PHILIPPINE

CORPORATE LAW
OPENING LECTURE
By
DEAN CESAR L. VILLANUEVA, B.S.C., C.P.A, LL.B., LL.M., FAICD, D.J.S.
ATENEO DE MANILA LAW SCHOOL
Rockwell Center, Makati City
CLV LECTURES
CORPORATE LAW
HOUSEKEEPING
1. CORPORATE LAW A 4 - UNIT COURSE
Corporate Practice Course
Mergers & Acquisition Course
Corporate Rehabilitation and Insolvency
2. JOINT CLASSES : (a) Lecture on Special Topics
(b) Catch-up and Integration
of Lessons
CLV LECTURES
CORPORATE LAW
3. BASES OF FINAL GRADE:
40% Recitation (about 150 cases)
20% Mid-Term Exams Grade
40% Final Exams Grade
4. RULES IN RECITATION GRADES:
60% When absent Medical Certificates required; cannot
exceed two (2) instances in the semester
70% For Pass
HOUSEKEEPING
CLV LECTURES
CORPORATE LAW
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:
cvillanueva@vgslaw.com

7. NO PRESCRIBED TEXTBOOK
CLV LECTURES
CORPORATE LAW
INTRODUCTION TO CORPORATE LAW
1. HOW IT USED TO BE 25 YEARS AGO (1986)
Considered a Technical Course, likened to Tax
2. THE SETTING TODAY: Economic Growth/Financial Crisis
Globalization
Corporate Governance Reforms
E-commerce and What Lies Ahead
3. USED TO BE: CORPORATE LAW WAS TAUGHT
AHEAD OF PARTNERSHIP AND TAUGHT IN THE
SAME SEMESTER AS AGENCY.
CLV LECTURES
CORPORATE LAW
INTRODUCTION TO THE STUDY OF CORPORATE LAW
4. BASIC PRINCIPLES IN AGENCY AND PARTNERSHIP
4.1. AGENCY
<http://deanclv.wordpress.com/dean-clv-on-agency-law/>
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
CLV LECTURES
CORPORATE LAW
4.2. PARTNERSHIP
<http://deanclv.wordpress.com/dean-clv-on-partnership-law>
<http://deanclv.wordpress.com/dean-clv-on-joint-ventures/>
Essentially contractual in nature
When elements of (a) contribution to a common fund for
purpose of venture and (b) intent to divide profits among
themselves
Partnership is formed
With a Juridical Personality separate and distinct from the
partners
Mutual Agency among the partners
Principle of Delectus Personarae
Partners liable for Partnership debts even to properties not
invested into the partnership venture (Doctrine of
Unlimited Liability)
INTRODUCTION TO THE STUDY OF CORPORATE LAW
CLV LECTURES
CORPORATE LAW
INTRODUCTION TO THE STUDY OF 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
CLV LECTURES
CORPORATE LAW
BUSINESS THESIS OF THE STUDY OF
CORPORATE LAW
1. THE CORPORATION CONCEPT
. . . 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. 2, corporation code
CLV LECTURES
CORPORATE LAW
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
ATTRIBUTES OF CORPORATION
JURIDICAL PERSON - A corporation is an artificial
being
CREATURE OF THE LAW - Created by operation of law
SEPARATE JURIDICAL - With a right of succession
PERSONALITY

CREATURE OF LIMITED POWERS - Has only such
powers, attributes and properties expressly
authorized by law or incident to its existence
CLV LECTURES
CORPORATE LAW
TRI- LEVEL LEGAL RELATIONSHIPS IN
THE CORPORATE SETTING
I. JURIDICAL ENTITY LEVEL
II. INTRA-CORPORATE CONTRACT LEVEL
III. EXTRA-CORPORATE CONTRACT LEVEL
Views the relationship between State and the corporation
Views the relationships between and among the members
of corporate family
Views the relationship between corporation and outsiders
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
____________________________________________________
CLV LECTURES
CORPORATE LAW
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 Doctrines
Under the aegis Constitutional Principles
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
CLV LECTURES
CORPORATE LAW
1. Between Corporation and its Agents (Directors
and Officers)
Governed by Corporate Law, Law on Agency and Trust;
and in some case by Labor Law principles
2. Between Corporation and Shareholders/Members
Governed by Corporate Law, supplemented by
Contract Law Doctrines
3. Between and Among Stockholders/Members in
Common Venture
Governed by Corporate Law, supplemented by
Contract Law Doctrines
II. INTRA-CORPORATE RELATIONSHIPS
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
CLV LECTURES
CORPORATE LAW
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
III. EXTRA-CORPORATE RELATIONSHIPS
1. Between Corporation and its Employees
Governed by Labor Law, but in limited cases by the
Business J udgment Rule of Corporate Law
2. Between Corporation and its Contract Creditors
Governed by Contract Law, particularly Mutuum and
Credit Transactions principles
3. Between Corporation and Other Claimants
Governed by Quasi-Delicts or Torts principles and
principles in Human Relationships
CLV LECTURES
CORPORATE LAW
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
TRI- LEVEL EXISTENCE IN
THE CORPORATE SETTING
I. ASSETS-ONLY LEVEL
II. BUSINESS ENTERPRISE LEVEL
III. JURIDICAL ENTITY LEVEL
Aggregation of Assets and Resources
Economic unit or the going concern
The business or endeavor pursued in the
medium of the corporation
Defines the Subject Matter of Contract
Determines the Applicable Law
_______________________________________________________
CLV LECTURES
CORPORATE LAW
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 versus Debt Investments

CLV LECTURES
CORPORATE LAW
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)
CLV LECTURES
CORPORATE LAW
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
4. CORPORATE LAW ESSENTIALLY FROM COMMON
LAW TRADITION; THE IMPETUS OF COMMERCE

5. DIFFERENCE IN APPROACHES BETWEEN CIVIL
LAW AND COMMON LAW

6. PROPER TREATMENT OF THE CORPORATION
CODE AND OF CORPORATE LAW
CLV LECTURES
CORPORATE LAW
7. UNDERLYING FUNCTION OF PRIVATE CORPORATIONS
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
the Corporation Code should be given a
reasonable or liberal construction which will
best execute its purpose, even though such
construction is not within its strict literal
interpretation. A strict construction should not
be permitted to defeat the policy and purpose of
the Code. Therefore, a literal interpretation is to
be rejected if it would be unjust or lead to
absurd results.
Soriano v. Offshore Shipping and Manning Corp., 177 SCRA 513, 519 (1989)
CLV LECTURES
CORPORATE LAW
8. THE ROLE OF THE CORPORATE LAWYER
BUSINESS THESIS OF THE STUDY OF CORPORATE LAW
It is worthy to mention that decisions of our
courts have frequently enunciated the principle
that the intent of the Legislature will govern. Thus,
the Corporation Code should be given a judicious,
not stern and discordant interpretation, which will
promote and uplift the development of trade
relations and which will encourage friendly
commercial intercourse among corporations
provided that its primordial end (protection of
public interest) is served.
SEC Opinion No. 04-36, 15 June 2004
CLV LECTURES
CORPORATE LAW
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