Corporation

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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.

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Corporation

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Characteristics of a corporation

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Separate legal existence

limited liability of shareholders

transferable stock ownership

easy to obtain capital

continuous corporate life

corporate management

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Were created by a charter granted by the philippine government and as a legal entity, it has the rights and privileges of a person

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Corporation

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A corporation can act under its own name rather than in the name of its shareholders

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Separate legal existence

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The extent of liability of the shareholders is normally limited to the investment are capital contribution. In other words, their losses cannot exceed the amount which they have contributed to the corporation.

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Limited liability of shareholders

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Have a prior claim against the corporate assets in case there is corporate liquidation but have no legal claim against the personal assets of the individual shareholders

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Corporate creditors

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Entirely at the discretion of the individual shareholder. It does not require the consent or approval of either the corporation or other shareholders

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Transferable stock ownership

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A corporation can obtain funds are capital through stock issuance.

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Easy to obtain capital

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The maximum life of a corporation is equivalent to 50 years but that is subject to renewal of another 50 years

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Continuous corporate life

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A corporation will continue to exist even if there is a withdrawal death or incapacity of a shareholder employee or officer

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Continuous corporate life

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Shareholders manage the corporation indirectly through its board of directors whom they elect

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Corporate management

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Advantages of a corporation

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•Has the capacity to act as a legal entity

•shareholders have limited liability

•has continued to your existence which enables it to obtain a strong credit line

•shares of stock are transferable

•greater ability to acquire funds or capital

•management is centralized by the board of directors

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Disadvantages of a corporation

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•More costly and complicated to form and manage

•heavily regulated

•subject to heavier taxation than other forms of business

•minority shareholders are subservient to the wishes of the majority

•permits the uniting of incompatible and conflicting elements in one venture

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It is a corporation whose share capital are divided into shares and are authorized to distribute to the holders of such share dividends or allotments of the surplus profits on the basis of the shares held

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Stock corporation

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It is one where no part of its income is distributable as dividends to its members, trustee, or officers and likewise any profit obtained by it as an incident to its operations shall whenever necessary or proper, be used for furtherance of the purpose or purposes for which the corporation was organized.

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Non stock corporation

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A corporation which is created or organized in the philippines

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Domestic corporation

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Is one formed, organize or existing under any laws other than those of the philippines and whose laws allow Filipino citizens and corporations to do business in his own country or state

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Foreign corporation

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Is a legal entity created by a government to undertake commercial activities on its behalf

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Public corporation

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Is a corporation organized for private purpose, aim or benefit

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Private corporation

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Is a private corporation which is granted a franchise to perform functions of a public character

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Quasi-public corporation

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A corporation with more than one corporator

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Corporation aggregate

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A corporation organized for establishing any church organization whose purpose is the teaching and spreading of religious beliefs and principle

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Ecclesiastical corporation

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A corporation created not for private gain or profit but for the administration of a charitable trust or for a charitable purpose or one supported by charity

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Eleemosynary corporation

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A corporation organized for business purposes

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Civil corporation

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A corporation that has complied with all the requirements set by law

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De jure corporation

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A corporation that exist in fact but has failed to become a corporation by law. It may also refer to a corporation that has been dissolved or suspended but continues to function as a corporation

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De facto corporation

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A corporation which makes a false representation of fact to a third party

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Corporation by estoppel

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A corporation whose shares are not open for public subscription. The share ownership is limited to selected persons or members of a family not exceeding 20 persons

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Close corporation

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A corporation whose shares are widely distributed and traded to the general public

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Open corporation

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The corporation that holds a controlling interest in a subsidiary corporation

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Parent or holding corporation

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The corporation owned and controlled by the parent or holding company

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Subsidiary corporation

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Person who originally formed the corporation whose name and signature appeared in the articles of incorporation. They should be natural persons or human beings rather than artificial beings.

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Incorporators

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Those who composs a corporation either as incorporator, shareholder or member.

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Corporators

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Corporators of a non-stock corporation

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Members

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Corporators in a stock corporation who may either be natural or juridical person

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Stockholders or shareholders

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Persons who undertake the necessary steps and procedures to organize the corporation

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Promoters

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Persons who agreed to buy shares of stock but will pay at a later date

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Subscribers

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Persons who undertake to sell shares of stocks to the general public. They are usually investment bankers who have agreed alone or with others to buy at the stated terms an entire or substantial part of an issue of certificates; guaranteed the sale of an issue by agreement to buy from the issuing corporation any unsold portion at a stated price or agreed to use his best efforts to market all or part of an issue; or offered for sale shares he has purchased from a controlling stockholder

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Underwriters