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TITLE XIII - SPECIAL CORPORATIONS - Coggle Diagram

- - - - RELIGIOUS CORPORATIONS
        
        Section 107. Classes of Religious Corporations. -
        
        Corporation Sole
        
        Religious Societies
        
        Section 108. Corporation Sole. - Formed by the chief archbishop, bishop, priest, minister, rabbi or other presiding elder of a religious denomination, sect or church. For the purpose of administering, managing, as a trustee, the affairs, property and temporalities of such.
        
        Section 109. Articles of Incorporation
        
        Section 110. Submission of the Articles of Incorporation.
        
        Section 111. Acquisition and Alienation of Property. - Generally, may acquire properties for its church, charitable, benevolent, or educational purposes, and may receive bequests or gifts for such purposes.
        
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        Procedure for Incorproration - Head must:
        
        File with the SEC an AOI
        
        Affidavit verifying the AOI, accompanied by a copy of the SEC, certificate of election/letter of appointment, duly certified to be correct by any notary public.
        
        Becomes corporation after filing.
        
        But, this is effective only after SEC approval and issuance of certificate of incorporation.
        
        Contents of the AOI - Must contain the ff:
        
        HEAD - That the applicant chief archbishop, bishop, priest, minister, rabbi, or presiding elder represents the religious denomination, sect or church which desires to become a corporation sole;
        
        CONSISTENT - That the rules, regulations and discipline of the religious denomination, sect or church are consistent with becoming a corporation sole and do not forbid it;
        
        CHARGED - That such chief archbishop, bishop, priest, minister, rabbi, or presiding elder is charged with the administration of the temporalities and the management of the affairs, estate and properties of the religious denomination, sect or church within the territorial jurisdiction, so described succinctly in the articles of incorporation;
        
        VACANCY; HOW FILLED - The manner by which any vacancy occurring in the office of chief archbishop, bishop, priest, minister, rabbi, or presiding elder is required to be filled, according to the rules, regulations or discipline of the religious denomination, sect or church; and
        
        PRINCIPAL OFFICE - The place where the principal office of the corporation sole is to be established and located, which place must be within the territory of the Philippines.
        
        Other Contents - The articles of incorporation may include any other provision not contrary to law for the regulation of the affairs of the corporation.
        
        Organized by one Person - To accommodate the church, juridical entity that becomes liable in place of the church.
        
        Applicable Provisions (De Leon) - primarily governed by Sections to and suppletorily, by the general provisions of Title XI on non-stock corporations 87 to insofar as they may be applicable
        
        Since the special pertaining to religious corporations do not specify the mode of election of the board of trustees of a religious corporation, its by-laws may provide the same in line with rules of the religious denomination of which it is a part. (SEC Opinion, Feb. 28 1974)
- - - - Required Proof for Dissolution -
        
        Estate - Proof of partition
        
        Trust - Proof of termination of the trust
  - - - Section 119. Bylaws - OPC not required to submit and file corporate bylaws.
        
        Section 120. Display of Corporate Name - shall indicate the letters "OPC" either below or at the end of its corporate name.
      - Section 121. Single Stockholder as Director, President. - The single stockholder shall be the sole director and president of the One Person Corporation.
        
        Shall not be appointed as the corporate secretary
        
        Section 122. Treasurer, Corporate Secretary, and Other Officers - Shall be appointed within (15) days from the issuance of its certificate of incorporation and should be reported to the SEC within (5) days from appointment.
        
        Stockholder Treasurer Bond requisite - A single stockholder who is likewise the self-appointed treasurer of the corporation shall give a bond to the Commission in such a sum as may be required:
        
        The bond shall be renewed every two (2) years or as often as may be required
        
        Written Undertaking - That the said stockholder/treasurer shall undertake in writing to faithfully administer the One person Corporation's funds to be received as treasurer, and to disburse and invest the same according to the articles of incorporation as approved by the Commission.
        
        Computation of Surety Bond (MC 7) - Must be computed based on the authorized capital stock of the OPC, depending on the bracket provided.
        
        Section 123. Special Functions of the Corporate Secretary - In addition to functions designated by OPC, corp sec shall:
        
        (a) Be responsible for maintaining the minutes book and/or records of the corporation;
        
        (b) Notify the nominee or alternate nominee of the death or incapacity of the single stockholder, which notice shall be given no later than five (5) days from such occurrence;
        
        (c) Notify the Commission of the death of the single stockholder within five (5) days from such occurrence and stating in such notice he names, residence addresses, and contact details of all known legal heirs; and
        
        (d) Call the nominee or alternate nominee and the known legal heir to meeting and advise the legal heirs with regard to, among others, the election of a new director, amendment of the articles of incorporation, and other ancillary and/or consequential matters.
        
        Section 127. Minute Book. - shall maintain a minutes book which shall contain all actions, decisions, and resolutions taken by the One Person Corporation.
        
        Section 128. Records in Lieu of Meetings/Approval of Corporate Acts - When action is needed on any matter, it shall be sufficient to prepare a written resolution, signed and dated by the single stockholder; and recorded in the minutes book of the One Person Corporation.
        
        The date of recording in the minutes for all purposes under this Code.
        
        Section 129. Reportorial Requirements - OPC must submit the following within a period prescribed by the Commission:
        
        (a) Annual financial statements audited by an independent certified public accountant: Provided, That if the total assets or total liabilities of the corporation are less than Six hundred thousand pesos (₱600,000.00), the financial statements shall be certified under oath by the corporation's treasurer and president;
        
        (b) A report containing explanations or comments by the president on every qualification, reservation, or adverse remark or disclaimer made by the auditor in the latter's report;
        
        (c) A disclosure of all self-dealings and related party transactions entered into between the One Person Corporation and the single stockholder; and
        
        (d) Other reports as the Commission may require.
        
        OPC's Fiscal Year -
        
        GR - the fiscal year of a One Person Corporation shall be that set forth in its articles of incorporation or,
        
        XCPN - in the absence thereof, the calendar year.
        
        Effect of Failure to Submit - The Commission may place the corporation fail to submit the reportorial requirements three (3) times, consecutively or intermittently, within a period of five (5) years.
        
        Section 130. Liability of Single Shareholder. -
        
        GR - the stockholder shall be jointly and severally liable for the debts and other liabilities of the One Person Corporation.
        
        XCPN - Upon concurrence of all the requisites:
        
        The sole shareholder must show that the corporation was adequately financed;
        
        This refers to state of financing at the point of incorporation. Inadequately financed if incorporated without reasonable assets to support its undertaking/capitalization.
        
        He must prove that the property of the OPC is independent of the stockholder's personal property;
        
        Present tense, thus refers to the period of conduct of the business operations of the OPC. Related to piercing doctrine, if assets/properties of OPC are mixed with the stockholder, then separate juridical personality may be piereced.
        
        There is no ground to pierce the veil of corporate fiction.
        
        Section 131. Conversion from an Ordinary Corporation to a One Person Corporation
        
        Single Stockholder
        
        Acquisition - of all the stocks of an ordinary corporation
        
        Application - for conversion into a One Person Corporation subject to the submission of such documents as the Commission may require.
        
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        Piercing of Corporate Veil - Allows state to disregard that fiction that the corporation has separate legal personality.
        
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        1. Q. Distinguish resolutions in regular v OPC -
        
        Regular - There would have to be a meeting.
        
        OPC - Written resolution only. Thus, only need to establish proof of approval. Whereas in regular, proof of approval, meeting, etc.,
        
        Section 124. Nominee and Alternate Nominee
        
        Effect of Death of Single Stockholder - Nominee and alternate nominee designated by the single stockholder shall takeover in the case of death/incapacity. Shall manage the corporation's affairs and take place of director.
        
        Term of Management - until the legal heirs of the single stockholder have been lawfully determined, and the heirs have designated one of them or have agreed that the estate shall be the single stockholder of the One Person Corporation.
        
        Alternate Nominee - shall sit as director and manage the One Person Corporation in case of the nominee's inability, incapacity, death, or refusal to discharge the functions as director and manager of the corporation, and only for the same term and under the same conditions applicable to the nominee.
        
        Section 126. Change of Nominee or Alternate Nominee - The single stockholder may, at any time, change its nominee and alternate nominee by submitting to the Commission the names of the new nominees and their corresponding written consent.
        
        For this purpose, the articles of incorporation need not be amended.
        
        Q. Differentiate role of OPC Corp. Sec. vs. that in regular corporation
        
        Regular Corporation - In case of death of stockholder, changes in the stock and transfer book altered by the Corporate Sec. Thus, any change in shareholders, Corp. Sec. must submit general information sheet and stock and transfer books to the SEC.
        
        OPC - In OPC, there is an element of trust. Corp. Sec. is entrusted with duty to contact nominees/relevant persons in case of incapacity of the single stockholder.
        
        Similarities - general record keeping functions the same.
        
        In general, minsiterial roles of the corproate secretary. If there's any discretion
        
        Incapacity contemplated - May be temporary or permanent. Thus, similar concept as incapacity under the Civil Code.
        
        Term of Nominee & Alternate Nominee -
        
        GR - Nominee - In case of death or permanent incapacity of hte single stockholder/ nominee shall sit as director and manage the affairs of the OPC until the legal heirs of the single stockholder have been lawfully designated AND heirs have designated one of them/agreed that the estate shall be the single stockholder of the OPC.
        
        XCPN - Alternate Nominee - in case of the nominee's inability, incapacity, death, or refusal to discharge the functions as director and manager of the corporation, and only for the same term and under the same conditions applicable to the nominee.
        
        Q. If OPC does not have any bylaws, does it make sense to have separate corporate secretary to make minutes?
        
        Mixed opinions, but generally minutes book refers to all actions taken by the corporation.
        
        Q. How about treasurer? Why corp sec prohibited from being treasurer, while treasurer can be president and treasurer?
        
        Because separate because corporate secretary responsible for notifying the SEC and the nominee.
        
        Q. Why is there a requisite of a bond?
        
        Because capacity to abuse power as president and treasurer.
        
        Bond here is not bond in the concept of a security, but instead issued to answer for failure to perform a duty.
    - - Distinguished from Sole Proprietorship
        
        Sole Proprietorship -
        
        Has no separate legal personality from the proprietor conducting the business.
        
        The assets of the sole proprietorship are similarly owned by the proprietor conducting the business.
        
        The obligations that the sole proprietorship incurred in conducting the business may be enforced against the proprietor.
        
        Registetered with the DTI
        
        OPC -
        
        Has a legal personality separate and distinct from the sole stockholder of the corporation.
        
        The assets of the OPC are not owned by its sole stockholder unless the OPC is not
        adequately financed and/or the assets.
        
        The obligations of the corporation cannot be enforced against its sole stockholder unless
        the situation warrants piercing the veil of corporate fiction.
        
        Registered with SEC
  - - - Q. Why No Bylaws?
        
        Limited number of persons means not necessary to have bylaws. Furthermore, more relevant information already found in the AOI, as well as the other provisions of the RCC.
        
        Why must OPC be indicated? do you agree/disagree with this rule? Does this not result in discrimination as far as an OPC is concerned?
        
        Gives persons dealing with the OPC additional information/caveat. Similar to the rule with banks, where the lower levels of banks are required to indicate the classification of their licenses, whether rural bank or thrift bank, etc.,
        
        To give the public an idea as to the level of capitalization and authorities of the bank.