Can Congress create a private corporation via law?
Since February 8, 1935, the legislature has not passed even a single piece legislation establishing a private corporation. Which provision of the constitution hinders the passing of such law? (2008 bar examination)
"The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability." (Article XII, Section 16 of the 1987 Constitution)
The power of Congress to create laws is plenary and overarching. The only limitation is the Constitution and this is one of the few limitations. Without this limitation, Congress would be capable of limiting the creation of corporations via the passage of laws. This creates an unfair situation where only those who have influence can create corporations. What is worse is that the wealthiest businessmen can influence Congress into stopping the creation of any other corporation and, since lawmaking is discretionary, those wanting to create cannot go to court and ask for a writ of mandamus.
Laws creating government-owned and/or controlled corporations (GOCCs) are called "charters." They are chartered corporations.
At present, the general law governing the creation of corporation via registration is Batas Pambansa Bilang (BP) 68, also known as the Corporation Code of the Philippines which has been amended many, many times.
"The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability." (Article XII, Section 16 of the 1987 Constitution)
The power of Congress to create laws is plenary and overarching. The only limitation is the Constitution and this is one of the few limitations. Without this limitation, Congress would be capable of limiting the creation of corporations via the passage of laws. This creates an unfair situation where only those who have influence can create corporations. What is worse is that the wealthiest businessmen can influence Congress into stopping the creation of any other corporation and, since lawmaking is discretionary, those wanting to create cannot go to court and ask for a writ of mandamus.
Laws creating government-owned and/or controlled corporations (GOCCs) are called "charters." They are chartered corporations.
At present, the general law governing the creation of corporation via registration is Batas Pambansa Bilang (BP) 68, also known as the Corporation Code of the Philippines which has been amended many, many times.