (1997)4. Commissioner of Internal Revenue v. Norton and Harrison, 11 SCRA 714 (1964)

Week 5 TOPIC : PRE-INCORPORATION

A. Pre-Incorporation Subscription Agreements B. Promoter’s Contracts

EXPECTED OUTCOME : Determine the binding effect of pre-incorporation contracts and the persons liable therefor


ASSIGNMENTCorporation Code : Sections 5, 60, 61Other Laws : Civil Code, Articles 1305, 1317-1319, 1403, 1404, 1409, 1897-1901 Required Text : pp 142-151

Week 6 TOPIC : DEFECTIVELY-FORMED CORPORATIONS

A. De facto corporation B. Corporation by estoppel

EXPECTED OUTCOME : Identify the enforceability of contracts entered into by de jure corporations, de facto corporations, and corporations by estoppel


ASSIGNMENTCorporation Code : Sections 20, 21, 25Required Text : pp 152-174Cases :

1. Hall v. Piccio, 86 Phil. 603 (1950)2. Lim v. Philippine Fishing Gear Industries, Inc., 317 SCRA 728 (1999)

Week 6-7 TOPIC : FORMATION OF CORPORATIONS

A. Requirements for Incorporation1. Steps in incorporation2. Corporate name3. Corporate term4. Primary and secondary purposes5. Incorporators6. Capital stock, Paid up capital, Authorized capital stock7. Articles of incorporation8. By-Laws9. Revocation of certificate

B. Commencement of corporate existence

EXPECTED OUTCOME : Outline the steps and legal requirements in forming a corporation


ASSIGNMENTCorporation Code : Sections 10-19, 23, 36, 46-48, 50, 51, 62, 97, 103, 107-108, 111-112,

116, 124-131Required Text : pp 174-179, 188-230

Week 7-8 TOPIC : CORPORATE POWERS

A. Corporate Powers under the Corporation Code1. Extend corporate term2. Increase or decrease capital stock3. Deny pre-emptive right4. Sale on disposition of assets5. Acquisition of own shares6. Invest in another business7. Declare dividends8. Managements contracts9. Amend/Adoption Articles of Incorporation and By-laws

B. Corporate Powers provided in the Articles of Incorporation and By-Laws1. Primary Purpose2. Secondary Purpose

EXPECTED OUTCOME : Determine the sources of corporate powers and the requirements for exercising them


ASSIGNMENTCorporation Code : Sections 2, 23, 36-44, 46, 81-86, 113Required Text : pp 233-288

Week 9 MIDTERM EXAMINATIONS

Week 10 TOPIC : DIRECTORS, OFFICERS, TRUSTEES

A. Ultra vires doctrineB. Doctrine of Apparent AuthorityC. Business Judgment Rule

EXPECTED OUTCOME : Determine and consequences of ultra vires acts; Identify the rights and responsibilities of directors, trustees and officers


ASSIGNMENTCorporation Code : Sections 23-35, 45, 49, 53-54, 92-93, 97, 101, 104, 114Required Text : pp 179-186, 291-336Cases : Philippine National Bank v. Court of Appeals, 94 SCRA 357 (1979)

Yao Ka Sin Trading v. Court of Appeals, 209 SCRA 763 (1992)

Week 11-12 TOPIC : DIRECTORS, OFFICERS, TRUSTEES

A. Directors and Trustees1. Qualifications and Disqualifications2. Election, Removal and Replacement3. Regular and Special Meetings of Directors, Quorum, Executive4. Organizational Meeting5. Responsibilities6. Executive Committee 7. Interlocking Directors8. Duty of Loyalty

B. Officers1. Qualifications ad Disqualifications2. Appointment3. Responsibilities

C. Duties and Responsibilities1. Conflict of Interest2. Business Opportunity

EXPECTED OUTCOME : Identify the rights and responsibilities of directors, trustees and officers; Determine the procedure and requirements for selecting directors, trustees and officers; Discuss related legal and technical know-how in the management of a corporation; Determine the legal principles essential to participating in the organization and management of a corporation


ASSIGNMENTCorporation Code : Sections 23-35, 49, 53-54, 92-93, 97, 101, 104, 114, 144Required Text : pp 336-382, 387-429

Week 13 TOPIC : SHAREHOLDERS AND MEMBERS

A. Meetings and QuorumB. Voting, voting trusts, proxiesC. Appraisal RightD. Right to inspect financial statements and other corporate books

and recordsE. Transfer of sharesF. Transfer and termination of membership G. Derivative Suits

EXPECTED OUTCOME : Identify the rights and responsibilities of stockholders and members


ASSIGNMENTCorporation Code : Sections 16, 24, 26, 37-40, 42-44, 46, 48-52, 54-59, 74-75, 77, 81-86,

89-91, 93, 100(2), 141, 144Other Laws : Required Text : pp 433-516

Cases : Tan v. Sycip, 499 SCRA 216 (2006)

Week 13-14 TOPIC : SHARES AND DIVIDENDS

A. Subscription 1. Subscription Contracts 2. Payment of Subscription

B. Consideration for stocks C. Classes of Shares

1. Voting/Non-Voting2. Par/No-Par Value3. Preferred Shares4. Founder’s Shares5. Redeemable Shares6. Treasury Shares

D. Watered StocksE. Stock Certificate, Transfer of Shares and RestrictionsF. Dividends

1. Cash dividends 2. Stock dividends 3. Property dividends

G. Delinquency sale

EXPECTED OUTCOME : Identify the various kinds of shares and the body of rules governing their issuance, transfer or sale


ASSIGNMENTCorporation Code : Sections 6-9, 41, 60-73, 137Required Text : pp 519-571, 581-615

Week 15 TOPIC : ACQUISITION, MERGER, CONSOLIDATION

EXPECTED OUTCOME : Determine the procedure, requirements and legal effects of acquisitions, mergers and consolidation


ASSIGNMENT :Corporation Code : Sections 76-80, 132Required Text : pp 677-719

Week 16 TOPIC : DISSOLUTION AND LIQUIDATION

A. Voluntary DissolutionB. Involuntary DissolutionC. Non-use of corporate powers failure to operateD. Liquidation

EXPECTED OUTCOME : Discuss the requirements and procedures and requirements for dissolving a corporation and winding up corporate affairs


ASSIGNMENTCorporation Code : Sections 117-122Required Text : pp 835-867

Week 17 TOPIC : WRAP UP AND REVIEW

ACTIVITIES : Grand Recitation

EXPECTED OUTCOME : Consolidate all matters discussed during the semester and identify corporate processes and requirements from pre-corporation to liquidation

Week 18 FINAL EXAMINATIONS

COURSE SCHEDULE

1. Regular Classes

Days: Tuesdays-FridaysTime: 4:30-6:00pm Section 4CLM

6:10-7:40pm Section 4ALM7:40-9:10pm Section 4BLM

2. Special Classes

Day: To be determinedTime: To be determined

EXPECTATIONS FROM STUDENTS

1. Students should be prepared for graded recitations every meeting.

2. The assignments for each day are based on the topics and text coverage indicated in this syllabus. Students are expected to study the assignment for the day and participate intelligently in class discussions.

3. Students not wearing the prescribed uniform, or wearing their uniform improperly shall automatically be called for recitation for the entire class.

4. Students who are on unexcused absence will receive a grade of 5.0 for quizzes, seatwork, reports and recitations, as applicable. There will be no special quiz, seatwork, report of recitation for any student, whether absence is excused or unexcused.

5. Electronic gadgets should be turned off or put on silent mode during classes. A quiz will be given if a gadget goes off during class, and such quiz may, at the sole discretion of the professor, be on any topic covered from the start of the semester up to the assignment for the day as indicated in this syllabus.

6. Students using electronic gadgets in class, or during quizzes, recitations or seatwork, are conclusively presumed to be cheating. Any form of communication with persons in or outside the classroom during quizzes, recitations or seatwork shall likewise be conclusively presumed as cheating.

7. Unnecessary noise (e.g., talking with each other while somebody is reciting, side comments) during class hours is not allowed. The professor shall have sole discretion to give a quiz for unruly behavior or when the noise level becomes intolerable. The quiz may be on any topic covered from the start of the semester up to the assignment for the day as indicated in this syllabus.

8. Students will be given opportunities during the semester to improve their grades. Except on the ground of mathematical error, at no instance shall a grade be modified once it has been entered in the school’s online grading system. For the avoidance of doubt, no special project or removal examination will be given after final grades have been released. This applies to graduating students.

9. The rules of San Beda College on absences and tardiness will be strictly applied.

GRADING SYSTEM

1. Course Requirements

a. Examinations, quizzes and seatwork b. Participation in graded recitation

2. Optional Requirements

a. Individual and group reportsb. Written reports and movie review

The guidelines and topics for reports and movie review shall be given at start of the semester. Reports and movie reviews shall be credited to the Final Examination grade of the student.

Individual and group reports, if any, shall be scheduled during the semester to coincide with the topics in the course outline above. The professor reserves the right to modify the guidelines for reports or to cancel reports, as may be appropriate for the semester’s requirements.

Handwritten movie reviews shall be submitted no later than 6:20 pm on 6 October 2011.

3. Computation of Grades

Each student’s scholastic performance for the course shall be determined as follows:

a. Midterm Grade Computation:

Basis Weighti. Class Standing (which considers quizzes, recitations and other

course requirements given during the midterm only)60%

ii. Midterm Examination 40% TOTAL 100%

b. Final Grade Computation:

Basis Weighti. Midterm Examination 20%ii. Class Standing (which considers quizzes, recitations and other

course requirements given during the midterm only)50%

iii. Final Examination 30% TOTAL 100%

The Department’s grading system is base 25%, computed as follows:

([Raw Score/Total Items][0.75][100]) + 25

REFERENCES

1. Prescribed Text

a. Philippine Corporation Law by Cesar L. Villanueva, Cesar (Manila: Rex Bookstore 2010).

b. Corporation Code of the Philippines

2. Optional Text

a. The Law on Partnerships and Private Corporations by Hector S. De Leon (Manila: Rex Book Store, 2005).

b. The Law on Partnerships and Private Corporations for Business Students by Carlo B. Suarez (Manila: GIC Enterprises, 2006).

c. The Law on Business Organizations (Partnership and Corporations) by Justo P. Torres, Jr. (Manila: Rex Bookstore, 2000).

d. Partnership and Corporation by Renato R. Pasimio (Mandaluyong City: National Bookstore, 2004).

3. Electronic Sources

a. http://sc.judiciary.gov.ph/ b. http://www.lawphil.net/ c. http://www.sec.gov.ph/

http://www.sec.gov.ph/

http://www.lawphil.net/

http://sc.judiciary.gov.ph/

Documents

LMG10 Syllabus 2011-05-19 (1)