Legal Aspects Pre Final Reviewer PDF

LEGAL ASPECTS PRE FINAL REVIEWER Implied Warranties 1. Warranty against eviction – Buyer shall enjoy the legal and peaceful possession of Article 1458 – Contract of...

LEGAL ASPECTS PRE FINAL REVIEWER Implied Warranties 1. Warranty against eviction – Buyer shall enjoy the legal and peaceful possession of Article 1458 – Contract of Sale the thing Sale- is a contract; hence as a general rule it is 2. Warranty against hidden defect- The perfected from by mere consent thing shall be free from any hidden faults or defects. Vendee – The Buyer Vendor – The Seller Persons not liable for Breach of Warranty Article 1477 – The transfer of Ownership 1. Sheriff’s sale 2. Auctioneer Article 1485 – The Recto Law 3. Mortgagee RA 6652 – The realty installment buyer act or 4. Pledgee Maceda Law 5. Other person professing to sell by virtue of authority in fact or law Implied warranties- Are those that are inherent in the contract of sale Double Sale – First owner, first to acquire Three known forms of Business Organization 1. Sole Proprietorship 2. Partnership Two Kinds of Sale: 3. Corporation 1. Absolute Sale – A contract of sale is absolute when the title to the property passes to the vendee upon delivery of the Sole Proprietorship – Oldest and simplest and thing sold. most prevalent form of business enterprise. Personally liable for all the debts and obligations of 2. Conditional Sale – Ownership remains the business. with the vendor and does not pass to the Partnership – Exists when two or more persons vendee until full payment of the purchase agree to place their money, effects and labor and price. skill in lawful commerce or business. This begins from the moment there is an execution of a contract Recto Law finds applicable if: Corporation – Is an artificial being created by 1. There is an absolute sale or contract of sale operation of law. 2. The object is personal property and not real Fiduciary Nature of Partnership – Based on property or land trust and confidence Delectus Personae – Means no one can become a partner without a partner without the consent of 3. The transaction is installment all partners. Dissolution or Partnership – The change in Obligations of the Vendor relation of the partners 1. To transfer the ownership Dissolution of Corporation – means the 2. To deliver the thing extinguishment of the franchise and termination ot 3. To warrant the thing its corporate existence. 4. To take care of the thing 5. To pay expenses for the execution and registry of the sale, unless there is Obligations of Sole Proprietorship stipulation to the contrary. 1. To secure license and business permits 2. To register the business name 3. To pay tax 4. To pay personally all debts and obligations of the business A.leonor  - Cannot engage in another business which  ADVANTAGES OF A SOLE PROPRIETOR of the same kind of business of the partnership 1. Sole enjoyment of profit - Shall receive a share in the profit 2. The Sole Proprietor can decide to continue equivalent to the amount stipulated or to stop the operation of the business anytime - Is always liable for losses 3. Low Capitalization 2. Industrial Partner – One who contributes 4. Filing of Taxes is generally less complicated industry or skills than corporation - Cannot engage in business for himself o DISADVANTAGES - as for profits, this partnership shall receive such share as may be just and 1. Personally liable and obligations of the equitable under the circumstances business - Is not liable for any losses 2. Burdensome because all decisions and undertakings are to be carried out by the - Liable for any liabilities incurred by the proprietor alone partnership from their creditors 3. Limited ability to raise capital 3. Capitalist- Industrial Partner - A partner who contributed both capital and industry Article 1768- Partnership has juridical personality - He shall also receive a share in the profits in proportion to his capital Classifications of Partnership 4. General Partner – A partner who is liable beyond the extent of what he has 1. As to Liability contributed. a. General Partnership- who are liable 5. Limited Partner – Liable only to the to the extent of their separate property extent of what he has contributed b. Limited Partnership- A partnership - Can only contribute only cash or property with one or more general partners and but never in industry. one or more limited partners. 6. Managing Partner- Manages the business of the Partnership 2. As to Duration a. Partnership at will – It may be terminated depending upon the will of  ADVANTAGES OF PARTNERSHIP the partners - It easy to form since generally partnership b. Partnership for a specific period- is formed by mere consent. agree upon to exist only for a specific term or period. - Easy to make a decision - More capital is available in the business Classification of Partners 1. Capitalist Partner – One who contributes capital (Property or Money) - is not exempt to any losses A.leonor o DISADVANTAGES 2. Corporators- The Board of directors, Board of trustees, Stockholders, or - The partners are liable for the actions of members including the incorporators. their co-partners 3. Stockholders and Members- Persons - Easy to dissolve who own or holders of shares of stock 4. Corporate Officers – A president who - If the partnership is unable to pay the must be a director, Treasurer who must be debts, the personal assets of the general resident of the PH, and a Secretary who must be a resident and citizen of the PH. - Internal conflict or personal interest of certain partners is always probable. 5. Directors and Trustees- Manage the affairs of the corporation Attributes of a Corporation 6. Independent Director – Person who 1. It is an artificial being apart from the shareholdings. 2. It is created by operation of law 3. Has a right of succession 4. It has express and implied powers Corporate term- A corporation now has a perpetual (continues) existence unless its articles of Management of the Corporation – It cannot incorporation provide otherwise. act alone; thus there should be somebody who should govern its affairs One Person Corporation (OPC) – Only a  The corporation is a stock corporation natural person, trust, or an estate may form a OPC.  it shall be governed by Board of directors  Non-stock corporation, the same shall be managed by the Board of Trustees. Companies that cannot be incorporated as  ADVANTAGES OF A CORPORATION One Person Corporation - It has a strong legal personality 1. Banks and Quasi-banks - Free transferability of shares 2. Preneed (funeral industry) , trust, insurance - Centralized Management 3. Public and publicly-listed companies - Limited liability 4. Non-chartered government-owned and - It has a perpetual existence unless its controlled corporations articles of incorporations o DISADVANTAGES Components of One Person Corporation 1. Director & President – The single stock - The process of forming corporation is holder shall be the sole director and complicated president of the OPC - It is always subject to the control & 2. Officers of OPC – OPC shall appoint a regulation of the government treasure, corporate secretary and other officers. - A corporation cannot engage in business other than the business specified in the articles of incorporation Nominee- Shall sit as director and manage the - Minority stock holder generally have no affairs of the OPC until the legal heirs of the say in the operation of the corporation. single stockholder have been lawfully determined. Alternate Nominee- Shall sit as director and Components of Corporation manage the OPC if the nominee becomes incapacitated, dies or refuses to discharge 1. Incorporators - Founders of the functions as director. corporation. A.leonor Classifications of Corporation Powers of the Corporation 1. Stock Corporation – Have capital stocks a. Express powers/the powers expressly divided into shares granted by the law ex: Jollibee, San Miguel Corp b. Incidental Powers. Power of succession, 2. Non-Stock Corporation – No part of its power to adopt and amend by its laws income is distributable c. Implied Powers. Power to act in the usual ex: Lyceum of the Philippines, Other course of business. educational institutions 3. Private Corporation – Established by private individuals for private purposes Three (3) Modes of Dissolution of ex: Jollibee, San Miguel Corp, Lyceum of Corporation the Philippine University 1. Voluntary Dissolution 4. Public Corporation – Formed or organized 2. Involuntary Dissolution for the government 3. Expiration or Shortening of term ex: University of the Philippines, Department of Tourism, other local government units 5. Corporation de Jure- Organized in strict compliance of all the requirements of the laws 6. Corporate de Facto – There exists a flaw in its incorporation. Should issue a certificate of incorporation, exercises corporate powers 7. Corporation by Prescription – Exercised by a body of men ex: Catholic Church 8. Domestic Corporation- Organized in accordance to the laws of the Philippines 9. Foreign Corporation – Organized under the laws of another country 10. Corporation Sole – Purpose of administering and managing, as trustees, affairs properties and temporalities of any religious denomination (Bishops, priest, minister and other presiding elder of a religious denomination) 11. Eleemosynary Corporation – Organized for Charitable purposes. 12. One Person Corporation – Single stockholder ex: Caritas Manila, GMA Kapuso Foundation A.leonor