Obligations and Contracts

• A creditor in a determinate obligation can compel specific performance and ask for the delivery of the same thing, but cannot ask for compliance at the debtor's expense.

• A debtor's duty in an indeterminate or generic obligation includes delivering something of average quality, not necessarily all accessions and accessories.

• Rights of a creditor in an indeterminate or generic obligation encompass recovering damages for breach and seeking delivery at the debtor's expense, but not necessarily performance.

• A debtor's duties in a determinate obligation involve delivering all accessions and accessories and paying damages for breach, without extraordinary diligence unless required by law.

• The general rule of no liability for unforeseen events has exceptions: when the obligation assumes risk, in cases specified by law, or as stipulated, but not when the event is completely independent of human intervention.

Essential Requisites of Partnership

• A valid contract, contributions of money, property, or industry, organization for gain or profit, and a lawful object for the common benefit of partners are essential to create a partnership.

Types of Partnership

• Universal partnership of profits consists of all that the partners may acquire by their work during the partnership's existence.
• Universal partnership of all present property is when partners contribute current assets to a common fund, intending to share it and any profits acquired.

Types of Partners

• Limited, ostensible, de facto, and dormant partners are all types, as related to third parties.

• A universal partnership between spouses is prohibited, as this violates laws prohibiting the transfer of property between spouses, especially if done in contemplation of marriage.

• A general partnership may exist in any form and is not subject to several exceptions.

• In a partnership, profits and losses are distributed as agreed; if only profits are specified, losses are distributed justly and equitably.

• In partnerships, if there is no existing, valid agreement, the shares go to what is just and equal.

• If there's no partnership agreement, all partners manage, or management can be assigned to a third party.

General Partnership Capital Requirements

• For general partnerships with capital of Php3,000 or more, the public instrument and SEC registration aren't required specifically for validity.

Attributes of a Corporation

• Attributes of a corporation: artificial being, operation of law, and legal powers, but not with the right to a concession.

Corporation Nationality

• A corporation's nationality is determined by the place of incorporation.

• Concession Theory establishes that a corporation exists because the state allows it.

• According to the Limited Capacity Doctrine, corporations can only use powers granted to them.

• Private corporations are generally formed by the Corporation Code of the Philippines; public ones are through general laws.

De Facto Corporation

• De facto corporations require a valid law, attempted good faith incorporation, and use of corporate powers, but not organization under the law.

• A Corporation by Prescription is recognized through immemorial usage.

• A Foreign Corporation is created under laws other than those of the Philippines, allowing Filipino citizens and corporations to conduct business in its originating country.

• All stockholders can be foreigners, excluding in fully or partly nationalized corporations.

• At least fifteen people are typically needed to organize a corporation. Licensed professionals are not restricted from organizing a corporation.

Incorporators

• Incorporators must be of legal age, but perpetual existence is not always a factor of corporation.

• Close corporation articles can permit management by stockholders instead of directors. A majority is needed for a quorum.

• A natural person or an estate can form a one-person corporation, but not a partnership or trust.

• A one-person corporation must still fill a treasurer and other positions, and the single stockholder can be the corporate secretary.

Corporate Dissolution

• Submitting the original Certificate of Incorporation isn't necessary; dissolution submissions include resolution copies, proof of publication, and agency recommendations.

• Credit cooperatives help members save and borrow money.

• Cooperatives can have regular members but NOT irregular members. Foreigners cannot join cooperatives.

• In cooperatives, the quorum needs to consist of 25% of members who can vote.

• Cooperative boards must have at least 5 but no more than 15 members and can only be dissolved by insolvency after court hearing.

• Cooperatives are valid for 50 years and must file incorporation articles that are signed and acknowledged.

Elements of a Contract

• Elements of a contract include being Accidental and Nominative, but not Natural.

Stages of Contract

• The phases of a deal are Generation, Perfection, and Consummation, but not Winding up.

• Consent or legal capacity flaws make contracts voidable.

• Rescissible contracts cause injury or damage.

• Void contracts lack essential requirements.

• Industrial partners may engage in other business if the partnership allows it.

• Capitalist partners can engage in different businesses, but not directly competitive ones.

Principle of Delectus Personae

• Membership requires consent from all initial partners

Property Rights of a Partner

• Partners have the right to participate in management, interest in the partnership, and formal accounting, but not just rights to specific partnership property.

• A partner's interests can be assigned to another person.

• All partners, including industrial partners, are responsible for a partnership's debts. In quasi-delict, all partners are liable pro rata.

• Termination is NOT one of the final stages of a partnership.

• Until a check has been cleared, issuing one should not be considered an initial contribution.

• Any arrangement whereby partners agree not to have a share in either profits or losses should be considered null and void.

• Generally, a limited partner has limited liability, but may become responsible if he participates in the management of the enterprise.

• Under cooperative principles, subsidies are NOT allowed.

• Unlike corporate boards, cooperative boards can directly attend or arrange for board meetings by proxy.

• At least fifteen (15) naturalized members must legally organize a primary cooperative.

• General Assembly is responsible for electing board members.

• Transfer of partnership interest of one year must be held before any transfer can take place.

One Person Corporation - Nominee

• In one person corporations, any death/incapacity is to be stated in writing in the Articles of Incorporation

Exceptions

• Banks, Quasi-banks and Insurance companies, cannot organize single owner operations

• Single owner operations (also known as OPCs) cannot be converted from stock corporations. Vacancies can only be filled by board memebers.

• Disapproval of articles can occur is any percentage of stocks are not compliant with governmental procedures

Rights of Juridical Persons

• Succession is the right of corporate continuance, despite the death of stakeholders.

Securing Juridical Personality

• Juridical personalities are obtained once incorporation certificates are issued.

Corporate Stock

• Rights of shareholders include demanding payments if disinclined from the corporations acts

• Two positions in a corporation CAN be held together(Treasurer and Director), it cannot be the President and Chairman of the Board

• No foreigner stakeholders are allowed in Financing companies.