Components of a Corporation

  • Corporators – Those who compose a corporation, whether as stockholders or members
  • Incorporators – They are those mentioned in the Articles of Incorporation as originally forming and composing the corporation and who are signatories thereof.
  • Directors and trustees – The Board of Directors is the governing body in a stock corporation while the Board of Trustees is the governing body in a non‐ stock corporation.
  • Corporate officers – they are the officers who are identified as such in the Corporation Code, the Articles of Incorporation, or the By‐laws of the corporation.
  • Stockholders – Owners of shares of stock in a stock corporation.
  • Members – Corporators of a corporation which has no capital stock. They are not owners of shares of stocks, and their membership depends on terms provided in the articles of incorporation or by‐laws (Sec. 91).
  • Promoter – A person who, acting alone or with others, takes initiative in founding and organizing the business or enterprise of the issuer and receives consideration therefor. (Sec. 3.10, R.A. No. 8799, SRC)
  • Subscriber – persons who have agreed to take and pay for original, unissued shares of a corporation formed or to be formed.
  • Underwriter – a person who guarantees on a firm commitment and/or declared best effort basis the distribution and sale of securities of any kind by another.

Who is a promoter?

A person who brings about or cause to bring about the formation and organization of a corporation by: 

  • bringing together the incorporators or the persons interested in the enterprise
  • procuring subscriptions or capital for the corporation and
  • setting in motion the machinery which leads to the incorporation of the corporation itself.

What is the liability of a promoter?

All promoter(s) have joint personal liability for a corporation that was never formed. He remains liable on contracts even after incorporation even though corporation adopts the contract.

Are promoters agents of a corporation?

NO. Promoters are not agents of the corporation before it comes into existence.   Upon incorporation, the practice is for the BOD to pass a resolution ratifying the contracts entered into by the incorporators with the promoter. Then, they become agents of the corporation.