UNIVERSITY OF SANTO TOMAS

THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

OUTCOMES-BASED TEACHING-LEARNING PROGRAM FOR TAXATION LAW 1

Course Title: Law on Business Organization

Course Number:

Credit Units: 3

Contact Hours: 3 HOURS PER WEEK

Course Placement:
Pre-requisites: none

Course Facilitator: ANTONIO M. CHUA Juris Doctor.

Attorney & Counselor at Law

Consultation Place/Time: 13:00-15:00/AB Faculty Consultation Room

Email: antoniochua77@gmail.com
amchua@ust.edu.ph

Course Description: Business Law 1

The course consist of Three modules.

Module 1 of the course covers the laws on Corporation .

Module 2 covers laws on Cooperative .

Module 3 covers Partnership Law

Approved by: PROF. MICHAEL ANTHONY C. VASCO, PH.D.

 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES
Dean
DEPARTMENT OF LEGAL MANAGEMENT
Date of Approval:

Legal Management
Course
Program Intended
Institutional Outcomes Intended
Learning Outcomes
Learning
(PILOs)
Outcome
Core S.E.A.L. of Thomasian Graduate Attributes (ThoGAs) Arts and Letters Graduate Attributes Upon successful completion Upon completion
Values Thomasian As a graduate of the A graduate of the UST Faculty of Arts of the UST A.B. in Legal of the course , the
Education University of Santo Tomas, and Letters is expected to manifest the Management : student should be
I am expected to: following: able to :
- Manifest leadership abilities to promote 1. Leadership Skills to Work Alone and
advocacies for life, freedom, justice, and in Teams.
solidarity in the service of the family, the To exhibit a work ethic anchored on
local and global communities, the Church honesty, responsibility and Make legal
and the environment. accountability among students, and action, decision
-exemplify values-driven leadership in the hone their leadership skills to both 1. Make judgment and , opinion,
COMPETENCE, COMMITMENT, COMPASSION

professional conduct of the lead and work in cooperation with pursue actions consistent
communication practice others. resolution ,
with Christian morals, values
Servant leader - Implement relevant projects and concerning the
and principles in dealing
activities that speak of Christian 2. Ethical Action and Moral Character. with personal and business
compassion to the poor and the To exhibit highest standards of professional concerns. organization
marginalized in order to raise their quality integrity in both personal behavior and
of life professional decorum. grounded on
- Show respect for the human person, both legal and
regardless of race, religion, age, and sound ethical
gender
standard .
- Express myself clearly, correctly, and 3. Communicate Effectively.
confidently in various environments, To articulate ideas and express 2. Exhibit interpersonal and Write opinion,
contexts, and technologies of human positions as steeped in the Thomasian communication skills to prepare legal
Effective interaction value of truth, guided by faith and effectively carry out an documents ,
communicator -Embrace individual differences and show reason. assigned task in local or
respect for the people I engage with daily conduct
and multicultural environment,
collaborator - Work productively with individuals or with due regard to the meetings ,
groups from diverse cultures and Filipino culture and identity concerning the
demographics . business
-Manifest a high sense of emotional organization
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

maturity as I work with individuals and logically
groups grounded on
- Show profound respect for individual legal principles
differences and/or uniqueness as
and consistent
members of God’s creation
with specific
legal
requirement .

- Show judiciousness and resourcefulness

in making personal and professional
decisions 4. Body of Knowledge, Research and 3. Demonstrate capability in Conduct
- Engage in research undertakings that Creative Skills. Exhibit adequate applying legal and
respond to societal issues knowledge in the Humanities, Social management principles, corporate
-demonstrate ability to conceptualize, Sciences and other related disciplines, theories and concept in meetings ,
strategize and execute ideas guided by the and apply it in various academic creating new ideas and
principles of critical thinking researches and creative endeavors. solution to various legal and
consistent
Analytical and -Cultivate the skill and harness available business management with legal
creative technology to compliment imagination problems. requirements.
thinker and innovation towards creative 4.Exhibit competencies in
endeavors solving practical problems
- Express personal and professional required in joining the
insights through an ethical and evidence- workforce in a corporate
based approach environment.
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

- Engage in reflective practice to ensure 5. Critical Skills, Effective Problem
disciplinal relevance and professional Solving.
development To progressively engage in theories
- Sustain in the continuing quest for and facts, in the light of reason, Understand
communication practice excellence by towards solving theoretical and fundamental
conducting research and catching up with practical problems.
current technological trends concepts in
- Exhibit preparedness and interest for 6. Social Awareness and Global Business Org.
continuous upgrading of competencies Perspective.
required by the profession or area of To demonstrate awareness and
law that will
specialization understanding of relevant social issues 5. Formulate meaningful allow them
Lifelong - Manifest fidelity to the teachings of and responsiveness to the needs of the
learner
contributions as a strategic understand
Christ, mediated by the Catholic Church, in global community through concrete partner in building the
the continuous deepening of faith and social action. organization to become
and critically
spirituality in dealing with new life globally competitive. resolved
situations and challenges more
complex
issues in
business
organization
law.

Performance Indicators (PI) of each PILO

Program Indented Learning Outcome Performance Indicators

Upon completion of all the courses offered in Legal As evidence of learning the PILO , an LM student
Management, the student should have the ability to : must be able to specifically :

1 Make judgment and pursue actions 1a Resolved hypothetical or real legal and /or
consistent with Christian morals, values and business problem, question, issues through the
principles in dealing with personal and professional application of Christian Ethical principles and
Concern. theories.

1b. Do conduct manifesting Christian Moral

Values
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

2 Exhibit interpersonal and communication 2a Write or orally communicate convincing,

skills to effectively carry out an assigned task in persuasive opinion, advice, argument or
local or multicultural environment, with due regard reasoning, plan, strategies in resolving real or
to the Filipino culture and identity . hypothetical question / issues problem in business
and /or law through the application of business
and / or legal principles, theories and methods
relevant to the Philippine legal and business
environment .

2bWrite, create, execute a plan, strategies

opinion, advice, argument or in collaboration
/ consultation with the Team or Group in a
local or multicultural environment .

3a Resolved real or hypothetical question / issues

3 Demonstrate capability in applying legal problem in business and /or law through the
and management principles, theories and concept in application of business and / or legal principles,
creating solution to various legal and business theories and methods relevant to the Philippine
management problems. legal and business environment .

4 Exhibit competencies in solving practical 3a. Resolved real or hypothetical legal and /or
problems required in joining the workforce in a business problem by creating /discovering out of
corporate environment. the box solution or by applying simple ‘common
sense’ solution.
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES
5 DEPARTMENT
FormulateOF meaningful contributions as a
LEGAL MANAGEMENT 5a Produce new and creative ideas / knowledge
strategic partner in building the organization to through research / study that contribute to the
become globally competitive. growth and development of Philippine based
organization to become globally competitive .

5b. Plan and execute, through student

organization, projects that contribute to the growth
and development of the target community.

INTENDED CONTENT TEACHING-LEARNING ASSESSMENT TASKS

LEARNING ACTIVITIES
OUTCOMES
MODULE 1
(for Approximately
10 weeks ) Part 1
Upon completion of A Corporation Readings :

this module, the 1. Definition Section 2 Corporation Code  Graded Recitation/

student should be quizzes
2. Attributes of a Corporation  Preliminary examination
able to : Section 3 Corporation Code And Final Examination
B. Classes of Corporations
1.accomplished and C. Nationality of Corporations Section 123; Villanueva Submission of a capstone
pages 46 to 59 project . 10%
file incorporation 1. Place of Incorporation Test
papers with full An accomplished article of a
2. Control Test incorporation and by laws of
understanding of its
legal effect 3. Grandfather Rule
Stock corporation / or non
2. resolved corporate D. Corporate Juridical Personality stock corporation
issues grounded on 1. Doctrine of Separate Juridical A video presentation of a
corporate legal special board meeting and
principles Personality a shareholders meeting
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

3. conduct corporate with required documentary

a. Liability for Torts and Pages 36 to 45 requirement of notices
meetings in And all the documents
Crimes
consistent with rules required by the SEC for an
and procedures b. Recovery of Moral increase in the authorized
capital stock .
provided by law. Damages
4. Do corporate Read Chapter 4 Villanueva A critique of the conduct
2. Doctrine of Piercing the shareholders meeting of the
action consistent
Corporate Veil submitted video.
with the rights and
responsibility a. Grounds for Application of
provided by law Doctrine

Part 2
E. Incorporation and Organization
1. Number and Qualifications of Section 10 Corporation Code
incorporators
2. Corporate Name; Limitations on Use of Section 18. Read also RedLine
Corporate Name Trans. V Rural transit 60
3. Corporate Term Phil549
Section 11
4. Minimum Capital Stock Requirements
Section 12 , section 13
F. Articles of Incorporation
155 to 158 Villanueva Gov of P.I ve
a. Nature and Function of Articles Manila Railroad Co52 Phil699
b. Contents Section 14, 15
Section 16
c. Amendment
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

d. Non-Amendable Items
G. Adoption of By-Laws
a. Nature and Functions of By-Laws Section 46 -48

b. Requisites of Valid By-Laws Read Chapter 7 Villanueva

c. Binding Effect
d. Amendment or Revision

H. Registration and Issuance of Certificate of

Section 19 -21 Read Hall v
Incorporation Piccio 86Phil603
De Jure Corpration
De facto
Corporation by Estoppel
Part 3
Section 36 -44
F. Corporate Powers
1 . General Powers; Theory of General
Capacity
2. Specific Powers; Theory of Specific
Capacity
a. Power to Extend or Shorten
Corporate Term
b. Power to Increase or Decrease
Capital Stock or
Incur, Create, Increase Bonded
Indebtedness
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

c. Power to Deny Pre-Emptive

Rights
d. Power to Sell or Dispose of
Corporate Assets
e. Power to Acquire Own Shares
f. Power to Invest Corporate Funds
in Another
Corporation or Business
g. Power to Declare Dividends
h. Power to Enter Into Management
Contracts
Section 45
i. Ultra Vires Acts Read 160 to 185 Villanueva
i. Applicability of
Ultra Vires Doctrine
ii. Consequences of
Ultra Vires Acts
Part 4
Section 23 to 35 Chapter 9
G. Board of Directors and Trustees
Villanueva
1. Doctrine of Centralized Management
2. Business Judgment Rule
3.Tenure, Qualifications, and
Disqualifications of Directors or Trustees
4. Elections
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

a. Quorum
b. Cumulative Voting/Straight
Voting
5. Removal
6. Filling of Vacancies
7. Compensation
8. Rules on Fiduciaries' Duties and
Liabilities
9.Responsibility for Crimes
10 . Contracts
a. By Self-Dealing Directors with the
Corporation
b. Between Corporations with
Interlocking Directors
12. Executive Committee
13. Meetings of the Board
a. Regular or Special
1. When and Where
ii. Notice
b. Who Presides
c. Quorum
d. Rule on Abstention
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

Part 5 Read Chapter 11 Villanueva

H. Stockholders and Members

1. Rights of Stockholders and
Members
a. Doctrine of Equality of Shares
2. Participation in Management
a. Proxy
b. Voting Trust
c. Cases When Stockholders'
Action is Required
i. By a Majority Vote
ii. By a Two-Thirds Vote
iii. By Cumulative Voting
3. Proprietary Rights
a. Right to Dividends
b. Right of Appraisal
C. Right to Inspect
d. Pre-Emptive Right
e. Right to Vote
f. Right to Dividends
g. Right of First Refusal
3. Remedial Rights
a. Individual Suit
b. Representative Suit
C. Derivative Suit Section 49 to 59 Corporation
4. Meetings Code
a. Regular or Special
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

i. When and Where

ii. Notice
b. Who Calls the Meetings
c. Quorum
d. Minutes of the Meetings

Part 6
I. Capital Structure Chapter 12 Villanueva
1.Subscription Agreements
2.Consideration for Shares of Stock Section 60 to 73
3.Shares of Stock
a. Nature of Shares of Stock
b. Consideration for Shares of Stock
a. Watered Stock
i. Definition
ii. Liability of Directors for
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

Watered Stocks
iii. Trust Fund Doctrine for
Liability for Watered Stocks
d. Situs of the Shares of Stock
e. Classes of Shares of Stock

4.Payment of Balance of Subscriptio

Call by Board of Directors
a.Notice Requirement
b.Sale of Delinquent Shares
i. Effect of Delinquency
ii. Call by Resolution of the Board
of Directors
iii. Notice of Sale

iv. Auction Sale and the Highest

Bidder
Certificate of Stock
a. Nature of the Certificate
b. Uncertificated Shares
c. Negotiability
i. Requirements for Valid Transfer
of Stocks
d. Issuance
i. Full Payment
ii. Payment Pro-Rata
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

e. Lost or Destroyed Certificates

Part 7
Chapter 15 Villnueva
Section 117-122
Dissolution of Corporation Chapter 15
Non-use of Corporate Charter
or Continuous lnorperation of a Corporation
iii. Legislative Dissolution
iv. Dissolution by the SEC on
Grounds under

a) exemption and
distinguish it Existing Laws
from 2. Methods of Liquidation
deductions a. By the Corporation Itself
b) Know the
amount b. By Conveyance to a Trustee
allowed under within a Three-Year Period
exemption . c. By Management Committee or
Rehabilitation Receiver
UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

d. By Liquidation after Three Years

Part 8 Chapter 17 Villanueva

K. Other Corporations
1. Non-Stock Corporations
a. Definition
b. Purposes
Chapter 18 Villanueva
c. Treatment of Profits
d. Distribution of Assets upon
Dissolution
2. Foreign Corporations
a. Bases of Authority over
Foreign Corporations 1.
Consent
ii. Doctrine of "Doing Business" (related to
definition under the RA.
No. 7042 or the Foreign
Investments Act)
b. Necessity of a License to Do
Business
'
i. Requisites for Issuance of a
License
ii. Resident Agent
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

c. Personality to Sue
d. Suability of Foreign Corporations
e. Instances When Unlicensed
Corporations May Be Allowed to Sue
f. Grounds for Revocation of
License

Module 2
One week Partnership Law Outline in Partnership law
Villanueva

Module 3 Distinction between Cooperative and Corporation Cooperative Code of the

Two weeks
Philippines

REFERENCES:
 UNIVERSITY OF SANTO TOMAS
THE CATHOLIC UNIVERSITY OF THE PHILIPPINES

DEPARTMENT OF LEGAL MANAGEMENT

Corporation of the Philippines
Philippine Corporation Law Cesar Villanueva
Corporation Law Hector De Leon
Any and all books available that give comment of the provisions

GRADING SYSTEM:

Preliminary exam : 30%

Recitation / quizzes / Report
30%
Finals exam 30%
Capstone project 10%

COURSE POLICIES:

1. Attendance shall be checked. The number of absences shall not be more than 9 hours or 3 meetings.
2. Student who is absent and called for recitation shall be given a failing grade of 70 even if excused.
3. Special tests shall be given ONLY to missed major examinations.
4. Recitation shall be given the weight of a quiz .