A business organization has always been considered as a form of human relation that plays an important role in our economic scheme. Not only does it provide a wide array of transactions and possibilities that are secured, but also provides many opportunities to create another entity that would have a personality of its own.



The advantages of creating a business organization outweigh the disadvantages of the long and tedious process of forming the same. The only gatekeeper therefore, in fostering a healthy business organization is complying with the rules in forming the same.

A corporation is one form of business organization that creates a completely different entity from those people that forms it. It may be established for the propagation of a business interest or it may be organized for noble, charitable reasons. The former is known as stock corporations, and the latter are more commonly known as non-stock corporations. Both these types of corporations have different requisites of formation. Only upon compliance of these requisites may these types of corporations have a distinct and separate personality of their own.

The formation of a stock corporation usually requires the following:

1. That it must comply with the minimum number of incorporators, or those who are the initial members of the corporation having their name and signature included in the Articles of Incorporation. These incorporators must be owners of at the least one share in the capital stock for them to be validly considered as incorporators.

2. A valid Articles of Incorporation. An Articles of Incorporation actually provides the laws and regulations and the circumstances creating the corporation. It provides the business purpose why the corporation was established. Also, it provides the amount of capital stock and paid-up capital the corporation actually has.

3. Capital stock is another requisite necessary in the formation of a corporation. A corporation must have a financial capital before it starts. Our laws on business organization actually require a minimum amount of capital stock before a corporation can actually be formed.

4. Paid-up capital is another requisite in the formation of a corporation. Paid-up capital, as the term implies, actually includes that amount obtaining from the capital stock which must actually be paid in cash, and money on hand by the corporation before it can be formed.

These are just some of the requisites in forming a corporation. If you need to get the whole picture, hire an expert corporate attorney now.