Francisco T. Verzosa Corporation Law 2006 BAR EXAMINATION LA$ %.

$&at is t&e 'octrine o( )piercin* t&e +ei, o( corporate entit-. E/p,ain. 02.1 points.2 "!33E"TE4 AN"$ER FROM T5E !.#. LA$ CENTER !n'er t&e 'octrine o( )piercin* t&e +ei, o( corporate entit-67 t&e ,e*a, (iction t&at a corporation is an entit- wit& a 89ri'ica, persona,it- separate an' 'istinct (ro: its :e:;ers or stoc<&o,'ers :a- ;e 'isre*ar'e' an' t&e corporation wi,, ;e consi'ere' as a :ere association o( persons7 s9c& t&at ,ia;i,it- wi,, attac& 'irect,- to t&e o((icers an' t&e stoc<&o,'ers 0!:a,i +s Co9rt o( Appea,s7 %=> "CRA 12>7 1?2 @%>>0A2. It is an eB9ita;,e 'octrine 'e+e,ope' to a''ress sit9ations w&ere t&e separate corporate persona,it- o( a corporation is a;9se' or 9se' (or wron*(9, p9rposes. 2. To w&at circ9:stances wi,, t&e 'octrine app,-. 02.1 points.2 "!33E"TE4 AN"$ER FROM T5E !.#. LA$ CENTER T&e 'octrine o( )piercin* t&e +ei, o( corporate entit-6 wi,, app,w&en t&e corporationCs separate 89ri'ica, persona,it- is 9se'D a. to 'e(eat p9;,ic con+enienceE ;. to 89sti(- wron*7 protect (ra9'7 or 'e(en' cri:eE c. as a s&ie,' to con(9se t&e ,e*iti:ate iss9es '. w&ere t&e corporation is so or*anize' an' contro,,e' an' its a((airs are so con'9cte' as to :a<e it :ere,- an instr9:enta,it-7 a*enc-7 con'9it7 or a'89nct o( anot&er corporation. T&is was ta<en (ro: t&e case o( !:a,i +s Co9rt o( Appea,s 0%=> "CRA 12>7 1?2 @%>>0A2. F. $&at is t&e :ini:9: an' :a/i:9: n9:;er o( incorporators reB9ire' to incorporate a stoc< corporation. Is t&is a,so t&e sa:e :ini:9: an' :a/i:9: n9:;er o( 'irectors reB9ire' in a stoc< corporation. 02.1 points2 "!33E"TE4 AN"$ER FROM T5E !# LA$ CENTER A" #ARA#5RA"E4 As pro+i'e' (or in section %0 o( t&e Corporation Co'e7 An- n9:;er o( nat9ra, persons not ,ess t&an 1 ;9t not :ore t&an %1 :a;eco:e incorporators o( a corporation. !E"TION" FOR COR#ORATION

$it& re*ar' to n9:;er o( 'irectors7 "ection %? no. 6 pro+i'es t&at t&e n9:;er o( 'irectors or tr9stees s&a,, not ;e ,ess t&an 1 nor :ore t&an %1.

?. M9st a,, incorporators an' 'irectors ;e resi'ents o( t&e #&i,ippines. 02.1 points2 "!33E"TE4 AN"$ER FROM T5E !# LA$ CENTER A" #ARA#5RA"E4 No7 not a,, incorporators an' 'irectors :9st ;e resi'ents o( t&e #&i,ippines. $it& re*ar' to incorporators7 "ection %0 o( t&e Corporation Co'e pro+i'es t&at a:on* t&e incorporators 01 :ini:9n7 %1 :a/i:9:2 :a8orit- ;ein* resi'ents is s9((icient. $it& re*ar' to 'irectors7 t&e ,ast sentence o( section 2F o( t&e Corporation Co'e pro+i'es t&at a :a8orit- o( t&e 'irectors or tr9stees o( a,, corporations :9st ;e resi'ents o( t&e #&i,ippines. 1. $&at is an intraGcorporate contro+ers-. 0= points2 FIR"T "!33E"TE4 AN"$ER FROM T5E !.#. LA$ CENTER An intraGcorporate contro+ers- is a 'isp9te ;etween t&e (o,,owin*D a. a stoc<&o,'er an' a corporation o( w&ic& &e is a stoc<&o,'er Eor ;. ;etween a stoc<&o,'er an' anot&er stoc<&o,'er o( t&e sa:e corporation. In ;ot& cases7 t&e s9;8ect o( t&e 'isp9te or contro+ers- arose o( s9c& re,ations&p. T&is was pro+i'e' ;- "9nset View Con'o:in9: Corp. +s Ca:pos Hr. 0%0? "CRA F0F @%>=%A2 "ECON4 "!33E"TE4 AN"$ER FROM T5E !.#. LA$ CENTER Accor'in* to "C A':inistrati+e Me:o. No. 0%G2G0? 200%7 An intraGcorporate 'isp9te is a ci+i, case in+o,+in* t&e (o,,owin*D a. 'e+ices or sc&e:es e:p,o-e' ;-7 or an- act o( t&e ;oar' o( 'irectors7 ;9siness associates7 o((ices or partners7 a:o9ntin* to (ra9' or :isrepresentation w&ic& :a- ;e 'etri:enta, to t&e interest o( t&e p9;,ic an'Ior o( t&e stoc<&o,'ers7 partners7 or :e:;ers o( an- corporation7 partners&ip7 or associationE ;. contro+ersies arisin* o9t o( intraGcorporate7 partners&ip7 or association re,ations7 ;etween an' a:on* stoc<&o,'ers7 :e:;ers7 or association re,ations7 ;etween an' a:on* stoc<&o,'ers7

:e:;ers7 or associatesE an' ;etween7 an- or a,, o( t&e: an' t&e corporation7 partners&ip or association o( w&ic& t&e- are stoc<&o,'ers7 :e:;ers7 or associates7 respecti+e,-E c. contro+ersies in t&e e,ection or appoint:ent o( 'irectors7 tr9stees7 o((icers7 or :ana*ers o( corporations7 partners&ips7 or associationsE '. 'eri+ati+e s9itsE an' e. inspection o( corporate ;oo<s.

6. Is t&e "ec9rities an' E/c&an*e Co::ission t&e +en9e (or actions in+o,+in* intraGcorporate contro+ersies. "!33E"TE4 AN"$ER FROM T5E !# LA$ CENTER No7 Actions in+o,+in* intraGcorporate contro+ersies are co*niza;,e ;- t&e Re*iona, Tria, Co9rt7 'esi*nate' ;- t&e "9pre:e Co9rt 9n'er "C A':. Me:o No. 00G%%G0F7 w&ic& &as 89ris'iction o+er t&e principa, o((ice o( t&e corporation7 partners&ip or association concerne' as pro+i'e' ;- "ec. 17 R9,e %7 "C A':. Me:o. No. 02G2G 0?.