 Corporation and Securities Law

I. INTRODUCTION General
Kinds of Business Organizations Sole Proprietorship
Read: Yon Mitori vs Union Bank, GR 225538, Oct. 14, 2020 Partnership
Joint Venture
Corporation
Historical Background
II. DEFINITION AND ATTRIBUTES Concession theory
Case: Tayag vs Benguet Consolidated, Nov. 29, 1968* Doctrine of corporate
entity/separate personality; artificial being
Case: Stradcom vs Orpilla, July 2, 2018*
The Linden Suites vs Meridien, GR 211969, Oct. 4, 2021* (J, Hernando)
As to property
Case: Wise & Co. vs Man Sung Lung, 69 Phil 309*
Saw vs CA, 195 SCRA 740* As to obligations
Case: As to rights
Case:
Case: Meralco vs TEAM Electronics, Dec. 13, 2007*
Eternal Gardens vs Perlas, Sept. 7, 2020*
Noelle Whessoe vs Independent Testing, Nov. 7, 2018* Arco Pulp and Paper vs.
Lim, GR 206806, June 25, 2014*
As to criminal liability
Case: Ching vs Secretary of Justice, Feb. 6, 2006*
As to nationality (Sec. 123, RCP)
Exceptions: in times of war; for investment purposes
Case: Narra Nickel vs Redmont, GR 195580, April 21, 2014* (control test vs
grandfather rule); See, MR, Jan. 28, 2015
Vasquez vs De Borja, 74 Phil 560*
Stonehill vs Diokno, June 19, 1967* Manila Gas Corp vs CIR, 62 Phil 895*
PNB vs CA. 83 SCRA 237, 1978* Entitlement to moral damages (Art. 2219[7],
Civil Code)
As to torts Case:

Heirs of Gamboa vs Teves, GR 176579, Oct. 9, 2012*

Roy vs Herbosa, GR 207246, April 28, 2017* Exceptions to doctrine of separate
personality
Case: Cua vs Ng Wee, March 21, 2018
Doctrine of Limited Capacity/Theory of Special Capacities Advantages of
corporate form of business
Disadvantages
Distinctions between a corporation and partnership Government power in
relation to corporations
III. CLASSIFICATION OF CORPORATIONS Stock and non-stock
Case: BCDA vs CIR, June 20, 2018 (J, Hernando)* Corporations created by
special law
Public and Private
Case: National Coal Corporation vs CIR
PNB vs Pabalan, GR L-33112, June 15, 1978*
Philippine Mining vs Aguinaldo, GR 245273, July 27, 2021 (en banc) PNCC vs
NLRC, GR 248401, June 23, 2021
Ecclesiastical and Lay
Aggregate and sole
One Person Corporation
Close and Open
Parent/Holding, Subsidiaries and Affiliates
Case: Maricalum Mining vs Florentino, July 23, 2018* Domestic and Foreign
Quasi-Public
Quasi Corporations
De Jure Corporation
De Facto Corporation Corporation by estoppel
Case: Intl Express Travel vs CA, Oct. 19, 2000* Corporations vested with public
interest
IV. FORMATION AND ORGANIZATION Process of Incorporation
Contents of the Articles of Incorporation Prefatory Paragraph
Corporate Name
Case: De La Salle Montessori vs Dela Salle Brothers, Feb. 7, 2018* See: SEC
Memorandum Circular no. 13 (2019)
Purpose Clause Principal Office
Case: Sy vs Tyson Enterprises, GR L-56763, Dec. 15, 1982*

Term of existence
Doctrine of Relations/Relating Back
Case: Alhambra Cigar vs SEC, July 29, 1968* Incorporators (Sec. 5)
Number, Qualifications and disqualifications (Sec. 10, 107, 116)
See: SEC Memorandum Circular no. 16 (2019) Directors and Trustees
Number, qualifications and disqualifications (Sec. 13f, 22, 26, 106, 121)
Capitalization
Authorized capital stock, subscribed capital, paid-up capital, outstanding
capital stock, capital under the 1987 Constitution
Read: Gamboa vs Teves, June 28, 2011*
Heirs of Gamboa vs Teves, GR 176579, Oct. 9, 2012* Roy vs Herbosa, GR
207246, Apri. 18, 2017*
Shares of stock and classification
Doctrine of equality of shares (what shares can be denied voting rights)
Purpose of classification
Common shares
Preferred shares
Read: Republic Planters vs Agana, GR 517565, March 3, 1997* Par and no-par
value shares
Limitations on issuance of no-par value shares
Founders shares
Redeemable shares
Read: De Leon vs PLDT, GR 211389, Oct. 6, 2021
Voting and non-voting shares
Instances when non-voting shares may vote
Treasury shares
Case: Salido vs Aramaywan Metals, GR 233857, March 18, 2021*
Other matters consistent with law Restrictions and preferences Arbitration
agreement No-transfer clause
Treasurer elect
Undertaking to change name Execution clause Acknowledgment
Commencement of Corporate Existence Defectively formed corporations
De facto corporations
Case: Missionary Sisters vs Alzona, Aug. 6, 2018*
Seventh Day Adventist vs Northeastern Mindanao, July 21, 2006* Sawadjaan
vs CA, June 8, 2005*
Organization and Commencement of Business
Corporate Organization Commencement of Business Transaction

V. CORPORATE CHARTER AND ITS AMENDMENTS

The Corporate Charter

 Corporate Charter
an instrument or authority from the sovereign power bestowing
rights or power, and is often used convertibly witht the term “act of
incorporation” where the corporation was formed under a special
act of the legislature and with the articles of incorporation where
the corporation was formed under a general law.

 Three-fold contract
o Between the corporation and the State
o Between the Corporation and the Stockholders or members
o Among the Stockholders or Members
 Components of Franchise
o Corporations created under the crporation code
 Articles of Incorporation
 Relevant laws under which it is created
 Corporation Code
 By Laws
  Pertinent provisions of statute governing them
o Corporations created by legislative Act( Corporationscreated by
Special laws or charter
 Special law creating it
 Any all laws, rules and regulation affecting or applicable to
them
 Franchise
o Applies to the right or privilege itself to be and act as a corporation
or to do certain act while charter applies to the instrument by
which the state vests such right or privilege.
 Primary franchise
- The right or privilege off being a corporation
which the State confer upon the applicant for
this faculty (the right to exist as a corporation
 Secondary Franchise
- Powers and privilege vested in and to be
exercised by the corporate body as such.

The Corporate Entity Theory

 Separate and distinct personality

As a legal entity the corporation is possessed with a personality
separate and distinct from the individual stockholders or memebts and is
not affected by the personal rights, oblications or transactions of the
latter.

Section 18. Registration, Incorporation and Commencement of Corporation

Existence. -

A person or group of persons desiring to incorporate shall submit the intended corporate name to the
Commission for verification. If the Commission finds that the name is distinguishable from a name
already reserved or registered for the use of another corporation, not protected by law and is not
contrary to law, rules and regulation, the name shall be reserved in favor of the incorporators.

The incorporators shall then submit their articles of incorporation and bylaws to the Commission.

If the Commission finds that the submitted documents and information are fully compliant with the
requirements of this Code, other relevant laws, rules and regulations, the Commission shall issue the
certificate of incorporation. (grant of primary Franchise)

A private corporation organized under this Code commences its corporate existence and
juridical personality from the date the Commission issues the certificate of incorporation
under its official seal thereupon the incorporators, stockholders/members and their successors shall
constitute a body corporate under the name stated in the articles of incorporation for the period of time
mentioned therein, unless said period is extended or the corporation is sooner dissolved in accordance
with law.( Then and only then will it acquie an juridical personality to
1. Sue and be sued
2. Enter into contracts
3. Hold any property or convey property
4. Or perform any act, in its own name
Piercing the Veil of Corporate Fiction (exception to doctrine of corporate
entity)

GR: Corporate Legal Entity

XPN : PVCF

 CLE is confined to legitimate transactions and is subject to equitable

limitations to prevent its being used as a cloak or cover for fraud or
illegalityor to work an injustice.

Case:

 Francisco Motors vs CA, GR 100812, June 25, 1999*

The rationale behind piercing a corporation’s identity in a given case is to remove the barrier between the
corporation from the persons comprising it to thwart the fraudulent and illegal schemes of those who use the
corporate personality as a shield for undertaking certain proscribed activities. However, in the case at bar,
instead of holding certain individuals or persons responsible for an alleged corporate act, the situation has
been reversed. It is the petitioner as a corporation which is being ordered to answer for the personal liability
of certain individual directors, officers and incorporators concerned. Hence, it appears to us that the doctrine
has been turned upside down because of its erroneous invocation. Note that according to private respondent
Gregorio Manuel his services were solicited as counsel for members of the Francisco family to represent them
in the intestate proceedings over Benita Trinidad’s estate. These estate proceedings did not involve any
business of petitioner.

 Total Petroleum vs Lim, June 23, 2020 *

 WPM International Trading vs Labayen, Sept. 17, 2014*
 Maricalum Mining vs Florentino, July 23, 2018*
 Enano-Bote vs Alvarez, GR 223572, Nov. 10, 2020*
 ABS-CBN vs Hilario, GR 193136, July 10, 2019*
 Zaragosa vs Tan, GR 225544, Dec. 4, 2017*
 Cua vs Ng Wee, GR 220926, March 21, 2018*
 Sps Fernandez vs Smart Communications, GR 212885, July 17, 2019*
A corporate director, trustee, or officer is to be held solidarity liable with the corporation in the following instances:

1. When directors and trustees or, in appropriate cases, the officers of a corporation:

(a) vote for or assent to patently unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate affairs;
(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members,
and other persons;

2. When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did
not forthwith file with the corporate secretary his written objection thereto;

3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily
liable with the Corporation; or

4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action
  HSBC vs Sps Galang, GR 199565, June 30, 2021*

Though a subsidiary company's separate corporate personality may be disregarded when the evidence shows that such
separate personality was being used by its parent or holding corporation to perpetrate a fraud or evade an existing
obligation, none of these circumstances were alleged or proved by Spouses Galang.

They simply claimed that HSBC-SRP and HSBC acted in bad faith when they foreclosed the mortgaged property though
they (Spouses Galang) were up to date in their payments.

More, the insistence of Spouses Galang that HSBC was privy to the Mortgage Agreement for its interests are so
intertwined with those of HSBC- SRP that they have become identical — constitutes a collateral attack on the corporate
personality of HSBC-SRP which is prohibited by the Corporation Code of the Philippines. Such an inquiry into the legal
personality of a corporation may only be made by the Solicitor General in a Quo Warranto proceeding.

 The Linden Suites vs Meridien Far East, GR 211969, Oct. 4, 2021

This legal fiction may only be disregarded if it is used as a means to perpetrate fraud or an illegal act, or as a vehicle
for the evasion of an existing obligation, the circumvention of statutes, or to confuse legitimate issues.

The well-settled doctrine is inapplicable in the case at bench. Petitioner wanted the officers to be examined not for the
purpose of passing unto them the liability of respondent as its judgment obligor.

 * Symex Security vs Rivera, GR 202613, Nov. 8, 2017*

Section 31 of the Corporation Code is the governing law on personal liability of officers for the debts of the
corporation.

To hold a director or officer personally liable for corporate obligations, two requisites must concur:

(1) it must be alleged in the complaint that the director or officer

a. assented to patently unlawful acts of the corporation or
b. that the officer was guilty of gross negligence or bad faith; and

(2) there must be proof that the officer acted in bad faith.

Based on the records, respondents failed to specifically allege either in their complaint or position paper that Arcega, as
an officer of Symex, willfully and knowingly assented to the acts of Capt. Cura, or that Arcega had been guilty of gross
negligence or bad faith in directing the affairs of the corporation. In fact, there was no evidence at all to show Arcega's
participation in the illegal dismissal of respondents.

Clearly, the twin requisites of allegation and proof of bad faith, necessary to hold Arcega personally liable for the
monetary awards to the respondents, are lacking.

 Hongkong & Shanghai Bank vs Sps Galang, GR 199565, June 30, 2021*

Considering, too, that Spouses Galang are not entitled to damages, there is simply no reason to pierce the corporate
veil as they would have nothing to collect or regain from HSBC. Otherwise stated, Spouses Galang do not have a cause
of action against HSBC
-control
-fraud
-proximate cause of the damage
Amendments of the Corporate Charter

Section 35. Corporate Powers and Capacity. - Every corporation incorporated under this Code has the power and
capacity:

(d) To amend its articles of incorporation in accordance with the provisions of this Code;

Section 15. Amendment of Articles of Incorporation.

 Votes required
Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any
provision or matter stated in the articles of incorporation may be amended by:
a. a majority vote of the board of directors or trustees and
b. the vote or written assent of the stockholders representing at least two-thirds
(2/3) of the outstanding capital stock, without prejudice to the appraisal right of
dissenting stockholders in accordance with the provisions of this Code.

The articles of incorporation of a nonstock corporation may be amended by

i. the vote or written assent of majority of the trustees and
ii. at least two-thirds (2/3) of the members.

 Submission and filing wit the SEC

 The original and amended articles together shall contain all provisions required by law to
be set out in the articles of incorporation.
 Amendments to the articles shall be indicated by underscoring the change or changes
made, and a copy thereof duly certified under oath by the corporate secretary and a
majority of the directors or trustees, with a statement that the amendments have been duly
approved by the required vote of the stockholders or members, shall be submitted to the
Commission.

 Effectivity
The amendments shall take effect:
- upon their approval by the Commission or
from the date of filing with the said Commission if not acted upon within six (6) months from the
date of filing for a cause not attributable to the corporation.

Special Amendments
Section 36. Power to Extend or Shorten Corporate Term. –

 Votes required

A private corporation may extend or shorten its term as stated in the articles of incorporation
 when approved by a majority vote of the board of directors or trustees, and
 ratified at a meeting by the stockholders or members representing at least two-thirds (2/3) of the
outstanding capital stock or of its members.

 Notice Requirement

Written notice of the proposed action and the time and place of the meeting shall be sent to the stockholders or
members at their respective place of residence as shown in the books of the corporation, and must be deposited to the
addressee in the post office with postage prepaid, served personally, or when allowed in the bylaws or done with the
consent of the stockholder, sent electronically in accordance with the rules and regulations of the Commission on the
use of electronic data messages.
 Right of Appraisal
In case of extension of corporate term, a dissenting stockholder may exercise the right of appraisal under the
conditions provided in this Code.

Section 37. Power to increase or Decrease Capital Stock; Incur, Create or

Increase Bonded Indebtedness. –

 Vote required

No corporation shall increase or decrease its capital stock or incur, create or increase any bonded indebtedness
unless
 approved by a majority vote of the board of directors and
 by two-thirds (2/3) of the outstanding capital stock at a stockholders' meeting duly called for the purpose.

 Notice Requirement

Written notice of the time and place of the stockholders' meeting and the purpose for said meeting must be sent to the
stockholders at their places of residence as shown in the books of the corporation served on the stockholders
personally, or through electronic means recognized in the corporation's bylaws and/or the Commission's rules as a
valid mode for service of notices.

 Certification requirement

A certificate must be signed by a majority of the directors of the corporation and countersigned by the chairperson and
secretary of the stockholders' meeting, setting forth:

a) That the requirements of this section have been complied with;

b) The amount of the increase or decrease of the capital stock;
c) In case of an increase of the capital stock, the amount of capital stock or number of shares of no-par stock
thereof actually subscribed, the names nationalities and addresses of the persons subscribing, the amount of
capital stock or number of no-par stock subscribed, the names, nationalities and addresses of the persons
subscribing, the amount of capital stock or number of no-par stock subscribed by each, and the amount paid
by each on the subscription in cash or property, or the amount of capital stock or number of shares of no-par
stock allotted to each stockholder if such
d) n.

 Filing Period

The application with the Commission shall be made within six (6) months from the date of approval of the board of
directors and stockholders, which period may be extended for justifiable reasons.

 Where copies are kept

Copies of the certificate shall be kept on file in the office of the corporation and filed with the Commission and attached
to the original articles of incorporation.

 25%-25% Rule

After approval by the Commission and the issuance by the Commission of its certificate of filing may declare: Provided,
That the Commission shall not accept for filing any certificate of increase of capital stock unless accompanied by a
sworn statement of the treasurer of the corporation lawfully holding office at the time of the filing of the certificate,
showing that
 at least twenty-five percent (25%) of the increase in capital stock has been subscribed and
 that at least twenty-five percent (25%) of the amount subscribed has been
o paid in actual cash to the corporation or
o that property, the valuation of which is equal to twenty-five percent (25%) of the subscription, has
been transferred to the corporation:
Provided, further, That no decrease in capital stock shall be approved by the Commission if its effect shall
prejudice the rights of corporate creditors.

 Nonstock Corporations

Nonstock corporations may incur, create or increase bonded indebtedness when approved by a majority of the board of
trustees and of at least two-thirds (2/3) of the members in a meeting duly called for the purpose.

 Registration of Bonds
Bonds issued by a corporation shall be registered with the Commission, which shall have the authority to determine
the sufficiency of the terms thereof.

Provisions subject to
amendment

Those matters which are dait accompli are beyond the powers or authority of the corporation to change, alter or
modify.

Ex.
a. Names of incorporators
b. Incorporating directors and trustees
c. Name of treasurer originaly elected
d. No. of shares orginally subscribed and paid
e. Date and place of execution of the AOI signatures and acknowlegment
thereof

All other matters stated in the AOI are subject to amendment

Change in corporate name

Any change in corporate name does not affect the rights and obligation of the Corporation. It does not affect the
identity of the corporation.

Amendment of corporate term

Section 11. Corporate Term. -

A corporation shall have perpetual existence unless its articles of incorporation provides
otherwise.

Corporations with certificates of incorporation issued prior to the effectivity of this Code and
which continue to exist shall have perpetual existence, unless the corporation, upon a vote
of its stockholders representing a majority of its articles of incorporation: Provided, That
any change in the corporate term under this section is without prejudice to the appraisal right
of dissenting stockholders in accordance with the provisions of this Code.

A corporate term for a specific period may be extended or shortened by amending the articles of
incorporation: Provided, That no extension may be made earlier than three (3) years prior to the
original or subsequent expiry date(s) unless there are justifiable reasons for an earlier extension
as may be determined by the Commission: Provided, further, That such extension of the
corporate term shall take effect only on the day following the original or subsequent expiry
date(s).
Revival of Corporate Term

A corporation whose term has expired may apply for revival of its corporate existence, together
with all the rights and privileges under its certificate of incorporation and subject to all of its
duties, debts and liabilities existing prior to its revival.

Upon approval by the Commission, the corporation shall be deemed revived and a certificate of
revival of corporate existence shall be issued, giving it perpetual existence, unless its
application for revival provides otherwise.

No application for revival of certificate of incorporation of banks, banking and quasi-banking

institutions, preneed, insurance and trust companies, non-stock savings and loan associations
(NSSLAs), pawnshops, corporations engaged in money service business, and other financial
intermediaries shall be approved by the Commission unless accompanied by a favorable
recommendation of the appropriate government agency.

VI.DIRECTORS/TRUSTEES AND CORPORATE OFFICERS

Powers of the board

Section 22. The Board of Directors or Trustees of a Corporation; Qualification and Term. -

 Doctrine or principle of centralized management

Unless otherwise provided in this Code, the board of directors or trustees shall
a. exercise the corporate powers,
b. conduct all business, and
c. control all properties of the corporation.

Case:

 Colegio Medicofarmaceutico vs Lim, July 2, 2018*

In this case, the issuance of the demand letter dated March 5, 2008 to collect the payment of unpaid rentals from
respondent and to demand the latter to vacate the subject property was done in the ordinary course of business, and
thus, within the scope of the powers of Del Castillo.

In fact, it was his duty as President to manage the affairs of petitioner, which included the collection of receivables.

Article IV, Section 2 of the Bylaws of petitioner expressly states that the President has the power to: x x x x b. Exercise
general [supervision], control and direction of the business and affairs of the Colegio; x x x x e. Execute in behalf of the
Colegio, bonds, mortgages, and all other contracts and agreements which the Colegio may enter into; x x x x j. Exercise
or perform such other duties as are incident to his office or such powers and duties as the Board may from time to
time [prescribe

When not exercised directly

However, just as a natural person may authorize another to do certain acts for and on his behalf, the
board of directors may validly delegate some of its functions and powers to officers, committees or agents.
 The authority of such individuals to bind the corporation is generally derived from law, corporate by
laws or authorization from the board, either expressly or impliedly by habit, custom or acquiescence in the
general course of business.

Classification of powers
Classification of Powers of Corporate Agents / Officers

General Rule is that a corporation is bound by the acts of its corporate officers if they act within th scope of the
classification of powers of corporate agent:
 Those expressly conferred or those granted by the AOI, the corporate by-laws or by the official act of the BOD
 Those that are incidental or those actsare naturally and ordinarilly done which are reasonable and necessary
to carr outthe corporate purposes
 Those that are inherent acts that go with the office
 Those that are apparent or those act which although not actually granted, the proncipal knowingly allows or
permits it to be done
 Powers arising out of customs, usage or emergency,

Qualifications and disqualifications

Term of directors

Directors shall be elected for a term of one (1) Year from among the holders of stocks registered in the
corporation's book

Trustees shall be elected for a term not exceeding three (3) years from among the members of the
corporation.

Principle of Hold Over - Each director and trustee shall hold office until the successor is elected and
qualified.

 A director who ceases to own at least one (1) share of stock or a trustee who ceases to be a member of the
corporation shall cease to be such.( What is material is legal title and not beneficial ownership)

Section 26. Disqualification of Directors, Trustees or Officers.

A person shall be disqualified from being a director, trustee or officer of any corporation if, within five (5) years prior
to the election or appointment as such, the person was:

(a) Convicted by final judgment:

(1) Of an offense punishable by imprisonment for a period exceeding six (6) years;

(2) For violating this Code; and

(3) For violating Republic Act No. 8799, otherwise known as "The Securities Regulation Code";

(b) Found administratively liable for any offense involving fraudulent acts; and

(c) By a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct similar to those
enumerated in paragraphs (a) and (b) above.

The foregoing is without prejudice to qualifications or other disqualifications, which the Commission, the primary
regulatory agency, or Philippine Competition Commission may impose in its promotion of good corporate governance or
as a sanction in its administrative proceedings.
Independent directors (corporations vested with public interest)

Independent Directors

The board of the following corporations vested with public interest shall have independent directors
constituting at least twenty percent (20%) of such board:

(a) Corporations covered by Section 17.2 of Republic Act No. 8799, otherwise known as "The Securities
Regulation Code", namely
a. those whose securities are registered with the Commission,
b. corporations listed with an exchange or with assets of at least Fifty million pesos
(50,000,000.00) and
c. having two hundred (200) or more holders of shares, each holding at least one hundred (100)
shares of a class of its equity shares;

(b) Banks and quasi-banks, NSSLAs, pawnshops, corporations engaged in

a. money service business,
b. preneed,
c. trust and
d. insurance companies and other financial intermediaries; and

(c) Other corporations engaged in businesses vested with public interest similar to the above, as may be
determined by the Commission, after taking into account relevant factors which are germane to the
objective and purpose of requiring the election of an independent director, such as the extent of minority
ownership, type of financial products or securities issued or offered to investors, public interest involved
in the nature of business operations, and other analogous factors.

An independent director is a person who apart from shareholdings and fees received from any business or
other relationship which could, or could reasonable be received to materially interfere with the exercise of
independent judgment in carrying out the responsibilities as a director.

Independent directors
- must be elected by the shareholders present or entitled to vote in absentia during the election of
directors.
-
- shall be subject to rules and regulations governing their qualifications, disqualifications, voting
requirements, duration of term and term limit, maximum number of board membership and other
requirements that the Commission will prescribed to strengthen their independence and align with
international best practices

SEC Memorandum Circular No. 4 (Mar 9,2017)

- Maximum cumulative term of nine years; perpetually barred as independent director but may continue to
qualify as nonidependent director.
- Board may retain ID beyond nine years upon meritorious justification and shareholders aproval during the
annual shareholders meeting
- Reckoning – 2012

Other Special laws

- Independent directors in exchange and other organied markets(SEC M.C. 20 s, 2020) – at least 1/3 of the
members of the board; maximum period of 10 years; mandatory cooling off period of 1 year after the first five
yeas
- Banks (BSP) – ID 1/3 of members or 2 directors whichever is higer.
- Real Estate investment trust – 1/3
- SEC MC No. 16 s 2002 – ID must be registered owner of at least 1 share
- Listed and public companies (Securities regulation Code ) – 2 ID or at least 20% which ever is less

Election and voting

 Election of Directors or Trustees.

 Except when the exclusive right is reserved for holders of founders' shares under Section 7 of this Code ,
each stockholder or member shall have the right to nominate any director or trustee who posseses all
of the qualifications and none of the disqualifications set forth in this Code.

 At all elections of directors or trustees, there must be present, the owners of majority of the
outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote
 either in person or
 through a representative authorized to act by written proxy,

 Vote through remote communication or in absentia

When so authorized in the bylaws or by a majority of the board of directors, the

stockholders or members may also vote through remote communication or in absentia:
Provided, That the right to vote through such modes may be exercised in corporations
vested with public interest, notwithstanding the absence of a provision in the bylaws of
such corporations.

A stockholder or member who participates through remote communication or in absentia,

shall be deemed present for purposes of quorum.

 The election must be by ballot if requested by any voting stockholder or member.

 Election in Stock Corporations

In stock corporations, stockholders entitled to vote shall have the right to vote the number of
shares of stock standing in their own names in the stock books of the corporation
ii. at the time fixed in the bylaws or
iii. where the bylaws are silent at the time of the election.

The said stockholder may:

(a) vote such number of shares for as many persons as there are directors to be elected;
(b) cumulate said shares and give one (1) candidate as many votes as the number of
directors to be elected multiplied by the number of shares owned; or
(c) distribute them on the same principle among as many candidates as may be seen fit:

Provided, That the total number of votes cast shall not exceed the number of shares
owned by the stockholders as shown in the books of the corporation multiplied by
the whole number of directors to be elected:

Provided, however, That no delinquent stock shall be voted.

Cumulative Voting ( a matter of right):

No. of Shares – 500
No. of directos to be elected -10
Votes entitlted – 500

Cummulative voting is a matter of right to

 Election in NonStock Corporations

 Unless otherwise provided in the articles of incorporation or in the bylaws, members of
nonstock corporations may cast as many votes as there are trustees to be elected by
may not cast more than one (1) vote for one (1) candidate.

Nominees for directors or trustees receiving the highest number of votes shall be declared
elected.

 Where no Election is held

Such meeting may be adjourned and the corporation shall proceed in accordance with Section
25 of this Code.
 If no election is held, or
 the owners of majority of the outstanding capital stock or majority of the members
entitled to vote are not present in person, by proxy, or through remote
communication or not voting in absentia at the meeting,

 The directors or trustees elected shall perform their duties as prescribed by law, rules of good
corporate governance, and bylaws of the corporation

Case: Rev. Ao-As vs CA, June 20, 2006* Are delinquent stocks entitled to
vote- No\
Before a share in a stock corporation may be considered delinquent, the same must first be correlated with the
pertinent provisions of the Revised Corporation Code (RCC) regarding the payment of balance of subscription (Section
66, RCC) and Delinquency Sale (Section 67, RCC).

Under Section 66, it is the board of directors which may, at any time, declare due and payable to the
corporation unpaid subscriptions. Payment of unpaid subscription or its percentage, together with any interest
accrued shall be made in accordance with the subscription contract or on the date stated in the call made by the board
of directors. If there is no payment made on such date, the entire balance shall be considered due and payable. As a
consequence, the holder of such share is liable for interest at the legal rate on such balance unless a different rate is
provided in the subscription contract.

When does a share become delinquent then? If no payment was made within thirty (30) days from the date
specified in the subscription contract on the date stated in the call made by the board of directors, all stocks covered
by the subscription shall become “delinquent” and shall be subjected to sale, unless the board of director orders
otherwise. The frequently asked question is, “Is there a need for the board of directors to make a call that such share is
delinquent?” A categorical answer is not provided in the Revised Corporation Code. What is clear though is that, the
RCC provides a specific period of thirty (30) days within which the stockholder may settle his obligations to the
corporation. Said period is to be reckoned from the date specified in the subscription contract or on the date stated in
the call made by the board of directors. Otherwise, the same shall become delinquent without the call made by the
board of directors.

Is there a remedy of the holder of such delinquent share? There is. The holder of such delinquent share may pay
the balance due on his subscription including accrued interest, costs of advertisement and expense of sale. Failure to
pay the same shall render the delinquent share to be sold at a public auction.

Quorum requirement

Section 52. Regular and Special Meetings of Directors or Trustees; Quorum. –

 Quorum required for valid board meeting

GR: a majority of the directors or trustees as stated in the articles of incorporation shall constitute a quorum
to transact corporate business,
XPN: Unless the articles of incorporation or the bylaws provides for a greater majority,

 Validity of Corporate Acts

 every decision reached by at least a majority of the directors or trustees constituting a quorum,
except for the election of officers which shall require the vote of a majority of all the members of the board,
shall be valid as a corporate act.

Corporate officers (Sec. 24) Compliance officer

Corporate Officers. –
 Election
Immediately after their election, the directors of a corporation must formally organize an elect:
(a) a president, who must be a director;
(b) a treasurer, who must be a resident;
(c) a secretary, who must be a citizen and resident of the Philippines; and
(d) such other officers as may be provided in the bylaws.

Compliance officer for Corporations vested with public interest

If the corporation is vested with public interest, the board shall also elect compliance officer.

 Concurrent positions
The same person may hold two (2) or more positions concurrently,
except that no one shall act
 as president and secretary or
 as president and treasurer at the same time, unless otherwise allowed in this Code.

 The officers shall manage the corporation and perform such duties as may be provided in the bylaws
and/or as resolved by the board of directors.

Section 91. Election and Term of Trustees. –

The number of trustees shall be fixed in the articles of incorporation or bylaw which may or may not be more than
fifteen (15). They shall hold office for not more than three (3) years until their successors are elected and qualified.
Trustees elected to fill vacancies occurring before the expiration of a particular term shall hold office for the unexpired
period.

Except with respect to independent trustees of nonstock corporation shall be elected as trustee.

Unless otherwise provided in the articles of incorporation or the bylaws, the members may directly elect
officers of a nonstock corporation.

Read:
 Cacho vs Balagtas, GR 202974, Feb. 7, 2018*
 Malcaba vs Prohealth, GR 209085, June 5, 2018*

Rule 14, Sec. 12, Revised Rules of Civil Procedure

Service of summons (Rule 14, Sec. 13, 2020 Revised Rules of Civil Procedure;
Sec. 5a, Interim Rules of Procedure Governing Intra-corporate controversies)

Rule 14 Rules of CivPro

Section 12. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or association
organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing partner,
general manager, corporate secretary, treasurer, or in- house counsel of the corporation wherever they may be found, or in their
absence or unavailability, on their secretaries.
If such service cannot be made upon any of the foregoing persons, it shall be made upon the person who customarily receives the
correspondence for the defendant at its principal office.

In case the domestic juridical entity is under receivership or liquidation, service of summons shall be made on the receiver or liquidator,
as the case may be.
Should there be a refusal on the part of the persons above-mentioned to receive summons despite at least three (3) attempts on two (2)
different dates, service may be made electronically, if allowed by the court, as provided under Section 6 of this Rule. (11a)

INTERIM RULES OF PROCEDURE FOR INTRA-CORPORATE CONTROVERSIES

SEC. 5. Summons. – The summons and the complaint shall be served together not later than five (5) days from the date of filing of the
complaint.

Service upon domestic private juridical entities. – If the defendant is a domestic corporation, service shall be deemed adequate if made
upon any of the statutory or corporate officers as fixed by the by-laws or their respective secretaries. If the defendant is a partnership,
service shall be deemed adequate if made upon any of the managing or general partners or upon their respective secretaries. If the
defendant is an association, service shall be deemed adequate if made upon any of its officers or their respective secretaries.

Validity and binding effects of actions of corporate officers

To be a valid corporate actsthe decision of at least a majority of the directors or trustees present at a meeting at which
qurom is required.

Any action of the board without a meeting will not bind the corporation unless subsequently ratified, express or
implied

Doctrine of Apparent Authority*

The doctrine of apparent authority provides that a corporation will be estopped from denying the agent’s
authority if it knowingly permits one of its officers or any other agent to act within the scope of an apparent authority,
and it holds him out to the public as possessing the power to do those acts.

Case:
 Lapu Lapu Foundation vs CA, Jan. 29, 2004*
 Advance Paper Corp vs Arma Traders, Dec. 11, 2013*
 Agro vs Vitarich (en banc), GR 217454, Jan. 11, 2021*
 Terp Construction vs Banco Filipino, GR 221771, Sept. 18, 2019*
 Jorgenetics Swine vs Thick & Thin, GR 201044, May 5, 2021*

Removal and filling up of vacancies

Section 27. Removal of Director or Trustees.

 No. of votes Required

Any director or trustee of a corporation may be removed from office
o by vote of the stockholders holding or representing at least two-thirds (2/3) of the
outstanding capital stock, or
o in a nonstock corporation, by a vote of at least two-thirds (2/3) of the member entitled to
vote:

 Where votes should take place

Such removal shall take place either
o at a regular meeting of the corporation or
o at a special meeting called for the purpose,
 When
in either case, after previous notice to stockholders or members of the corporation of the
intention to propose such removal at the meeting.

 Special Meeting

A special meeting of the stockholders or members for the purpose of removing any director or
trustee must be called by the secretary
 on order of the president, or
 upon written demand of stockholders representing or holding at least a majority of
the outstanding capital stock, or a majority of the members entitled to vote.

If there is no secretary, or the secretary, despite demand, fails or refuses to call the special
meeting or to give notice thereof, the stockholder or member of the corporation signing the
demand may call the special meeting or to give notice thereof, the stockholder or member of
the corporation signing the demand may call for the meeting by directly addressing the
stockholders or members.

Notice of the time and place of such meeting, as well as of the intention to propose such removal,
must be given by publication or by written notice prescribed in this Code.

Removal may be with or without cause: Provided, That removal without cause may not be used to
deprive minority stockholders or members of the right representation to which they may be entitled
under Section 23 of this Code.

 Commission’s Power to remove Director or Trustee

The Commission shall,

o motu propio or upon verified complaint, and
o after due notice and hearing,
order the removal of a director or trustee elected despite the disqualification, or whose
disqualification arose or is discovered subsequent to an election.

The removal of a disqualified director shall be without prejudice to other sanctions

that the Commission may impose on the board of directors or trustees who, with
knowledge of the disqualification, failed to remove such director or trustee.

Section 28. Vacancies in the Office of Director or Trustee; Emergency Board.

 Filling up of Vacancy

Any vacancy occurring in the board of directors or trustees other that by removal or expiration of term
o if still constituting a quorum- may be filled by the vote of at least a majority of the remaining directors or
trustees,
o otherwise, said vacancies must be filled by the stockholders or members in a regular or special meeting
called for that purpose.
o the election must be held no later than forty-five (45) days from the time the vacancy arose.

When the vacancy is due to term expiration,

o the election shall be held no later that the day of such expiration at a meeting called for that purpose.

When the vacancy arises as a result of removal by the stockholders or members,

 o the election may be held on the same day of the meeting authorizing the removal and
o this fact must be so stated in the agenda and notice of said meeting.

A director or trustee elected to fill vacancy

 shall be referred to as replacement director or trustee and
 shall serve only for the unexpired term of the predecessor in office.

 when the vacancy prevents the remaining directors from constituting a quorum and emergency action is
required

However, when the vacancy

(1) prevents the remaining directors from constituting a quorum and
(2) emergency action is required to prevent grave, substantial, and irreparable loss or damage to the
corporation,
the vacancy may be temporarily filled from among the officers of the corporation by unanimous vote of the
remaining directors or trustees.

The action by the designated director or trustee shall be limited to the emergency action necessary, and the
term shall cease within a reasonable time form the termination of the emergency or upon election of the
replacement director or trustee, whichever comes earlier.

The corporation must notify the Commission within three (3) days from the creation of the emergency board,
stating therein the reason for its creation.

 directorship or trusteeship to be filled by a reason of an increase in the number of directors or trustees

Any directorship or trusteeship to be filled by a reason of an increase in the number of directors or trustees
o shall be filled only by an election at a regular or at a special meeting of stockholders or members
duly called for the purpose, or
o in the same meeting authorizing the increase of directors or trustees if so stated in the notice of the
meeting.

In all elections to fill vacancies under this section, the procedure set forth in Section 23 and 25 of this Code
shall apply.

Compensation of directors/officers

Section 29. Compensation of Directors or Trustees. –

GR: the directors or trustees shall not received any compensation in their capacity as such, except for reasonable per
diems:
Excpetion:
- any provision in the bylaws fixing their compensation,
- the stockholders representing at least a majority of the outstanding capital stock or majority of the members
may grant directors or trustees with compensation and approve the amount thereof at a regular or special
meeting.
- Director renders extraordinary or unusual service

In no case shall the total yearly compensation of directors exceed ten percent (10%) of the net income before income
tax of the corporation during the preceding year.

Directors or trustees shall not participate in the determination of their own per diems or compensation.

Corporations vested with public interest shall submit to their shareholders and the Commission, an annual report of
the total compensation of each of their directors or trustees.
Case: Gonzaga vs COA, GR 244816, June 29, 2021 (en banc)*

Liability of Corporate Directors/Officers; when personally and solidarily liable

with corporation

Section 30. Liability of Directors, Trustees or Officers. –

- Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the
corporation or
- who are guilty of gross negligence or bad faith in directing the affairs of the corporation or
- acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be
liable jointly and severally for all damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons.

A director, trustee or officer shall not attempt to acquire, or any interest adverse to the corporation in respect of any
matter which has been reposed in them in confidence, and upon which, equity imposes a disability upon themselves to
deal in their own behalf; otherwise, the said director, trustee or officer shall be liable as a trustee for the corporation
and must account for the profits which otherwise would have accrued to the corporation.

Case:
Espiritu vs Petron, Nov. 24, 2009*
Stradcom vs Orpilla, GR 206800, July 2, 2018*
Polymer Rubber vs Ang, July 24, 2013*
United Philippine Lines vs Alkuino, GR 245960, July 14, 2021* Solidbank
Corp. vs Mindanao Ferroalloy, GR 153535, July 28, 2005*

Business Judgment Rule; exceptions (See Sec. 103, RCC)

Under the business judgment rule, questions of policy and management are
left to the judgment of the officers and directors of a corporation, and the
courts have no authority to substitute the board’s judgment with theirs.

Moreover, the board is considered the business manager of the corporation and
its orders cannot be reviewed by the courts as long as it acts in good faith
(Philippine Stock Exchange Inc. vs. Court of Appeals, G.R. 125469, Oct. 27,
1997).

Exception:

any contrary provision in the close corporation's articles of incorporation,

bylaws, or stockholders' agreement,
  if the directors or stockholders are so divided on the management
of the corporation's business and affairs
 that the votes required for a corporate action canot be obtained,
 with the consequence that the business and affairs that the votes
required for that the business of the corporation can no longer be
conducted to the advantage of the stockholders generally,
 the Commission, upon written petition by any stockholder,
 shall have the power to arbitrate the dispute.
 In the exercise o such power, the Commission shall have authority
to make appropriate orders, such as:
o (a) cancelling or altering any provision contained in the
articles of incorporation, bylaws, ot any stockholders'
agreement;
o (b) cancelling, altering or enjoining a resolution or act of the
corporation or its board of directors, stockholders, officers,
or other person party to the action;
o (d) requiring the purchase at their fair value of shares of any
stockholder, either by the corporation regardless of the
availability or unrestricted retained earnings in its, books or
by the other stockholder;
o (e) appointing a provisional director;
o (f) dissolving the corporation; or
o (g) granting such other relief as the circumstances may
warrant.

A provisional director shall be an impartial person who is neither a

stockholder nor a creditor of the corporation or any of its subsidiaries or
affiliates, and whose further qualifications, if any, may be determined by
the Commission.

A provisional director is not a receiver of the corporation and does not

have the title and powers of a custodian or receiver.

A provisional director shall have all the rights and powers of a duly
elected director, including the right to be notified of and to vote at
meetings of directors until removed by order of the Commission pr by all
the stockholders.

The compensation of the provisional director shall be determined by

agreement between such provisional director and the corporation.

Case:
Saber vs CA, Aug. 31, 2004*

Metroplex Berhad vs Sinophil, GR 208281, June 28, 2021* (J, Hernando)

Three-fold duty of directors

1. Duty of Obedience

 Basis
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 or incidental to its existence. (Sec. 2 ,
Doctrine of Limited Powers)

The directors or trustees elected shall perform their duties as prescribed

by law, rules of good corporate governance, and bylaws of the corporation
(Sec. 23 RCC)

Ultra Vires Acts of the Corporations. - No corporation shall possess or

exercise corporate powers other than those conferred by this Code or by
its articles of incorporation and except as necessary or incidental to the
exercise of the powers conferred.( Section 44.)

Law f Agency – an agent must act only within the scope of authority given
to him by the principal; and that when he exceeds such authority, he
thereby assumes liability thereto

2. Duty of Diligence

- Covers the common law obligation of directors ,trustees and

officers to act with due diligence of a prudent

3. Duty of Loyalty

Case: Strong vs Repide (special facts doctrine)

PCGG vs Gutierrez, July 9, 2018*

UCPB vs Secretary of Justice, GR 209601, Jan. 12, 2021* (en banc)

Self-dealing directors

Interlocking directors

Doctrine of Corporate Opportunity

Case: Guth vs Loft, Inc. 5 A.2d 503 Ch. 255 (Del. 1939)
TOPROS vs Chang, GR, 200070-71, Dec. 7, 2021 * (elements)
Derivative Suit
Case: Ago Realty vs Ago, GR 210906, Oct. 16, 2019*
Executive, management and other committees
Powers that cannot be delegated to executive committee

VII. CORPORATE POWERS AND AUTHORITY Doctrine of Limited Capacity

Classification of Corporate Powers Express General Powers:
Power to sue and be sued
Power to have perpetual existence unless AI provides otherwise Power to adopt
and use a common seal
Power to amend articles of incorporation

Power to adopt bylaws

Power to sell/issue stocks or admit members
Power to acquire/alienate property
Power to enter into partnerships, joint venture, merger
Power to make donations
Power to establish pension, retirement, and other plans
Implied Powers:
Express Specific Powers:
Power to extend/shorten corporate term
Power to increase/decrease capital stock; incur, create bonded indebtedness
Case: Metroplex Berhad vs Sinophil, GR 208281, June 28, 2021* Power to
deny preemptive rights
Power to sell/dispose all or substantially all corporate assets
See: SEC Memorandum Circular no. 12 (2020) Power to acquire own shares
Purpose, Requirement, Exceptions (See Sec. 8, 103, 104, RCC)
Read: Salido vs Aramaywan Metals, GR 233857, March 18, 2021* Power to
invest funds
Requirements and Procedure Power to declare dividends
With whom lodged
Requirements for declaration (can dividends be declared out of capital)
Unrestricted retained earnings
See: SEC Memorandum Circular no. 11, 2018 Type of dividends
When right to dividends is vested
Limitation to surplus profits (See Sec. 42, RCC) Can treasury shares be
declared as dividends Allocation of dividends
Power to enter into management contracts Requirements and procedure
Ultra vires acts Consequences
On the corporation itself On the immediate parties On the stockholders
VIII. BY-LAWS
Adoption and modes
Case: China Banking vs CA, GR 117604, March 26, 1997* PMI Colleges vs
NLRC, 1997*
IX. MEETINGS Stockholders/members meeting

Read: SEC Memorandum Circular no. 6 (2020) Requirements for valid meeting
Case: Board of Directors vs Tan Villongco vs Yabut (quorum)
Mallare vs A&E, GR 233646, June 16, 2021* Place of meetings
Matters to be presented to stockholders during regular meeting
Matters required to be taken up at stockholders’ meetings called for that
purpose Directors/trustees meeting
Kinds of meetings
Read: SEC Memorandum Circular no. 6 (2020)
Quorum requirement
Venue of meetings
Stockholders right to vote and manner of voting Proxy and other representative
voting
Case: NIDC vs Aquino Voting Trust
X. TRUST FUND DOCTRINE
Case: CIR vs CA, 1999*
Halley vs Printwell, May 30, 2011* Ong Yong vs Tiu, April 8, 2003*
XI. STOCKS AND STOCKHOLDERS Subscription contract
Pre-incorporation subscription Doctrine of Indivisibility of Subscription Stock
certificates
Case: Lincoln Philippines vs CA, 1998* Bitong vs CA, 1998*
Certificates of stock and their transfer
Case: Chemphil Export vs CA, Dec. 12, 1995* (mortgage of shares)
Guy vs Guy, GR189486, Sept. 5, 2012* (street certificate)
Tee Ling Kiat vs Ayala Corp., March 7, 2018* Valid restrictions on transfer
Forged and unauthorized transfers Issuance of stock certificate Watered stocks
Trust Fund Doctrine
Read: Enano Bote vs Alvarez, GR 223572, Nov. 10, 2020* Effects of issuance
Enforcement and payment of unpaid subscriptions Case:
Effects of delinquency
Rights of unpaid shares
Lost or destroyed certificates Rights and liabilities of stockholders Suits by
stockholders/members
Individual Suits Class Suits Derivative Suits
Requisites Case:
Read:
SMC vs Khan, 1989*
Cua vs Ocampo, Dec. 4, 2009*
Sec. 1, Interim Rules of Procedure for Intra Corporate
Controversies
XII. CORPORATE BOOKS AND RECORDS
Books and records to be kept Right of inspection
Case: Francisco vs del Castillo, GR 236726, Sept. 14, 2021 (en banc)*
XIII. MERGER AND CONSOLIDATION Requirements and procedure
Effects of merger/consolidation
Case: Sumifra vs Baya, April 7, 2017*
XIV. APPRAISAL RIGHT Definition
When exercised Requirements and procedure Effects of exercise of right When
right to payment ceases Cost of appraisal
XV. NON-STOCK CORPORATIONS Definition
Purpose
Read: BCDA vs CIR Membership and voting rights Trustees and Officers
XVI. CLOSE CORPORATION Definition
Permissive provisions
Effects of breach of qualifying conditions
Read: Florete vs Florete, April 2, 2018* Stockholders agreement
When board meeting not necessary

Preemptive right
Deadlocks
Withdrawal of stockholders/dissolution
XVII. SPECIAL CORPORATIONS Educational corporations
Religious corporations Corporation sole
Filling up of vacancies Dissolution
Religious societies
One person corporation
Who may form
Articles of incorporation Directors and officers
Nominee and alternate nominee Liability of single shareholder
XVIII. DISSOLUTION AND WINDING UP Methods of dissolution
Expiration of corporate term
Voluntary dissolution where no creditors are affected Voluntary dissolution
where creditors are affected Shortening of corporate term
Involuntary dissolution
Effects of dissolution
Liquidation
Modes of liquidation
Case: Reyes vs Bancom Devt Corp., Jan. 1, 2018*
Consuelo Metal vs Planters Devt Bank, June 26, 2008*
XIX. FOREIGN CORPORATIONS Definition
Application for License
Modes of entry
Resident agent
Control test vs grandfather rule
Case: Narra Nickel Mining vs Redmont
MR Jan. 28, 2015 (majority decision only)
What constitutes doing business
Case: CIR vs Interpublic Group, GR 207039, Aug. 14, 2019*
Doing business without license; effects
Case: CIR vs Interpublic Group, GR 207039, Aug. 14, 2019*
Llorente vs Star City, GR 212050, Jan. 15, 2020*

XX. XXI.
XXII. XXIII.
I.
Capacity to sue
Case: Llorente vs Star City Pty Ltd., Jan. 15, 2020 (isolated transaction rule)*
Laws governing foreign corporations Amendment of articles of incorporation
Merger/consolidation
Revocation of license
Withdrawal of license
MISCELLANEOUS PROVISIONS Arbitration for corporations
POWERS, FUNCTIONS, JURISDICTION OF SEC Case: Roman vs SEC, GR
196329, June 1, 2016*
INVESTIGATIONS, OFFENSES, PENALTIES
JURISDICTION OF SPECIAL COMMERCIAL COURTS
Read: AM 03-03-03-SC (as amended) June 21, 2016
PART II
PRESIDENTIAL DECREE 902-A, as amended Devises or schemes amounting to
fraud Intra-corporate controversies
Tests to determine
Cases: Gulfo vs Ancheta, Aug. 15, 2012*
Rivera vs Florendo, 1986*
Marc II Marketing vs Joson, Dec. 12, 2011* Abejo vs dela Cruz, 1987*
Tumagan vs Kairuz, Sept. 12, 2018*
SEC vs CA, Oct. 22, 2014*
GSIS vs CA, April 16, 2009*
Aguirre vs FQB+7, Jan. 9, 2013*
Ku vs RCBC Securities, Oct. 17, 2018*
BPI vs Bacalla, GR 223404, July 15, 2020*
SEC vs Subic Bay, GR 179047, March 11, 2015* De Leon vs PLDT, GR 211389,
Oct. 6, 2021*
Controversies in election, appointment, removal of directors/officers Cases:
Cacho vs Balagtas, Feb. 7, 2018*
Malcaba vs Prohealth Pharma, GR 209085, June 6, 2018* Appointment of
management committee, board or body

II. SECURITIES REGULATION CODE (RA 8799) Securities defined/enumerated

Investment Contracts
Read: SEC vs Howey; SEC vs Turner
SEC vs Prosperity.com, Jan. 25, 2012
Power Homes vs SEC, Feb. 26, 2008
SEC vs CJH Development Corp, GR 210316, Nov. 28, 2016* Cua vs Ng Wee,
GR 221135, July 5, 2017*
Registration of securities
Regulation of brokers, dealers, and salesmen
Tender offer rule; when mandatory
Independent director rule
Other forms of fraudulent transactions and market manipulations
Wash sale
Matched order
Painting the tape
Marking the close
Hype and dump
Making false and misleading statements Short sale
Insider trading
Civil and administrative sanctions
Penal sanctions
Settlement offer
Limitation of actions
Amount of damages