PUBLIC CORPORATION

Definition of public corporation

It is formed or organized for the government of a portion of the State (Corporation Code)

Elements of a municipal corporation

1. A legal creation or incorporation
2. A corporate name by which the artificial personality or legal entity is known and in which all corporate acts are done
3. Inhabitants constituting the population who are invested with the political and corporate powers which are executed through
duly constituted officers and agents
4. A place or territory within which the local civil government and corporate functions are exercised.

Dual nature of municipal corporations

1. Governmental
a. The municipal corporation acts as an agent of the State for the government of the territory and the inhabitants within the
municipal limits
b. It exercises by delegation a part of the sovereignty of the State
2. Private/proprietary
a. It acts in a similar category as a business corporation, performing functions not strictly governmental or political
b. Those exercised for the special benefit and advantage of the community.

*Note: Local Government Code §15. Every LGU created or recognized under this Code is a body politic and corporate endowed with
powers to be exercised by it in conformity with law. As such, it shall exercise powers as a POLITICAL SUBDIVISION of the national
government and as a CORPORATE ENTITY representing the inhabitants of its territory.

Requisites for the Incorporation of a Municipal Corporation

1. Territory
2. Population
3. Charter

Requisites of a De Facto Municipal Corporation

1. A valid law authorizing incorporation
2. An attempt in good faith to organize under it
3. A colorable compliance with the law
4. An assumption of corporate powers

An attack on Legal Existence

A quo warranto proceeding brought by the State is the proper remedy. It should be commenced within 5 years from the time the act
complained of was committed.

Creation of Local Government Units (LGUs)

1. Authority to Create LGUs (§ 6, LGC)

 By law enacted by Congress
Province
City
Municipality
Any other political subdivision (A barangay may also be created by law. See §386)
2. By ordinance passed by Sangguniang Panlalawigan/Panlungsod
For barangay located within its territorial jurisdiction
3. Indicators for creation/conversion
a. Income
b. Population
c. Land Area
4. Plebiscite Requirement
a. It applies to the creation, division, merger, abolition or substantial alteration of boundaries of LGU.
b. Creation etc. should be approve by a majority of the votes cast in a plebiscite called for the purpose in the
political unit or units directly affected.
5. Beginning of Corporate Existence ( §14, LGC)
Corporate existence commences upon the election and qualification of its chief executive and a majority of members of the
Sanggunian unless some other time is fixed by the law or ordinance creating it.