Page 1 of 10 | Topic 1 Corporation and Corporate Governance [Czirelle Dominique E. Papa]
CORPORATION
Page 2 of 10 | Topic 1 Corporation and Corporate Governance [Czirelle Dominique E. Papa]
What is a Corporation?
Pursuant to Section 2 of the Revised Corporation Code of the Philippines, 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.
What are the 4 attributes of a corporation? Discuss each.
An Artificial Being.
A corporation is like a human person
wherein it can sue and sued in its name.
Moreover, a corporation has an
expressed life.
Created by Operation of Law
Certain laws governing corporations are
automatically applied to a corporation
upon establishment – even without
expressed intent to include in the
articles of incorporation.
Has the Right of Succession
This talks about the instance when the
current head of the company dies, there
will be an automatic process where the
next head will be determined and
thereafter appointed.
Has only the power, attributes, and
the properties expressly authorized
by law or incident to its existence.
This entails that the corporation itself is
distinct from its stakeholders. Thus,
liabilities arising from either parties shall
not be made to apply to the other.
Define Stakeholders of a Corporation.
The stakeholders of the corporation are those parties that have interest in a
corporation that can either affect or be affected by the business.
Who are the Stakeholders of a Corporation?
Common stakeholders of a corporation are its investors, creditors, suppliers,
employees, and customers.
Distinguish shareholders, bondholders, and directors.
Shareholders
Bondholders
Directors
These are the people that
maintain ownership of the
corporation through
holding shares of stocks.
They can also be
considered as investors to
the company.
Bondholders are people
who are connected to the
company through their
ownership of company
bonds. Moreover, they
are considered to be
creditors of the
corporation.
These are people elected
by the shareholders to
manage the day-to-day
operations of the
company.
What is the purpose for the establishment of a corporation?
A modern, critical view of the purpose of a corporation is more than just the pursuit of
shareholders’ wealth and better investment opportunities. Another function is through
executing customer value, investing in employees which can improve them, and gives
ethical and fair supplier relationship. A corporation also helps the people invest more
and lessen unemployment rate that helps the economy grow.
Difference between multinational and transnational corporations. Give at least
3 examples each.
A multinational corporation (MNC) has
facilities and other assets in at least one
Transnational companies have many
companies around the world but do not
