DOING BUSINESS

CHAPTER 1

DOING BUSINESS INTERNATIONAL AGREEMENT REVIEWER

a. Definition of Terms:

1. Treaty - A treaty is an agreement between sovereign States (countries) and in some cases international organisations, which is binding at international law. An agreement between an Australian State or Territory and a foreign Government will not, therefore, be a treaty. An agreement between two or more States will not be a treaty unless those countries intend the document to be binding at international law.

2. International agreement - formal understandings or commitments between two or more countries. An agreement between two countries is called "bilateral," while an agreement between several countries is "multilateral." The countries bound by an international agreement are generally referred to as "States Parties."

3. Agreement - manifestation of mutual assent by two or more persons to one another. It is a meeting of the minds in a common intention and is made through offer and acceptance. An agreement can be shown from words, conduct, and in some cases, even silence.

4. Executive agreement - executive agreement, an agreement between the United States and a foreign government that is less formal than a treaty and is not subject to the constitutional requirement for ratification by two-thirds of the U.S. Senate.

5. Contract - A contract is an agreement between two parties that creates an obligation to perform (or not perform) a particular duty.

Corporate RA 11232

Chapter 2 Corporation

(RA 11232, RCC)

a. General Principles

1. Nature and Attributes

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.

2. Nationality

In our Jurisdiction, there two recognized test determining the nationality of a corporation, "Control Test", or the liberal rule; and the stricter test, the "Grandfather Rule".

The Control Test, as the embodied in the definition of

"Philippine National"provides that "shares belonging to corporation or partnership at least 60% of the capital of which is owned by Filipino Citizens shall be considered as Philippine Nationality".

The Grandfather Rule, when there is "doubt" over the 60-40 Filipino-Foreign Equity Ownership. This rule states that if the percentage of Filipino ownership in the corporation is less than 60%, only the number of shares corresponding to this percentage shall be declared as Filipino.

3. Separate juridical personality

A corporation is an artificial being created by law, with a separate personality from its stockholders. It is not liable for acts or liabilities of its stockholders, and stockholders are only liable for the extent of their subscribed capital. Corporations can acquire, possess, and lease property in their name, making foreigners not the owners of corporate property. However, the separate juridical personality of a corporation can be pierced when used as a cover for fraud or illegality. The corporation can act as though it were a person, owning properties, transacting, and committing acts expressly authorized by law or incidental to its existence. The board of directors can delegate specific powers to officers, but certain corporate acts require stockholder approval. It is recommended to secure the services of a retainer firm or counsel to advise on corporate matters.

4. Liability of Directors and Officers - Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.