2. Corporate Personality

Corporate Personality and Its Commencement

Under Section 18 of Republic Act No. 11232, a private corporation commences its corporate existence and juridical personality from the date the Securities and Exchange Commission issues the certificate of incorporation under its official seal¹. Thereupon, the incorporators, stockholders or members, and their successors constitute a body corporate under the name stated in the articles of incorporation for the period of time specified therein, unless extended or sooner dissolved in accordance with law¹.

Where corporate authority is lacking, Section 20 of Republic Act No. 11232 provides that all persons who assume to act as a corporation knowing it to be without the authority to do so shall be liable as general partners for all debts, liabilities, and damages incurred or arising as a result thereof². When such ostensible corporation is sued on any transaction entered into or any tort committed by it, it is precluded from using its lack of corporate personality as a defense; conversely, anyone who assumes an obligation to an ostensible corporation cannot resist performance on the ground that there was in fact no corporation².

Notwithstanding a corporation's distinct existence, corporate officers may face personal solidary liability if they expressly bind themselves by agreement, as sustained in Spouses Fernandez v. Smart Communications, Inc., G.R. No. 212885, 17 July 2019, where the Court held that an undertaking expressly stipulating solidary liability sufficiently stated a cause of action against Nolasco for the corporate cellphone charges³. Under Rule 8, Section 12 of the 2019 Amendments to the Rules of Civil Procedure, failure to state a cause of action is generally raised as an affirmative defense in the answer. In resolving that defense, the court hypothetically admits the ultimate factual allegations in the complaint to determine whether it can grant the relief demanded³. Spouses Fernandez applied this test to a motion to dismiss under the rules then in force.