...March 23, 2012. Approved, May 1, 1980 Batas Pambansa Bilang 68 THE CORPORATION CODE OF THE PHILIPPINES Be it enacted by the Batasang Pambansa in session assembled: TITLE I - GENERAL PROVISIONS DEFINITIONS AND CLASSIFICATIONS Section 1. Title of the Code. – This Code shall be known as “The Corporation Code of the Philippines.” (n) 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 incident to its existence. (2) Section 3. Classes of corporations. – Corporations formed or organized under this Code may be stock or non-stock corporations. Corporations 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 are stock corporations. All other corporations are non-stock corporations. (3a) Section 4. Corporations created 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. (n) Section 5. Corporators and incorporators, stockholders and members. – Corporators are those who compose a corporation, whether as stockholders or as members. Incorporators are those stockholders...
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... - This Code shall be known as "The Corporation Code of the Philippines". Sec. 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 incident to its existence. Sec. 3. Classes of corporations. - Corporations formed or organized under this Code may be stock or non-stock corporations. Corporations 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 are stock corporations. All other corporations are non-stock corporations. Sec. 4. Corporations created 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. Sec. 5. Corporators and incorporators, stockholders and members. - Corporators are those who compose a corporation, whether as stockholders or as members. 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 in a stock corporation are called stockholders or shareholders. Corporators in a non-stock corporation are called members. Sec. 6. Classification...
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...Duties of Corporate People It is probably best to elaborate a little on what a corporation is before expounding on the duties of corporate people. A corporation is an organizational unit that is formed with the approval of the government and given the same legal rights as a real individual. A sole corporation comprises of a single person but an collective corporation is made up of a group of individual. This organization is approved to conduct business and/or other activities on behalf of the corporation such as issuing shares in an effort to increase capital or begin a business (Mallor, Barnes, Bowers and Langvardt, 2010). All corporations need someone to manage the business. While the shareholders assume shares in an organization, it is not customary for them to handle the business aspect of the corporation. A Board of Directors consists of individuals or members elected or appointed by the shareholders. This primal governing body performs as the entity; sets policies and guidelines; hold the power to appoint individuals as officers and safeguards the best interests of the corporation. This appointed body of individuals is charged to manage the company’s affairs and is ultimately accountable for the overall activities of the organization (Prado-Lorenzo & Garcia-Sanchez, 2010). Further responsibilities of the board encompass the “Duty of Care,” “Duty of Loyalty” and “Business Judgment Rule.” The most important of the three is the “Duty of Care” which defines that...
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...Australian School of Business School of Taxation and Business Law LEGT 2741 BUSINESS ENTITIES TUTORIAL GUIDE SESSION ONE 2012 1 LEGT 2741 BUSINESS ENTITIES Tutorial Guide TUTORIALS PURPOSE The purpose of the questions in the tutorial guide is to help interpret and apply the lecture material. Additionally, the tutorial problems and questions also allow you to practice for the final exam which will consist of similar questions. Note: there will be no answers given out to the tutorial questions or past exam papers in class or posted to Blackboard. The purpose of the questions is to allow you to apply the course material and gauge your own level of competence. Simply giving you the suggested answers will defeat this purpose. It is your responsibility to attend tutorials prepared so that you can gauge your own level of competence and are able to contribute to class discussion. However, if you are uncertain and wish to explore a topic further or test your understanding of past exam questions, please do not hesitate to consult with your tutor or lecturer. The purpose of this tutorial guide is also to allow students to develop the skills (both verbal and written) necessary to analyse problems which may arise in practice. The guide is designed to allow each student to reach the goal of being able to apply theory, knowledge and problem solving technique to fact situations that may arise in company law. It is essential that students learn to select the important issues...
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...North South University LAW 200 Assignment # 2 Prepared for: Barrister A.M. Masum Faculty of Business North South University Prepared by: ID NAME 062 528 030 M.Montasir Imran Khan Section: 02 Page | 1 “A proper balance of the rights of majority and minority shareholders is essential for the smooth functioning of the company.”- Explain & Illustrate? 1. Introduction: The basic principal relating to the administration of the affairs of a company is that “the will of the majority is supreme”. The general rule is that the decisions of the majority shareholders in a company bind the minority. 1 In a world that recognizes ‘simple majority rules’, minority shareholders of companies are by default vulnerable to oppression, disregard and unfair treatment by majority shareholders who are in control of the company. Majority shareholders also have certain obligations to minority shareholders in their capacity of controlling the corporation. In certain cases this minority shareholder right can be exercised directly against a shareholder, without having to go against a corporation or through the derivatives action process.2 In such case a proper balance of the rights of majority and minority shareholders is essential for the smooth functioning of the company. The oppression of minority or mismanagement of a company by majority therefore calls for some remedial action. 3 Today’s minority shareholders come to the corporation with varied attitudes and agendas. Although...
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...INTRODUCTION TO CORPORATION ACCOUNTING Corporation – an artificial being created by operation of law having the rights of succession and the power, attributes and properties expressly authorized by law or incident to its existence. Characteristics of a Corporation 1. Separate legal entity – A corporation is an artificial being with a personality separate from that of its individual owners. 2. Created by operation of law – A corporation is generally created by operation of law. The mere agreement of the parties cannot give rise to a corporation. 3. Rights of succession – A corporation continues to exist notwithstanding the withdrawal, death, insolvency or incapacity of the individual owners. Changes in the ownership structure do not dissolve a corporation. 4. Powers, attributes, properties expressly authorized by law – Being a creation of law, a corporation can only exercise powers provided by law and powers which are incidental to its existence. 5. Ownership divided into shares – Proprietorship in a corporation is divided into units known as shares of stocks. 6. Board of Directors (BOD) – Management of the business is vested in a board of directors elected by the stockholders. The BOD is the governing body or decision-making body of the corporation. Comparison between Partnership and Corporation Partnership|Corporation| Formed by 2 persons.|Formed by 5 persons| || Starts with agreement among partners; may be formed orally.|Starts with the issuance...
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...ManBank. Bob her friend wants a business loan of $300 million to start a new airline. Joan does the research and finds that Bill has worked as an assistant regional manager for a Midwestern airline for 12 years, and that under Bob’s watch the company increased sales 28%. Joan recommends to the board that they grant Bob the loan in which they do. After 3 years Bob files bankruptcy and the bank can only reclaim $150 million. They shareholders seek to file a derivative law suit against Joan for breach of fiduciary duty of care. The questions here is Joan’s conduct protected by the business judgment rule and if so how likely are the shareholders going to be able to succeed successfully with the law suit. Federal Rule 23.1(a) states that this rule applies when one or more shareholders or members of a corporation or an unincorporated association bring a derivative action to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of shareholders or members who are similarly situated in enforcing the right of the corporation or association. USCS Fed Rules Civ Proc R 23.1 The business judgment rule, a well-established doctrine of corporate law, "bars judicial inquiry into actions of directors taken in good faith and in honest pursuit of the legitimate purposes of the corporation. Abramowitz v. Posner, 513...
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...I. Corporate form of organization There are three primary forms of business organization : * The proprietorship * The partnership * The corporation The special characteristics of the corporate form that affect accounting include : 1. Influence of state corporate law 2. Use of the capital stock or share system 3. Development of a variety of ownership interest 1. State Corporate Law Anyone who wishes to establish a corporation must submit articles of incorporation to the state in which incorporation is desired. After fulfilling requirements, the state issues a corporation charter, thereby recognizing the company as a legal entity subject to state law. It is to the company’s advantage to incorporate in a state whose laws favor the corporate form of business organization. For example, consider that nearly half of all public corporations in the United States are incorporated in Delaware. Why Delaware? The state has a favorable tax and regulatory environment, resulting in Delaware being home to more corporations- in public and private- than people. Each state has its own business incorporation act. The accounting for stockholder’s equity follows the provision of these acts. 2. Capital Stock or Share System Stockholder’s equity in a corporation generally consists of a large number of units or shares. Within a given class of stock, each share exactly equals every other share. In the absence of restrictive provisions, each share carries...
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...CONTENTS Introdcution ...................................................................................................................................................................2 Definition of a Company ............................................................................................................................................2 Features of a Corporation ..........................................................................................................................................3 Difference Between a Company and Its personnel .......................................................................................................4 Shareholders ..............................................................................................................................................................4 Directors ....................................................................................................................................................................4 Directors as agent: .................................................................................................................................................5 Directors as Trustees: ............................................................................................................................................5 The Veil of Incorporation ............................................................................................................................
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...voluntarily agreed to form a stock corporation under the laws of the Republic of the Philippines; AND WE HEREBY CERTIFY: FIRST: That the name of the said corporation shall be “SOLAR POWER PANEL CORPORATION”; SECOND: That the nature of the business or purposes to be conducted or promoted by the corporation is to engage in any lawful act or activity for which corporations may be organized under the Business Corporation Code of the Republic of the Philippines. THIRD: That the principal office of the corporation is located in the Municipality of Bayambang, Province of Pangasinan, Philippines; FOURTH: That the term for which said corporation is to exist for fifty (50) years from and after the date of issuance of the certificate of incorporation; or shall have perpetual existence. FIFTH: That the names and residences of the incorporators of the corporation are as follows: NAME NATIONALITY RESIDENCIES Gloria S. Santiago Filipino 334 Diaz, Bautista, Pangasinan Faye Liza G. Eco Filipino Sarah Jane DV. Maniling Filipino Marcelo D. Tamayo Jr. Filipino Ariel M. Ochinang Filipino Ryan A. Kaiklian Filipino Jesie R. Galam Filipino Froilyn C. Camacho Filipino Jezziel B. Requilman Filipino Mary Eleanore J. uy Filipino Eizyl Z. Soriano Filipino Francis G. Romero Filipino Elvin P. Oriel Filipino SIXTH: That the number 0of directors or trustees of the corporation shall be five (5); and the names and...
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...Disclosure Law, Shareholders filed a Derivative Action, and because of certain actions Risk Corp. lost money due to the data breach. There are several relevant laws & principles that pertain to Risk Corporation. The Business Judgement Rule could be used as a defense for Tom Lawless in response to the derivative action. The business judgement rule states that directors and officers are immune from personal liability if their actions are reasonable when made but prove to be detrimental to the corporation. Next, the Duty of Loyalty may have been broken when Lawless didn’t put the corporation's interest ahead of personal interests. This happened when the Risk Corp. didn’t disclose the potential conflict of interests regarding cyber break-ins. The Duty of Care is relevant because the directors and officers have a duty to exercise reasonable care in conducting corporate affairs. And lastly Shareholder litigation is seen here when the shareholders filed a derivative action after the discovery of the data breach and the decline of stock prices of the Risk Corporation. Scenario 2 A shareholder is part owner of a corporation based on the percentage of the corporation's stock the shareholder owns. Shareholders have the right to vote to approve any fundamental corporate changes that the board of directors wishes to implement. Examples of changes are amending the articles of incorporation or its by-laws, merging or dissolving the corporation, increasing the shares the corporation can authorize...
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...personally liable for its debts? Law Upon incorporation, a company becomes a separate legal entity from its directors and members (s119). It can sue and be sued, acquire assets and debts, and enter into contracts in its own name. Its existence can lasts a lifetime as well. The Doctrine of Separate Legal Entity also known as “corporate veil” entails that the Directors of a Company have no personal liability while its Shareholders are only liable up to the amount they paid for their shares. In Salomon v Salomon & Co Ltd Case, Mr. Salomon was the majority shareholder and a secured creditor of the company. Upon winding up, the liquidators argued that Mr. Salomon must not be considered as a secured creditor since he was in control of the company itself. But the Court’s decision recognized Mr. Salomon as a secured creditor since the company has a separate legal personality from the directors and shareholder upon its registration and it has nothing to do with Mr. Salomon being a secured creditor. Application Applying s119 corporations act, Easy Groceries Pty Ltd is a separate legal entity from its directors and shareholders, meaning that Easy Groceries Pty Ltd as a company itself is liable for the debts that occurred. Conclusion As an own legal entity, Easy Groceries Pty Ltd is liable for all the debts occurred. 2. Directors A. Tom and Jones : Executive directors Issue Are Tom and Jones directors under s9 Corporations’ Act? Did they breach their...
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...IIBM Institute of Business Management Corporate Governance www.iibmindia.in Chapter 1 Corporate Governance Corporate governance refers to the system by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, crors, auditors, regulators, and other stakeholders) and specifies the rules and procedures for making decisions in corporate affairs. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations. Governance involves the alignment of interests among the stakeholders. There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 2001–2002, most of which involved accounting fraud. Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance. In the U.S., these include Enron Corporation and MCI Inc. (formerly WorldCom). Their demise is associated with the U.S. federal government passing the Sarbanes-Oxley Act in 2002, intending to restore public confidence in corporate...
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...Running Head: Business Law Business Law Oweya Vincent Makaya University of Nairobi THE COMPANY AS A JURISTIC PERSON VERSUS RESPONSIBILITY FOF THE DIRECTOR’S ACTIONS. Introduction: For a very long time a company has been treated as a corporate entity or a juristic person. In fact the concept of limited liability stems from this premise. Despite being an artificial person a company is wholly a creature of human beings, by human beings and for human beings. It solely rely on humans to conduct and transact any business. This research paper seeks to examine the concept of juristic personality, its advantages and its relationship with its owners. It delves into how decisions are made by this juristic personality, its liabilities and liabilities of those running it. The paper shall seek to examine if this veil of juristic person exists permanently or it can be lifted. What are the consequences of lifting that gown of juristic personality? The Concept of juristic personality. Companies and corporations are said to be legal or juristic personalities. This arises from the incorporation process. A corporation is a word that is said to have been derived from a Latin word corpus which means among other things “body”. An incorporated body becomes what is known as a “corpora coporata” in Latin or corporate body. The idea of a juristic person in law refers to an entity recognized in law as an artificial person. What this means is the entity recognized...
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...CORPORATE LAW EXAM: strategies for revision It is important to prepare a good set of revision notes to assist you in your preparation for the Corporate Law exam. Please note that section numbers and page numbers may not be accurate. PREPARATION OF NOTES Make your notes as user-friendly as possible. • Summarise the law; divide into relevant areas (eg. transactions with shares prohibited by the Corporations Law: share buy backs; financial assistance; capital reductions; indirect self-acquisition...) • Similarly, summarise the relevant sections of Legislation in each area (eg - what is a variation of class rights? See s 246C) • in any summary, cross reference it to the relevant page in your notes • Index your notes with table of contents or "Flags". Practice using your materials in exam-type conditions When do the majority commit fraud on the minority in common law? ("An abuse of power whereby the majority secures an unfair gain at the expense of the minority") |Expropriation of company's property |Ratification of breach of directors' duty |Expropriation of members' property | | | | | |1. Wrong against the company [LH 554-555] |1. Wrong against the company [LH 555-557] |1. Wrong against minorty member [LH 557-558]| |2. Cases |2. Gen meeting has a wide power to ratify...
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