i. De Facto Corporation

As To Legal Status

• De jure corporation
• Corporation organized in accordance with requirements of law;
• Every corporation is deemed to be a de jure until proven otherwise
• De facto corporation (Sec. 19)¹
• A corporation claiming in good faith to be a corporation under the Revised Corporation Code but where there exists a flaw in its incorporation or it falls short of the requirements provided by law.
• It is the result of an attempt to incorporate under an existing law coupled with the exercise of corporate powers.
• A de facto corporation will incur the same obligations; have the same powers and rights as a de jure corporation.
• The due incorporation of any corporation claiming in good faith to be a corporation under the Revised Corporation Code, and its right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such corporation may be a party.
• Under the Rules of Court Rule 66², inquiry must be done by the Solicitor General in a quo warranto proceeding where the main issue is the right to exist as a corporation

Elements of a de facto corporation

• Valid law under which the corporation could be incorporated;
• Bona fide or colorable attempt to incorporate under that law; and
• Actual exercise of corporate powers. (Arnold Hall v. Piccio, G.R. No. L-2598)³

Note: A corporation which has failed to file its bylaws within the prescribed period does not ipso facto lose its powers as such (Sawadjaan v. Court of Appeals, G.R. No. 141735, 8 June 2005)⁴.