Definition of a corporation and its attributes The NLRC ordered Concept Builders to reinstate
Artificial being its illegally dismissed employees and pay them
o Considered a "person" back wages.
o Has a personality separate and distinct However, Concept Builders ceased its business
from that of its stockholders and other operations.
corporations to which it may be The illegally dismissed employees then sued
connected. HPPI, alleging that HPPI and Concept Builders
o Except when being used for fraudulent were owned by the same stockholders and
purposes. shared the same premises.
Created by operation of law They also alleged that Concept Builders
Right of succession temporarily suspended its business operations
Possesses powers and attributes that are to evade its legal obligation to them.
expressly authorized by law or incidental to its Where a sister corporation is used as a shield to
existence evade a corporation's subsidiary liability, the
corporation may not be heard to say that it has
Case 1: Commissioner of Customs vs Oilink a personality separate and distinct from the
International Corporation other corporations.
The BOC was demanding URC to pay taxes. The piercing of the corporate veil comes into
For some reason, the BOC also demanded Oilink play.
to pay the taxes that are due to URC. Piercing the corporate veil may be allowed only
Oilink was 100% owned by URC. if the following elements concur:
There was no ground to pierce the veil of o Control, not the mere majority or
corporate existence. complete control, but complete
Piercing the corporate veil may be allowed only domination, not only of finances but of
if the following elements concur: policy and business practice in respect
o Control, not the mere majority or to the transaction attacked so that the
complete control, but complete corporate entity as to this transaction
domination, not only of finances but of had at that time, no separate mind, will,
policy and business practice in respect or existence of its own.
to the transaction attacked so that the o Such control must’ve been used by the
corporate entity as to this transaction defendant to commit fraud or wrong, to
had at that time, no separate mind, will, perpetrate the violation of a statutory
or existence of its own. or positive legal duty or dishonest and
o Such control must’ve been used by the unjust act in contravention of plaintiff’s
defendant to commit fraud or wrong, to legal rights; and
perpetrate the violation of a statutory o The aforesaid control and breach of
or positive legal duty or dishonest and duty must proximately cause the injury
unjust act in contravention of plaintiff’s or unjust loss complained of.
legal rights; and
o The aforesaid control and breach of Both corporations shared the same premises,
duty must proximately cause the injury had the same president, the same board of
or unjust loss complained of. directors, the same corporate officers, and
The doctrine of piercing the corporate veil has substantially the same subscibers.
no application here because the BOC did not
establish that Oilink had been set up to avoid Clearly, Concept Builders ceased its business
the payment of taxes or duties, or for purposes operations in order to evade the payment to
that would defeat public convenience, justify their employees of back wages and to bar their
wrong, protect fraud, defend crime, confuse reinstatement to their former positions.
legitimate legal or judicial issues, perpetrate
deception, or otherwise circumvent the law. HPPI is obviously a business conduit of Concept
Builders and its emergence was skillfully
Case 2: Concept Builders, Inc. vs NLRC orchestrated to avoid financial liability that was
already attached to Concept Builders.
Created by Operation of Law
A corporation's personality begins to exist upon
SEC's issuance of a certificate of incorporation.
There are also instances when a corporation is
created by law, in which case it begins to exist
in accordance with the law.
Right of Succession
A corporation's existence is not affected by the
death, withdrawal, insolvency, incapacity, or
change in the personalities of the stockholders
or members.
Powers and Attributes Expressed by Law or Incident to
its Existence
Express powers of a corporation are found in
Sections 35-44 of the RCC
Those which are incidental to the corporation's
existence may also be exercised.
Differences between a corporation and the other
modes of doing business
Sole Proprietorship, partnerships, and
Corporation
