BY-LAWS (Sec.

46 & 47)
When adopted:
(a) No later than one (1) month after receipt from SEC of official notice of issuance of Cert. of
incorporation.
Requirement: Affirmative vote of stockholders representing at least majority of outstanding capital
stock (Stock Corp.) or members (Non-Stock). Must be signed by stockholders or members voting for
them
(b) Prior to incorporation
Requirement:
Where kept:

Approval of all incorporators; must be signed by all of them

(1) In the principal office of the corporation ; and
(2) Securities and Exchange Commission

When effective:
Only upon the SECs issuance of a certification that the by-law are not inconsistent
with the Corporation Code.
Special corporations: By-laws and/or amendments thereto must be accompanied be a certificate of the
appropriate government agency to the effect that such by-laws / amendments are in accordance with
law.

banks or banking institutions

building and loan associations
trust companies
insurance companies
public utilities
educational institutions
other special corporations governed by special laws

Contents of By-laws - Subject to the provisions of the Constitution, this Code, other special laws, and
the articles of incorporation, a private corporation may provide in its by-laws for:
1)
the time, place and manner of calling and conducting regular or special meetings of the directors
or trustees
2)
the time and manner of calling and conducting regular and special meetings of the stockholders or
members;
3)

the required quorum in meetings of stockholders or members and the manner of voting herein;

4)

the form for proxies of stockholders and members and the manner of voting them;

5)

the qualifications, duties and compensation of directors or trustees, officers and employees;

6)
the time for holding the annual election of directors or trustees and the mode or manner of giving
notice thereof;
7)
the manner of election or appointment and the term of office of all officers other than directors or
trustees;
8)

the penalties for violation of the by-laws;

9)

in the case of stock corporations, the manner of issuing certificates; and

10) such other matters as may be necessary for the proper or convenient transaction of its corporate
business and affairs.

As a general rule, the by-laws of a corporation are valid if they are reasonable and calculated to
carry into effect the objective of the corporation and are not contradictory to the general policy of
the laws of the land.

Is a provision in the by-laws allowing the BOD, by vote of absolute majority, to cancel shares valid?

No. It is a patent nullity, being in direct conflict with Sec. 187 of the Corp. Law which prohibits forced
surrender of unmatured stocks except in case of dissolution.

Is a provision in the by-laws fixing the salary of directors valid?

Yes. Since the Corporation Law does not prescribe the rate of compensation, the power to fix
compensation lies with the corporation.

Is a provision requiring persons elected to the Board of Directors to own at least P 5,000 shares
valid?

Yes. The Corporation Law gives the corporation the power to provide qualifications of its directors.

Where the SEC grants a license to a foreign corporation, it is deemed to have approved its foreignenacted by-laws. Sec. 46 of the Corporation Code which states that by-laws are not valid without SEC
approval applies only to domestic corporations.
A board resolution appointing an attorney-in-fact to represent the corporation during pre-trial is
not necessary where the by-laws authorize an officer of the corporation to make such appointment.