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USTGoldenNotesLawonPublicCorporations

UST

G OLDEN

N OTES

2011

L.LOCALGOVERNMENTS

Note: Every LGU created or recognized under this

a.PUBLICCORPORATIONS

powers tobeexercisedbyitinconformitywithlaw.

code is a body politic and corporate endowed with

As such, it shall exercise powers as a political
subdivision of the national government and has a

Q:Whatisapublic corporation?

corporate entity representing the inhabitants of its

A:Itisone createdbytheStateeitherbygeneral

or special act for purposes of administration of

local government or rendering service in the
th

publicinterest.(Rodriguez,p.2,LGC5 Edition)

(Sec.15,LGC)
territory

corporations?
Q:Whataretheclassesof
A:

Q: Distinguish public corporation from private

corporation.

1.

Quasipublic corporations public

corporationscreated asagenciesofthe
State for narrow and limited purposes
without the powers and liabilities of
governing corporations.
self

2.

Municipal corporations body politic

and corporate constituted by the
incorporation of inhabitants for
purposes of local government. It is
established by law partly as an agency
of the State to assist in the civil
government of the country, but chiefly
to regulate and administer the local or
internal affairs of the city, town or
district which is incorporated. (Dillon,
Municipal Corporations, Vol.2, pp. 58

A:
PUBLIC

CORPORATION

CORPORATION

PRIVATE
Purpose

Administrationof
localgovernment

Privatepurpose

Who creates

Bythestateeitherby
generalorspecialact

Byincorporatorswith
recognizanceofthestate

Howcreated
Bylegislation

Q:Whatisthecriteriontodeterminewhethera
corporationisapublic corporation?

A: By the relationship of the corporation to the

createdbytheStateasitsown agencyto
stateif
help itincarryingoutitsgovernmental functions,
itispublic,otherwise,itisprivate.

of
a public
Q: What are the dual characteristics
corporation?
A:

1.

2.

182

59.)

Byagreementofmembers

Public or governmental acts as an

agent of the State for the government
oftheterritoryand itsinhabitants.

actsasan agent
Privateorproprietary
ofthe community inthe administration
of local affairs. As such, it acts as
separate entity for its own purposes,
and notasubdivisionoftheState.(Bara
Lidasan vs. COMELEC G.R. No. L28089,
25, 1967 citing McQuillin,
October
MunicipalCorporations, 3ded., pp. 456
464)

Q:WhatisaGovernment Owned and Controlled

Corporation(GOCC)?

A: any agency organized as a stock or non stock

corporation vested with functions relating to

public

whether governmental or

proprietary in nature, and owned by the

government directly or indirectly through its
instrumentalities either wholly, or where
applicableas in the caseof stockcorporationsto
the extent of at least 51% of its capital stock.
No. 292
(Section 2 (13) of Executive Order
(AdministrativeCode of1987)

needs

Q:What are the requisites ofa GOCC?

A:

1.
2.
3.

Anyagencyorganizedasastockornon
stockcorporation
Vested with functions relatingto public
needs whether governmental or
proprietaryinnature
Owned by the Government directly or
through its instrumentalities either
wholly, or, where applicable as in the

LAWTEAM:
P OLITICAL
E.BRACEROII
&
ADVISER:ATTY.EDWINREYSANDOVALSUBJECTHEAD:RACHELM ARIE L.FELICES
ASST.SUBJECTHEADS:WIVINO
CHRISTINE
Y.UYM EMBERS:LAWRENCEP AULOH.AQUINO
EASTERAND.AYOS,
HERAZEUS
,LEANDRORODELV.ATIENZA
,M ARINETH
T.BONILLA
CARLOR.BALA,WILFREDO
,JR.,KEELACHERNARR.DINOY,APRILV.ENRILE,KENNETHJAMESCARLOC.HIZON,JOSEM ARIA
R.REYES,ROMILINDA
C.SIBAL,JASMINM.SISON,ZARAHP ATRICIA
T.SUAREZ,RALPHJULIOUS
L.
G.M ENDOZA,ROGERCHRISTOPHER
VILLAMOR.

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USTGoldenNotesLawonPublicCorporations

L OCAL

G OVERNMENTS

caseofstockcorporations,totheextent
of at least fiftyone (51) of its capital
stock. (Leyson, Jr. v. Office of the
27,
Ombudsman, G.R. No. 134990,April
2000)
Q: What laws may govern GOCCs and how do
you determinewhich will govern?

and municipalities, upon therecommendation ofthe

sangguniang concernedprovidedthatthesame shall

only upon ratification in a plebiscite

be effective
conducted for the purpose in the political unit
directlyaffected.(R.A.7160, Sec.13)

a
Q: What is the nature and function of
municipal corporation?

A: Government corporations may be created by

special charters or by incorporation under the
generalcorporationlaw. Thosecreatedbyspecial
charters are governed by the Civil Service Law
while those incorporated under the general
corporationlaw aregovernedbytheLaborCode.
(Blaquera vs.Alcala, G.R. No. G.R. No. 109406.
September11, 1998)

A: It is body politic and corporate constituted by

the incorporation of inhabitants for purposes of

local government. It is established by law partly

as an agency of the State to assist in the civil
government of the country, but chiefly to
regulate and administer the local or internal
affairs of the city, town or district which is
incorporated. (Dillon, Mun. Corp., Vol.2, pp. 58
59.)

Q:Distinguishpublic corporationfromaGOCC.

municipal
Q: What are the different types of

A:
PUBLIC

CORPORATION

corporations?

GOCCs
Purpose

A:

Performance
offunctions
needs
relatingtopublic
whetherGovernmental or
Proprietaryin nature
Who creates

Administrationof
localgovernment

Bythestateeitherby
generalorspecialact

1.

De jure municipal corporations

created or recognized by operation of

ByCongressorby
incorporators

Howcreated
(1) Originalchartersor
speciallaws or(2)general
Bylegislation
corporationlaw asastock
ornon stockcorporation

CORPORATIONS

b.MUNICIPAL
a
Q: What are the essential elements of
municipal corporation?
A:

1.
2.
3.

Legalcreation
Corporatename
Inhabitants constituting the population
who are vested with political and
corporatepowers

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4.

corporatepowers
(Rodriguez, p.4, LGC 5th
Territory

Edition)

Note: The sangguniang panlalawigan may, in

consultation

with the Philippine Historical

Commission change the name of component cities

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO& JOHNHENRYC.M ENDOZA
ANDFINANCE
C.LEE
VICECHAIRFORADMINISTRATION
:JEANELLE

UNIVERSITY OF SANTO TOM AS

Facultad deDerecho

i v i l

183

& THEENAC.M ARTINEZ

VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM. M ASACAYAN

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