Identification
Republic Act XXXXX, otherwise known as the Revised Corporation Code of the Philippines (RCCP), was signed into law by President Rodrigo Duterte on Feb 20, 2019 and became effective Feb 23, 2019.
Republic Act 11232
What are the types of corporations according to Sec. 3 of Republic Act 11232 (The Revised Corporation Code of the Philippines)?
1. Stock Corporation
2. Non-stock Corporation
A corporation is considered a Parent corporation when it has 50% of ownership interest in another corporation.
False
What are By-laws?
The rules of action adopted by the corporation for its internal government.
Domestic Corporation vs. Foreign Corporation
Domestic Corporation - organized under Philippine Laws.
Foreign Corporation - organized under foreign laws.
A person who apart from his fees and shareholdings is independent of management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out the responsibilities of a director.
Independent Director
What are the 3 steps in the creation of a corporation?
1. Promotion
2. Incorporation
3. Formal organization and commencement of business operations
Statement 1: All incorporators are corporators of a corporation
Statement 2: Not all corporators are incorporators.
Statement 1: True
Statement 2: True
Define a One Person Corporation (OPC) as defined in Section 116 of the RCCP.
OPC is a corporation with a single stockholder, who may be a natural person, a trust or an estate.
Stockholders vs. Members
Stockholders - are the corporators in a stock corporation.
Members - are the corporators in a non-stock corporation.
This the right of a shareholder to purchase additional shares of stock or any new shares issued to maintain same percentage of stock ownership.
Pre-emptive Right
Give 3 rights of a shareholder.
(1) Vote at stockholders’ meetings or by proxy; (2) Sell stock; (3) Pre-emptive right; (4) Receive dividends, if any; (5) Share equally in any assets remaining after creditors are paid in a liquidation; (6) Be issued certificate of stock or other evidence of share ownership and to transfer such shares; (7) Right to elect and remove directors; (8) Right to adopt, amend or repeal the by-laws; (9) Right to inspect corporate books and records, and to receive financial reports of the corporation’s operations; (10) Right to participate in the distribution of corporate assets upon dissolution.
1. Ecclesiastical corporation – is organized for religious purposes
2. Eleemosynary corporation – is established for public profit
3. Civil corporation – is established for business or profit
1. True
2. False
3. True
What is Authorized Shares or Authorized Capital Stock?
It is the maximum number of shares which a corporation may issue.
Par value shares - One in which a specific amount is fixed in the articles of incorporation and appearing on the certificate of stock.
No-par value shares - One without any value appearing on the face of the certificate of stock.
(1) __________. It is the record of the names of shareholders, installments paid and unpaid by shareholders and dates of payment, any transfer of stock and dates thereof, by whom and to whom made.
(2) __________. It is a ledger which details the number of shares issued to each shareholder.
(1) Stock and Transfer Book
(2) Shareholder's Ledger
Give 2 advantages and 2 disadvantages of organizing a corporation.
ADVANTAGES - Separate legal entity; Limited liability of stockholders; Continuous life; Transferable ownership rights; Management is centralized in the Board of Directors; Lack of mutual agency for stockholders; Ease of capital accumulation
DISADVANTAGES - Complicated in formation and management; Governmental regulation; High cost of formation and operation; Heavier taxation than other forms of business organizations; Minority shareholders are subservient to the wishes of the majority; Management and control have been separated from ownership; Transferability of shares permits the uniting of incompatible and conflicting elements in one venture.
In an OPC,
(1) The President is the single stockholder.
(2) The President can be the Corporate Secretary
(3) The President cannot be the Treasurer.
(1) True
(2) False
(3) False
Define a Publicly-held Corporation.
Is a corporation whose shares of stock are listed on the Philippine Stock Exchange and having 200 or more holders, at least 200 of which are holding at least 100 shares.
Who can be incorporators under the Revised Corporation Code of the Philippines (R.A. 11232) vs. under the Corporation Code (R.A. 68)?
RCCP - any persons, partnership or corporation.
Corporation Code - only natural persons.
This is the national government regulatory agency charged with the supervision of the different corporations in the Philippines.
Securities and Exchange Commission
Illustrate the hierarchy of Corporate Structure.
Shareholders
Board of Directors
Officers
Employees
Statement 1: Under the RCCP, there is no minimum subscribed capital and no minimum paid-in capital requirement.
Statement 2: The 25% subscribed and 25% paid-up rule is also not applicable when the corporation increases its capital stock.
Statement (1): True
Statement (2): False
Define a corporation according to Section 2 of the Revised Corporation Code of the Philippines (R.A. 11232).
An artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.
What is your instructor's complete name.
Lean Rando C. Capinpuyan, CPA