Article 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member.
Notes:
1) Definition.
a. Juridical persons – refer to artificial persons created by fiction of law.
2) Artificial persons. Juridical persons are artificial persons in the sense that they are made-up or invented abstracts or concepts. For example, a corporation is a non-tangible idea which is incapable of being experienced by the human senses such as sight, hearing, or touch. In contrast, a natural person is capable of being seen, heard, or touched. By fiction of law, it means that these are assumed as facts at least for purposes of the law, particularly the courts.
2) It is submitted that the grant of legal personality to juridical persons is for the purpose of allowing them to acquire rights and incur obligations, particularly when it comes to transactions. Of course, the extent of the rights granted and obligations imposed depend on the law which constituted them, e.g. 1987 Constitution / Revised Administrative Code / Local Government Code for the National Government, its offices, agencies, and instrumentalities, as well as the Local Government Unites; Revised Corporation Code for Corporations; Cooperative Code for Cooperatives.
3) Legal personality for these juridical persons commences from the moment they have been constituted according to their enabling law. For example, a corporation gains its legal personality after successful registration with the Securities and Exchange Commission (SEC). Notwithstanding that, before operating, it may need to secure first a mayor’s permit with the concerned LGU, register with Bureau of Internal Revenue, and register with a host of other agencies or offices. The acquisition of legal personality is not affected by the subsequent requirements for operation.
4) Article 44 provides for a distinction between: (a) Public Corporations/Institutions/Entities – or those constituted for public interest or purpose; and (b) Private Corporations/Partnerships/Associations – or those constituted for private interest or purpose.
5) For private corporations/partnerships/associations, the juridical personality granted is “separate and distinct from that of each shareholder, partner or member.” Thus, private corporations/partnerships/associations may contract on their own without binding its shareholders, partners, or members. Conversely, any liability incurred by these private corporations/partnerships/associations are generally of their own and cannot be imposed against the person of their shareholders, partners, or members.
Article 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating or recognizing them.
Private corporations are regulated by laws of general application on the subject.
Partnerships and associations for private interest or purpose are governed by the provisions of this Code concerning partnerships.
Notes:
1) When it comes to (a) the State and its political subdivisions, and (b) public corporations, institutions, and entities, they are governed by their respective enabling laws. Hence, these laws or regulations often specifically apply only to certain Government offices, agencies, or instrumentalities, and not wholesale (although there are exceptions).
2) As for private corporations, they are subject to the general laws that apply for any and all that intend to set up a company. Thus, laws on general application, such as the Revised Corporation Code, apply to any and all private corporations. The same principles apply for private partnerships and associations, which are primarily governed by the Civil Code.
Article 46. Juridical persons may acquire and possess property of all kinds, as well as incur obligations and bring civil or criminal actions, in conformity with the laws and regulations of their organization.
Notes:
1) As with natural persons, juridical persons have the legal capacity to acquire and possess property of all kinds. These may range from movable properties such as computers and other office equipment, to immovable properties such as land and buildings.
2) Similarly, juridical persons may incur obligations. These may be in the form of contractual obligations, such as payment for goods or services, performance of a work, or delivery of an item or property. Juridical persons may likewise enter into employment contracts or independent contractor agreements with individuals. This is because natural persons cannot act on their own but only via or through the act of natural persons.
3) Juridical persons may also bring civil or criminal actions. They have the right to go to court to protect their rights or seek redress. In a civil action, they may ask for an injunction, specific performance, damages, among other things. On the other hand, they may resort to criminal action against an offender who committed a criminal act, such as estafa or fraudulent misrepresentations, theft of goods or merchandise, or intellectual property right violations, to name a few.
4) For all of the above, juridical person’s may exercise their rights and perform their obligations “in conformity with the laws and regulations of their organization.” These applicable laws and regulations may vary depending on the how the juridical person is established. For instance, corporations are subject to the Revised Corporation Code and its Implementing Rules and Regulations (IRR); meanwhile, cooperatives are subject to the Cooperative Code and its IRR.
Article 47. Upon the dissolution of corporations, institutions and other entities for public interest or purpose mentioned in No. 2 of article 44, their property and other assets shall be disposed of in pursuance of law or the charter creating them. If nothing has been specified on this point, the property and other assets shall be applied to similar purposes for the benefit of the region, province, city or municipality which during the existence of the institution derived the principal benefits from the same.
Notes: N/A
