Philippine Commercial Law

1. LAW 104 (INTRODUCTION TO LAW)
COMMERCIAL LAW

2. Presentation
Outline
 CORPORATION LAW
 NEGOTIABLE
INSTRUMENTS
 INSURANCE CODE
 TRANSPORTATION
LAW
 CODE OF COMMERCE
 BANKING LAW
 INTELLECTUAL
PROPERTY

3. REVISED CORPORATION CODE (RA 11232)

4. Revised
Corporation Code
 Approved by Congress on
February 20, 2019
 Signed into law on February 21,
2019
 Took effect on February 23, 2019
 Repealed BP Blg68 (Corporation
Code of the Philippines 1980)
 Ease of doing business, more
protection to corporation and
stockholders, promoting good
corporate governance.

5. Private Corporation
 Formed for some private
purpose, benefit, aim.
 By general corporation law
particularly the RCC
Public Corporation
 Corporation created for
political purposes
 By general law or special law
“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.”
–Section 2, RCC
Formation of a Corporation

6. Quasi-Public Corporations (Public Utilities)
Created by operation of general corporation law but performs
governmental functions.
Engaged in private business involving public interest.
De Facto Corporation
One which actually exists for all practical purposes
as a corporation, but which has no legal right to
corporate existence as against the State.
Corporation by Estoppel
No real existence in law
Neither de jure or de facto
A mere fiction existing for the particular case, and
vanishing where the element of estoppel is absent.
Other Forms of
Corporation

7. Major Classes of Corporation
1. Stock Corporation –those which has capital stock divided into
shares and are authorized to distribute to the holders such shares,
dividends, or allotments of the surplus profits on the basis of the
shares held.
2. Non-stock Corporation –a corporation where no part of its income is
distributable as dividends to its members, trustees, or officers:
provided, that any profit which it may obtain incidental to its
operations shall, whenever necessary or proper, be used for the
furtherance of the purpose of purposes for which the corporation was
organized (RCC Sec. 86)

8. Who may form a Corporation?
• Section 10 of Republic Act 11232, otherwise known as the Revised
Corporation Code of the Philippines, allows any person, partnership,
association or corporation, singly or jointly with others, but not more
than 15 in number, to organize a corporation for any lawful purpose or
purposes. Incorporators who are natural persons must be of legal age.
• Perpetual term
Section 11. Corporate Term. A corporation shall have perpetual
existence unless its article of incorporation provides otherwise.
Reviewer on Commercial Law, Sundiang and Aquino

9. NEGOTIABLE INTSRUMENTS

10. NEGOTIABLE INTSRUMENTS
A written contract for the payment of money which
complies with the requirements of Sec. 1 of the NIL, which
by its form and on its face, is intended as a substitute for
money and passes from hand to hand as money, so as to
give the holder in due course (HDC) the right to hold the
instrument free from defenses available to prior parties.
Reviewer on Commercial Law, Sundiang and Aquino

11. Kinds of Negotiable Instruments
Promissory Note (PN)
Bill of Exchange (BN)
Check

12. NEGOTIABILITY
A. It must be in writing and signed
by the maker or drawer;
B. Must contain an unconditional
promise or order to pay a sum
certain in money;
C. Must be payable on demand, or
at a fixed or determinable future
time;
D. Must be payable to order or to
bearer; and
E. Where the instrument is
addressed to a drawee, he must be
named or otherwise indicated
therein with reasonable certainty.
Requisites of Negotiability (Sec. 1, NIL)

13. PD 1460: INSURANCE CODE

14. INSURANCE
A "contract of insurance" is an agreement whereby one
undertakes for a consideration to indemnify another against
loss, damage or liability arising from an unknown or
contingent event. A contract of suretyship shall be deemed
to be an insurance contract, within the meaning of this
Code, only if made by a surety who or which, as such, is
doing an insurance business as herein after provided.
Section 2 Insurance Code

15. GENERAL RULE
“An insurance business
consists of undertaking,
for a consideration, to
indemnify another
against loss, damage or
liability arising from an
unknown or contingent
event.”

16. Insurable Interest
Risk of Loss or Damage / Designated
Peril as Cause
Consideration: Premium
Risk Distributing Scheme
Elements

17. REQUISITES OF A VALID
CONTRACT OF INSURANCE
• A subject matter in which the insurer has an insurable interest
• Event or peril insured against which maybe any (future) contingent
or unknown event, past or future (Sec. 3), and a duration for the risk
thereof
• A promise to pay for the promise known as a “premium”
• A meeting of the minds y or indemnify in a fixed or ascertainable
amount
• A consideration of the parties upon all of the foregoing essentials
• The parties must be competent to enter into the contract
• Under Sec. 226, “no policy of insurance shall be issued or delivered
within the Philippines unless in the form previously approved by the
Insurance Commissioner”
• The purpose must not be contrary to law or public policy.

18. TRANSPORTATION LAW

19. COMMON CARRIERS
Concept of transportation is one whereby a
certain person or association of persons
obligates themselves to transport persons,
things, or news from one place to another
for a fixed price.

20. Article 1732 of the CIVIL CODE
Common carriers are persons, corporations,
firms or associations engaged in the
business of carrying or transporting
passengers or goods or both, by land, water,
or air, for compensation, offering their
services to the public.

21. DIFFERENCE BETWEEN COMMON
CARRIER AND PRIVATE CARRIER

22. DIFFERENCE BETWEEN COMMON
CARRIER AND PRIVATE CARRIER

23. CODE OF COMMERCE

24. -Those who having legal capacity to engage in commerce,
habitually devote themselves thereto (Art.1, Code of
Commerce)
Legal capacity to engage in commerce: having
completed the age of 18 years
Having free disposition of their property (Art. 4).
Legal Presumption of habitually engaging in commerce
exists from the moment the person who intends to engage
therein announced through circulars, newspapers, handbills,
posters exhibited to the public, or in any manner whatsoever,
an establishment which has for its object some commercial
operation. (Art. 3)
-A merchant need not devote his full time to commerce
Merchants
- The middleman between the
consumer and manufacturer; a
merchant must do business in
his own name.

25. APPLICABLE LAWS
(whether or not executed by merchants)
a. Code of Commerce
b. If no provision, Commercial
Customs
c. In the absence of these two,
Civil Code
“Customs take precedence over civil law
because of the progressive character of
commerce. For centuries, negotiable
instruments are governed mostly by
customs rather than law. But civil law can
also supplement the Code of Commerce -
the Code does not contain provisions on
extinguishments of obligations or
damages.”

26. Letters of Credit
Purpose:
- The primary purpose of the
LoC is to substitute for and
support the agreement of the
buyer/importer to pay money
under a contract or other
arrangement. It creates in the
seller/exporter a secure
expectation of payment.
Art. 567, Code of Commerce: those issued
by one merchant to another or for the
purpose of attending to a commercial
transaction

27. BANKING LAW

28. RA 8791: General Banking Law of 2000
“An act providing for the regulation of and organization and
operations of banks, quasi-banks, trust entities and for other
purposes.”

29. Policy of the General Banking Law
I. The state recognizes:
a. The vital role of banks in providing an environment conducive
to the sustained development of the national economy and;
b. The fiduciary nature of banking that requires high standards
of integrity and performance.
II. The state shall promote and maintain a stable and
efficient banking and financial system that is globally
competitive, dynamic and responsive to the demands of a
developing economy.

30. INTELLECTUAL PROPERTY

31. INTELLECTUAL PROPERTY RIGHTS
“Intangible property rights granted by law to owners of
intellectual creations such as inventions, designs, signs and
names used in commerce, and literary and artistic works.”

32. -Copyright and Related Rights;
Trademark and Service Marks;
Geographic Indicator;
Industrial Design
-Patents;
-Layout Designs (Topographies) of Integrated
Circuits;
-Protection of Undisclosed Information [Sec 4.1, RA
8293]
Intellectual
Property Rights
under the Intellectual Property
Code (RA 8293)

33. Thank you!