Partnership Accounting
CORPORATION
Section 2 of the Philippine Corporation Code defines corporation as:
“An artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.”
NATURE OF A CORPORATION
1. Artificial being – It is not a real or natural person, but the law assumes it as a person. It can enter into contracts, can own, and dispose properties, can sue or be sued in its own name, and has separate and distinct personality form its stockholders, authorised officers, and employees.
2. Created by operation of law – It cannot come into existence by mere agreement of the parties because it requires special authority or grant by the government. It can only be allowed to exist for lawful purposes only.
3. Power of succession – It can continue to exit, despite the death, withdrawal, insolvency, or incapacity of the members or stockholders. The shares of stock, as evidence of ownership in a corporation, can be transferred from one person to another.
4. Powers, attributes, and properties – It can only exercise powers that is expressly authorised to perform in accordance with the Corporation Code, its Articles, By-laws, and other special laws.
GENERAL TYPES OF CORPORATION
1. Public – Formed for purposes connected with the administration of the government.
2. Private – Owned and controlled by private individuals.
TYPES OF CORPORATION AS TO PURPOSE
1. Profit – Main objectives are to earn profit and remain solvent.
2. Non-profit – These are usually organised for a specific mission, other than to make a profit.
TYPES OF PRIVATE CORPORATION
1. Stock – Organised to engage in profit-making business, with its capital divided into shares of stock.
2. Non-stock – Non-profit in nature, like religious and charitable institutions.
3. Open – A private stock corporation whose shares of stocks are traded in the stock exchange, or whose
Section 2 of the Philippine Corporation Code defines corporation as:
“An artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.”
NATURE OF A CORPORATION
1. Artificial being – It is not a real or natural person, but the law assumes it as a person. It can enter into contracts, can own, and dispose properties, can sue or be sued in its own name, and has separate and distinct personality form its stockholders, authorised officers, and employees.
2. Created by operation of law – It cannot come into existence by mere agreement of the parties because it requires special authority or grant by the government. It can only be allowed to exist for lawful purposes only.
3. Power of succession – It can continue to exit, despite the death, withdrawal, insolvency, or incapacity of the members or stockholders. The shares of stock, as evidence of ownership in a corporation, can be transferred from one person to another.
4. Powers, attributes, and properties – It can only exercise powers that is expressly authorised to perform in accordance with the Corporation Code, its Articles, By-laws, and other special laws.
GENERAL TYPES OF CORPORATION
1. Public – Formed for purposes connected with the administration of the government.
2. Private – Owned and controlled by private individuals.
TYPES OF CORPORATION AS TO PURPOSE
1. Profit – Main objectives are to earn profit and remain solvent.
2. Non-profit – These are usually organised for a specific mission, other than to make a profit.
TYPES OF PRIVATE CORPORATION
1. Stock – Organised to engage in profit-making business, with its capital divided into shares of stock.
2. Non-stock – Non-profit in nature, like religious and charitable institutions.
3. Open – A private stock corporation whose shares of stocks are traded in the stock exchange, or whose