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PHILIPPINE
CORPORATELAW
OPENING LECTURE
By
DEANCESAR L.VILLANUEVA, B.S.C., C.P.A, LL.B., LL.M., FAICD, D.J.S.
ATENEO DE MANILA LAW SCHOOLRockwell Center, Makati City
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3.BASES OF FINAL GRADE:40% Recitation(about 150 cases)
20% Mid-Term Exams Grade
40% Final Exams Grade
4. RULESINRECITATION GRADES:
60% When absent Medical Certificates required; cannot
exceed two (2) instances in the semester
70% For Pass
HOUSEKEEPING
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HOUSEKEEPING
5. COURSE OUTLINE:a. Need to keep up-to-date because of many
cases assigned
b. Basis of Class Discussions and Exams
6.CONDUCT OF CLASSES:
There are no stupid questions
Queries to e-mail address:
cvi l [email protected]
7. NOPRESCRIBED TEXTBOOK
mailto:[email protected]:[email protected]:[email protected]:[email protected]8/10/2019 213635475 Corporation Law Dean Cesar L Villanueva
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CLV LECTURESCORPORATE LAW
INTRODUCTION TO CORPORATE LAW
1. HOW IT USED TO BE 25 YEARS AGO (1986) Considered a TechnicalCourse,likened to Tax
2. THE SETTING TODAY: Economic Growth/Financial CrisisGlobalization
Corporate Governance Reforms
E-commerce and What Lies Ahead
3. USED TO BE: CORPORATE LAW WAS TAUGHTAHEAD OF PARTNERSHIP AND TAUGHT IN THE
SAME SEMESTER AS AGENCY.
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INTRODUCTION TO THE STUDYOF CORPORATE LAW
4. BASIC PRINCIPLES IN AGENCY AND PARTNERSHIP
4.1. AGENCY
Essentially a contractual relationship Representative and Fiduciary in nature
Essentially Revocable in nature
Agent must account for all profits and
earnings
Preparatory to achieve a main contract or objective
Agent not liable when acting within the scope of his
authority
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INTRODUCTION TO THE STUDYOF CORPORATE LAW
5. HISTORY OF PHILIPPINE CORPORATE LAW
5.1. The Spanish Code of Commerce
5.2. The Corporation Law (Act 1459; 1 April 1906)
Was weary of the size and potency of
Corporate Enterprises
Contained prohibitory provisions on cross
ownership of corporations and of owning land
5.3. Corporation Code (May, 1980)
5.4. Pres. Decree No. 902-A
5.5. Reversal of Trend: Securities Regulation Code
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BUSINESS THESIS OF THE STUDY OF
CORPORATE LAW
1.THE CORPORATIONCONCEPT
. . . A corporation is an artificial beingcreated by operation of law, having the right
of succession and the powers, attributes and
properties expressly authorized by law or
incident to its existence.
Sec. 2, corporation code
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BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
ATTRIBUTESOF CORPORATION
JURIDICALPERSON - A corporation is an artificialbeing
CREATURE OF THELAW - Created by operationof law
SEPARATEJURIDICAL - With a right of successionPERSONALITY
CREATURE OF LIMITED POWERS - Has only suchpowers,attributes and properties expressly
authorized by law or incident to its existence
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TRI- LEVELLEGALRELATIONSHIPS IN
THE CORPORATESETTING
I. JURIDICALENTITY LEVEL
II. INTRA-CORPORATE CONTRACT LEVEL
III. EXTRA-CORPORATE CONTRACT LEVEL
Views th e relat ionship b etween State and the corporat ion
Views the relat ions hips between and among th e members
of corporate family
Views the relationship between corporation and outsiders
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
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I.JURIDICAL ENTITY LEVEL
Relationship Between State and Corporation
Covered by Section 2, Corporation Code
Essentially Governed by Corporate Law
Principles
Animated by Contract Law Doctr ines
Under the aegis Cons t i tut ional Pr incip les
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
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1.Between Corporation and its Agents (Directorsand Officers)
Governed by Corporate Law, Law on Agency and Trust ;
and in som e case by Labor L aw princip les
2.Between Corporation and Shareholders/Members
Governed by Corporate Law, supplemented b y
Contract Law Doctr ines
3.Between and Among Stockholders/Members inCommon Venture
Governed by Co rporate Law, supplemented by
Contract Law Doctr ines
II.INTRA-CORPORATE RELATIONSHIPS
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
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BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
III. EXTRA-CORPORATERELATIONSHIPS
1. Between Corporation and its Employees
Governed by Labor Law, but in l imited cases by the
Bu siness Judgment Rule of Corpo rate Law
2. Between Corporation and its Contract Creditors
Governed by Contract Law, part icu lar ly Mutuum and
Credi t Transact ions princip les
3. Between Corporation and Other Claimants
Governed by Quasi-Del ic ts or Torts p r incip les and
princip les in Human Relat ionsh ips
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BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
TRI- LEVEL EXISTENCE IN
THE CORPORATESETTING
I. ASSETS-ONLY LEVEL
II. BUSINESS ENTERPRISE LEVEL
III. JURIDICALENTITY LEVEL
Aggregat ion o f Assets and Resou rces
Economic unit or the going concern
The business or endeavor purs ued in the
medium of the corpo rat ion
Defines the Subject Matter of Contract
Determines the App l icable Law
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BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
1. CORPORATE VEHICLE IS A COMPLEX FORM OF
OWNERSHIP-MANAGEMENT SYSTEM AND ITS
UNDERLYING BASIS IS CONTRACT.
2.THE DEMANDS OF COMMERCE:
(a) Corporation Essentially a Medium of Pursuing
Commercial Transactions
(b) Equity versusDebt Investments
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BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
3.
OUTLINE SHOWS OUR DISCUSSIONS
BASED ON MAJOR TOPICS
STRONG JURIDICAL PERSONALITY
LIMITED LIABILITY
CENTRALIZED MANAGEMENT
FREE-TRANSFERABILITY OF UNITS OF
OWNERSHIP (SHARES OF STOCK)
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7. UNDERLYING FUNCTION OF PRIVATE CORPORATIONS
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
the Corporat ion Code shou ld be given a
reasonable or l iberal construct ion which wi l l
best execute i ts purpose, even though such
construct ion is not within i ts str ic t l i teralinterpretat ion. A str ic t cons truct ion should no t
be permit ted to defeat the pol icy and pu rpose of
the Code. Therefore, al i teral interpretat ion is to
be rejected i f i t would be unjust or lead to
absurd resul ts.
Soriano v. Offshore Shipping and Manning Corp., 177 SCRA 513, 519 (1989)
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8.THE ROLE OF THE CORPORATE LAWYER
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
It is worthy to m ent ion that decis ions of ou r
courts have frequent ly enunciated the princ iple
that the intent of the Legislature wil l govern. Thus,
the Corporat ion Code should be given a judic ious ,
no t stern and disco rdant interpretat ion, wh ich w i l l
promote and upl i f t the development of trade
relat ions and which wi l l encourage fr iendlycommerc ia l intercourse among corporat ions
provided that i ts pr imordial end (protect ion of
publ ic in terest) is served.
SEC Opinion No. 04-36, 15 June 2004
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