Sec. 1.

Title of the Code – This Code shall be known as the “Revised Corporation Code of the
Philippines”
=The purpose of the re-enactment is to align the country’s primary law on corporations with the rest of
the world, by updating it through:
Sec. 2. Corporation Defined – A corporation is an artificial being created by operation of law, having the
right of succession and the powers, attributes, and properties expressly authorized by law and incident
to its existence.
=The law creates a juridical entity endowed with certain powers, attributes and properties, with legal
personality separate and distinct from the person composing and running the same.
Nationality. Generally, the corporation is considered a national of the country where it was
incorporated (Place of incorporation test) Exceptions: 1. In times of war, the nationality of a corporation
is determined by the nationality of the controlling stockholders (Control Test); 2. Under the Foreign
Investment Act of 1991 (R.A. No. 7042 as amended). Philippine National is a corporation organized
under Philippine laws of which 60% of the capital stock.
Grandfather Rule is a method of determining the nationality of a corporation which in turn is owned by
another corporation by breaking down the equity structure of the shareholders of the corporation.
H. Unentitled to Moral Damages. Moral damages cannot be awarded in favor of corporations because
they do not have feelings and mental state.
General Rule: Corporation cannot claim moral damages. Exception: If the corporation has a good
reputation and such reputation was destroyed (Coastal Pacific Trading v Southern Rolling Mills, Co) **In
Filipinas Broadcasting Network Inc. v. Ago Medical and Educational Center, the SC ruled that a
corporation can recover moral damages under Article 2219(7) if it was the victim of defamation
1. Fraud Cases When the corporate identity is used to justify wrong, to commit fraud, or to defend a
crime. There is always an element of malice or evil motive in fraud cases.
2. It is created by operation of law A corporation comes into existence upon the issuance of the
certificate of incorporation (Sec. 18 of the RCC).
FRANCHISES OF CORPORATION a. Primary or corporate franchise/General franchise **The right or
privilege granted by the State to individuals to exist and act as a corporation after its incorporation
3. It enjoys the right of succession.= . The law is so to make corporation more stable.
Sec. 3. Classes of Corporations. – Corporations formed or organized under this Code may be stock or
non-stock corporations. Stock corporations are those which have capital stock divided into shares and
are authorized to distribute to the holders of such shares, dividends, or allotments of the surplus profits
on the basis of the shares held. All other corporations are non-stock corporations.
Note: A corporation is deemed to be “going public” when it decides to list its shares in the stock
exchange. These include corporations that will make initial public offering of its shares. A corporation is
said to be “ going private” when it would restrict the shareholders to a certain group.
Sec. 4. Corporations created by Special Laws or Charters. - Corporations created by special Laws or
charters shall be governed primarily by the provisions of the special law or charter creating them or
applicable to them, supplemented by the provisions of this Code, insofar as they are applicable. Under
Article XII Section 16 of the 1987 Constitution, the Congress shall not, except by general law, provide
for the formation, organization, or regulation of private corporations. Government-owned or controlled
corporations may be created or established by special charters in the interest of the common good
Sec. 5. Corporators and Incorporators, Stockholders and Members. – Corporators are those who
compose a corporation, whether as stockholders or shareholders in a stock corporation or as members
in a non-stock corporation. Incorporators are those stockholders or members mentioned in the articles
of incorporation as originally forming and composing the corporation and who are signatories thereof.
SEC. 6. Classification of Shares. – The classification of shares, their corresponding rights, privileges, or
restrictions, and their stated par value, if any, must be indicated in the articles of incorporation.
SEC. 7. Founders’ Shares. – Founders’ shares may be given certain rights and privileges not enjoyed by
the owners of other stocks. Where the exclusive right to vote and be voted for in the election of
directors is granted, it must be for a limited period not to exceed five (5) years from the date of
incorporation: Provided, That such exclusive right shall not be allowed if its exercise will violate
Commonwealth Act No. 108, otherwise known as the “Anti-Dummy Law”; Republic Act No. 7042,
otherwise known as the “Foreign Investments Act of 1991”; and other pertinent laws.
SEC. 8. Redeemable Shares. – Redeemable shares may be issued by the corporation when expressly
provided in the articles of incorporation. They are shares which may be purchased by the corporation
from the holders of such shares upon the expiration of a fixed period, regardless of the existence of
unrestricted retained earnings in the books of the corporation, and upon such other terms and
conditions stated in the articles of incorporation and the certificate of stock representing the shares,
subject to rules and regulations issued by the Commission
. SEC. 9. Treasury shares. – Treasury shares are shares of stock which have been issued and fully paid
for, but subsequently reacquired by the issuing corporation through purchase, redemption donation, or
some other lawful means. Such shares may again be disposed of for a reasonable price fixed by the
board of directors.
Submission of Articles of Incorporation; contractual significance *The life of a corporation commences
from the issuance of the Certificate of Registration by the SEC upon filing of t
SEC. 14. Form of Articles of Incorporation. – Unless otherwise prescribed by special law, the articles of
incorporation of all domestic corporations shall comply substantially with the following form:
SEC. 13. Contents of the Articles of Incorporation. – All corporations shall file with the Commission
articles of incorporation in any of the official languages, duly signed and acknowledged or authenticated,
in such form and
SEC. 17. Corporate name. – No corporate name shall be allowed by the Commission if it is not
distinguishable from that already reserved or registered for the use of another corporation, or if 3 such
name is already protected by law, or when its use is contrary to existing law, rules and regulations.
SEC. 10. Number and Qualifications of Incorporators. – Any person, partnership, association or
corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a
corporation for any lawful purpose or purposes:
A corporation with a single stockholder is considered a One Person Corporation as described in Title XIII,
Chapter III of this Code.
SEC. 12. Minimum Capital Stock Not Required of Stock Corporations. – Stock corporations shall not be
required to have a minimum capital stock, except as otherwise specifically provided by special law.
SEC. 18. Registration, Incorporation and Commencement of Corporate Existence. – A person or group
of persons desiring to incorporate shall submit the intended corporate name to the Commission for
verification.