213635475 Corporation Law Dean Cesar L Villanueva

8/10/2019 213635475 Corporation Law Dean Cesar L Villanueva

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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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CLV LECTURESCORPORATE LAW

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]


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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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8/21CLV LECTURESCORPORATE LAW

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



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



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



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


____________________________________________________



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




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





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




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

_______________________________________________________




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




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


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


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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213635475 Corporation Law Dean Cesar L Villanueva