Published — June 6, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
After reading “Who may exercise the powers of the corporation?”, read also “What are the powers of a stock corporation?”
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The board of directors or trustees shall exercise the corporate powers, conduct all business, and control all properties of the corporation.
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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.
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Corporate powers may be directly conferred upon corporate officers or agents by statute, the articles of incorporation, the by-laws or by resolution or other act of the board of directors.
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. (Section 2, Revised Corporation Code of the Philippines.) As a creation of law, the powers of the corporation are lodged with the natural persons who comprise the corporation.
The law says:
Section 22 of Title III of the Revised Corporation Code of the Philippines states that:
“SEC. 22. The Board of Directors or Trustees of a Corporation; Qualification and Term. – Unless otherwise provided in this Code, the board of directors or trustees shall exercise the corporate powers, conduct all business, and control all properties of the corporation.
xxx” (Emphasis supplied.)
Section 44 of Title IV of the Revised Corporation Code of the Philippines likewise provides that:
“SEC. 44. Ultra Vires Acts of 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 35 of Title IV of the Revised Corporation Code of the Philippines provides for the powers of a corporation. These corporate powers, general or specific, are exercised by the Board of Directors or Trustees of the corporation, acting as a collegial body. To wit:
“SEC. 35. Corporate Powers and Capacity. – Every corporation incorporated under this Code has the power and capacity:
(a) To sue and be sued in its corporate name;
(b) To have perpetual existence unless the certificate of incorporation provides otherwise;
(c) To adopt and use a corporate seal;
(d) To amend its articles of incorporation in accordance with the provisions of this Code;
(e) To adopt bylaws, not contrary to law, morals or public policy, and to amend or repeal the same in accordance with this Code;
(f) In case of stock corporations, to issue or sell stocks to subscribers and to sell treasury stocks in accordance with the provisions of this Code; and to admit members to the corporation if it be a nonstock corporation;
(g) To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage, and otherwise deal with such real and personal property, including securities and bonds of other corporations, as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the Constitution;
(h) To enter into a partnership, joint venture, merger, consolidation, or any other commercial agreement with natural and juridical persons;
(i) To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no foreign corporation shall give donations in aid of any political party or candidate or for purposes of partisan political activity;
(j) To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers, and employees; and
(k) To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in the articles of incorporation.”
Jurisprudence says:
“The law vests in corporations rights, powers and attributes as if they are natural persons with physical existence and capabilities to act on their own.” (Lanuza, Jr. v. BF Corporation, G.R. No. 174938, October 01, 2014)
“It is the board of directors or trustees which exercises almost all the corporate powers in a corporation.” (Riosa v. Tabaco La Suerte Corporation, G.R. No. 153413
“A corporation, being a juridical entity, may act through its board of directors, which exercises almost all corporate powers, lays down all corporate business policies and is responsible for the efficiency of management.” (Cebu Mactan Members Center v. Masahiro Tsukahara, G.R. No. 159624, July 17, 2009)
How are corporate powers conferred upon the corporate officers?
“Corporate powers may be directly conferred upon corporate officers or agents by statute, the articles of incorporation, the by-laws or by resolution or other act of the board of directors.” (Citibank v. Chua, et.al. G.R. No. 102300, March 17, 1993)
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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