Corporation by estoppel is stated in SEC. 21 of Bilang Pambansa "The Corporation Code of the Philippines" with details as follows:
SEC. 21. Corporation by estoppel. - All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof: Provided, however, That when any such onstensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not be allowed to use as a defense its lack of corporate personality.
One who assumes an obligation to an onstensible corporation as such, cannot resist performance thereof on the ground that there was in fact no corporation.
