What is the liability of persons who act as a corporation without proper authority?
All persons who assume to act as a corporation knowing they lack the authority to do so shall be liable as general partners for any resulting debts, liabilities, and damages incurred (SEC. 20, Revised Corporation Code of the Philippines). This imposition of personal liability bypasses the intended shield of corporate personality for unauthorized actors. However, if that ostensible corporation is sued on a transaction it entered into or a tort it committed, it is legally prohibited from using its lack of corporate personality as a defense. Conversely, anyone who assumes an obligation to such an ostensible corporation cannot refuse performance based on the claim that the corporation did not legally exist.
02 November 2025
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Nicolas and De Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com/.
