2014 Mercantile Law, Q5

A corporation organized under the Corporation Code commences to have corporate existence and juridical personality and is deemed incorporated: (1%)
(A) from the date the application for incorporation is filed with the Securities and Exchange Commission (SEC)
(B) from the date the SEC issues a certificate of incorporation under its official seal
(C) thirty (30) days after the date the application for incorporation is filed with the SEC
(D) thirty (30) days after the datethe SEC issues a certificate of incorporation under its official seal

Quick check

When does a private corporation commence to have corporate existence and juridical personality under Section 18 of Republic Act Number 11232?

What is the legal effect of the issuance of a certificate of incorporation by the Securities and Exchange Commission?

Can an entity acquire de jure corporate existence before the Securities and Exchange Commission issues its certificate of incorporation?

Who possesses legal standing to collaterally attack the due incorporation of a de facto corporation in a private civil suit?

Which primary statute governs corporate formation, issuance of certificates of incorporation, and corporate existence in the Philippines?

Learn more about these topics

1. Corporate Existence Commencement
Under Section 18 of the Revised Corporation Code of the Philippines (Republic Act Number 11232), a private corporation organized under the Code commences to have corporate existence and juridical personality only from the date the Securities and Exchange Commission issues the certificate of incorporation under its official seal. Prior to the issuance of the certificate of incorporation, the entity possesses no separate juridical personality in law, cannot acquire rights, and cannot incur binding corporate obligations as a de jure corporation.

2. Certificate of Incorporation
The issuance of the certificate of incorporation by the Securities and Exchange Commission serves as the conclusive legal act that brings a private corporation into entity existence. Unlike ordinary contracts that take effect upon mutual consent, corporate personality is a state-granted privilege created by legislative grant through the Commission's official regulatory act. The official seal on the certificate marks the exact legal moment when the corporation transitions from a pre-incorporation enterprise into a recognized legal person.

3. De Facto Corporation
Under Section 19 of the Revised Corporation Code, where there has been a bona fide attempt to organize a corporation in good faith under the law and an actual exercise of corporate powers, a de facto corporation exists. The due incorporation of any corporation claiming in good faith to be a corporation under this 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, but only by the State.

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The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

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Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026