philippine special commercial laws
TRANSCRIPT
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Batas Pambansa Bilang 68
THE CORPORATION CODE OF THE
PHILIPPINES
Be it enacted by the Batasang Pambansa in sessionassembled:
TITLE I
GENERAL PROVISIONS
DEFINITIONS AND CLASSIFICATIONS
Sectin !" Title of the Code. – This Code shall be
known as "The Corporation Code of the Philippines."
(n)
Sectin #" Corporation defined. – A corporation is anartificial being created by operation of law, haing
the right of s!ccession and the powers, attrib!tes and properties epressly a!thori#ed by law or incident toits eistence. ($)
Sectin $" Classes of corporations. – Corporations
for%ed or organi#ed !nder this Code %ay be stock or
non&stock corporations. Corporations which haecapital stock diided into shares and are a!thori#ed to
distrib!te to the holders of s!ch shares diidends or
allot%ents of the s!rpl!s profits on the basis of theshares held are stock corporations. All other
corporations are non&stock corporations. ('a)
Sectin %" Corporations created by special laws or
charters. – Corporations created by special laws orcharters shall be goerned pri%arily by the proisions
of the special law or charter creating the% or
applicable to the%, s!pple%ented by the proisionsof this Code, insofar as they are applicable. (n)
Sectin &" Corporators and incorporators,
stockholders and members. – Corporators are those
who co%pose a corporation, whether as stockholdersor as %e%bers. ncorporators are those stockholders
or %e%bers %entioned in the articles of incorporation
as originally for%ing and co%posing the corporation
and who are signatories thereof.
Corporators in a stock corporation are called
stockholders or shareholders. Corporators in a non&
stock corporation are called %e%bers. (a)
Sectin 6" Classification of shares. – The shares of
stock of stock corporations %ay be diided intoclasses or series of shares, or both, any of which
classes or series of shares %ay hae s!ch rights,
priileges or restrictions as %ay be stated in the
articles of incorporation* Proided, That no share%ay be depried of oting rights ecept those
classified and iss!ed as "preferred" or "redee%able"shares, !nless otherwise proided in this Code*Proided, f!rther, That there shall always be a class
or series of shares which hae co%plete oting rights
Any or all of the shares or series of shares %ay hae a par al!e or hae no par al!e as %ay be proided for
in the articles of incorporation* Proided, howeer,
That banks, tr!st co%panies, ins!rance co%panies,
p!blic !tilities, and b!ilding and loan associationsshall not be per%itted to iss!e no&par al!e shares of
stock.
Preferred shares of stock iss!ed by any corporation
%ay be gien preference in the distrib!tion of theassets of the corporation in case of li+!idation and in
the distrib!tion of diidends, or s!ch other
preferences as %ay be stated in the articles ofincorporation which are not iolatie of the
proisions of this Code* Proided, That preferred
shares of stock %ay be iss!ed only with a stated paral!e. The board of directors, where a!thori#ed in the
articles of incorporation, %ay fi the ter%s and
conditions of preferred shares of stock or any seriesthereof* Proided, That s!ch ter%s and conditions
shall be effectie !pon the filing of a certificate
thereof with the ec!rities and -change
Co%%ission.
hares of capital stock iss!ed witho!t par al!e shall
be dee%ed f!lly paid and non&assessable and the
holder of s!ch shares shall not be liable to the
corporation or to its creditors in respect thereto*Proided That shares witho!t par al!e %ay not be
iss!ed for a consideration less than the al!e of fie(P/.00) pesos per share* Proided, f!rther, That theentire consideration receied by the corporation for
its no&par al!e shares shall be treated as capital and
shall not be aailable for distrib!tion as diidends.
A corporation %ay, f!rther%ore, classify its sharesfor the p!rpose of ins!ring co%pliance with
constit!tional or legal re+!ire%ents.
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-cept as otherwise proided in the articles of
incorporation and stated in the certificate of stock,each share shall be e+!al in all respects to eery other
share.
here the articles of incorporation proide for non&
oting shares in the cases allowed by this Code, the
holders of s!ch shares shall neertheless be entitledto ote on the following %atters*
1. A%end%ent of the articles of incorporation
$. Adoption and a%end%ent of by&laws
'. ale, lease, echange, %ortgage, pledge orother disposition of all or s!bstantially all of the
corporate property
. nc!rring, creating or increasing bondedindebtedness
/. ncrease or decrease of capital stock
2. 3erger or consolidation of the corporation
with another corporation or other corporations
4. nest%ent of corporate f!nds in another
corporation or b!siness in accordance with thisCode and
5. 6issol!tion of the corporation.
-cept as proided in the i%%ediately preceding
paragraph, the ote necessary to approe a partic!lar
corporate act as proided in this Code shall bedee%ed to refer only to stocks with oting rights. (/a)
Sectin '" Founders’ shares. – 7o!nders8 shares
classified as s!ch in the articles of incorporation %ay be gien certain rights and priileges not en9oyed by
the owners of other stocks, proided that where theecl!sie right to ote and be oted for in the election
of directors is granted, it %!st be for a li%ited periodnot to eceed fie (/) years s!b9ect to the approal of
the ec!rities and -change Co%%ission. The fie&
year period shall co%%ence fro% the date of theaforesaid approal by the ec!rities and -change
Co%%ission. (n)
Sectin 8" edeemable shares. – :edee%able shares
%ay be iss!ed by the corporation when epressly so
proided in the articles of incorporation. They %ay be p!rchased or taken !p by the corporation !pon the
epiration of a fied period, regardless of the
eistence of !nrestricted retained earnings in the
books of the corporation, and !pon s!ch other ter%sand conditions as %ay be stated in the articles of
incorporation, which ter%s and conditions %!st also be stated in the certificate of stock representing saidshares. (n)
Sectin (" Treasury shares. – Treas!ry shares are
shares of stock which hae been iss!ed and f!lly paid
for, b!t s!bse+!ently reac+!ired by the iss!ingcorporation by p!rchase, rede%ption, donation or
thro!gh so%e other lawf!l %eans. !ch shares %ay
again be disposed of for a reasonable price fied bythe board of directors. (n)
TITLE II
INCORPORATION AND ORGANI)ATION OF
PRIVATE CORPORATIONS
Sectin !*" !umber and "ualifications ofincorporators. – Any n!%ber of nat!ral persons not
less than fie (/) b!t not %ore than fifteen (1/), all of
legal age and a %a9ority of who% are residents of thePhilippines, %ay for% a priate corporation for any
lawf!l p!rpose or p!rposes. -ach of the incorporators
of s stock corporation %!st own or be a s!bscriber toat least one (1) share of the capital stock of the
corporation. (2a)
Sectin !!" Corporate term. – A corporation shall
eist for a period not eceeding fifty (/0) years fro%the date of incorporation !nless sooner dissoled or
!nless said period is etended. The corporate ter% as
originally stated in the articles of incorporation %ay be etended for periods not eceeding fifty (/0) years
in any single instance by an a%end%ent of the
articles of incorporation, in accordance with thisCode Proided, That no etension can be %adeearlier than fie (/) years prior to the original or
s!bse+!ent epiry date(s) !nless there are 9!stifiable
reasons for an earlier etension as %ay be deter%ined by the ec!rities and -change Co%%ission. (2)
Sectin !#" #inimum capital stock re"uired of stock
corporations. – tock corporations incorporated
!nder this Code shall not be re+!ired to hae any
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%ini%!% a!thori#ed capital stock ecept as
otherwise specifically proided for by special law,and s!b9ect to the proisions of the following section.
Sectin !$" $mount of capital stock to be subscribed
and paid for the purposes of incorporation. – At least
twenty&fie percent ($/;) of the a!thori#ed capital
stock as stated in the articles of incorporation %!st bes!bscribed at the ti%e of incorporation, and at least
twenty&fie ($/;) per cent of the total s!bscription
%!st be paid !pon s!bscription, the balance to be payable on a date or dates fied in the contract of
s!bscription witho!t need of call, or in the absence of
a fied date or dates, !pon call for pay%ent by the board of directors* Proided, howeer, That in no
case shall the paid&!p capital be less than fie
Tho!sand (P/,000.00) pesos. (n)
Sectin !%" Contents of the articles of incorporation. – All corporations organi#ed !nder this code shall file
with the ec!rities and -change Co%%ission
articles of incorporation in any of the officiallang!ages d!ly signed and acknowledged by all of
the incorporators, containing s!bstantially the
following %atters, ecept as otherwise prescribed bythis Code or by special law*
1. The na%e of the corporation
$. The specific p!rpose or p!rposes for which thecorporation is being incorporated. here a
corporation has %ore than one stated p!rpose,the articles of incorporation shall state which is
the pri%ary p!rpose and which is
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(a%e of Corporation)
@ A?? 3- DE TF-- P:--T*
The !ndersigned incorporators, all of legal age and a
%a9ority of who% are residents of the Philippines,hae this day ol!ntarily agreed to for% a (stock)
(non&stock) corporation !nder the laws of the:ep!blic of the Philippines
A6 - F-:-DE C-:T7E*
7:T* That the na%e of said corporation shall be
"BBBBBBBBBBBBBBBBBBBBB, C. or
C@:P@:AT@"
-C@6* That the p!rpose or p!rposes for whichs!ch corporation is incorporated are* (f there is %ore
than one p!rpose, indicate pri%ary and secondary p!rposes)
TF:6* That the principal office of the corporation islocated in the City:TF* That the ter% for which said corporation isto eist is BBBBBBBBBBBBB years fro% and after the
date of iss!ance of the certificate of incorporation
77TF* That the na%es, nationalities and residencesof the incorporators of the corporation are as follows*
AT@A?TE :-6-C-
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
GTF* That the n!%ber of directors or tr!stees of
the corporation shall be BBBBBBB and the na%es,
nationalities and residences of the first directors ortr!stees of the corporation are as follows*
AT@A?TE :-6-C-
BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBB
BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBB
BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBB
BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBB
BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBB
-H-TF* That the a!thori#ed capital stock of the
corporation is BBBBBBBBBBBBBBBBBBBBBB(PBBBBBBBBBBB) P-@ in lawf!l %oney of the
Philippines, diided into BBBBBBBBBB shares with the
par al!e of BBBBBBBBBBBBBBBBBBBB
(PBBBBBBBBBBBBB) Pesos per share.
(n case all the share are witho!t par al!e)*
That the capital stock of the corporation is
BBBBBBBBBBBBBB shares witho!t par al!e. (n case
so%e shares hae par al!e and so%e are witho!t paral!e)* That the capital stock of said corporation
consists of BBBBBBBBBBBBB shares of which
BBBBBBBBBBBBBB shares are of the par al!e of BBBBBBBBBBBBBBBBB (PBBBBBBBBBBBB) P-@ each
and of which BBBBBBBBBBBBBBBBB shares are witho!t
par al!e.
-IFTF* That at least twenty fie ($/;) per cent ofthe a!thori#ed capital stock aboe stated has been
s!bscribed as follows*
ationality o. of hares
!bscribed
A%
!
BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB BB
BBBBBBBBBBBBBBBBB BB
BB BB
BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB
BB
BBBBBBBBBBBBBBBBB
BB
BB
BB
BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB
BB
BBBBBBBBBBBBBBBBB
BB
BB
BB
BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB BB
BBBBBBBBBBBBBBBBB BB
BB BB
BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB
BB
BBBBBBBBBBBBBBBBB
BB
BB
BB
BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB
BB
BBBBBBBBBBBBBBBBB
BB
BB
BB
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TF* That the aboe&na%ed s!bscribers hae paid
at least twenty&fie ($/;) percent of the totals!bscription as follows*
A%o!nt !bscribedTotal
Paid&n
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB
(3odify os. 5 and = if shares are with no par al!e.
n case the corporation is non&stock, os. 4, 5 and =of the aboe articles %ay be %odified accordingly,
and it is s!fficient if the articles state the a%o!nt ofcapital or %oney contrib!ted or donated by specified
persons, stating the na%es, nationalities andresidences of the contrib!tors or donors and the
respectie a%o!nt gien by each.)
T-TF* That BBBBBBBBBBBBBBBBBBBBB has beenelected by the s!bscribers as Treas!rer of the
Corporation to act as s!ch !ntil his s!ccessor is d!ly
elected and +!alified in accordance with the by&laws,
and that as s!ch Treas!rer, he has been a!thori#ed to
receie for and in the na%e and for the benefit of thecorporation, all s!bscription (or fees) or contrib!tions
or donations paid or gien by the s!bscribers or%e%bers.
-?-H-TF* (Corporations which will engage in any
b!siness or actiity resered for 7ilipino citi#ens
shall proide the following)*
"o transfer of stock or interest which shall red!ce
the ownership of 7ilipino citi#ens to less than the
re+!ired percentage of the capital stock as proided by eisting laws shall be allowed or per%itted to berecorded in the proper books of the corporation and
this restriction shall be indicated in all stock
certificates iss!ed by the corporation."
T- F-:-@7, we hae here!nto signed
these Articles of ncorporation, this BBBBBBBBBB day
of BBBBBBBBBBBBBBBB, 1= BBBBBB in the
City:-:8 A776AHT
:-P>D?C @7 TF- PF?PP-)
CTECPA?TE @7 ) ..
P:@HC- @7 )
, BBBBBBBBBBBBBBBBBBBB, being d!ly sworn, depose
and say*
That hae been elected by the s!bscribers of the
corporation as Treas!rer thereof, to act as s!ch !ntil
%y s!ccessor has been d!ly elected and +!alified inaccordance with the by&laws of the corporation, and
that as s!ch Treas!rer, hereby certify !nder oath that
at least $/; of the a!thori#ed capital stock of the
corporation has been s!bscribed and at least $/; ofthe total s!bscription has been paid, and receied by
%e, in cash or property, in the a%o!nt of not less than
P/,000.00, in accordance with the Corporation Code.
BBBBBBBBBBBBBBBBBBBB
(ignat!re of Treas!rer)
>DC:D-6 A6 @: to before %e, a
otary P!blic, for and in the City
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BBBBBBBBBBBBBBBBBBBBBBB on BBBBBBBBBBBB, 1=
BBBBBB
@TA:E P>D?C
3y co%%ission epires on BBBBBBBBB, 1= BBBBB
6oc. o. BBBBBBBBB
Page o. BBBBBBBBB
Dook o. BBBBBBBB
eries of 1=BBBB (4a)
Sectin !6" $mendment of $rticles of %ncorporation.
– >nless otherwise prescribed by this Code or byspecial law, and for legiti%ate p!rposes, any
proision or %atter stated in the articles ofincorporation %ay be a%ended by a %a9ority ote ofthe board of directors or tr!stees and the ote or
written assent of the stockholders representing at
least two&thirds ($
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Sectin !(" Commencement of corporate e)istence. –
A priate corporation for%ed or organi#ed !nder thisCode co%%ences to hae corporate eistence and
9!ridical personality and is dee%ed incorporated fro%
the date the ec!rities and -change Co%%ission
iss!es a certificate of incorporation !nder its officialseal and there!pon the incorporators,
stockholdersnless otherwise proided in this Code, the corporate
powers of all corporations for%ed !nder this Code
shall be eercised, all b!siness cond!cted and all property of s!ch corporations controlled and held by
the board of directors or tr!stees to be elected fro%a%ong the holders of stocks, or where there is nostock, fro% a%ong the %e%bers of the corporation,
who shall hold office for one (1) year !ntil their
s!ccessors are elected and +!alified. ($5a)
-ery director %!st own at least one (1) share of thecapital stock of the corporation of which he is a
director, which share shall stand in his na%e on the
books of the corporation. Any director who ceases to be the owner of at least one (1) share of the capital
stock of the corporation of which he is a director shallthereby cease to be a director. Tr!stees of non&stock
corporations %!st be %e%bers thereof. A %a9ority ofthe directors or tr!stees of all corporations organi#ed
!nder this Code %!st be residents of the Philippines.
Sectin #%" +lection of directors or trustees. – At all
elections of directors or tr!stees, there %!st be present, either in person or by representatie
a!thori#ed to act by written proy, the owners of a
%a9ority of the o!tstanding capital stock, or if there
be no capital stock, a %a9ority of the %e%bersentitled to ote. The election %!st be by ballot if
re+!ested by any oting stockholder or %e%ber. nstock corporations, eery stockholder entitled to ote
shall hae the right to ote in person or by proy the
n!%ber of shares of stock standing, at the ti%e fiedin the by&laws, in his own na%e on the stock books of
the corporation, or where the by&laws are silent, at the
ti%e of the election and said stockholder %ay ote
s!ch n!%ber of shares for as %any persons as there
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are directors to be elected or he %ay c!%!late said
shares and gie one candidate as %any otes as then!%ber of directors to be elected %!ltiplied by the
n!%ber of his shares shall e+!al, or he %ay distrib!te
the% on the sa%e principle a%ong as %any
candidates as he shall see fit* Proided, That the totaln!%ber of otes cast by hi% shall not eceed the
n!%ber of shares owned by hi% as shown in the books of the corporation %!ltiplied by the wholen!%ber of directors to be elected* Proided, howeer,
That no delin+!ent stock shall be oted. >nless
otherwise proided in the articles of incorporation orin the by&laws, %e%bers of corporations which hae
no capital stock %ay cast as %any otes as there are
tr!stees to be elected b!t %ay not cast %ore than one
ote for one candidate. Candidates receiing thehighest n!%ber of otes shall be declared elected.
Any %eeting of the stockholders or %e%bers called
for an election %ay ad9o!rn fro% day to day or fro%ti%e to ti%e b!t not sine die or indefinitely if, for any
reason, no election is held, or if there are not present
or represented by proy, at the %eeting, the owners of a %a9ority of the o!tstanding capital stock, or if there
be no capital stock, a %a9ority of the %e%bers
entitled to ote. ('1a)
Sectin #&" Corporate officers, "uorum. –%%ediately after their election, the directors of a
corporation %!st for%ally organi#e by the election of
a president, who shall be a director, a treas!rer who%ay or %ay not be a director, a secretary who shall be
a resident and citi#en of the Philippines, and s!ch
other officers as %ay be proided for in the by&laws.
Any two ($) or %ore positions %ay be heldconc!rrently by the sa%e person, ecept that no one
shall act as president and secretary or as president and
treas!rer at the sa%e ti%e.
The directors or tr!stees and officers to be electedshall perfor% the d!ties en9oined on the% by law and
the by&laws of the corporation. >nless the articles ofincorporation or the by&laws proide for a greater%a9ority, a %a9ority of the n!%ber of directors or
tr!stees as fied in the articles of incorporation shall
constit!te a +!or!% for the transaction of corporate b!siness, and eery decision of at least a %a9ority of
the directors or tr!stees present at a %eeting at which
there is a +!or!% shall be alid as a corporate act,ecept for the election of officers which shall re+!ire
the ote of a %a9ority of all the %e%bers of the
board.
6irectors or tr!stees cannot attend or ote by proy a
board %eetings. (''a)
Sectin #6" eport of election of directors, trusteesand officers. – ithin thirty ('0) days after the
election of the directors, tr!stees and officers of thecorporation, the secretary, or any other officer of thecorporation, shall s!b%it to the ec!rities and
-change Co%%ission, the na%es, nationalities and
residences of the directors, tr!stees, and officerselected. ho!ld a director, tr!stee or officer die,
resign or in any %anner cease to hold office, his heirs
in case of his death, the secretary, or any other officerof the corporation, or the director, tr!stee or officer
hi%self, shall i%%ediately report s!ch fact to the
ec!rities and -change Co%%ission. (n)
Sectin #'" *is"ualification of directors, trustees orofficers. – o person conicted by final 9!dg%ent of
an offense p!nishable by i%prison%ent for a period
eceeding si (2) years, or a iolation of this Code
co%%itted within fie (/) years prior to the date ofhis election or appoint%ent, shall +!alify as a
director, tr!stee or officer of any corporation. (n)
Sectin #8" emo(al of directors or trustees. – Anydirector or tr!stee of a corporation %ay be re%oed
fro% office by a ote of the stockholders holding orrepresenting at least two&thirds ($
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=
is no secretary, the call for the %eeting %ay be
addressed directly to the stockholders or %e%bers byany stockholder or %e%ber of the corporation signing
the de%and. otice of the ti%e and place of s!ch
%eeting, as well as of the intention to propose s!ch
re%oal, %!st be gien by p!blication or by writtennotice prescribed in this Code. :e%oal %ay be with
or witho!t ca!se* Proided, That re%oal witho!tca!se %ay not be !sed to deprie %inoritystockholders or %e%bers of the right of
representation to which they %ay be entitled !nder
ection $ of this Code. (n)
Sectin #(" -acancies in the office of director ortrustee. – Any acancy occ!rring in the board of
directors or tr!stees other than by re%oal by the
stockholders or %e%bers or by epiration of ter%,%ay be filled by the ote of at least a %a9ority of the
re%aining directors or tr!stees, if still constit!ting a+!or!% otherwise, said acancies %!st be filled by
the stockholders in a reg!lar or special %eeting calledfor that p!rpose. A director or tr!stee so elected to fill
a acancy shall be elected only or the !nepired ter%
of his predecessor in office.
Any directorship or tr!steeship to be filled by reason
of an increase in the n!%ber of directors or tr!stees
shall be filled only by an election at a reg!lar or at a
special %eeting of stockholders or %e%bers d!ly
called for the p!rpose, or in the sa%e %eetinga!thori#ing the increase of directors or tr!stees if so
stated in the notice of the %eeting. (n)
Sectin $*" Compensation of directors. – n the
absence of any proision in the by&laws fiing their
co%pensation, the directors shall not receie any
co%pensation, as s!ch directors, ecept forreasonable per die%s* Proided, howeer, That any
s!ch co%pensation other than per die%s %ay be
granted to directors by the ote of the stockholders
representing at least a %a9ority of the o!tstandingcapital stock at a reg!lar or special stockholders8
%eeting. n no case shall the total yearlyco%pensation of directors, as s!ch directors, eceed
ten (10;) percent of the net inco%e before inco%e
ta of the corporation d!ring the preceding year. (n)
Sectin $!" iability of directors, trustees orofficers.& 6irectors or tr!stees who willf!lly and
knowingly ote for or assent to patently !nlawf!l acts
of the corporation or who are g!ilty of gross
negligence or bad faith in directing the affairs of thecorporation or ac+!ire any personal or pec!niary
interest in conflict with their d!ty as s!ch directors or
tr!stees shall be liable 9ointly and seerally for all
da%ages res!lting therefro% s!ffered by thecorporation, its stockholders or %e%bers and other
persons.
hen a director, tr!stee or officer atte%pts to ac+!ire
or ac+!ire, in iolation of his d!ty, any interestaderse to the corporation in respect of any %atter
which has been reposed in hi% in confidence, as to
which e+!ity i%poses a disability !pon hi% to deal inhis own behalf, he shall be liable as a tr!stee for the
corporation and %!st acco!nt for the profits which
otherwise wo!ld hae accr!ed to the corporation. (n)
Sectin $#" *ealings of directors, trustees or officerswith the corporation. – A contract of the corporation
with one or %ore of its directors or tr!stees or
officers is oidable, at the option of s!ch corporation,!nless all the following conditions are present*
1. That the presence of s!ch director or tr!stee in
the board %eeting in which the contract was
approed was not necessary to constit!te a+!or!% for s!ch %eeting
$. That the ote of s!ch director or tr!stee wasnot necessary for the approal of the contract
'. That the contract is fair and reasonable !nderthe circ!%stances and
. That in case of an officer, the contract has
been preio!sly a!thori#ed by the board of
directors.
here any of the first two conditions set forth in
the preceding paragraph is absent, in the case ofa contract with a director or tr!stee, s!ch contract
%ay be ratified by the ote of the stockholdersrepresenting at least two&thirds ($
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!nder the circ!%stances. (n)
Sectin $$" Contracts between corporations with
interlocking directors. – -cept in cases of fra!d, and proided the contract is fair and reasonable !nder the
circ!%stances, a contract between two or %ore
corporations haing interlocking directors shall not
be inalidated on that gro!nd alone* Proided, That if the interest of the interlocking director in one
corporation is s!bstantial and his interest in the other
corporation or corporations is %erely no%inal, heshall be s!b9ect to the proisions of the preceding
section insofar as the latter corporation or
corporations are concerned.
tockholdings eceeding twenty ($0;) percent of the
o!tstanding capital stock shall be considered
s!bstantial for p!rposes of interlocking directors. (n)
Sectin $%" *isloyalty of a director. – here adirector, by irt!e of his office, ac+!ires for hi%self a
b!siness opport!nity which sho!ld belong to the
corporation, thereby obtaining profits to the pre9!dice
of s!ch corporation, he %!st acco!nt to the latter forall s!ch profits by ref!nding the sa%e, !nless his act
has been ratified by a ote of the stockholders
owning or representing at least two&thirds ($
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11. To eercise s!ch other powers as %ay be
essential or necessary to carry o!t its p!rpose or p!rposes as stated in the articles of incorporation.
(1'a)
Sectin $'" Power to e)tend or shorten corporate
term. – A priate corporation %ay etend or shorten
its ter% as stated in the articles of incorporation whenapproed by a %a9ority ote of the board of directors
or tr!stees and ratified at a %eeting by the
stockholders representing at least two&thirds ($
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-change Co%%ission shall not accept for filing
any certificate of increase of capital stock !nlessacco%panied by the sworn state%ent of the
treas!rer of the corporation lawf!lly holding
office at the ti%e of the filing of the certificate,
showing that at least twenty&fie ($/;) percentof s!ch increased capital stock has been
s!bscribed and that at least twenty&fie ($/;) percent of the a%o!nt s!bscribed has been paideither in act!al cash to the corporation or that
there has been transferred to the corporation
property the al!ation of which is e+!al totwenty&fie ($/;) percent of the s!bscription*
Proided, f!rther, That no decrease of the capital
stock shall be approed by the Co%%ission if its
effect shall pre9!dice the rights of corporatecreditors.
on&stock corporations %ay inc!r or create bonded indebtedness, or increase the sa%e, with
the approal by a %a9ority ote of the board oftr!stees and of at least two&thirds ($
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%a9ority of the tr!stees in office will be s!fficient
a!thori#ation for the corporation to enter into anytransaction a!thori#ed by this section.
Sectin %!" Power to ac"uire own shares. – A stock
corporation shall hae the power to p!rchase or
ac+!ire its own shares for a legiti%ate corporate
p!rpose or p!rposes, incl!ding b!t not li%ited to thefollowing cases* Proided, That the corporation has
!nrestricted retained earnings in its books to coer
the shares to be p!rchased or ac+!ired*
1. To eli%inate fractional shares arising o!t of
stock diidends
$. To collect or co%pro%ise an indebtedness to
the corporation, arising o!t of !npaids!bscription, in a delin+!ency sale, and to
p!rchase delin+!ent shares sold d!ring said saleand
'. To pay dissenting or withdrawing stockholdersentitled to pay%ent for their shares !nder the
proisions of this Code. (a)
Sectin %#" Power to in(est corporate funds in
another corporation or business or for any other purpose. – !b9ect to the proisions of this Code, a
priate corporation %ay inest its f!nds in any other
corporation or b!siness or for any p!rpose other thanthe pri%ary p!rpose for which it was organi#ed when
approed by a %a9ority of the board of directors or
tr!stees and ratified by the stockholders representingat least two&thirds ($
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then the %anage%ent contract %!st be approed by
the stockholders of the %anaged corporation owningat least two&thirds ($
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giing notice thereof
4. The %anner of election or appoint%ent and the
ter% of office of all officers other than directorsor tr!stees
5. The penalties for iolation of the by&laws
=. n the case of stock corporations, the %anner
of iss!ing stock certificates and
10. !ch other %atters as %ay be necessary forthe proper or conenient transaction of its
corporate b!siness and affairs. ($1a)
Sectin %8" $mendments to bylaws. – The board of
directors or tr!stees, by a %a9ority ote thereof, andthe owners of at least a %a9ority of the o!tstanding
capital stock, or at least a %a9ority of the %e%bers ofa non&stock corporation, at a reg!lar or special%eeting d!ly called for the p!rpose, %ay a%end or
repeal any by&laws or adopt new by&laws. The owners
of two&thirds ($
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otice of %eetings shall be in writing, and the ti%e
and place thereof stated therein.
All proceedings had and any b!siness transacted atany %eeting of the stockholders or %e%bers, if
within the powers or a!thority of the corporation,
shall be alid een if the %eeting be i%properly held
or called, proided all the stockholders or %e%bersof the corporation are present or d!ly represented at
the %eeting. ($ and $/)
Sectin " 2uorum in meetings. – >nless otherwise proided for in this Code or in the by&laws, a +!or!%
shall consist of the stockholders representing a
%a9ority of the o!tstanding capital stock or a %a9orityof the %e%bers in the case of non&stock corporations.
(n)
Sectin &$" egular and special meetings ofdirectors or trustees. – :eg!lar %eetings of the boardof directors or tr!stees of eery corporation shall be
held %onthly, !nless the by&laws proide otherwise.
pecial %eetings of the board of directors or tr!stees
%ay be held at any ti%e !pon the call of the presidentor as proided in the by&laws.
3eetings of directors or tr!stees of corporations %ay
be held anywhere in or o!tside of the Philippines,
!nless the by&laws proide otherwise. otice ofreg!lar or special %eetings stating the date, ti%e and
place of the %eeting %!st be sent to eery director or
tr!stee at least one (1) day prior to the sched!led%eeting, !nless otherwise proided by the by&laws. A
director or tr!stee %ay waie this re+!ire%ent, either
epressly or i%pliedly. (n)
Sectin &%" 3ho shall preside at meetings. – The president shall preside at all %eetings of the directors
or tr!stee as well as of the stockholders or %e%bers,
!nless the by&laws proide otherwise. (n)
Sectin &&" ight to (ote of pledgors, mortgagors,and administrators. – n case of pledged or
%ortgaged shares in stock corporations, the pledgor
or %ortgagor shall hae the right to attend and ote at%eetings of stockholders, !nless the pledgee or
%ortgagee is epressly gien by the pledgor or
%ortgagor s!ch right in writing which is recorded on
the appropriate corporate books. (n)
-ec!tors, ad%inistrators, receiers, and other legal
representaties d!ly appointed by the co!rt %ayattend and ote in behalf of the stockholders or
%e%bers witho!t need of any written proy. ($4a)
Sectin &6" -oting in case of 'oint ownership of
stock. – n case of shares of stock owned 9ointly by
two or %ore persons, in order to ote the sa%e, theconsent of all the co&owners shall be necessary,
!nless there is a written proy, signed by all the co&
owners, a!thori#ing one or so%e of the% or any other person to ote s!ch share or shares* Proided, That
when the shares are owned in an "and
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corporation, it shall be noted that the transfer in the
na%e of the tr!stee or tr!stees is %ade p!rs!ant tosaid oting tr!st agree%ent.
The tr!stee or tr!stees shall eec!te and delier to the
transferors oting tr!st certificates, which shall be
transferable in the sa%e %anner and with the sa%e
effect as certificates of stock.
The oting tr!st agree%ent filed with the corporation
shall be s!b9ect to ea%ination by any stockholder of
the corporation in the sa%e %anner as any othercorporate book or record* Proided, That both the
transferor and the tr!stee or tr!stees %ay eercise the
right of inspection of all corporate books and recordsin accordance with the proisions of this Code.
Any other stockholder %ay transfer his shares to the
sa%e tr!stee or tr!stees !pon the ter%s andconditions stated in the oting tr!st agree%ent, andthere!pon shall be bo!nd by all the proisions of said
agree%ent.
o oting tr!st agree%ent shall be entered into for
the p!rpose of circ!%enting the law against%onopolies and illegal co%binations in restraint of
trade or !sed for p!rposes of fra!d.
>nless epressly renewed, all rights granted in a
oting tr!st agree%ent shall a!to%atically epire atthe end of the agreed period, and the oting tr!st
certificates as well as the certificates of stock in the
na%e of the tr!stee or tr!stees shall thereby bedee%ed cancelled and new certificates of stock shall
be reiss!ed in the na%e of the transferors.
The oting tr!stee or tr!stees %ay ote by proy
!nless the agree%ent proides otherwise. ('2a)
TITLE VII
STOC0S AND STOC0HOLDERS
Sectin 6*" 0ubscription contract. – Any contract for
the ac+!isition of !niss!ed stock in an eisting
corporation or a corporation still to be for%ed shall be dee%ed a s!bscription within the %eaning of this
Title, notwithstanding the fact that the parties refer to
it as a p!rchase or so%e other contract. (n)
Sectin 6!" Preincorporation subscription. – A
s!bscription for shares of stock of a corporation still
to be for%ed shall be irreocable for a period of atleast si (2) %onths fro% the date of s!bscription,
!nless all of the other s!bscribers consent to the
reocation, or !nless the incorporation of said
corporation fails to %ateriali#e within said period orwithin a longer period as %ay be stip!lated in the
contract of s!bscription* Proided, That no pre&incorporation s!bscription %ay be reoked after thes!b%ission of the articles of incorporation to the
ec!rities and -change Co%%ission. (n)
Sectin 6#" Consideration for stocks. – tocks shall
not be iss!ed for a consideration less than the par oriss!ed price thereof. Consideration for the iss!ance of
stock %ay be any or a co%bination of any two or
%ore of the following*
1. Act!al cash paid to the corporation
$. Property, tangible or intangible, act!ally
receied by the corporation and necessary or
conenient for its !se and lawf!l p!rposes at a
fair al!ation e+!al to the par or iss!ed al!e ofthe stock iss!ed
'. ?abor perfor%ed for or serices act!ally
rendered to the corporation
. Preio!sly inc!rred indebtedness of thecorporation
/. A%o!nts transferred fro% !nrestricted retained
earnings to stated capital and
2. @!tstanding shares echanged for stocks in theeent of reclassification or conersion.
here the consideration is other than act!al
cash, or consists of intangible property s!ch as
patents of copyrights, the al!ation thereof shallinitially be deter%ined by the incorporators or
the board of directors, s!b9ect to approal by the
ec!rities and -change Co%%ission.
hares of stock shall not be iss!ed in echangefor pro%issory notes or f!t!re serice.
The sa%e considerations proided for in this
section, insofar as they %ay be applicable, %ay
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be !sed for the iss!ance of bonds by the
corporation.
The iss!ed price of no&par al!e shares %ay befied in the articles of incorporation or by the
board of directors p!rs!ant to a!thority conferred
!pon it by the articles of incorporation or the by&
laws, or in the absence thereof, by thestockholders representing at least a %a9ority of
the o!tstanding capital stock at a %eeting d!ly
called for the p!rpose. (/ and 12)
Sectin 6$" Certificate of stock and transfer of
shares. – The capital stock of stock corporations shall
be diided into shares for which certificates signed bythe president or ice president, co!ntersigned by the
secretary or assistant secretary, and sealed with the
seal of the corporation shall be iss!ed in accordance
with the by&laws. hares of stock so iss!ed are personal property and %ay be transferred by deliery
of the certificate or certificates indorsed by the owner
or his attorney&in&fact or other person legallya!thori#ed to %ake the transfer. o transfer, howeer,
shall be alid, ecept as between the parties, !ntil the
transfer is recorded in the books of the corporationshowing the na%es of the parties to the transaction,
the date of the transfer, the n!%ber of the certificate
or certificates and the n!%ber of shares transferred.
o shares of stock against which the corporationholds any !npaid clai% shall be transferable in the
books of the corporation. ('/)
Sectin 6%" %ssuance of stock certificates. – o
certificate of stock shall be iss!ed to a s!bscriber!ntil the f!ll a%o!nt of his s!bscription together with
interest and epenses (in case of delin+!ent shares), if
any is d!e, has been paid. ('4)
Sectin 6&" iability of directors for watered stocks.
– Any director or officer of a corporation consentingto the iss!ance of stocks for a consideration less than
its par or iss!ed al!e or for a consideration in anyfor% other than cash, al!ed in ecess of its fair
al!e, or who, haing knowledge thereof, does not
forthwith epress his ob9ection in writing and file thesa%e with the corporate secretary, shall be solidarily,
liable with the stockholder concerned to the
corporation and its creditors for the difference
between the fair al!e receied at the ti%e of
iss!ance of the stock and the par or iss!ed al!e of
the sa%e. (n)
Sectin 66" %nterest on unpaid subscriptions. –!bscribers for stock shall pay to the corporation
interest on all !npaid s!bscriptions fro% the date of
s!bscription, if so re+!ired by, and at the rate of
interest fied in the by&laws. f no rate of interest isfied in the by&laws, s!ch rate shall be dee%ed to be
the legal rate. ('4)
Sectin 6'" Payment of balance of subscription. –!b9ect to the proisions of the contract of
s!bscription, the board of directors of any stock
corporation %ay at any ti%e declare d!e and payableto the corporation !npaid s!bscriptions to the capital
stock and %ay collect the sa%e or s!ch percentage
thereof, in either case with accr!ed interest, if any, as
it %ay dee% necessary.
Pay%ent of any !npaid s!bscription or any
percentage thereof, together with the interest accr!ed
if any, shall be %ade on the date specified in the
contract of s!bscription or on the date stated in thecall %ade by the board. 7ail!re to pay on s!ch date
shall render the entire balance d!e and payable and
shall %ake the stockholder liable for interest at thelegal rate on s!ch balance, !nless a different rate of
interest is proided in the by&laws, co%p!ted fro%
s!ch date !ntil f!ll pay%ent. f within thirty ('0) daysfro% the said date no pay%ent is %ade, all stocks
coered by said s!bscription shall there!pon beco%e
delin+!ent and shall be s!b9ect to sale as hereinafter proided, !nless the board of directors orders
otherwise. ('5)
Sectin 68" *elin"uency sale. – The board of
directors %ay, by resol!tion, order the sale ofdelin+!ent stock and shall specifically state the
a%o!nt d!e on each s!bscription pl!s all accr!ed
interest, and the date, ti%e and place of the salewhich shall not be less than thirty ('0) days nor %orethan sity (20) days fro% the date the stocks beco%e
delin+!ent.
otice of said sale, with a copy of the resol!tion,shall be sent to eery delin+!ent stockholder either
personally or by registered %ail. The sa%e shall
f!rther%ore be p!blished once a week for two ($)
consec!tie weeks in a newspaper of general
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circ!lation in the proince or city where the principal
office of the corporation is located.
>nless the delin+!ent stockholder pays to thecorporation, on or before the date specified for the
sale of the delin+!ent stock, the balance d!e on his
s!bscription, pl!s accr!ed interest, costs of
adertise%ent and epenses of sale, or !nless the board of directors otherwise orders, said delin+!ent
stock shall be sold at p!blic a!ction to s!ch bidder
who shall offer to pay the f!ll a%o!nt of the balanceon the s!bscription together with accr!ed interest,
costs of adertise%ent and epenses of sale, for the
s%allest n!%ber of shares or fraction of a share. Thestock so p!rchased shall be transferred to s!ch
p!rchaser in the books of the corporation and a
certificate for s!ch stock shall be iss!ed in his faor.The re%aining shares, if any, shall be credited in
faor of the delin+!ent stockholder who shalllikewise be entitled to the iss!ance of a certificate of
stock coering s!ch shares.
ho!ld there be no bidder at the p!blic a!ction who
offers to pay the f!ll a%o!nt of the balance on the
s!bscription together with accr!ed interest, costs ofadertise%ent and epenses of sale, for the s%allest
n!%ber of shares or fraction of a share, the
corporation %ay, s!b9ect to the proisions of this
Code, bid for the sa%e, and the total a%o!nt d!e shall
be credited as paid in f!ll in the books of thecorporation. Title to all the shares of stock coered by
the s!bscription shall be ested in the corporation astreas!ry shares and %ay be disposed of by said
corporation in accordance with the proisions of this
Code. ('=a&2a)
Sectin 6(" 3hen sale may be "uestioned. – oaction to recoer delin+!ent stock sold can be
s!stained !pon the gro!nd of irreg!larity or defect in
the notice of sale, or in the sale itself of the
delin+!ent stock, !nless the party seeking to %aintains!ch action first pays or tenders to the party holding
the stock the s!% for which the sa%e was sold, withinterest fro% the date of sale at the legal rate and no
s!ch action shall be %aintained !nless it is
co%%enced by the filing of a co%plaint within si
(2) %onths fro% the date of sale. (4a)
Sectin '*" Court action to reco(er unpaid
subscription. – othing in this Code shall preent the
corporation fro% collecting by action in a co!rt of
proper 9!risdiction the a%o!nt d!e on any !npaids!bscription, with accr!ed interest, costs and
epenses. (=a)
Sectin '!" +ffect of delin"uency. – o delin+!ent
stock shall be oted for or be entitled to ote or to
representation at any stockholder8s %eeting, nor shallthe holder thereof be entitled to any of the rights of a
stockholder ecept the right to diidends in
accordance with the proisions of this Code, !ntil and!nless he pays the a%o!nt d!e on his s!bscription
with accr!ed interest, and the costs and epenses of
adertise%ent, if any. (/0a)
Sectin '#" ights of unpaid shares. – Folders of
s!bscribed shares not f!lly paid which are not
delin+!ent shall hae all the rights of a stockholder.
(n)
Sectin '$" ost or destroyed certificates. – The
following proced!re shall be followed for the
iss!ance by a corporation of new certificates of stock
in lie! of those which hae been lost, stolen ordestroyed*
1. The registered owner of a certificate of stock
in a corporation or his legal representatie shallfile with the corporation an affidait in triplicate
setting forth, if possible, the circ!%stances as tohow the certificate was lost, stolen or destroyed,
the n!%ber of shares represented by s!chcertificate, the serial n!%ber of the certificate
and the na%e of the corporation which iss!ed the
sa%e. Fe shall also s!b%it s!ch otherinfor%ation and eidence which he %ay dee%
necessary
$. After erifying the affidait and other
infor%ation and eidence with the books of the
corporation, said corporation shall p!blish anotice in a newspaper of general circ!lation
p!blished in the place where the corporation hasits principal office, once a week for three (')
consec!tie weeks at the epense of the
registered owner of the certificate of stock whichhas been lost, stolen or destroyed. The notice
shall state the na%e of said corporation, the na%e
of the registered owner and the serial n!%ber of
said certificate, and the n!%ber of shares
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represented by s!ch certificate, and that after the
epiration of one (1) year fro% the date of thelast p!blication, if no contest has been presented
to said corporation regarding said certificate of
stock, the right to %ake s!ch contest shall be
barred and said corporation shall cancel in its books the certificate of stock which has been
lost, stolen or destroyed and iss!e in lie! thereofnew certificate of stock, !nless the registeredowner files a bond or other sec!rity in lie!
thereof as %ay be re+!ired, effectie for a period
of one (1) year, for s!ch a%o!nt and in s!ch for%and with s!ch s!reties as %ay be satisfactory to
the board of directors, in which case a new
certificate %ay be iss!ed een before the
epiration of the one (1) year period proidedherein* Proided, That if a contest has been
presented to said corporation or if an action is
pending in co!rt regarding the ownership of saidcertificate of stock which has been lost, stolen or
destroyed, the iss!ance of the new certificate of
stock in lie! thereof shall be s!spended !ntil thefinal decision by the co!rt regarding the
ownership of said certificate of stock which has
been lost, stolen or destroyed.
-cept in case of fra!d, bad faith, or negligenceon the part of the corporation and its officers, no
action %ay be bro!ght against any corporation
which shall hae iss!ed certificate of stock inlie! of those lost, stolen or destroyed p!rs!ant to
the proced!re aboe&described. (:.A. $01a)
TITLE VIII
CORPORATE BOO0S AND RECORDS
Sectin '%" Books to be kept/ stock transfer agent . –-ery corporation shall keep and caref!lly presere at
its principal office a record of all b!siness
transactions and %in!tes of all %eetings of
stockholders or %e%bers, or of the board of directorsor tr!stees, in which shall be set forth in detail the
ti%e and place of holding the %eeting, howa!thori#ed, the notice gien, whether the %eeting was
reg!lar or special, if special its ob9ect, those present
and absent, and eery act done or ordered done at the
%eeting. >pon the de%and of any director, tr!stee,stockholder or %e%ber, the ti%e when any director,
tr!stee, stockholder or %e%ber entered or left the
%eeting %!st be noted in the %in!tes and on a
si%ilar de%and, the yeas and nays %!st be taken on
any %otion or proposition, and a record thereofcaref!lly %ade. The protest of any director, tr!stee,
stockholder or %e%ber on any action or proposed
action %!st be recorded in f!ll on his de%and.
The records of all b!siness transactions of the
corporation and the %in!tes of any %eetings shall beopen to inspection by any director, tr!stee,
stockholder or %e%ber of the corporation at
reasonable ho!rs on b!siness days and he %ayde%and, in writing, for a copy of ecerpts fro% said
records or %in!tes, at his epense.
Any officer or agent of the corporation who shallref!se to allow any director, tr!stees, stockholder or
%e%ber of the corporation to ea%ine and copy
ecerpts fro% its records or %in!tes, in accordance
with the proisions of this Code, shall be liable tos!ch director, tr!stee, stockholder or %e%ber for
da%ages, and in addition, shall be g!ilty of an
offense which shall be p!nishable !nder ection 1of this Code* Proided, That if s!ch ref!sal is %ade
p!rs!ant to a resol!tion or order of the board of
directors or tr!stees, the liability !nder this sectionfor s!ch action shall be i%posed !pon the directors or
tr!stees who oted for s!ch ref!sal* and Proided,
f!rther, That it shall be a defense to any action !nder
this section that the person de%anding to ea%ine
and copy ecerpts fro% the corporation8s records and%in!tes has i%properly !sed any infor%ation sec!red
thro!gh any prior ea%ination of the records or%in!tes of s!ch corporation or of any other
corporation, or was not acting in good faith or for a
legiti%ate p!rpose in %aking his de%and.
tock corporations %!st also keep a book to beknown as the "stock and transfer book", in which
%!st be kept a record of all stocks in the na%es of the
stockholders alphabetically arranged the install%ents
paid and !npaid on all stock for which s!bscriptionhas been %ade, and the date of pay%ent of any
install%ent a state%ent of eery alienation, sale ortransfer of stock %ade, the date thereof, and by and to
who% %ade and s!ch other entries as the by&laws
%ay prescribe. The stock and transfer book shall be
kept in the principal office of the corporation or in theoffice of its stock transfer agent and shall be open for
inspection by any director or stockholder of the
corporation at reasonable ho!rs on b!siness days.
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o stock transfer agent or one engaged principally in
the b!siness of registering transfers of stocks in behalf of a stock corporation shall be allowed to
operate in the Philippines !nless he sec!res a license
fro% the ec!rities and -change Co%%ission and
pays a fee as %ay be fied by the Co%%ission, whichshall be renewable ann!ally* Proided, That a stock
corporation is not precl!ded fro% perfor%ing or%aking transfer of its own stocks, in which case allthe r!les and reg!lations i%posed on stock transfer
agents, ecept the pay%ent of a license fee herein
proided, shall be applicable. (/1a and '$a P.D. o.$25.)
Sectin '&" ight to financial statements. – ithin
ten (10) days fro% receipt of a written re+!est of any
stockholder or %e%ber, the corporation shall f!rnishto hi% its %ost recent financial state%ent, which shall
incl!de a balance sheet as of the end of the lasttaable year and a profit or loss state%ent for said
taable year, showing in reasonable detail its assetsand liabilities and the res!lt of its operations.
At the reg!lar %eeting of stockholders or %e%bers,
the board of directors or tr!stees shall present to s!chstockholders or %e%bers a financial report of the
operations of the corporation for the preceding year,
which shall incl!de financial state%ents, d!ly signed
and certified by an independent certified p!blic
acco!ntant.
Foweer, if the paid&!p capital of the corporation is
less than P/0,000.00, the financial state%ents %ay becertified !nder oath by the treas!rer or any
responsible officer of the corporation. (n)
TITLE I1
/ERGER AND CONSOLIDATION
Sectin '6" Plan or merger of consolidation. – Two
or %ore corporations %ay %erge into a singlecorporation which shall be one of the constit!ent
corporations or %ay consolidate into a new singlecorporation which shall be the consolidated
corporation.
The board of directors or tr!stees of each corporation,
party to the %erger or consolidation, shall approe a plan of %erger or consolidation setting forth the
following*
1. The na%es of the corporations proposing to
%erge or consolidate, hereinafter referred to asthe constit!ent corporations
$. The ter%s of the %erger or consolidation and
the %ode of carrying the sa%e into effect
'. A state%ent of the changes, if any, in thearticles of incorporation of the s!riingcorporation in case of %erger and, with respect
to the consolidated corporation in case of
consolidation, all the state%ents re+!ired to beset forth in the articles of incorporation for
corporations organi#ed !nder this Code and
. !ch other proisions with respect to the
proposed %erger or consolidation as are dee%ednecessary or desirable. (n)
Sectin ''" 0tockholder’s or member’s appro(al. –
>pon approal by %a9ority ote of each of the board
of directors or tr!stees of the constit!ent corporationsof the plan of %erger or consolidation, the sa%e shall
be s!b%itted for approal by the stockholders or
%e%bers of each of s!ch corporations at separatecorporate %eetings d!ly called for the p!rpose.
otice of s!ch %eetings shall be gien to all
stockholders or %e%bers of the respectiecorporations, at least two ($) weeks prior to the date
of the %eeting, either personally or by registered%ail. aid notice shall state the p!rpose of the
%eeting and shall incl!de a copy or a s!%%ary of the plan of %erger or consolidation. The affir%atie ote
of stockholders representing at least two&thirds ($
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affir%atie ote of stockholders representing at least
two&thirds ($
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s!riing or consolidated corporation. The rights
of creditors or liens !pon the property of any ofs!ch constit!ent corporations shall not be
i%paired by s!ch %erger or consolidation. (n)
TITLE 1
APPRAISAL RIGHT
Sectin 8!" nstances of appraisal right. – Anystockholder of a corporation shall hae the right to
dissent and de%and pay%ent of the fair al!e of his
shares in the following instances*
1. n case any a%end%ent to the articles ofincorporation has the effect of changing or
restricting the rights of any stockholder or class
of shares, or of a!thori#ing preferences in anyrespect s!perior to those of o!tstanding shares of
any class, or of etending or shortening the ter%of corporate eistence
$. n case of sale, lease, echange, transfer,%ortgage, pledge or other disposition of all or
s!bstantially all of the corporate property and
assets as proided in the Code and
'. n case of %erger or consolidation. (n)
Sectin 8#" 4ow right is e)ercised. – The appraisal
right %ay be eercised by any stockholder who shallhae oted against the proposed corporate action, by
%aking a written de%and on the corporation withinthirty ('0) days after the date on which the ote was
taken for pay%ent of the fair al!e of his shares*
Proided, That fail!re to %ake the de%and withins!ch period shall be dee%ed a waier of the appraisal
right. f the proposed corporate action is i%ple%ented
or affected, the corporation shall pay to s!chstockholder, !pon s!rrender of the certificate or
certificates of stock representing his shares, the fair
al!e thereof as of the day prior to the date on whichthe ote was taken, ecl!ding any appreciation or
depreciation in anticipation of s!ch corporate action.
f within a period of sity (20) days fro% the date the
corporate action was approed by the stockholders,the withdrawing stockholder and the corporation
cannot agree on the fair al!e of the shares, it shall be
deter%ined and appraised by three (') disinterested
persons, one of who% shall be na%ed by the
stockholder, another by the corporation, and the third
by the two th!s chosen. The findings of the %a9orityof the appraisers shall be final, and their award shall
be paid by the corporation within thirty ('0) days
after s!ch award is %ade* Proided, That no pay%ent
shall be %ade to any dissenting stockholder !nlessthe corporation has !nrestricted retained earnings in
its books to coer s!ch pay%ent* and Proided,f!rther, That !pon pay%ent by the corporation of theagreed or awarded price, the stockholder shall
forthwith transfer his shares to the corporation. (n)
Sectin 8$" +ffect of demand and termination of
right. – 7ro% the ti%e of de%and for pay%ent of thefair al!e of a stockholder8s shares !ntil either the
abandon%ent of the corporate action inoled or the
p!rchase of the said shares by the corporation, allrights accr!ing to s!ch shares, incl!ding oting and
diidend rights, shall be s!spended in accordancewith the proisions of this Code, ecept the right of
s!ch stockholder to receie pay%ent of the fair al!ethereof* Proided, That if the dissenting stockholder
is not paid the al!e of his shares within '0 days after
the award, his oting and diidend rights shalli%%ediately be restored. (n)
Sectin 8%" 3hen right to payment ceases. – o
de%and for pay%ent !nder this Title %ay be
withdrawn !nless the corporation consents thereto. f,
howeer, s!ch de%and for pay%ent is withdrawnwith the consent of the corporation, or if the proposed
corporate action is abandoned or rescinded by thecorporation or disapproed by the ec!rities and
-change Co%%ission where s!ch approal is
necessary, or if the ec!rities and -changeCo%%ission deter%ines that s!ch stockholder is not
entitled to the appraisal right, then the right of said
stockholder to be paid the fair al!e of his shares
shall cease, his stat!s as a stockholder shall there!pon be restored, and all diidend distrib!tions which
wo!ld hae accr!ed on his shares shall be paid tohi%. (n)
Sectin 8&" 3ho bears costs of appraisal. – The costs
and epenses of appraisal shall be borne by the
corporation, !nless the fair al!e ascertained by the
appraisers is approi%ately the sa%e as the pricewhich the corporation %ay hae offered to pay the
stockholder, in which case they shall be borne by the
latter. n the case of an action to recoer s!ch fair
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$
al!e, all costs and epenses shall be assessed against
the corporation, !nless the ref!sal of the stockholderto receie pay%ent was !n9!stified. (n)
Sectin 86" !otation on certificates/ rights of
transferee. – ithin ten (10) days after de%anding
pay%ent for his shares, a dissenting stockholder shall
s!b%it the certificates of stock representing hisshares to the corporation for notation thereon that
s!ch shares are dissenting shares. Fis fail!re to do so
shall, at the option of the corporation, ter%inate hisrights !nder this Title. f shares represented by the
certificates bearing s!ch notation are transferred, and
the certificates conse+!ently cancelled, the rights ofthe transferor as a dissenting stockholder !nder this
Title shall cease and the transferee shall hae all the
rights of a reg!lar stockholder and all diidenddistrib!tions which wo!ld hae accr!ed on s!ch
shares shall be paid to the transferee. (n)
TITLE 1I
NON2STOC0 CORPORATIONS
Sectin 8'" 6efinition. – 7or the p!rposes of thisCode, a non&stock corporation is one where no part of
its inco%e is distrib!table as diidends to its
%e%bers, tr!stees, or officers, s!b9ect to the proisions of this Code on dissol!tion* Proided,
That any profit which a non&stock corporation %ay
obtain as an incident to its operations shall, wheneer necessary or proper, be !sed for the f!rtherance of the
p!rpose or p!rposes for which the corporation was
organi#ed, s!b9ect to the proisions of this Title.
The proisions goerning stock corporation, when pertinent, shall be applicable to non&stock
corporations, ecept as %ay be coered by specific
proisions of this Title. (n)
Sectin 88" P!rposes. – on&stock corporations %ay
be for%ed or organi#ed for charitable, religio!s,ed!cational, professional, c!lt!ral, fraternal, literary,
scientific, social, ciic serice, or si%ilar p!rposes,like trade, ind!stry, agric!lt!ral and like cha%bers, or
any co%bination thereof, s!b9ect to the special
proisions of this Title goerning partic!lar classes of non&stock corporations. (n)
CHAPTER I
/E/BERS
Sectin 8(" ight to (ote. – The right of the %e%bers
of any class or classes to ote %ay be li%ited, broadened or denied to the etent specified in the
articles of incorporation or the by&laws. >nless so
li%ited, broadened or denied, each %e%ber,
regardless of class, shall be entitled to one ote.
>nless otherwise proided in the articles ofincorporation or the by&laws, a %e%ber %ay ote by
proy in accordance with the proisions of this Code.
(n)
Hoting by %ail or other si%ilar %eans by %e%bers of
non&stock corporations %ay be a!thori#ed by the by&
laws of non&stock corporations with the approal of,and !nder s!ch conditions which %ay be prescribed
by, the ec!rities and -change Co%%ission.
Sectin (*" on&transferability of %e%bership. –3e%bership in a non&stock corporation and all rightsarising therefro% are personal and non&transferable,
!nless the articles of incorporation or the by&laws
otherwise proide. (n)
Sectin (!" Ter%ination of %e%bership. –3e%bership shall be ter%inated in the %anner and
for the ca!ses proided in the articles of
incorporation or the by&laws. Ter%ination of%e%bership shall hae the effect of eting!ishing all
rights of a %e%ber in the corporation or in its property, !nless otherwise proided in the articles of
incorporation or the by&laws. (n)
CHAPTER II
TR,STEES AND OFFICES
Sectin (#" +lection and term of trustees. – >nless
otherwise proided in the articles of incorporation orthe by&laws, the board of tr!stees of non&stock
corporations, which %ay be %ore than fifteen (1/) in
n!%ber as %ay be fied in their articles ofincorporation or by&laws, shall, as soon as organi#ed,
so classify the%seles that the ter% of office of one&
third (1
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$/
!nepired period.
o person shall be elected as tr!stee !nless he is a
%e%ber of the corporation.
>nless otherwise proided in the articles ofincorporation or the by&laws, officers of a non&stock
corporation %ay be directly elected by the %e%bers.(n)
Sectin ($" Place of meetings. – The by&laws %ay
proide that the %e%bers of a non&stock corporation
%ay hold their reg!lar or special %eetings at any
place een o!tside the place where the principaloffice of the corporation is located* Proided, That
proper notice is sent to all %e%bers indicating the
date, ti%e and place of the %eeting* and Proided,f!rther, That the place of %eeting shall be within the
Philippines. (n)
CHAPTER III
DISTRIB,TION OF ASSETS IN NON2STOC0
CORPORATIONS
Sectin (%" ules of distribution. – n case
dissol!tion of a non&stock corporation in accordance
with the proisions of this Code, its assets shall beapplied and distrib!ted as follows*
1. All liabilities and obligations of thecorporation shall be paid, satisfied and
discharged, or ade+!ate proision shall be %adetherefore
$. Assets held by the corporation !pon a
condition re+!iring ret!rn, transfer orconeyance, and which condition occ!rs by
reason of the dissol!tion, shall be ret!rned,
transferred or coneyed in accordance with s!ch
re+!ire%ents
'. Assets receied and held by the corporation
s!b9ect to li%itations per%itting their !se only
for charitable, religio!s, beneolent, ed!cational
or si%ilar p!rposes, b!t not held !pon acondition re+!iring ret!rn, transfer or
coneyance by reason of the dissol!tion, shall be
transferred or coneyed to one or %orecorporations, societies or organi#ations engaged
in actiities in the Philippines s!bstantially
si%ilar to those of the dissoling corporation
according to a plan of distrib!tion adopted p!rs!ant to this Chapter
. Assets other than those %entioned in the
preceding paragraphs, if any, shall be distrib!ted
in accordance with the proisions of the articles
of incorporation or the by&laws, to the etent thatthe articles of incorporation or the by&laws,
deter%ine the distrib!tie rights of %e%bers, or
any class or classes of %e%bers, or proide fordistrib!tion and
/. n any other case, assets %ay be distrib!ted to
s!ch persons, societies, organi#ations orcorporations, whether or not organi#ed for profit,
as %ay be specified in a plan of distrib!tion
adopted p!rs!ant to this Chapter. (n)
Sectin (&" Plan of distribution of assets. – A plan proiding for the distrib!tion of assets, not
inconsistent with the proisions of this Title, %ay be
adopted by a non&stock corporation in the process of
dissol!tion in the following %anner*
The board of tr!stees shall, by %a9ority ote, adopt a
resol!tion reco%%ending a plan of distrib!tion and
directing the s!b%ission thereof to a ote at a reg!laror special %eeting of %e%bers haing oting rights.
ritten notice setting forth the proposed plan ofdistrib!tion or a s!%%ary thereof and the date, ti%e
and place of s!ch %eeting shall be gien to each%e%ber entitled to ote, within the ti%e and in the
%anner proided in this Code for the giing of notice
of %eetings to %e%bers. !ch plan of distrib!tionshall be adopted !pon approal of at least two&thirds
($
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$2
restrictions on transfer per%itted by this Title and (')
The corporation shall not list in any stock echangeor %ake any p!blic offering of any of its stock of any
class. otwithstanding the foregoing, a corporation
shall not be dee%ed a close corporation when at least
two&thirds ($
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$4
transferred is concl!siely pres!%ed to hae
notice of this fact.
'. f a stock certificate of any close corporationconspic!o!sly shows a restriction on transfer of
stock of the corporation, the transferee of the
stock is concl!siely pres!%ed to hae notice of
the fact that he has ac+!ired stock in iolation ofthe restriction, if s!ch ac+!isition iolates the
restriction.
. heneer any person to who% stock of aclose corporation has been iss!ed or transferred
has, or is concl!siely pres!%ed !nder this
section to hae, notice either (a) that he is a person not eligible to be a holder of stock of the
corporation, or (b) that transfer of stock to hi%
wo!ld ca!se the stock of the corporation to be
held by %ore than the n!%ber of persons per%itted by its articles of incorporation to hold
stock of the corporation, or (c) that the transfer of
stock is in iolation of a restriction on transfer ofstock, the corporation %ay, at its option, ref!se to
register the transfer of stock in the na%e of the
transferee.
/. The proisions of s!bsection () shall not beapplicable if the transfer of stock, tho!gh
contrary to s!bsections (1), ($) or ('), has been
consented to by all the stockholders of the closecorporation, or if the close corporation has
a%ended its articles of incorporation in
accordance with this Title.
2. The ter% "transfer", as !sed in this section, isnot li%ited to a transfer for al!e.
4. The proisions of this section shall not i%pair
any right which the transferee %ay hae to
rescind the transfer or to recoer !nder any
applicable warranty, epress or i%plied.
Sectin !**" $greements by stockholders. &
1. Agree%ents by and a%ong stockholders
eec!ted before the for%ation and organi#ationof a close corporation, signed by all stockholders,
shall s!rie the incorporation of s!ch
corporation and shall contin!e to be alid and
binding between and a%ong s!ch stockholders, if
s!ch be their intent, to the etent that s!ch
agree%ents are not inconsistent with the articlesof incorporation, irrespectie of where the
proisions of s!ch agree%ents are contained,
ecept those re+!ired by this Title to be
e%bodied in said articles of incorporation.
$. An agree%ent between two or %orestockholders, if in writing and signed by the
parties thereto, %ay proide that in eercising
any oting rights, the shares held by the% shall be oted as therein proided, or as they %ay
agree, or as deter%ined in accordance with a
proced!re agreed !pon by the%.
'. o proision in any written agree%ent signed
by the stockholders, relating to any phase of the
corporate affairs, shall be inalidated as between
the parties on the gro!nd that its effect is to %akethe% partners a%ong the%seles.
. A written agree%ent a%ong so%e or all of the
stockholders in a close corporation shall not be
inalidated on the gro!nd that it so relates to thecond!ct of the b!siness and affairs of the
corporation as to restrict or interfere with the
discretion or powers of the board of directors*Proided, That s!ch agree%ent shall i%pose on
the stockholders who are parties thereto the
liabilities for %anagerial acts i%posed by thisCode on directors.
/. To the etent that the stockholders are actiely
engaged in the %anage%ent or operation of the
b!siness and affairs of a close corporation, thestockholders shall be held to strict fid!ciary
d!ties to each other and a%ong the%seles. aid
stockholders shall be personally liable forcorporate torts !nless the corporation has
obtained reasonably ade+!ate liability ins!rance.
Sectin !*!" 3hen board meeting is unnecessary or
improperly held.& >nless the by&laws proideotherwise, any action by the directors of a close
corporation witho!t a %eeting shall neertheless be
dee%ed alid if*
1. Defore or after s!ch action is taken, writtenconsent thereto is signed by all the directors or
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$. All the stockholders hae act!al or i%plied
knowledge of the action and %ake no pro%ptob9ection thereto in writing or
'. The directors are acc!sto%ed to take infor%al
action with the epress or i%plied ac+!iescence
of all the stockholders or
. All the directors hae epress or i%pliedknowledge of the action in +!estion and none of
the% %akes pro%pt ob9ection thereto in writing.
f a director8s %eeting is held witho!t proper call or
notice, an action taken therein within the corporate powers is dee%ed ratified by a director who failed to
attend, !nless he pro%ptly files his written ob9ection
with the secretary of the corporation after haingknowledge thereof.
Sectin !*#" Preempti(e right in close corporations.
– The pre&e%ptie right of stockholders in close
corporations shall etend to all stock to be iss!ed,incl!ding reiss!ance of treas!ry shares, whether for
%oney, property or personal serices, or in pay%ent
of corporate debts, !nless the articles of incorporation proide otherwise.
Sectin !*$" $mendment of articles of incorporation.
– Any a%end%ent to the articles of incorporation
which seeks to delete or re%oe any proisionre+!ired by this Title to be contained in the articles of
incorporation or to red!ce a +!or!% or oting
re+!ire%ent stated in said articles of incorporationshall not be alid or effectie !nless approed by the
affir%atie ote of at least two&thirds ($
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$=
books to coer its debts and liabilities ecl!sie of
capital stock* Proided, That any stockholder of aclose corporation %ay, by written petition to the
ec!rities and -change Co%%ission, co%pel the
dissol!tion of s!ch corporation wheneer any of acts
of the directors, officers or those in control of thecorporation is illegal, or fra!d!lent, or dishonest, or
oppressie or !nfairly pre9!dicial to the corporationor any stockholder, or wheneer corporate assets are being %isapplied or wasted.
TITLE 1III
SPECIAL CORPORATIONS
CHAPTER I 2 ED,CATIONAL
CORPORATIONS
Sectin !*6" %ncorporation. – -d!cational
corporations shall be goerned by special laws and by
the general proisions of this Code. (n)
Sectin !*'" Prere"uisites to incorporation. –
-cept !pon faorable reco%%endation of the
3inistry of -d!cation and C!lt!re, the ec!rities and
-change Co%%ission shall not accept or approethe articles of incorporation and by&laws of any
ed!cational instit!tion. (125a)
Sectin !*8" Board of trustees. – Tr!stees ofed!cational instit!tions organi#ed as non&stock
corporations shall not be less than fie (/) nor %orethan fifteen (1/)* Proided, howeer, That the
n!%ber of tr!stees shall be in %!ltiples of fie (/).
>nless otherwise proided in the articles of
incorporation on the by&laws, the board of tr!stees of
incorporated schools, colleges, or other instit!tions of
learning shall, as soon as organi#ed, so classifythe%seles that the ter% of office of one&fifth (1
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filled, according to the r!les, reg!lations or
discipline of the religio!s deno%ination, sect orch!rch to which he belongs and
/. The place where the principal office of the
corporation sole is to be established and located,
which place %!st be within the Philippines.
The articles of incorporation %ay incl!de anyother proision not contrary to law for the
reg!lation of the affairs of the corporation. (n)
Sectin !!#" 0ubmission of the articles of
incorporation. – The articles of incorporation %!st beerified, before filing, by affidait or affir%ation of
the chief archbishop, bishop, priest, %inister, rabbi or
presiding elder, as the case %ay be, and acco%panied by a copy of the co%%ission, certificate of election or
letter of appoint%ent of s!ch chief archbishop, bishop, priest, %inister, rabbi or presiding elder, d!lycertified to be correct by any notary p!blic.
7ro% and after the filing with the ec!rities and
-change Co%%ission of the said articles of
incorporation, erified by affidait or affir%ation, andacco%panied by the doc!%ents %entioned in the
preceding paragraph, s!ch chief archbishop, bishop,
priest, %inister, rabbi or presiding elder shall beco%ea corporation sole and all te%poralities, estate and
properties of the religio!s deno%ination, sect orch!rch theretofore ad%inistered or %anaged by hi%
as s!ch chief archbishop, bishop, priest, %inister,rabbi or presiding elder shall be held in tr!st by hi%
as a corporation sole, for the !se, p!rpose, behalf and
sole benefit of his religio!s deno%ination, sect orch!rch, incl!ding hospitals, schools, colleges, orphan
asyl!%s, parsonages and ce%eteries thereof. (n)
Sectin !!$" $c"uisition and alienation of property. –
Any corporation sole %ay p!rchase and hold real
estate and personal property for its ch!rch, charitable, beneolent or ed!cational p!rposes, and %ay receie
be+!ests or gifts for s!ch p!rposes. !ch corporation%ay sell or %ortgage real property held by it by
obtaining an order for that p!rpose fro% the Co!rt of
7irst nstance of the proince where the property issit!ated !pon proof %ade to the satisfaction of the
co!rt that notice of the application for leae to sell or
%ortgage has been gien by p!blication or otherwise
in s!ch %anner and for s!ch ti%e as said co!rt %ay
hae directed, and that it is to the interest of the
corporation that leae to sell or %ortgage sho!ld begranted. The application for leae to sell or %ortgage
%!st be %ade by petition, d!ly erified, by the chief
archbishop, bishop, priest, %inister, rabbi or
presiding elder acting as corporation sole, and %ay beopposed by any %e%ber of the religio!s
deno%ination, sect or ch!rch represented by thecorporation sole* Proided, That in cases where ther!les, reg!lations and discipline of the religio!s
deno%ination, sect or ch!rch, religio!s society or
order concerned represented by s!ch corporation solereg!late the %ethod of ac+!iring, holding, selling and
%ortgaging real estate and personal property, s!ch
r!les, reg!lations and discipline shall control, and the
interention of the co!rts shall not be necessary.(1/=a)
Sectin !!%" Filling of (acancies. – The s!ccessors inoffice of any chief archbishop, bishop, priest,
%inister, rabbi or presiding elder in a corporation soleshall beco%e the corporation sole on their accession
to office and shall be per%itted to transact b!siness as
s!ch on the filing with the ec!rities and -changeCo%%ission of a copy of their co%%ission,
certificate of election, or letters of appoint%ent, d!ly
certified by any notary p!blic.
6!ring any acancy in the office of chief archbishop,
bishop, priest, %inister, rabbi or presiding elder ofany religio!s deno%ination, sect or ch!rch
incorporated as a corporation sole, the person or persons a!thori#ed and e%powered by the r!les,
reg!lations or discipline of the religio!s
deno%ination, sect or ch!rch represented by thecorporation sole to ad%inister the te%poralities and
%anage the affairs, estate and properties of the
corporation sole d!ring the acancy shall eercise all
the powers and a!thority of the corporation soled!ring s!ch acancy. (1/5a)
Sectin !!&" *issolution. – A corporation sole %ay
be dissoled and its affairs settled ol!ntarily bys!b%itting to the ec!rities and -change
Co%%ission a erified declaration of dissol!tion.
The declaration of dissol!tion shall set forth*
1. The na%e of the corporation
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'1
$. The reason for dissol!tion and winding !p
'. The a!thori#ation for the dissol!tion of the
corporation by the partic!lar religio!sdeno%ination, sect or ch!rch
. The na%es and addresses of the persons who
are to s!perise the winding !p of the affairs ofthe corporation.
>pon approal of s!ch declaration of dissol!tion
by the ec!rities and -change Co%%ission, the
corporation shall cease to carry on its operations
ecept for the p!rpose of winding !p its affairs.(n)
Sectin !!6" eligious societies. – Any religio!s
society or religio!s order, or any diocese, synod, or
district organi#ation of any religio!s deno%ination,sect or ch!rch, !nless forbidden by the constit!tion,
r!les, reg!lations, or discipline of the religio!s
deno%ination, sect or ch!rch of which it is a part, or by co%petent a!thority, %ay, !pon written consent
and
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8/19/2019 Philippine Special Commercial Laws
32/78
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certified by a %a9ority of the board of directors or
tr!stees and co!ntersigned by the secretary of thecorporation. The ec!rities and -change
Co%%ission shall there!pon iss!e the certificate of
dissol!tion. (2$a)
Sectin !!(" Hol!ntary dissol!tion where creditors
are affected. – here the dissol!tion of a corporation%ay pre9!dice the rights of any creditor, the petition
for dissol!tion shall be filed with the ec!rities and
-change Co%%ission. The petition shall be signed by a %a9ority of its board of directors or tr!stees or
other officers haing the %anage%ent of its affairs,
erified by its president or secretary or one of itsdirectors or tr!stees, and shall set forth all clai%s and
de%ands against it, and that its dissol!tion was
resoled !pon by the affir%atie ote of thestockholders representing at least two&thirds ($pon fie (/) day8s notice, gien after the date on
which the right to file ob9ections as fied in the order
has epired, the Co%%ission shall proceed to hearthe petition and try any iss!e %ade by the ob9ections
filed and if no s!ch ob9ection is s!fficient, and the%aterial allegations of the petition are tr!e, it shall
render 9!dg%ent dissoling the corporation and
directing s!ch disposition of its assets as 9!stice
re+!ires, and %ay appoint a receier to collect s!chassets and pay the debts of the corporation. (:!le
10, :Ca)
Sectin !#*" *issolution by shortening corporate
term. – A ol!ntary dissol!tion %ay be effected bya%ending the articles of incorporation to shorten the
corporate ter% p!rs!ant to the proisions of this
Code. A copy of the a%ended articles of
incorporation shall be s!b%itted to the ec!rities and-change Co%%ission in accordance with this Code.
>pon approal of the a%ended articles ofincorporation of the epiration of the shortened ter%,as the case %ay be, the corporation shall be dee%ed
dissoled witho!t any f!rther proceedings, s!b9ect to
the proisions of this Code on li+!idation. (n)
Sectin !#!" %n(oluntary dissolution. – A corporation%ay be dissoled by the ec!rities and -change
Co%%ission !pon filing of a erified co%plaint and
after proper notice and hearing on the gro!nds proided by eisting laws, r!les and reg!lations. (n)
Sectin !##" Corporate li"uidation. – -ery
corporation whose charter epires by its own
li%itation or is ann!lled by forfeit!re or otherwise, orwhose corporate eistence for other p!rposes is
ter%inated in any other %anner, shall neertheless be
contin!ed as a body corporate for three (') years afterthe ti%e when it wo!ld hae been so dissoled, for
the p!rpose of prosec!ting and defending s!its by or
against it and enabling it to settle and close its affairs,
to dispose of and coney its property and to distrib!te
its assets, b!t not for