Mr. Vivencio Romero, Jr.

August 22, 1996 Mr. Vivencio Romero, Jr. Tarlac Power Corporation Tarlac, Tarlac S i r : This refers to your letter dated August 16, 1996 requesting opinion or clarification on whether TARLAC POWER CORPORATION and TARLAC ENTERPRISES INC. are treated as separate and distinct from each other or the same entity taking into consideration that the stockholders of both corporations are essentially the same . It is well-settled in corporate jurisprudence that a corporation has a personality separate and distinct from that of each shareholder. This is a basic attribute or privilege attached to a corporation which gives rise to the fundamental principle in corporation law that under normal conditions, the stockholders of a corporation are not personally liable for corporate obligations beyond their agreed contribution to the corporate capital. Following this corporate principle, in the absence of a finding of fraud or bad faith two or more corporations which are registered separately are to be treated as separate entities despite common ownership and control. Accordingly, the creation of another corporation by the same stockholders does not affect the separate and continuing existence or identity of the other corporation whose stocks they also hold, nor is the situation altered simply because the stockholders, directors and other officers of the two companies are identical. cdlex Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner