CORPORATION CODE

CORPORATION - artificial being created by operation of law

having the right of succession, and the powers, attributes and
properties expressly authorized by law and incident to its
existence (Sec. 2).
 THEORIES ON THE
FORMATION:
CONCESSION CORPORATE ETHNOLOGICAL JURAL
ENTERPRISE DEVELOPMENT
or ECONOMIC UNIT
juristic principle in the corporation not merely an Corporate idea is the formation of
creation of corporation, artificial being, but more the product of no private
under which a as an aggrupation of one people, and no corporation for
corporation is an persons doing business, one country but on certain purposes is
artificial creature without or an underlying business the contrary, permitted on the
any existence until it has unit. developed more or condition that they
received the imprimatur less independently, did not operate in
of the state acting in varying forms violation of laws of
according to law, among the several the state.
through the SEC. ethnological units.
ATTRIBUTES: it is
- an artificial being.
- created by operation of law.
- enjoys the right of succession.
- has the powers, attribute and properties expressly
authorized by law or incident to its existence.
COMPONENTs:
1. incorporators;
2. corporators;
3. stockholders/members;
4. promoter;
5. board of directors;
6. executive committee; and
7. officers of the corporation.
INCORPORATORs
They are those mentioned in the articles of incorporation as originally
forming and composing the corporation, having signed the articles and
acknowledged the same before a notary public. They have no powers beyond
those vested in them by the statute.
*only natural persons can be incorporators except when otherwise allowed
by law as in the case of incorporated cooperative which are allowed to be
incorporators of rural banks.
QUALIFICATIONS OF DIRECTORS/
TRUSTEES:
1. He must own at least (1) share capital stock of the corporation in
his own name, and if he ceases to own at least one share in his own
name, he automatically ceases to be a director. For non-stock
corporation, only members of the corporation can be elected to seat
in the board of trustees (Sec. 23).
2. A majority of the directors/ trustees must be residents of the
Philippines (Sec. 23).
3. He must not have been convicted by final judgment of an offense
punishable by imprisonment for a period exceeding six (6) years or a
violation of the Corporation Code, committed within five years from
the date of his election (Sec. 27).
4. He must not have a substantial interest in a competing corporation.
5. Only natural persons can be elected directors/trustees.
6. Other qualifications as may be prescribed in the by-laws of the
corporation.
DOCTRINES:
TRUST FUND WASTING ASSET
Under the Doctrine, no dividends can be permits corporations solely or principally
declared out of capital except only in two engaged in the exploitation of “wasting
instances: assets” to distribute the net proceeds derived
(1) liquidating dividends; and from exploitation of their holdings such as
mines, oil wells, patents and leaseholds,
(2)dividends from investments in wasting
without allowance or deduction for depletion.
asset corporation.
The justification of such rule is that as the
business of Wasting Asset Corporation is to
exploit and exhaust its assets, no one can
expect that its capital would be kept intact.
Hence that dividends cannot be paid out of
the capital but only from the profits must not
be applied as a rule.
 THEORY of:
GENERAL CAPACITY SPECIAL CAPACITY
corporation is said to hold such corporation cannot exercise powers
powers as are not prohibited or except those expressly or impliedly
withheld from it by general law given (everything is prohibited
(everything is allowed except when except when allowed).
prohibited).
POWERs:
EXPRESS INHERENT/ IMPLIED/NECESSARY
INCIDENTAL
granted by law, not expressly stated but exists as a necessary
Corporation Code and are deemed to be within consequence of the
its Articles of the capacity of exercise of the express
Incorporation or Charter corporate entities powers of the
corporation or the
pursuit of its purposes
as provided for in the
Charter
BOARD OF DIRECTORS
REPOSITORY OF CORPORATE
POWERS
unless otherwise provided by the Code, the corporate powers of all
corporation shall be exercised, all business conducted and all property of
such corporations controlled and held by the board of directors or trustees
to be elected from among the members of the corporation, who shall hold
office for one year and until their successors are elected and qualified.
EXCEPT:
1. Executive Committee; or
[Link] corporation enters into a management contract.
LIMITATIONS ON THE POWERS OF EXECUTIVE
COMMITTEE (SEC.35):
it CANNOT ACT on the following:
1. matters needing stockholder approval;
2. filling up of board vacancies;
3. amendment, repeal or adoption of by-laws;
4. amendment or repeal of any resolution of the
Board which by its express terms is not
amendable or repealable; and
5. cash dividend declaration
 THREE-FOLD DUTIES OF DIRECTORS
OBEDIENCE- they DILIGENCE LOYALTY
will direct the
affairs of the
corporation only in
accordance with
the purposes for
which it was
organized;
 CORPORATE OFFICERS (SEC. 25):
PRESIDENT SECRETARY TREASURER
shall be a shall be a resident may or may not
director and citizen of the be a director
Philippines

OTHER OFFICERs may be provided in the by-laws.

 INHERENT POWER OF
“AMOTION “
is the power to remove directors, officer
and trustees prior to the expiration of
their term.
SELF-DEALING DIRECTORS
those who personally contract with the
corporation in which they are directors. It
is discouraged because there can be no
real bargaining where the same is acting
on both sides of the trade.
REQUIREMENTS FOR THE VALIDITY OF
CONTRACTS
1. All the requisites in Sec. 32, to wit:
a) The presence of such director/trustee in the board meeting approving
the contract was not necessary for constituting a quorum for such
meeting;
b) The vote of such director/trustee in the board meeting approving the
contract was not necessary for the approval of the contract;
c) The contract is fair and reasonable under the circumstances; In the
case of an officer, there was previous authorization by the board of
directors.
2. Although not all said conditions are present, the corporation elects not
to attack or question the validity of the contract without prejudice to the
liability of the consenting director/trustee for damages under Sec. 31.
3. Where any of the first two conditions is absent, said contract must be
ratified by the vote of the stockholders representing at least 2/3 of the
outstanding capital stock or 2/3 of the members in a meeting called for
the purpose, provided that full disclosure of the adverse interest of the
director/ trustee involved is made at such meeting.
 INTERLOCKING DIRECTORS
They are those who sit in the boards of two or
more corporations that transact business with
one another or contract with each other
whether on isolated or regular basis not only
because one has big investments therein but
also because his services may have been
proven to be valuable, competent and
efficient.
REQUIREMENTS FOR VALIDITY OF
CONTRACTS
1. The contract is not fraudulent.
2. The contract is fair and reasonable under the
circumstances.
3. If the interlocking director’s interest in one corporation or
corporations is nominal(not exceeding 20% of the
outstanding capital stock), then all the conditions
prescribed in Sec. 32 on self-dealing directors must be
present with respect to the corporation in which he has 20%
or less interest:
a. the presence of the interlocking director in the board
meeting in which the contract was approved was not
necessary for the approval of the contract;
b. the vote of such director is not necessary for the
SPECIAL FACT DOCTRINE DOCTRINE OF CORPORATE
OPPORTUNITY
director takes advantage of if there is presented to a
an information by virtue of his corporate officer or director a
office to the disadvantage of business opportunity which:
the corporation. 1. corporation is financially able
to undertake;
2. from its nature, is in line with
corporations business and is of
practical advantage to it; and
3. one in which the corporation
has an interest or a reasonable
expectancy.
SOLIDARY LIABILITY OF DIRECTORS FOR
DAMAGES (SEC. 31):
1. willfully and knowingly vote for and assent
to patently unlawful acts of the corporation;
and
2. guilty of gross negligence or bad faith in
directing the affairs of the corporation;
3. acquire any personal or pecuniary interest
in conflict of duty.
 REMEDIES IN CASE OF
MISMANAGEMENT:
RECEIVERSHIP INJUNCTION, if DISSOLUTION, if the
the act has not abuse amounts to a
yet been done ground for quo
warranto but the
SolicitorGeneral
refuses to act; and
derivative suit or
complaint filed with
SEC.
.GENERAL CORPORATE POWERs
and CAPACITY
• to sue and be sued; (SEC. 36)
• to adopt and use of corporate seal;
• to amend Articles;
• to adopt by-laws;
• to enter into merger or consolidation;
• succession; FOR STOCK CORPORATION FOR NON-STOCK
CORPORATION
issue and sell stocks to admit members
subscribers and treasury
stocks

PURCHASE/RECEIVE/GRANT TAKE/DEAL
Real/Personal property Securities and bonds
ULTRA VIRES ACT and ILLEGAL ACTS
• An ultra vires act is not necessarily illegal although an illegal
act is always ultra vires.
• When the act of a corporation are spoken of as ultra vires, it
is not intended that they are unlawful but merely those
which are beyond the powers conferred upon the corporation
by the act of its creation, and are in violation of the trust
reposed in the managing board by the shareholders that the
affairs of the corporation shall be managed and the funds
applied solely for carrying out business objectives. An illegal
act however is one which is expressly prohibited by the
charter or statute or which is immoral or against public
policy.
EFFECTS OF ULTRA VIRES ACT ON:
EXECUTED EXECUTORY PART EXECUTORY
CONTRACTS CONTRACTS EXECUTED/EXECUTOR CONTRACTS
Y CONTRACTS authorized but
ULTRA VIRES
courts will not no principle of “no the principle
set aside or enforcement unjust of estoppel
interfere with even at the enrichment at shall apply.
such suit of either expense of
contracts party (void another” shall
and apply
unenforceable
)
 SPECIAL POWERS:
1. Power to extend or shorten corporate term
2. Increase / Decrease Corporate Stock
3. Incur, Create Bonded Indebtedness
4. Sell, Dispose. Lease, Encumber all or substantially all of corporate assets
5. Invest corporate funds in another corporation or business for other
purpose other than primary purpose
6. Power to declare dividends out of unrestricted retained earnings
7. Enter into management contract.
8. Purchase or acquire own shares provided:
(i) there is an unrestricted retained earnings
(ii) for legitimate purpose
 [Link] reasonable no donation to:
donations for:
a. public welfare; a. political party;
b. hospital; b. candidate; and
c. partisan political activity.
c. charitable;
d. cultural;
e. scientific;
f. civic; and
g. similar purposes
RESTRICTIONS ON THE POWER TO MAKE DONATIONS:

1. the donation must be reasonable, otherwise it would be

tantamount to a conversion of corporate funds;
2. that it must not be in aid of any political party or candidate;
3. that it must not be for purposes of partisan political activity.
CONTENTS of ARTICLES OF
INCORPORATION (SEC. 14):
[Link] of corporation;
2. purpose/s, indicating the primary and secondary purposes;
3. place of principal office;
4. duration;
5. names, citizenship and residences of incorporators;
6. number, names, citizenship and residences of directors;
7. if stock corporation, amount of capital stock, number of shares and in case of par
value stock corporations, the par value of each share;
8. names, residences, number of shares and amounts of subscription of subscribers
which shall not be less than 25% of ACS;
9. names, residences, and amount paid by each subscriber on their subscription,
which shall not be less than 25% of total subscription;
10. name of treasurer elected by subscribers; and
11. if the corporation engages in a nationalized industry, a statement that no transfer
of stock will be allowed if it will reduce the stock ownership of Filipinos to a
percentage below the required legal minimum.
MANAGEMENT CONTRACT
one entered into between two corporations whereby
one corporation undertakes to manage all or
substantially all of the business of the other corporation
for certain period of time, whether such be a service
contract, operating agreement or otherwise.
ELEMENTs of VALID BY-
LAWS:
1. Must not be contrary to existing law nor inconsistent with the Code, else they have no binding effect;
2. Must not be contrary to morals and public policy – State will interfere if it is so;
3. Must not impair contract obligations –Art III Sec 10,1987 Constitution
4. Must be general and uniform – they must affect all alike, and operate equally as to all persons or matters
standing in equal status or circumstances and without any unreasonable discrimination as to any particular
person or thing of the class;
5. Must be consistent with the charter or articles of incorporation – “charter” is used here in its broadest
sense without regard to whether the statutory right to be a corporation is obtained by special act or under
general statutes;
6. Must be reasonable, not arbitrary or oppressive . Reasonableness depends upon:
a. Facts and circumstances of the case
b. Nature, Purpose, Object of the corporation
c. Whether or not it is within the corporation’s power of adoption
d. The relation which the person raising the question sustains to the corporation, i.e. whether he is a
stockholder or member or stranger to the corporation.
• Thus a by-law may be reasonable as to the corporation and as to the third persons contracting
subsequently to its adoption with the corporation, and yet be invalid as to third persons sustaining at no
time of its adoption, contractual relations with the corporation
• If stockholders alone are affected, only they can attack.
BINDING EFFECTs of BY-LAWS:
as to MEMBERS and as to THIRD PERSONS
CORPORATION
 They have the same force and  Strangers are not bound to know
effect as the provisions of the the by-laws which are merely
charter and articles of provisions for the government of a
incorporation. They have the force corporation and notice to them will
of contract between the members not be presumed.
themselves.
 They are binding only upon the
RATIONALE: by-laws have no
corporation adopting them and on
extra-corporate force and are
its members and those having
not in the nature of legislative
direction, management and control
enactments so far as third
of its affairs.
persons are concerned.
WHAT CANNOT BE AMENDED IN THE
ARTICLES OF INCORPORATION
Those matters referring to facts existing as of the date of the
incorporation such as:
1. names of incorporators;
2. names of original subscribers to the capital stock of the
corporation and their subscribed and paid up capital;
3. treasurer elected by the original subscribers;
4. members who contributed to the initial capital of a non-
stock corporation;
5. date and place of execution of the articles of incorporation;
6. witnesses to and acknowledgment of the articles.
DISTINCTIONs:
INCORPORATORS CORPORATORS

 Signatory to articles.  Stockholder of stock

 Do not cease to be such. corporation or member of non-
 Number is limited to 5-15. stock corporation.
 Must have contractual  Cease to be such if they are no
capacity. longer stockholders.
 No restriction as number.
 May be such through a
guardian
NUMBER and QUALIFICATION of
INCORPORATORs: (Sec. 10)
1. natural person;
2. not less than 5 but not more than 15;
3. of legal age;
4. majority must be resident of the Philippines; and
5. each must own or subscribe to at least one share.
LIMITs on the USE OF CORPORATE
NAME
1. Names which are identical, deceptively or confusingly similar to
that of any existing corporation;
2. a name already protected by law;
3. a name which is patently deceptive, confusing or contrary to
existing laws.
DISTINCTIONs:
ARTICLES OF INCORPORATION BY-LAWS
 It is essentially a contract between the  It is more of a rule for the internal
corporation and the stockholders/ government of the corporation but has
members; between the stockholders/ the force of a contract between the
member inter se, and between the corporation and the stockholders/
corporation and the State; hence must members, and between the stockholders
be notarized themselves; and members;
 It is executed before incorporation.  It is usually executed after the
 It is a condition precedent in the incorporation although Sec. 46 allows
acquisition of corporate existence; simultaneous filling of the two;
 It is amended by a majority of the  It is a condition subsequent;
directors/ trustees and stockholders  It may be amended by a majority vote of
representing 2/3 of the outstanding the BOD and majority vote of
capital stock, or 2/3 of the members in outstanding capital stock or a majority of
case of non-stock corporations. the member in non-stock corporation.
 Power to amend/repeal articles cannot  Power to amend or repeal by-laws or
be delegated by the stockholders/ adopt new by-laws may be delegated by
members to the board of directors/ the 2/3 of the outstanding capital stock
trustees. or 2/3 of the members in the case of
CONTENTS OF ARTICLES OF INCORPORATION (SEC. 14):
[Link] of corporation;
[Link]/s, indicating the primary and secondary purposes;
[Link] of principal office;
[Link];
[Link], citizenship and residences of incorporators;
[Link], names, citizenship and residences of directors;
[Link] stock corporation, amount of capital stock, number of shares and in
case of par value stock corporations, the par value of each share;
[Link], residences, number of shares and amounts of subscription of
subscribers which shall not be less than 25% of ACS;
[Link], residences, and amount paid by each subscriber on their
subscription, which shall not be less than 25% of total subscription;
[Link] of treasurer elected by subscribers; and
if the corporation engages in a nationalized industry, a statement that
11.
no transfer of stock will be allowed if it will reduce the stock ownership
of Filipinos to a percentage below the required legal minimum.
DISTINCTIONs:
INCORPORATORS CORPORATORS
Signatory to articles. Stockholder of stock corporation or
Do not cease to be such. member of non-stock corporation.
Number is limited to 5-15. Cease to be such if they are no longer
Must have contractual capacity. stockholders.
No restriction as number.
May be such through a guardian
ADVANTAGES
1. enjoys perpetual succession under corporate name and in an artificial form
2. can take and grant property
3. can contract obligations
4. can sue and be sued in its corporate name as a juridical person
5. capacity to receive and enjoy common grants of privileges and immunities
6. no personal liability beyond value of their shares
 DOCTRINE OF SEPARATE
PERSONALITY
a corporation has a personality separate and
distinct from that of its stockholders or
members.
INSTRUMENTALITY RULE
where one corporation is so organized and controlled and its
affairs are conducted so that it is in fact, a mere instrumentality or
adjunct of the other, the fiction of the corporate entity of the
“instrumentality” may be disregarded. The control necessary to
invoke the rule is not mere majority or even complete stock
control but such domination of finances, policies, practices that
the controlled corporation has, so to speak, no separate mind, will
or existence of its own, and is, but a conduit for its principal.
PIERCING DOCTRINE OF THE VEIL OF CORPORATE
FICTION
- allows the state to disregard for certain justifiable reasons
the fiction of juridical personality for the corporation,
separate and distinct from the persons composing it.
FRAUD Cases ALTER EGO Cases EQUITY Cases

when a corporation is when the corporate entity is when piercing the corporate
used as a cloak to cover merely a farce since the fiction is necessary to achieve
fraud, or to do wrong corporation is an alter ego, justice or equity
business conduit or
instrumentality of a person or
another corporation
 FRANCHISES
PRIMARY SECONDARY
the franchise to exist as a right or privilege conferred upon
corporation existing corporation, such as to
use the streets of a municipality
to lay pipes or tracks, or operate
a messenger and express
delivery service.
 as to ORGANIZERs
CLASSES: PRIVATE– by private persons alone/with the
PUBLIC– by State only State.
as to FUNCTIONs
PUBLIC– governmental and other PRIVATE– usually for profit-making functions
functions
as to GOVERNING LAWs
PUBLIC– Special Laws PRIVATE-Law on Private Corporations
as to LEGAL STATUS
DE JURE corporation – corporation DE FACTO – a corporation where there exists
organized in accordance with a flaw in its incorporation (Sec. 20). Its
requirements of law existence cannot be inquired collaterally.
Such inquiry may be made by the Solicitor
General in a quo warranto proceeding (Sec.
20).
 as to EXISTENCE OF SHARES OF STOCK

Stock corporation – a corporation in Non-stock corporation – not issue stocks and

which capital stock is divided into shares not distribute dividends to their members,
and is authorized to distribute to holders for public good and welfare.
thereof of such shares dividends or
allotments of the surplus profits on the
basis of the shares held. (Sec. 3).
as to RELATIONSHIP OF MANAGEMENT AND CONTROL
Holding Corporation - it is one which controls
another as a subsidiary by the power to
elect management. It is one which holds
stocks in other companies for purposes of
control rather than for mere investment. It
has a passive portfolio merely holding
securities for control and management, as
distinguished from an active investment
policy which has an active portfolio buying
and selling securities.
 as to place OF INCORPORATION
DOMESTIC FOREIGN
corporation formed, a corporation formed , organized
organized or existing under or existing under any laws other
laws than those of the Philippines and
whose laws allow Filipino citizens
and corporation to do business in
its own country or state (Section
123).
OTHER corporations:
CLOSE SPECIAL
EDUCATIONAL
RELIGIOUS
a. Religious Societies
b. Corporation Sole
ACQUIRED ASSET CORPORATION
(a) organized under general corporation law under private ownership where at
least a majority of the shares of stock of which were conveyed to a government
corporation in satisfaction of a debt incurred with a government financial
institution, whether by foreclosure or otherwise; or
(b) a subsidiary corporation of a government corporation organized exclusively to
own and manage, or lease or operate specific physical assets acquired by a
government financial institution in satisfaction of debts incurred therewith (PD
2029, Sec. 3 c).
 KINDs of SUBSIDIARIES
WHOLLY-OWNED MAJORITY-OWNED AFFILIATES PARENT and SUBSIDIARY
Where one where one corporation company which is separate entities with power
corporation holds owns 51%-94% of the subject to common to contract with each other.
95% to 100% of the capital stock of control of a mother The BOD of the parent
capital stock of another corporation. holding company company determines its
another corporation. and operated as representatives to attend
part of the system. and vote in the stockholder’s
meeting of its subsidiary.
The stockholders of the
parent company demand
representation in the board
meetings of its subsidiary.
The BOD of the parent or
holding company has the
prerogative to choose its
nominees in the board of
directors or its subsidiary.
PRE-INCORPORATION SUBSCRIPTION
CONTRACT
subscription of shares of stock of a corporation still
to be formed shall be irrevocable for a period of at
least 6 months from date of subscription, unless:
[Link] of the other subscribers consent to the
revocation;
[Link] incorporation of said corporation fails to
materialize with said period or within a longer period
as may be stipulated in the contract of subscription;
provided that no pre-incorporation subscription may
be revoked after the submission of the articles of
incorporation to the SEC (Sec.61).
MINIMUM CAPITAL STOCK REQUIRED
(SEC. 12)
GENERAL RULE: NO minimum
required for capital stock.
EXCEPT:
DOMESTIC PRIVATE INVESTME SAVINGS FINANCING
INSURANCE DEVELOPMEN NT and LOAN Companies
Corporations T Banks Companies Corporation

P500T capital  CLASS A-P4M paid up at to be fixed Paid up for:

stock; 50%  CLASS B-P2M least P500T by the MM -P2M
subscribed and  CLASS C-P1M Monetary
Cities -P1M
the balance Board but
payable in 12 not less than others-P500T
months. P100T.
UNDERWRITING AGREEMENT
It is an agreement between a corporation
and a third person, termed the
“underwriter”, by which the latter agrees,
for a certain compensation, to take a
stipulated amount of stocks or bonds,
specified in the underwriting agreement, if
such securities are not taken by those to
whom they are first offered.
DISTINCTIONS:
UNDERWRITING AGREEMENT STOCK SUBSCRIPTION
AGREEMENT
 The signers obligate  The obligation of the signer
themselves to take the to the purchasers and to the
shares of stock which cannot public is absolute.
be sold.  There is no commission.
 Underwriters are usually  He becomes a stockholder of
allowed a commission. the company and is liable to
 In pure underwriting pay the amount due on the
agreement, the signer can stock.
refuse to become a
DOCTRINE OF INDIVIDUALITY OF
SUBSCRIPTION
- A subscription is one entire and indivisible
whole contract. It cannot be divided into
portions. (Sec. 64)
VALID CONSIDERATIONS IN SUBSCRIPTION
AGREEMENT: (SEC. 62)
1. Cash;
2. Property;
3. Labor or services actually rendered to the corporation;
4. Prior corporate obligations;
5. Amounts transferred from unrestricted retained
earning to stated capital,
6. Outstanding shares in exchange for stocks in the
event of reclassification or conversion.
NOTE: shares of stock shall not be issued in
exchange for promissory notes or future
services.
CAPITAL STOCK or LEGAL STOCK or
STATED CAPITAL
the amount fixed by the corporate charter to
be subscribed and paid in cash, kind or
property at the organization of the corporation
or afterwards and upon which the corporation
is to conduct its operation.
WAYS OF INCREASING THE CAPITAL
STOCK:
1. by increasing the number of shares and
retaining the par value;
2. by changing the par value of existing
shares without increasing the number of
shares;
3. by increasing the number of shares and
increasing
NOTE: the
the way ofpar value.
increase varies according to
the reason for the increase, and is left to the
sound judgment of the board of directors,
subject to ratification by the stockholders.
 SHARES OF WORKING CIRCULATING
STOCK CAPITAL CAPITAL
interest or right excess of current refers to the total
which owner has in assets over current amount of current
the management of liabilities. assets.
the corporation, and
its surplus profits,
and, on dissolution,
in all of its assets
remaining after the
payment of its debt.
DISTINCTIONS:
CAPITAL STOCK SHARES OF STOCK
 The amount paid in or  The interest or right which
secured to be paid in by the the stockholder has in the
stockholders upon which the management of the
corporation is to conduct its corporation, and its surplus
operation. It is the property profits, and upon dissolution,
of the corporation itself in all of its assets remaining
(monetary value). after payment of corporate
debts. Share of stock belongs
to the individual stockholders
and not to the company.
DISTINCTIONS:
SHARE OF STOCK CERTIFICATE OF STOCK
 unit of interest in a corporation.  evidence of the holder’s ownership
 It is an incorporeal or intangible of the stock and of his right as a
property. shareholder and of his extent
 It may be issued by the specified therein.
corporation even if the  It is concrete and tangible.
subscription is not fully paid.  It may be issued only if the
 Situs is generally the state where subscription is fully paid.
the corporation has its domicile:  The situs may be the place where
a. For purposes of taxation, situs is it is located or at the domicile of
inconsistent with an express the owner even though the
provision of the statute or it is domicile of the owner, except
unjust. when corporation is dominated
b. To register the chattel mortgages elsewhere.
over the shares of stock the status
is the duty/promise in which the