aESSENTIAL FEATURES OF PARTNERSHIP (p4) 1. There must be a valid contract 2.

Parties must have legal capacity to enter into the contract 3. There must be a mutual contribution of money, property, or industry to a common fund 4. The object must be lawful 5. The purpose or primary purpose must be to obtain profits and divide the same among the parties PROPERTY RIGHTS (p84) 1. His right in specific partnership property 2. His interest in the partnership 3. His right to participate in the management OTHER RIGHTS (p84-85) 1. Right to reimbursement for amounts advanced to the partnership and to in demnification for risks in consequence of management 2. Right of access and inspection of partnership books 3. Right to true and full information of all things affecting the partnersh ip 4. Right to a formal account of partnership affairs under certain circumsta nces 5. Right to have the partnership dissolved also under certain conditions ASSETS OF PARTNERSHIP (p154) 1. Partnership property 2. Contributions of the partners necessary for the payment of all liabiliti es in accordance with Art. 1797 ORDER OF APPLICATION OF ASSETS (p154) *should be IN ORDER!! 1. Those owing to partnership creditors 2. Those owing to partners other than for capital and profits such as loans given by the partners or advances for business advances 3. Those owing for the return of the capital contributed by the partners 4. Share of profits, if any, due to each partner ATTRIBUTES OF A CORPORATION (p209) 1. It is an artificial being 2. It is created by operation of law 3. It has the right of succession 4. It has only the powers, attributes, and properties expressly authorized by law or incident to its existence CLASSIFICATION OF CORPORATION UNDER THE CODE (p219) 1. Stock corporation 2. Non-stock corporation CLASSES 1. 2. 3. 4. OF PERSONS (p225) Corporators Incorporators Stockholders Members

STEPS IN CREATION OF CORPORATION (p256) 1. Promotion 2. Incorporation 3. Formal organization and commencement of business operations STEPS IN INCORPORATION (p256-257)

1. Drafting and execution of the articles of incorporation by the incorpora tors. 2. Filing with the Securities and Exchange Commission of the articles of in corporation 3. Payment of the filing and publication fees 4. Issuance of SEC of the certificate of incorporation if all papers filed after verification and examination are found in order REQUISITES FOR VALIDITY OF CORPORATE ACT *BOARD MEETING* (p321) 1. Meeting of the directors or trustees duly assembled as a board, i.e., as a body in a lawful meeting 2. Presence of a quorum 3. Decision of the majority of the quorum or, in other cases, a majority of the entire board 4. Meeting at the place, time, and in the manner provided in the by-laws SECTION 32 (p335) Dealings of directors, trustees or officers with the corporation a contract of the corporation with one or more of its directors or trustees or officers is voidab le, at the option of such corporation, unless all of the ff conditions are prese nt: 1. The presence of such director or trustee in the board meeting in w/c the contract was approved was not necessary to constitute a quorum for such meeting 2. The vote of such director or trustee was not necessary for the approval of the contract 3. The contract is fair and reasonable under the circumstances 4. In the case of an officer, the contract with the officer has been previo usly authorized by the board of directors DECLARATION OF DIVIDENDS (p381) 1. Existence of unrestricted retained earnings out of which the dividends m ay be declared and paid 2. Corporate resolution of the board of directors declaring the payment of a portion or all of such earnings to the stockholders REQUISITES FOR A VALID MEETING OF STOCKHOLDERS/MEMBERS (p411) 1. It must be held at the proper place 2. It must be held at the stated date and at the appointed time or at a rea sonable time thereafter 3. It must be called by the proper person 4. There must be a previous notice 5. There must be a quorum RIGHTS AND REMEDIES OF STOCKHOLDERS IN GENERAL (p450-4510) 1. Right to attend and vote in person or by proxy at stockholders meetings 2. Right to elect and remove directors 3. Right to approve certain corporate acts 4. Right to adopt and amend or repeal the by-laws or adopt new by-laws 5. Right to compel the calling of meetings of stockholders when for any cau se there is no person authorized to call a meeting 6. Right to issuance of certificate of stock or other evidence of stock own ership and be registered as shareholder 7. Right to receive dividends when declared 8. Right to participate in the distribution of corporate assets upon dissol ution 9. Right to transfer of stock on the corporate books 10. Right to pre-emption in the issue of shares 11. Right to inspect corporate books and records and to receive financial re port of the corporation s operations 12. Right to be furnished the most recent financial statement upon request a

nd to receive a financial report of the corporation s operations 13. Right to bring individual and representative or delinquency suits 14. Right to recover stock unlawfully sold for delinquency 15. Right to enter into a voting trust agreement 16. Right to demand payment of the value of his shares and withdraw from the corporation in certain cases 17. Right to have the corporation voluntarily dissolved LIABILITIES OF STOCKHOLDERS (p454) 1. Liability to the corporation for unpaid subscription 2. ......for interest on unpaid subscription 3. Liability to creditors of the corporation on unpaid subscription 4. Liability for watered stock 5. Liability for dividends unlawfully paid 6. Liability for failure to create corporation BOOKS/RECORDS TO BE KEPT BY CORPORATORS (p473) *Under the corporation code 1. A record of all business transactions 2. Minutes of all meetings of stockholders or members 3. Minutes of all meetings of directors or trustees 4. Stock and transfer book, in case of stock corporations COMMON 1. 2. 3. 4. 5. FORMS OF CORPORATE COMBINATIONS (p485) Sale of assets Lease of assets Sale of stock Merger (A+B=B) Consolidation (A+B=C)

INSTANCES OF APPRAISAL RIGHT (p491) 1. In case any amendment to the article of incorporation has the effect of changing or restricting the rights of any stockholders 2. In case of sale, lease, exchange, transfer, mortgage, pledge or other di sposition of all or substantially all of the corporate property and assets 3. In case of merger or consolidation 4. It is also available to a dissenting stockholder in case the corporation decides to invest its funds in another corporation or business or for any purpo se other than its primary purpose 5. Under Sec.105, any stockholder of a close corporation may, for an reason , compel said corporation to purchase his shares at their fair value, which shal l not be less than their par or issued value, when the corporation has sufficien t assets in its books to cover its debts and liabilities exclusive of capital st ock RULES APPLICABLE ONLY TO NON-STOCK CORPORATIONS (p504-505) 1. No part of its income is distributable as dividends to its members 2. It cannot engage in business with the object of making profits 3. The right to vote of members may be limited, broadened, or even denied i n the articles of incorporation or the by-laws 4. Unless otherwise provided by the articles of incorporation or the by-law s, a member may vote by proxy in accordance with the provisions of the Code 5. Each member shall be entitled only to one vote in the election of truste es unless cumulative voting is authorized in the articles of incorporation or th e by-laws 6. Voting by mail or other similar means may be authorized 7. Membership and all rights arising therefrom are personal and non-transfe rable unless otherwise provided in the articles of incorporation or the by-laws 8. Membership shall be terminated only in the manner and for the causes pro vided in the articles of incorporation or the by-laws

9. The number of trustess who must be members of the corporation may be mor e than 15 10. Unless otherwise provided in the articles of incorporation or the by-law s, the terms of office of the trustees first elected are staggered with 1 year i nterval 11. Trustees subsequently elected shall have term of 3 years 12. Officers other than trustees may be directly elected by the members unle ss otherwise provided in the articles of incorporation or the by-laws 13. The by-laws may provide that the members may hold their meetings at any place even outside the place where the principal office of the corporation is lo cated provided that such place is within the Philippines 14. In case of dissolution, its assets shall be applied and distributed in a ccordance with certain specific rules laid down by law or as may be specified in a plan of distribution adopted by the corporation provided it is not inconsiste nt with such rules DEFINITION OF CLOSE CORPORATION (p508) 1. All its issued stick, exclusive of treasury shares, shall be held of rec ord by not more than a specified number of persons, not exceeding 20 2. All its issued stock shall be subject to one or more restrictions on tra nsfer permitted by the Code 3. Any of its stock shall not be listed in any stock exchange or offered to the public RULES FOR NON-STOCK EDUCATIONAL CORPORATIONS (p527) 1. The number of trustees shall not be less than 5 nor more than 15 2. It shall be in multiples of 5 (5,10,15) 3. Unless otherwise provided in the articles of incorporation or the by-law s, the terms of office of the trustees shall be staggered with 1 year interval 4. Trustees subsequently elected shall have a term of 5 years 5. Trustees elected to fill vacancies occurring before the expiration if a particular term, shall hold office only for the unexpired period 6. A majority of the trustees shall constitute a quorum for the transaction of business 7. The powers and authority of trustees shall be defined in the by-laws LEGAL STEPS IN CORPORATE DISSOLUTION (p538) 1. The termination of the corporate existence at least as far as the right to go on doing ordinary business is concerned 2. The winding-up of its affairs, the payment of its debts, and the distrib ution of its assets among the shareholders or member and other persons in intere st. After winding-up, the existence of the corporation is terminated METHODS/CAUSES OF CORPORATE DISSOLUTION (p539) *VOLUNTARY* 1. By the vote of the board of directors/trustees and the stockholders/memb ers, where no creditors are affected 2. By judgement of the SEC after hearing of petition for voluntary dissolut ion, where creditors are affected 3. By amending the articles of incorporation to shorten the corporate term 4. In the case of a corporation sole, by submitting to the SEC a verified d eclaration of dissolution for approval *INVOLUNTARY* 1. By expiration of term provided for in the original articles of incorpora tion 2. By legislative enactments 3. By failure to formally organize and commence the transaction of its busi ness within 2 years from date of incorporation 4. By order of the SEC DISSOLUTION BY ORDER OF THE SEC (p547) 1. Violations by a corporation

2. 3. 4.

Deadlocks in a close corporation Mismanagement of a close corporation Suspension or revocation of certificate of registration of a corporation

EFFECTS OF DISSOLUTION (p549) 1. The corporation ceases as a body corporate to continue the business for which it was established 2. The corporation continues as a body corporate for 3 years for purpose of winding-up or liquidation 3. Upon the expiration of the winding-up period of 3 years, the corporation ceases to exist for all purposes and as a general rule, it can no longer sue an d be sued as such METHODS 1. 2. 3. onveyed OF CORPORATE LIQUIDATION (p551) Liquidation by the corporation itself Liquidation by a duly appointed receiver Liquidation by trustees to whom the board of directors or trustees had c the corporate assets

OBJECTIVES OF REGULATION OF FOREIGN CORPORATIONS (p557-558) 1. To place them on an equality with domestic corporations 2. To subject them to inspection so that their condition may be known 3. To protect the residents of the State doing business with them by subjec ting them to the courts of the State