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*Principles

*Codal provisions
*Discussion in the book

Corporation
Definition/Nature/Attributes (ch. 1-3)
AOI contract of corp and the state
BL contract of corp to
Theory of concession
Principle of limited capacity only granted by the state, hence outside the scope of
power
Ultra Vires Doctrine according to three types.
-

Beyond the powers(first type) -what are the 32 powers of a corporation?


Persons who have no authority (
Illegal acts

Second type of ultra vires(those entered into by persons without authority)


Principles of centralized management(sec 23 of the corp code)
2/3 Majority amendment by laws, corp will enter into a management contract with
another corp
Change/amendment in the relationship an underlying contractual relationship
requirement of the ratificatory vote. (principle of mutuality)
Pangungutang no changing of the underlying relationship for members always
presumed
Rationale for centralized management - should be managed by directors(required
by law)
What are the duties of the board of directors? Loyalty, Obedience, Diligence
Stock holder theory corp code (maximization of profits)
Stake holder theory (sec 32(1)) includes the community, suppliers, environment
*Counter-veiling doctrines
- doctrine of ratification not always expressed, can be impliedly(tumanggap
ng benefits)

- doctrine of estoppel
- reliance in good faith of the third party
- Doctrine of apparent authority(same with/derivative of estoppel) agent is
connected with the corporation. (Case of Agana vs PSI)
*XPN to the XPN (self dealing of directors and officers under Sec. 32)
Far more favorable sa director kesa sa corp. Director is liable.

Sources of Power of the Board (both original and delegated)


-

Original; Sec 23 of the corp code

Stock holders(they delegate the power to the board of directors)

Nature of relationship of the board of directors with the corp Fiduciary


Nature of relationship of the board of directors with stock holders Fiduciary
Corpus Corporate property
Trustee board of directors
Trustor - corporation

Business judgment rule:


1) decisions of the board of directors cannot be reveresed by the court
2) directors cannot be held personally liable
XPN to number 2: (sec 31 and 34)
Codal provisions (sec 25)
Board act as a body not individual directors
Meeting:
Board meeting: Art 6 Not less than 5 not more than 15(quorum) (7-4-3)

Magkaiba ang Dalawa: directors cannot bind the board in a stock holder meeintg
GR: Bawal ang proxy dahil should be in person.
XPN: Teleconferencing and videoconferencing
Stock holders meeting:
Board of directors meeting:

Executive committee: Sec 35


Qualifications: page 324
1) Must own at least one share of the capital stock(Legal/naked title is required)

Corporate stockholders:
-

Not qualified to be elected as to the board members

Disqualifications:
Permanent convicted for the violation of crime punishable for 6 years and
above
Disqualified violations of corp code for 5 years only

Page 327: A public corporation required to build an independent directors


-

Not an employee of the corp, not related to any of the board of directors

Election of the board(page 335)

Cumulative Voting(stock corporations)


No. of shares of subscribers * number of directors to be elected

Straight voting(non stock corporations)


No. of electors to be voted

Vacancy in Board: Sec 29


1)
2)
3)
4)

Removal by board of directors(stockholders has the power to remove)


Expiration of term(stockholders)
Remaining directors constitute a quorum(stockholders)
Increase in no. of BOD (approval of stock holders by amendment of the
articles of incorporation)

Removal other than 1 and 2 remaining directors


Remaining still commit a quorum(death)

Removal: Sec 28
With or without cause
XPN: if the removal involves a minority through cumulative voting with cause

Meetings-page 249
Regular and special
Requisites: p. 350
GR: valid corporate act:
7-4-4

Mode of attendance: P350


Attendance: p 351
Minutes of board meeting: p. 352
Minutes vs Resolution: p. 352
Compensation of directors and officers: p.352
Corporate officers: p. 354, sec 25
Such other officers as may be provided by laws.
*case mantling industrial and commercial corp vs coros. Page 364
President required stockholder
Secretary may or may not be a stockholder
Treasurer may or may not be a stock holder

Duties and Liabilities if directors, trustees and officers


Page 385 GR:

Not Less than the par value and puwedeng ibenta

Loyalty : sec. 31(2)/sec 34


Obedience: Sec 2, page 387
Diligence - Sec 32(1),p 388

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