SECT 1-9

11. FIRM NAME

A limited partnership is
required by law to add the
word Ltd.

12. DISSOLUTION

A partnership may be
dissolved at any time by
will of any or all of the
partners
Civil Code

PARTNERSHIP VS CORPORATION (p. 48)

1. MANNER OF
CREATION
2. NUMBER OF
INCORPORATORS
3. COMMENCEMENT OF
JURIDICAL
PERSONALITY
4. POWERS

5. MANAGEMENT

6. EFFECT OF
MISMANAGEMENT
7. RIGHT OF
SUCCESSION
8. EXTENT OF LIABILITY
OF THIRD PERSONS

9. TRANSERABILITY OF
INTEREST

10. TERMS OF
EXISTENCE

Michelle Duguil

PARTNERSHIP
Created by mere
agreement of parties
May be organized by only
2 persons
Moment of execution of
the contract of partnership
May exercise any power
authorized by the partners
provided X contrary to law,
morals, good customs,
public order or public
policy
When management is not
agreement upon, every
partner is an agent of the
partnership
Partner as such can sue a
co-partner who
mismanages
Partner has no right of
succession
Partners (E: Limited
partners) are liable
personally and subsidiarily
(sometimes solidarily) for
partnership debts to 3rd
persons
Partner cannot transfer his
interest in the partnership
so as to make the
transferee a partner
without the consent of all
other existing partners
because the partnership is
based on the principle of
delectus personarum
A partnership may be
established for any period
of time stipulated by the
partners

CORPORATION
Law or by operation of law
At least 5 incorporators
Date of issuance of the
certificate of incorporation
by the SEC under its
official seal
Powers expressly granted
by law or implied from
those granted or incident
to its existence
Power to do business is
vested in the BOD or
trustees
Suit against a member of
the BOD or trustees who
mismanages must be in
the name of the corp
right
Stockholders are liable
only to the extent of their
investment as represented
by the shared subscribed
by them
Stockholder has the right
to transfer his shares
without the prior consent
of the other stockholders
because a corporation is
not based on this principle

13. LAWS WHICH

GOVERN

Corporation Code

SIMILARITIES BETWEEN PART AND CORP

1. PERSONALITY
2. AGENT
3. COMPOSITION
4. PROFITS
5. LAW
6. TAX

PARTNERSHIP
CORPORATION
Juridical personality separate and distinct from the
individuals composing it
Corp and Part can only act through its agent
Org composed of an aggregate of individuals
E: Corporation sole
Like a part, a stock corporation distributes its profits to
those who contribute capital to the business (although
an industrial partner also shared in partnership profits)
Like a part, a corporation can only be organized where
there is a law authorizing its organization
A partnership, no matter how created or organized is
taxable as a corp, subject to income tax

OTHER CLASSIFICATIONS OF CORPORATIONS (p. 56)

As to number of persons who
compose them

1.
2.

As to whether they are for religious

purpose or not

1.

2.
Corp may not be formed
for a term in excess of 50
years extendible to not
more than 50 years in any
one instance

Corporation may adopt

any firm name provided it
is not identical or
deceptively similar to any
registered firm name or
contrary to existing law
Corporation can only be
dissolved with the consent
of the State

As to whether they are for charitable

purposes or not
As to state under whose laws they

1.
2.
1.

Corporation aggregate more

than 1 member, not less than 5
persons
Corporation sole associated with
the clergy, one member or
corporator only and his successors,
such as the bishop
Ecclesiastical Corpo religious
purpose
a. corporation sole
b. religious societies
Lay Corpo other than for religion
a. Eleemosynary
b. Civil
Eleemosynary charitable purpose
Civil business or profit
Domestic Phil laws

have been created

2.

As to their legal right to corporate

existence
As to whether they are open to public
or not

1.
2.
1.

As to their relation to another

corporation

2.
1.

2.

3.

As to whether they are for public or

private

1.
2.

Whether they are corp in the true

sense or limited sense only

1.
2.

Foreign laws other than Phil law

(For tax resident/non-resident)
De jure In fact and in law
De Facto In fact
Close corporation selected
persons or family
Open corporation
Parent or holding corporation
so related to another corp that it has
the power either directly or indirectly
to control or to elect majority of the
director of such other corp
Subsidiary corp Another
corporation owns at least majority
(50%) of the shares and thus has
control over ts financial or operating
policies
Affiliated corp one related to
another by owning or being owned
by a common management or by a
long term lease of its properties or
other control device
Public corp general good and
welfare
Private corp private benefit
a. GOCC majority owned by
government
b. Quasi-public corp - franchise
True Corp exists by statutory
authority
Quasi Corp exists without formal
legislative grant
a. Corporation by prescription
b. Corporation by estoppel

PUBLIC VS PRIVATE CORPORATION (p. 62)

1. GOVERNMENT
CONTROL

2. CONSENT

PUBLIC
Mere instrumentalities of
the state = subject to
governmental visitation
and control

May be created without

the consent of the locality
to be affected

PRIVATE
Charter of a private
corporation is a contract
between the state and the
corporation or
incorporators which under
the Constitution
prohibiting laws impairing
the obligation of contracts,
renders such corp. not
subject to visitation,
control or change by the
State
E: Police Power
Consent of incorporators
is necessary to the
creation of private
corporations

3. TAXATION, TORTS,
ETC
CAPITAL STOCK VS CAPITAL (p. 76)
WHAT
AMOUNT

CAPITAL
Actual corporate property;
concrete thing
Fluctuates or varies from
day to day according as
there are profits or losses
or appreciation or
depreciation of corporate
assets

BELONGS TO WHO

May be greater or lesser

than the amount of capital
stock
Belongs to the corporation

KIND

Real or personal

CAPITAL STOCK
Amount; abstract
Amount fixed in the
articles of incorporation
(where shares are with
par value) and is
unaffected by profits and
losses.

When issued, belongs to

the stockholder
Personal

* The term capital however is frequently used loosely in sense of capital stock

Michelle Duguil

SHARE OF STOCK
CAPITAL STOCK VS LEGAL CAPITAL (p. 76)
LEGAL CAPITAL
Like capital stock, legal
capital is merely an
amount and remains
unchanged
E: as outstanding shares
are increased or reduced
in number or amount
Sets the MINIMUM
AMOUNT of the corporate
assets which for the
protection of corporate
creditors, may not be
lawfully distributed to
stockholders

Kind of property
CAPITAL STOCK

Subscription

Capital stock limits the

MAXIMUM AMOUNT or
number of shares that
may be issued without
formal amendment of the
articles of incorporation

CAPITAL STOCK VS SHARE OF STOCK

SHARE OF STOCK
Commonly used in a
distributive sense to refer
to the stock in the hands
of the stockholders and
therefore belongs to them

Right or interest

CAPITAL STOCK
Used in a collective sense
to signify the whole body
of shares of stock in the
corporation

Situs of share of stock

Incorporeal or intangible
property
Represents the right or
interest of a person in a
corporation
May be issued even if the
subscription is not fully
paid
E: In no par shares
State where the corp has
its domicile which is
ordinarily the state under
whose laws it was created

CERTIFICATE OF
STOCK
Tangible property
Written evidence of that
right or interest
As a GR, a certificate of
stock may not be issued
unless the subscription is
fully paid
Place where its is located
or at the domicile of the
owner, even though the
corporation is domiciled
elsewhere

Situs of share of stock

retains that of the issuing
corporation, even though
the certificate is without
the state and is owned by
a non-resident
Possession of a certificate
of stock is not essential to
ownership of stock
because the right to stock
may exist independently
of the certificate

SHARE OF STOCK VS CERTIFICATE OF STOCK (p. 79)

Michelle Duguil