Provisions

Saturday, 24 February 2018 7:57 AM

The Great Big Summary of Corporation Code Provisions

Legend: BOD (board of directors) | AOI (articles of incorporation) | OCS (outstanding capital stock) | CS
(capital stock)SHs (stockholders) | ExeCom (Executive Committee) | Code (corporation code) | PH
(Philippines) | Corp (corporation) |
Title I
General Provisions – Definitions and Classifications
PROVISIO CONCEPT EXPANSION
N
Sec. 1 Title of the Code AKA "The Corporation Code of the Philippines"
Sec. 2 Corporation Defined 1. Artificial being
2. Created by operation of law
3. Right of succession
4. Incidental powers, attributes and properties
5. Authorized (by law) powers, attributes and properties
Sec. 3 Classes of STOCK
Corporations • Capital stock DIVIDED into shares and are AUTHORIZED to
○ Distribute to holders of such shares; OR
○ Distribute allotments of surplus profits on the basis of the shares held
NON-STOCK
• All other private corporations that are not stock
Sec. 4 Corporations • shall be governed PRIMARILY by the special law/ charter applicable
Created by Special • SUPPLEMENTED by provisions of CorpCode, as applicable
Laws/ Charters
Sec. 5 Corporations and CORPORATORS INCORPORATORS
Incorporators, Compose the corporation as: • Stockholders/ members mentioned
Stockholders and • Stockholders in the AOI
Members • Members • Originally forming and composing
the corporation
• Signatories thereof

Sec. 6 Classification of GR: Stock corporations can divide shares of stock into classes and/or series which have rights,
Shares privileges and restrictions as stated in the AOI.
EX: If shares OTHER THAN "preferred" or "redeemable" are deprived of voting rights
EE: Unless provided in the Code.
EEE: If there are NO SHARES at all with COMPLETE voting rights.

GR: Each share shall be equal in all respects to every other share
EX: Otherwise provided in the AOI AND stated in the certificate of stock

GR: Any or all shares/ series of shares may have par or no-par as provided in the AOI
EX: The following shall NOT be permitted to issue no-par stock:
• banks
• trust companies

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 • insurance companies
• public utilities
• building and loan associations

PREFERRED SHARES:
• Required to have par value (i.e. Cannot issue no par)
• Given preference in distribution of assets in case of liquidation
• Given preference in distribution of dividends
• Given preference as stated in the AOI as long as
○ not against Code
○ Filed with SEC (for effectivity)

NO PAR SHARES:
• Cannot be issued for consideration less than PHP 5.00/share
• Issued price may be fixed in AOI OR
○ BOD with AOI/ by-laws authority OR
○ BOD with authority from Majority of SH representing MAJORITY of OCS at
meeting called for such (see Sec. 62)

• Entire consideration received for the no-par shares are to be treated as CAPITAL and NOT
AVAILABLE for dividend distribution
• Holder of such is not liable to corporation or to creditors in respect thereto
• Deemed:
○ Fully paid
○ Non-assessable

GR: Vote necessary to approve a corporate act as provided in this Code shall refer ONLY to
stocks with VOTING RIGHTS
EX: Non-voting shares are entitled to vote on the following matters: (MEMORIZE!)
1. Amendment of AOI
2. Adoption and amendment of BY-LAWS
3. For all or substantially all of corporate property:
a. Sale
b. Lease
c. Exchange
d. Mortgage
e. Pledge
f. Other disposition
4. Incurring, creating, or increasing bonded indebtedness
5. Increase/Decrease of Capital Stock
6. Merger or consolidation with another corporation/s
7. Investment of CORPORATE FUNDS in another CORPORATION or business in
accordance with this Code
8. Dissolution of Corporation
Sec. 7 Founders' Shares Shares that:
• May be given rights and privileges not enjoyed by other stocks such as but not limited to:
○ exclusive right to vote and be voted for in the elections BUT
 Must be a limited period NOT EXCEEDING 5 years subject to SEC approval
 5-year period commences from date of SEC approval
Sec. 8 Redeemable Shares that:
Shares • May be purchased/ taken up by the corporation
○ after expiration of a fixed period
○ with or without unrestricted retained earnings in the books

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 ○ upon such other terms and conditions as may be in the AOI
 Terms and conditions must also be stated in the certificate of stock of share
Sec. 9 Treasury Shares Shares that:
• Issued, fully paid BUT subsequently reacquired by issuing corporation through:
○ Purchase
○ Redemption
○ Donation; or
○ Some other lawful means
• May be again disposed for a reasonable price fixed by the BOD

Title II
Incorporation and Organization of Private Corporations
PROVISION CONCEPT EXPANSION
Sec. 10 Number and Number of Incorporators: 5 or more but not more than 15
Qualifications:
Qualifications of
• Legal age
Incorporators • Majority are residents of the PH
• Each must own or subscribe to at least one (1) share of capital stock
Sec. 11 Corporate Term GR: Existence not exceeding 50 years
EX: Dissolution or Extension

On Extensions:
GR: maximum of 50 years per instance of extension
RQ: not earlier than 5 years prior expiry date immediately preceding
EX: justifiable reasons for early extension determined by SEC
Sec. 12 Minimum Capital GR: No required minimum authorized capital stock for stock corporations under this code
Stock Required of EX: SEC. 13 of this Code or otherwise specifically provided by special law
STOCK
Corporations Note: based on Sec. 13, there must be a minimum capitalization requirement of P80,000
Sec. 13 Amount of Capital Stock to be subscribed and paid for:
Stock to be • 25% of authorized capital as stated in AOI must be subscribed
Subscribed and Paid • 25% of total subscription must be paid upon subscription
for Purposes of • Paid-up capital should be at least P5,000
Incorporation So what must be the authorized capital for one to have a minimum of P5,000 paid up?
Let x = authorized capital
(0.25)(x) = subscribed
(0.25)(subscribed) must be paid-up. So,
(0.25)(0.25)(x) = 5,000
5000/[(0.25)(0.25)(x)] = P80,000 MINIMUM AUTHORIZED CAPITAL REQUIRED
Sec. 14 Contents of Articles File with SEC:
of Incorporation • AOI must be in any of official languages
• Duly signed by all incorporators
• Acknowledged by all incorporators
• That xxx has been elected as Treasurer until successor has been elected
• That no transfer of stock will reduce PH ownership to less than required
• Must be accompanied by SWORN STATEMENT OF TREASURER that:
○ 25% of authorized is subscribed
○ 25% of subscribed is paid to him in actual cash
 If property, fair valuation of such is equal to at least 25% of subscription
○ Paid-up is at least P5,000
• Should contain the following (except as prescribed by law/ Corporation Code)
a. Corp Name
b. Specific purpose/s

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 i. If multiple, state PRIMARY and identify SECONDARY
ii. Non-stock cannot have a purpose which contradicts its nature
c. Place of principal office
d. Term
e. For Incorporators, Preliminary Directors/ Trustees and Contributors (for non-stock):
i. Names
ii. Nationalities
iii. Residences
iv. For Contributors only: amount of contribution
f. Number of directors/trustees
i. Minimum 5
ii. Maximum 15
g. For stock corporation only:
i. Amount of authorized capital stock (ACS) in PH PESO
ii. Number of shares of ACS
iii. If par value shares:
1) Par value
2) Original subscribers
a) Names
b) Nationalities
c) Residences
d) Amount subscribed
iv. If not all par or not all without par, SUCH FACT MUST BE STATED
Sec. 15 Forms of Articles of [please see Code]
Incorporation
Sec. 16 Amendment of GR: By the ff:
Articles of IF STOCK
Incorporation • Majority vote of BOD or trustees AND
• 2/3 of Outstanding Capital Stock (OCS)
○ Without prejudice to dissenting stockholder's right of appraisal
IF NON-STOCK
• Vote or written assent of 2/3 MEMBERS
E: otherwise provided by this Code/ special law

HOW:
• Original and amended articles shall contain ALL provisions required by law in the AOI
• Articles as amended shall be underscore change/s made
• Copy should be duly certified under OATH by corporate secretary AND MAJORITY of
the directors or trustees stating that amendment/s have been duly approved by the
proper vote
• Submit the foregoing to the SEC

WHEN: amendments take effect upon:

• Approval of the SEC; OR
• From date of filing with the SEC IF not acted upon by the SEC within 6 months from date
of filing for causes not attributable to the corporation

Sec. 17 Grounds when SEC may reject on the following grounds provided that it gives incorporators reasonable time to
Articles of correct
Incorporation or
Amendment may be Grounds:
Rejected or • AOI or any amendment thereto is not substantially in accordance with forms prescribed
Disapproved here

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 • Purpose/s of corporation are unconstitutional, illegal, immoral, contrary to government
R&Rs
• Treasurer's Affidavit re: amount of capital stock subscribed and/or paid is FALSE
• Not compliant with required % of ownership of capital stock to be owned by PH per
Constitution
Additional Ground (for the list below): not accompanied by a favorable recommendation of the
appropriate government agency that such articles/ amendments are in accordance with law
• Banks
• banking and quasi-banking institutions
• building and loan associations
• trust companies and other financial intermediaries
• insurance companies
• public utilities
• educational institutions
• other corporations governed by special laws
Sec. 18 Corporate Name Identical or deceptively or confusingly similar company names with an existing corporation or to
any other name protected by law is not allowed.

Approval of change in corporate name by SEC, SEC will issue amended certificate of inc. under
amended
Sec. 19 Commencement of From the date the SEC issues a certificate of incorporation under its official seal
Corporate Existence From this time:
• Incorporators, stockholders/ members and successors now constitute body politic and
corporate
• Under such name in the AOI
• For the period stated in AOI
• Unless extended or dissolved
Sec. 20 De Facto The due incorporation of a corporation claiming in good faith that it is one shall not be inquired
Corporations into collaterally in any private suit to which corporation may be a party. Such inquiry may only
be made by the SolGen in a quo warranto proceeding.

Requisites (Hall v. Piccio)

1. Organized under valid law
2. Bona fide compliance with formalities of law ("colorable compliance" in good faith)
3. User of corporate powers
4. SEC issuance of certificate of incorporation
Sec.21 Corporation by • Person who assumes an obligation to a corporation purporting to be one cannot escape the
Estoppel obligation by claiming that there was no corporation.
• All who act as a corporation while knowing that they are not shall be liable as general partners
for all debts, liabilities, damages incurred arising from such
• Anyone who purports to be a corporation and enters into transactions cannot use the defense of
its lack of corporate personality.
Sec. 22 Effects of Non-use GR: Effects of non-user of corporate powers
of Corporate Charter • 2 years from date of incorporation: no formal organization and commencement of
and Continuous In- business or work transactions
operation of a Corporation deemed dissolved
Corporation • Subsequently inoperative for at least 5 years
ground for suspension/ revocation of its corporate franchise or certificate of
incorporation
EX: if SEC deems that failure to organize/commence business/ continuously operate is due to
causes beyond control of corporation

Title III

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 Title III
Board of Directors/ Trustees/ Officers
PROVISIO CONCEPT EXPANSION
N
Sec. 23 The Board of GR: corporate powers of all corporations under the Code are exercised by the board of directors
Directors or Trustees or trustees elected from stockholders with an office term of one (1) year until successors are
elected and qualified;
For corporations with no stock, from among the members of such corporation
EX: unless otherwise provided in the Code

Directors must own at least one (1) share of capital stock - share will be under his name in the
books
Ceasing to hold at least 1 stock = ceases to be a director
Trustees must be members

MAJORITY BOD SHOULD BE RESIDENTS OF THE PHILIPPINES for corporations organized

under this Code
Sec. 24 Election of Directors Requirements for Election:
or Trustees • Majority of owners of OCS or members entitled to vote (if non-stock) must be present
Can be in person or by written proxy
• By ballot if someone requests
• Highest number of votes are deemed elected
• May adjourn from day to day/ time to time but never sine die (i.e. without assigning a next
meeting) or indefinitely
○ Contemplates the event where there is no election held because no present/
represented by proxy the owners of a majority OCS/ majority entitled to vote
Voting
• Simple voting
○ Vote in person or by proxy
○ # of votes: Number of outstanding shares (in his name per the books) at the time
when fixed by by-laws
 If by-laws silent, at the time of election
○ May vote such number of shares for as many persons as there are directors
 i.e. divide such shares among number of directors or consolidate them into
one person
• Cumulative voting
○ Give one candidate as many votes = number of directors to be elected * number of
his shares
○ Or distribute them using the same principle among as many candidates as he
wants
• Restrictions on voting
○ Total number of votes cast shall NOT exceed:
no. of shares owned by the person as shown in the books * whole # of
directors to be elected
○ No delinquent stock shall be voted
• For non-stock corps:
○ GR: members may cast as many votes as there are trustees to be elected but
may not cast more than one vote for one candidate
○ EX: unless otherwise provided in the AOI or by-laws

Sec. 25 Corporate Officers, Directors/trustees cannot attend or vote by proxy at board meetings.
Quorum
GR: majority of the number of directors/trustees as fixed in the AOI constitutes the QUORUM
EX: unless by-laws provide for GREATER majority

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 Quorum is needed for:
• Transaction of corporate business
• Corporate acts (at least a MAJORITY of quorum)
○ EX: election of officers (needs a majority of all members of the board)
President
• Must be a director
• Cannot be CorSec
• Cannot be Treasurer
Treasurer
• Does not need to be a director
• Cannot be president
Corporate Secretary
• Must be a resident AND citizen of the PH
• Does not need to be a director
• Cannot be president
Other officers
• If provided for in the by-laws

Directors of the corp must formally organize immediately after their election and ELECT A
PRESIDENT
Sec. 26 Report of Election of WHO: CorSec or some other officer
Directors, Trustees, WHAT: Submit to SEC the:
and Officers • Names
• Nationalities
• Residences
- of directors, trustees, and officers elected
WHEN: within thirty (30) days after election

In case of death of the foregoing:

• Heirs shall report such fact to SEC
• Or CorSec or any other officer of the corporation
Sec. 27 Disqualification of Disqualifications:
Directors, Trustees, • Conviction by final judgement:
or Officers ○ of offense punishable by prision mayor and above [period exceeding 6 years]
○ of violating the Corp Code committed within 5 years prior
Sec. 28 Removal of Directors HOW: (2/3) vote of OCS [if non-stock, of members]
or Trustees Requirements
• Removal should take place at regular meeting or special meeting for such purpose
• After previous notice to SH of the intention to propose the removal in such meeting
• Special meeting must be
○ Called by secretary on order of the president; OR
○ Written demand by stockholders representing OCS majority; OR
○ If non-stock, majority of members entitled to vote
○ If no secretary or secretary refuses/fails to call or refuses/fails to give notice:
 Call may be addressed directly by any SH or member signing the demand to
the SHs or members
How Notice is Given
• Time, place, intention to propose removal must be shown
• By publication or by written notice as prescribed in the Code
Removing
• GR: may be without cause
• EX: if removal without cause is used to deprive MINORITY SHs or members of the right
of representation to which they may be entitled under Sec. 24 of the Code

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 Replacing
• May be filled by election at same meeting without further notice
• Or at any regular or special meeting called for the purpose
• Notice requirement is still needed

Sec. 29 Vacancies in the Vacancies other than removal or expiration of term:

Office of Director or If still constituting quorum:
Trustee • Vote majority of remaining directors/trustees
If no quorum:
• Filled by SH in a regular or special meeting called for such purpose
• Elected person shall fill only the unexpired term of predecessor

If 'filling' through increasing the number of directors/trustees

• Only through election in regular or special meeting of SH/members called for such
purpose
• OR in the same meeting where the increase was authorized if so stated in the notice
Sec. 30 Compensation of GR: directors shall not receive compensation except reasonable per diems
Directors EX: provision in the by-laws provides them compensation

Requisites:
• Such compensation (OTHER than per diems) are granted by the vote of SHs representing
at least majority of the OCS
• Done during regular or special SH's meeting
• Such compensation cannot exceed 10% of the net income before tax of the corporation
during preceding year
Sec. 31 Liability of Directors, Joint & several liablility* for all damage resulting from the ff. suffered by the
Trustees, or Officers corp/SHs/members/3rd P:
• Willfully, knowingly vote/assent to patently, unlawful acts of corp
• Guilty of gross negligence
• Guilty of bad faith in directing corporate affairs
• Acquire personal/pecuniary conflict of interest with their duty as directors/trustees
*means solidarily liable

Liable as trustee for corporation if:

• A matter was reposed to him in confidence
○ Equity provides that he not benefit from this on his own
• But he attempts to acquire or actually acquires an interest adverse to the corp WRT to
such matter
Sec. 32 Dealings of GR: contract of corporation w/ 1 or more of its directors/trustees/officers is voidable at the option
Directors, Trustees of the corporation
or Officers with EX: if ALL of the following are present:
Corporation 1. Presence of such director/trustee in the board meeting where the contract was approved
WAS NOT NECESSARY to constitute a quorum
2. Vote of such director/trustee NOT NECESSARY for the approval of the contract
3. Contract is fair and reasonable under the circumstances; and
4. In case of an OFFICER, contract with such has been previously authorized by the BOD
EEX: if either no. 1 OR 2 is absent in a contract with a director/trustee, such may be RATIFIED
by:
• Vote of SH representing at least (2/3) of the OCS or members (if non-stock) in a meeting
called for such purpose
Requisites for the EEX:
• Full disclosure of adverse interest of directors/trustees involved is made in such meeting
• Contract is fair and reasonable under the circumstances

Sec. 33

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 Sec. 33 Contracts between GR: contract between two or more corps having interlocking directors shall not be invalidated
Corporations with on the ground of mere interlocking of directors
interlocking directors EX:
• Cases of fraud
• Contract is unfair and unreasonable under the circumstances
Special instance:
• If interest of interlocking director is substantial in C1* and his interest in C2 is merely
nominal, such director with respect to C2 will be subject to the rules in Sec. 32

"substantial" in this section means stockholdings exceeding 20% of OCS

*C1 - corporation 1 (director has substantial interest)

*C2 - corporation 2 (director has nominal interest)
Sec. 34 Disloyalty of a GR: director must account to the corporation all his profits which we he gained through
Director disloyalty*
EX: if his act was ratified by SHs representing (2/3) of OCS
Note:
• This provision still applies even if the director used his own funds
• Disloyalty - the director, by virtue of his office, acquires a business opportunity for
himself which should have been for the corporation, and profits from the same at the
expense of the corp
Sec. 35 Executive Committee By-laws can create an ExeCom
Composition:
• 3++ members of the BOD
• Appointed by the BOD
Vote requirement: majority vote of all ExeCom members to act on:
• specific matters delegated by by-laws
• Matters delegated through majority vote of BOD
Except on:
1. Approval of any action which requires SH approval as well
2. Filling of BOD vacancies
3. Amendment of by-laws
4. Repeal of by-laws
5. Adoption of new by-laws
6. Amendment of any BOD resolution*
7. Repeal of any BOD resolution*
8. Distribution of cash dividends to SHs
*the BOD resolution contemplated here states in express terms that the ExeCom cannot amend
or repeal the same | absent that, I think the ExeCom can do so

Title IV
Powers of Corporations
PROVISIO CONCEPT EXPANSION
N
Sec. 36 Corporate Powers Powers of the Corporation
and Capacity 1. Sue and be sued in corporate name
2. Succession by its corporate name (w/in period stated in AOI/ Cert of Inc)
3. Adopt/use corp. seal
4. Amend AOI
5. Adopt by-laws
6. Amend/ repeal by-laws
7. FOR STOCK CORPS ONLY
a. issue/sell stocks to subscribers

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 b. sell treasury stocks
8. non-stock corp version: admit members to the corporation
9. purchse, receive, grant, convey, sell, lease, pledge, mortgage real and personal property
10. adopt plan of merger/consolidation
11. make reasonable donations even for public welfare, charitable, cultural, scientific or civic
except in aid of any political party/candidate for purposes of partisan political activity
12. establish pension, retirement or other plans for benefit of directors/trustees/officers/
employees
13. exercise powers essential/necessary for purposes in AOI
Sec. 37 Power to Extend or Voting Requirement:
Shorten Corporate • majority vote of BOD and
Term • RATIFIED at a meeting (not necessarily called for the purpose) by at least (2/3) OCS or
members
Notice Requirement:
• written notice of PROPOSED ACTION and of time and place of meeting shall be
○ sent to each stockholder/member in his residence as shown on books and
deposited to the addressee in post office with postage already paid
○ or served personally
Note:
• in case of term EXTENSION, any dissenting SH may exercise APPRAISAL RIGHT
Sec. 38 Power to Increase or  General Requirement
• Must not prejudice rights of corporate creditors (SEC will not approve if this happens)
Decrease Capital
 Voting Requirement
Stock; Incur, Create • Majority vote of BOD
or Increase Bonded • (2/3) OCS at a SH meeting duly called for the purpose
Indebtedness • Requires prior approval of the SEC
 Notice Requirement
• Written notice of proposed increase/diminution of CS or incurring, creating, increasing bonded
indebtedness
• Time and place of SH meeting at which the proposal is to be considered
• Addressed to each SH at his residence per the books of corporation and deposited to the
addressee in the post office with postage fees paid
• OR served personally
 Documentary Requirement
• Certificate in duplicate
○ signed by: majority of directors of corporation
○ Countersigned by: chairman and secretary of SH Meeting
• Must contain:
○ Statement that requirements of this section complied with
○ Amount of increase/diminution of CS
○ If increase of CS:
 Amount of CS/ no. of shares of no-par actually subscribed
 Names nationalities, residences of persons subscribing
 Amount of capital stock or no. of shares of no-par subscribed by each
 Amount paid by each cash or property
 Amount of CS or no. of no-par shares allotted to each SH if such increase is for
making effective stock dividend therefor authorized
○ Any bonded indebtedness to be incurred/created/increased
○ Actual indebtedness of corporation on the date of meeting
○ Amount of stock represented at meeting
○ Vote authorizing increase/diminution of CS or incurring/creating/increasing bonded
indebtedness
• Must also include:
○ Sworn statement of treasurer at that time showing:
 At least 25% of increased CS has been subscribed
 At least 25% of subscribed has been paid in cash/property [with property value
of 25% of subscription]
• Duplicates
○ One copy is kept on file with the corporation office
○ One copy is filed with the SEC and attached to the original AOI
 Effectivity
• From the time the SEC approves and issues certificate of filing

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 • From the time the SEC approves and issues certificate of filing

 Specific to Non-Stocks
• May incur bonded indebtedness or increase the same by approval of majority vote of BOT AND
(2/3) of members in meeting duly called for purpose
 Bonds issued by corporations should be registered with SEC

Sec. 39 Power to Deny Pre- GR: all SH of stock corp shall enjoy pre-emptive right to subscribe to all issues/ disposition of
emptive Right shares in proportion to their holdings
EX: right is denied by AOI or amendment thereto
Requirement:
• Pre-emptive right shall not extend to
○ shares issued in compliance with stock offerings/ minimum stock ownership by
public
○ Shares to be issued in GF with approval of SH 2/3 of OCS in exchange of
property/ payment of previous debt
Sec. 40 Sale or Other  Acts that can be done
Disposition of Assets • Sell, lease exchange, mortgage pledge, dispose of ALL or SUBSTANTIALLY ALL* of
its property and assets as the BOD/T may deem expedient
• Includes goodwill
• Must be in accordance with existing laws on illegal combinations/monopolies
 Voting Requirement
• Authorization of BOD by SH vote representing (2/3) OCS / (2/3) members for non-stock
○ If non-stock with NO members with voting rights, vote of MAJORITY of
trustees in office is sufficient authorization
• In a meeting duly called for such purpose
• Majority of BOD needed to perform act
 Notice requirement
• Written notice must contain
○ Proposed action
○ Time and place of meeting
• Addressed to each SH at his residence per the books of corp and deposited to
addressee in post office with postage paid
 Dissenting stockholder may exercise appraisal right
 GR: after SH/member authorization, BOD/T may, at discretion, ABANDON such sale/lease/
disposition, subject to rights of 3rd parties under any contract, with no further action/approval
by the SHs/memb
 EX: even without SH authorization, corporation may sell/lease/exchange/mortgage etc. any of
its property and assets if it is necessary in the usual and regular course of business of
the corp or if the proceeds from disposition be appropriated for conduct for remaining
business

*considered substantially all if thereby the corporation would be rendered incapable of

continuing business/ accomplishing purpose for incorporation
Sec. 41 Power to Acquire Requirement:
Own Shares • Corporation has unrestricted retained earnings in its books to cover shares to be
purchased
• Acquisition is for a legitimate purpose
Including but not limited to:
• Eliminating fractional shares arising from stock dividends
• Collecting/compromising indebtedness to corporation arising out of
○ Unpaid subscription
○ Delinquency sale
○ Purchase delinquent shares sold during sale
○ Payment of dissenting/withdrawing stockholders for their shares

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Sec. 42 Power to invest GENERAL RULE:
Corporate Funds in  Voting Requirement
Another Corporation • Majority of BOD
or Business or for • Ratified by SH representing at least (2/3) of OCS/ members
Any Other Purpose • In a meeting called for such purpose
 Notice requirement
• Written notice
• Time and place of meeting included
• Addressed to each SH at residence per books of corporation and deposited to the
addressee in post office with paid postage
• Or served personally
 Any dissenting stockholder will have appraisal right.
EXCEPTION
 If investment by corp is reasonably necessary to accomplish primary purpose as stated in
the AOI, approval of stockholders is unnecessary (i.e. just need BOD majority)
Sec. 43 Power to Declare  Prohibitions
Dividends • Must be declared out of unrestricted retained earnings
• Payable in cash/property/stock to all SH on basis of OCS held
• Dividends due on DELINQUENT stock shall:
○ First applied to unpaid balance on subscription + costs/expenses
○ Be withheld until unpaid subscription fully paid
 Voting Requirement
• Approval of SH representing not less than (2/3) of OCS
• At regular/special meeting for purpose

GR: corps are prohibited from retaining surplus profits in excess of 100% of paid-in CS
EX: when
• Justified by definite corporate expansion projects/ programs approved by BOD
• Corporation is prohibited under any loan agreement with any financial institution
without its consent secured
• When it can be clearly shown that such retention is necessary under special
circumstances, like when there is a need for reserve for probable contingencies

Sec. 44 Power to Enter into  Coverage

Management • any contract where a corp undertakes to manage/ operate substantially all of the
Contract business of another
• Can be called 'service contracts' or 'operating agreements' or others
 Duration
• GR: Should only be at most 5 years for one term
• EX: contracts which relate to utilization of natural resources - period as may be
provided by law
 Voting Requirement
• GR
○ Approved by BOD and
○ Approved by SHs owning at least majority of OCS at meeting duly called for
purpose
• EX
○ Where SHs representing same interest of both managing and managed corps
own and control more than 1/3 of the total OCS entitled to vote of the managing
corporation OR where majority of the BOD of managing corp also constitute
majority of the BOD of the managed corp, voting should be:
 Approved by SHs owning at least (2/3) of total OCS entitled to vote of
MANAGED corp (or members if non-stock)

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 Sec. 45 Ultra-Vires Acts of GR: No corporation shall exercise corporate powers except conferred by the Corporation
Corporations EX:
• if conferred by Code or AOI
• Necessary or incidental to exercise of powers conferred

Title V
By-Laws
PROVISIO CONCEPT EXPANSION
N
Sec. 46 Adoption of By-Laws  Voting Requirement
• For by-laws adopted and filed AFTER incorporation
○ Affirmative vote of SH representing at least majority of OCS/members
• For by-laws adopted and filed PRIOR incorporation
○ Approved and signed by all incorporators
 Documentary Requirement
• For by-laws adopted and filed AFTER incorporation
○ Signed by SH voting for it
○ Kept in the principal office of the corporation subject to SH inspection during
office hours
○ A copy is filed with the SEC (will be attached to the original AOI)
 Duly certified by majority of directors/trustees
 Duly countersigned by CorSec
• For by-laws adopted and filed PRIOR incorporation
○ Signed by all incorporators
○ Copy filed with the SEC together with AOI
 Filing requirement
• The following institutions must include a certificate of the appropriate gov't agency
to the effect that such by-laws/ amendments are in accordance with law:
○ Bank
○ Banking institution
○ Building and loan association
○ Trust company
○ Insurance company
○ Public utility
○ Educational institution
○ Other special corp governed by special laws
 Effectivity
• Upon issuance of the SEC of a certification that by-laws are not inconsistent with
Code

Sec. 47 Contents of By-Laws Private corporation's by-laws may contain, subject to code provisions:
• Time, place, manner of calling/conducting regular/special meetings of directors/trustees
• Time, manner of calling/conducting regular/special meetings of SH or members
• Required quorum of SH and manner of voting in meeting
• Form for proxies of SH and members and manner of voting
• Qualifications duties compensation of directors/trustees/ officers/ employees
• Time for holding annual election of officers and mode of notice
• Manner of election/appt and term of office for all officers other than directors/trustees
• Penalties for violating by-laws
• For stock: manner of issuing stock certs
• Other matters necessary for convenient transaction of corp biz
Sec. 48

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 Sec. 48 Amendments to By-  Voting requirement
Laws • Majority vote of BOD/BOT AND
• Majority of OCS/members
• At regular/special meeting duly called for the purpose
 Delegation of Powers Allowed
• Owners of (2/3) of OCS or members may delegate to the board of directors/trustees
power to amend/repeal any by-laws or adopt new ones
• CONDITION: any power delegated to amend/repeal shall be considered revoked
whenever:
○ SH owning/representing MAJORITY of OCS/members shall so vote at
regular/special meeting (not necessarily called for such purpose)
 Documentary requirement
• Amendment/new by-laws shall be attached to the original by-laws in the office
• Copy should be filed with the SEC and attached to the original AOI and original by-laws
○ Certified under oath by CorSec AND
○ Majority of directors/trustees
 Effectivity
• Upon issuance of the SEC of a certification that by-laws are not inconsistent with
Code

Title VI
Meetings
PROVISIO CONCEPT EXPANSION
N
Sec. 49 Kinds of Meetings REGULAR or SPECIAL
(applicable for directors, trustees, stockholders, members)
Sec. 50 Regular and Special REGULAR meetings
Meetings of • For SH/members
Stockholders or ○ Annually, fixed by by-laws
Members ○ If not fixed, April every year (date determined by BOD/T)
○ Notice: written and sent to all SH/ members of record at least two (2) weeks
prior to meeting unless by-laws say otherwise
SPECIAL meetings
• For SH/ members
○ Held any time deemed necessary or per by-laws
○ Notice: at least one week (1) written notice sent to all SH/members unless by-
laws provide otherwise
*Notice of Meeting may be waived, expressly, or impliedly, by any SH or member

Procedure if there is no one authorized to call a meeting:

• SH/member petitions SEC to call
• Application shows good cause for the call
• SEC issues order to petitioning SH/member directing him to call the meeting
• Petitioning SH will preside until majority of SH/members present have chosen among
them the presiding officer
Sec. 51 Place and Time of SH/member meetings
Meetings of Whether regular or special:
Stockholders or • In the city or municipality where PRINCIPAL OFFICE of corporation is located
Members • IF PRACTICABLE in the office itself
• Metro Manila shall be considered a city or municipality
Notice of Meetings shall be:
• In writing
• Time stated

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 • Place stated
GR: Improperly held or called meeting will invalidate proceedings, business transacted
EX: All stockholders or members of the corporation are present/ duly represented at meeting
EEX: If proceedings/ business transaction NOT within powers or authority of corporation
Sec. 52 Quorum in Meetings GR: stockholders representing a MAJORITY of OCS or majority of members (non-stock)
EX: otherwise provided in BY-LAWS or Code
Sec. 53 Regular and Special BOD/T Meetings
Meetings of Board of Regular Meetings
Directors or Trustees • GR: monthly
• EX: if BY-LAWS provide otherwise
Special Meetings
• Held anytime
• Held upon call of President or as provided in by-laws
Location
• GR: ANYWHERE in or outside the PH
• EX: by-laws provide otherwise
Notices
• Date, time, and place of meeting
• GR: Sent to every driector/trustee at least one (1) day prior to scheduled meeting
• EX: otherwise provided by by-laws
*director/ trustee may waive notice requirement either expressly or impliedly
Sec. 54 Who Shall Preside at GR: President presides at ALL meetings of directors/trustees as well as SH/members
Meetings EX: by-laws provide otherwise
Sec. 55 Right to Vote of GR: For pledged/mortgaged shares, pledgor/mortgagor shall have right to attend and vote
Pledgors, at meetings of stockholders
Mortgagors, and EX: If pledgee/mortgagee is expressly given such right in writing recorded on the corporate
Administrators books by pledgor/mortgagor

Executors, administrators, receivers, other legal reps duly appointed by the court may attend
and vote in behalf of the SH/members without need of any written proxy.
Sec. 56 Voting in Case of • GR: consent of ALL co-owners needed
Joint Ownership of • EX: written proxy, signed by ALL co-owners, authorizing one/some of them/ other person to
Stock vote for such shares
• EEX: If shares are owned in an "and/or" capacity, either one of the joint owners can vote for
such shares or appoint a proxy for it
Sec. 57 Voting Right for No voting rights as long as they remain in the Treasury.
Treasury Shares
Sec. 58 Proxies SHs/members may vote in person or by proxy in all meetings of SHs/members. (note that
BOD/T cannot vote via proxy)
Requirements:
• In writing
• Signed by SH/member
• Filed with CorSec before scheduled meeting
• GR: valid only for the meeting for which it was intended
• EX: if otherwise provided for in the proxy
• EEX: if longer than five (5) years at any one time
Sec. 59 Voting Trusts Requirements:
• GR: may vote by proxy
• EX: If agreement provides otherwise.
• In writing
• Notarized
• Specifies terms and conditions thereof

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 • Documentation
○ Certified copy filed with Corp and with SEC
○ If not, agreement is ineffective/ unenforceable
• Voting trust agreement filed with Corp shall be subject to examination, provided
transferor and trustee/s may inspect right of inspection of all corporate books and
records in accordance to code
Process
• Certificate/s of stock covered by the voting trust shall be cancelled and new ones issued
in the name of the trustee/s stating that they are issued pursuant to trustee
agreement.
• Books of the corp should note that the transfer in name of shares to trustee is pursuant
to a voting trust agreement
• Trustee/s shall execute and deliver to transferors voting trust certificates which shall be
transferable and have same effect as certificates of stock
• Any other SH may transfer his shares to same trustee/s upon terms and conditions
stated in voting trust agreement, and may inspect all corporate books and records.
Duration
• Shall expire automatically at end of agreed period and the certificates
• Voting trust certs are deemed cancelled
• New certificates of stock are re-issued in name of transferor
Restrictions:
• Cannot circumvent the law against monopolies and illegal combinations in restraint of
trade/ for purposes of fraud
• GR: Voting trust agreement shall not exceed five (5) years
• EX: Voting trust is specifically required as a condition in a loan agreement, then
voting trust may be more than 5 years but will automatically expire upon full
payment of the loan

Title VII
Stocks and Stockholders
PROVISION CONCEPT EXPANSION
Sec. 60 Subscription Contract • contract for acquisition of unissued stock in existing corporation or corporation-to-be-formed
is deemed a subscription contract
• Even if it is referred to as a 'purchase' or some other contract
Sec. 61 Pre-Incorporation GR: subscription of shares of stock for a corp-to-be shall be irrevocable for 6 months from
date of subscription
Subscription
EX: (i.e. may be revoked if)
• All other subscribers consent to revocation; or
• Corporation fails to materialize within said period or within a period as stipulated in
subscription contract
EEX: If the AOI has been submitted to the SEC
Sec. 62 Consideration for May be any/ combination of any two or more of the following (can also be used for
bonds insofar as they are applicable):
Stocks • Actual cash
• Property, tangible or intangible, actually received by corporation and is necessary for its use at
fair valuation = PAR or issued value of stock issued
• Labor performed for services ACTUALLY rendered to corporation
• Previously incurred indebtedness of corporation
• Amounts transferred from URE to stated capital
• Outstanding shares exchanged for stocks in event of reclassification or conversion

If other than cash, valuation thereof shall be initially determined by incorporators or BOD, subject to
SEC approval.

Prohibitions:
• Promissory notes
• Future service

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 • Future service

NO-PAR SHARES
• Issued price may be fixed in AOI OR
○ BOD with AOI/ by-laws authority OR
○ BOD with authority from Majority of SH representing MAJORITY of OCS at
meeting called for such (see Sec. 62)

Sec. 63 Certificate of Stock Capital stock shall be divided into shares with certificates
• Signed by president/ VP
and Transfer of
• Countersigned by CorSec or Asst. CorSec
Shares • Sealed with corporation seal
• Issued according to by-laws

Characteristics:
• Personal property
• May be transferred via delivery of certificate/s indoresed by owner or his atty.-in-fact or other
person legally authorized to transfer

Prohibitions
• No transfer shall be valid except as between parties UNTIL transfer is recorded in corpo books
showing:
○ Names of parties in transaction
○ Date of transfer
○ Number of certs and shares transferred
• No shares of stock against which corp holds any unpaid claim shall be transferrable in corp
books
Sec. 64 Issuance of Stock Full amount of subscription (with interest and expenses if delinquent) must first be paid before
certificate of stock can be issued for the subscriber.
Certificates
Sec. 65 Liability of Directors Any director/ officer-
• Consenting to issuance of stocks
for Watered Stocks
• For a consideration less than par/ issued value
• For a consideration in any form other than cash, valued in excess of its fair value
• Who having knowledge of the above, does not object in writing and file his objection with
CorSec
- shall be SOLIDARILY LIABLE with the stockholder concerned to the corp and its creditors for
Difference between fair value received at time of issuance and the par or issued value (FMV - PAR)
Sec. 66 Interest on Unpaid • Interest is paid from date of subscription
• Rate of interest fixed in by-laws
Subscriptions
• If no rate is fixed, rate shall be legal rate.
Sec. 67 Payment of Balance BOD may at any time declare due and payable unpaid subscriptions to the CS and collect the
same
of Subscription • With interest
• May be % declared due, not exact value
• Subject to provisions of contract of subscription
Payment
• On date specified in the contract or date stated in the CALL made by board
• Failure to pay shall render ENTIRE BALANCE DUE (acceleration clause)
• SH will be liable to pay interest on such balance computed from such date until full payment
• If different rate of interest is provided in by-laws, then such will be used
Time Limit
• GR: If within 30 DAYS from said date, no payment is made = DELINQUENT STOCKS
○ Such will be subject to delinquency sale
• EX: BOD orders otherwise
Sec. 68 Delinquency Sale Requirements:
• Resolution by BOD ordering the sale of delinquent stock stating:
○ Amount due on each subscription (includes interest)
○ Date, time, place of sale
 Should not be less than 30 days nor more than 60 days from the date the stocks
became delinquent
Notice:
• Copy of resolution is enclosed
• Sent to every delinquent SH PERSONALLY or REGISTERED MAIL

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 • Sent to every delinquent SH PERSONALLY or REGISTERED MAIL
• Published 1 per week for 2 consecutive weeks
• Newspaper of general circulation in province where principal office of corporation is
Sale:
• Sold at public auction to bidder who offers to pay full amount of balance (with interests, cost of
advertisements, expenses of sale) for smallest number of shares or fraction of a share
• Stock shall be transferred in the books of the corp to the purchaser, certificate shall be issued
to buyer
• Remaining shares shall be credited to delinquent SH
• Delinquent SH is also entitled to issueance of cert of stock covering the remaining
How to stop sale:
• Delinquent SH pays the corporation on or before date of sale (balance due plus interest and
other costs) OR
• BOD otherwise orders

If no interested bidder:
• For the smallest number of shares/fraction corporation may bid for the same
• Total amount due shall now be credited as PAID IN FULL in books of the corporation
• Title to all shares of stock covered by such shall be vested in corpo as TREASURY shares
Sec. 69 When Sale may be Action to recover delinquent stock sold can be sustained upon ground of irregularity or defect
in notice of sale or sale itself of delinquent stock
Questioned Requirement:
• Party seeking to maintain action first pays or tenders to the party holding the stock the sum
for which the same was sold with interest from date of sale at LEGAL RATE
• Must be commenced by filing of a complaint
• PRESCRIPTION FOR FILING COMPLAINT: SIX (6) MONTHS FROM DATE OF SALE
Sec. 70 Court Action to corporation can always collect via action in court of proper jurisdiction the amount due on
any unpaid subscription with accrued interest, costs and expenses. Nothing in the code
Recover Unpaid prevents the corporation.
Subscription
Sec. 71 Effect of Delinquency • cannot be voted for
• Is not entitled to vote or representation at any SH meeting
• Holder is not entitled to rights of an SH except right to dividends until he pays the amount due with
accrued interest, costs, and expenses of advertisement if any.
Sec. 72 Rights of Unpaid all the rights of an SH - since these aren't delinquent yet just not yet paid in full
Shares
Sec. 73 Lost or Destroyed Procedure
• Registered owner files with corporation an affidavit in triplicate setting forth the following
Certificates
information:
○ How the certificate/s were lost, stolen, or destroyed
○ Number of shares represented by each certificate
○ Serial numbers of certs
○ Name of corporation which issued the same
○ He can also submit other stuff he thinks are needed
• Corporation shall
○ Verify the affidavit
○ Verify the other information and evidence
○ Publish a Notice
 In newspaper of general circulation in place where corp has principal office
 Once a week for 3 consecutive weeks at expense of registered owner
 Notice shall state
□ Name of corporation
□ Name of registered owner
□ Serial numbers
□ Number of shares represented
□ GR: That after expiration of 1 year (grace period) from date of last
publication, if no contest, such right to contest is BARRED and the
corporation will cancel in its books the certificates and issue new ones
□ EX: the registered owner files a bond/security good for 1 year -> then the
corporation can actually issue a new certificate EVEN BEFORE THE END
OF THE 1 YEAR GRACE PERIOD
□ EEX: contest pending in court, issuance will be SUSPENDED UNTIL FINAL
DECISION regarding ownership of such certificates

GR: no action may be brought against any corporation which have issued certificate/s of stock in lieu of

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 GR: no action may be brought against any corporation which have issued certificate/s of stock in lieu of
those lost, stolen, destroyed which went through the above procedure

EX: in case of the following, on part of the corporation and its officers
• Fraud
• Bad faith
• Negligence

Title VIII
Corporate Books and Records
PROVISIO CONCEPT EXPANSION
N
Sec. 74 Books to be Kept, • should preserve record of all business transactions
• Includes minutes of meetings and information about such meetings
Stock Transfer Agent
• Yeas and nays as well as protests
• Inspection hours:
• Open to directors, trustees, SH or member
• At reasonable hours on business days
• May demand in writing for copies of excerpts from said records or minutes at his expense
• Any officer, agent of the corporation who shall refuse to allow any director, trustee, stockholder or
member to examine and copy excerpts shall be liable to such person
• GR: Guilty of an offense punishable under Sec. 144
• EX: If it was pursuant to a resolution order of the BOD/T then the directors/trustees who
voted for such refusal will be liable
• EEX: Defense for an action under this section that person demanding to examine has
improperly used any information secured through any prior examination of records
• Stock and transfer book should also be kept which contains record of all stocks in stockholders'
names as well as other pertinent information
• In principal office or office of stock transfer agent
• Inspection hours
• Any director or stockholder
• Reasonable hours on business days
• No stock transfer agent can operate in the PH unless
• Secures a license from SEC and pay fees
• Renew this annually
• Stock corporation is not precluded from performing/transferring own stocks
• Rules and regulations applying to stock transfer agents applies
• Except the license fee payment
Sec. 75 Right to Financial Period:
• 10 days from receipt of written request of any SH or member, corporation shall furnish him
Statements
most recent financial statement including balance sheet, profit los statement, reasonable
detail assets and liabilities
At regular meeting of SH or members, the BOD/T shall present to such SHs/members a financial
report
• Preceding year
• Includes financial statements
• Duly signed and certified by CPA
EXCEPTION
• IF paid up capital of the corp is LESS THAN PHP 50,000, financial statements may be certified
under oath by the treasurer or any responsible officer of the corp.

Title IX
Merger and Consolidation
PROVISION CONCEPT EXPANSION
Sec. 76 Plan of Merger or How done:
• BOD/T of each corporation party to the merger or consolidation (M/C) shall approve a plan of
Consolidation
M/C setting forth
○ Names of corp proposing to M/C (constituent corps)
○ Terms of M/C and mode of carrying the same
○ Statement of changes, if any, in AOI of surviving corp (if merger) and to consolidated
corp (if consolidation)
○ Such other provisions WRT to proposed M/C as deemed necessary
Sec. 77 Voting Requirement

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 Sec. 77 Stockholders' or Voting Requirement
• MAJORITY vote of EACH of the BOD/T of the constituent corps of the plan of M/C
Members' Approval
• Submitted for APPROVAL by the SH/members of each
• At separate corporate meetings duly called for such purpose
• Affirmative vote of SH representing 2/3 of OCS/ members is necessary to approve M/C plan
Notice Requirement
• Given to all SH/members of respective corps
• At least 2 weeks prior to date of meeting
• Personally or registered mail
• Notice shall state
○ Purpose of meeting
○ Includes copy/summary of plan of M/C
GR: any dissenting SH may exercise appraisal right
EX: the SH's have approved such plan but the BOD/T decide to abandon such plan - appraisal right
extinguished

Amendments:
• Any amendment may be made as long as
○ Approved by MAJORITY of respective BOD/T of the corps
○ Ratified by affirmative vote of 2/3 of OCS/members of each corp

Plan is considered as the agreement of M/C

Sec. 78 Articles of Merger or After approval, execution by each of the corps
• Signed by president/vp
Consolidation
• Certified by CorSec or Asst. CorSec
Information
• Plan of M/C
• Stock corp - number of shares OUTSTANDING, nonstock - number of MEMBERS
• Each corp - number of shares voting for and against plan, respectively
Sec. 79 Securities and The Articles of M/C (AMC) signed and certified shall be submitted to the SEC in
quadruplicate for approval
Exchange • For M/C of banks, banking institutions, bldg.loan associations, trust… a favorable certificate
Commission's from the pertinent government agency is required
Approval and • If SEC is satisfied that M/C is not inconsistent with Code and laws, issue a cert of M/C -
Effectivity of Merger or effectivity
Consolidation
If SEC has reason to believe that it is contrary to Code/laws:
• Set hearing to give corporations concerned opportunity to be heard
• Written notice of date time place of hearing
• Given to each consti corp at least two (2) weeks before said hearing

Sec. 80 Effects of Merger or Effects:

• A single corporation emerges - the personality of both corps die
Consolidation
• A + B = C (consolidation) | A + B = A or B (merger)
• Possesses all rights, privileges immunities receivables etc. shares belonging to each
constituent corporation
• Deemed transferred and vested in the surviving corp
• Responsible for the liabilities of the two corps which combined

Title X
Appraisal Right
PROVISION CONCEPT EXPANSION
Sec. 81 Instances of Appraisal When exercised (dissent and demand payment of FMV of shares):
• If amendment to AOI has effect of changing, restricting rights of any SH/class of shares
Right
• Or of authorizing preferences in any respect superior to the outstanding shares of any class
• Extending or shortening term of corporate existence
• Sale, lease exchange, transfer mortgage, pledge, other disposition of all or substantially all of
the corporate property and assets
• In case of M/C

Sec. 82 How Right Exercised Process

• SH dissents
• SH makes written demand on the corporation for payment of FMV of shares
Within 30 days after date on which vote was taken

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 ○ Within 30 days after date on which vote was taken
○ Failure to make such demand within said period = waiver of appraisal right
• If proposed corporate action is implemented, corporation shall pay to SH (after surrender of
certs of stock) FMV as of day prior to date on which vote was taken
○ Excludes appreciation or depreciation in anticipation of such corporate action

If there is disagreement on FMV of shares

• If 60 days from approval of corporate action the SH protesting and the corp cannot agree on
the FMV, it will be
○ Determined and appraised by three disinterested persons
○ One of them is named by stock holder
○ Another by the corporation
○ Third by the two previous
• Findings of the majority of appraisers will be final
• Award shall be paid by corporation within 30 days from award of appraisers
○ HOWEVER, no unrestricted retained earnings = no payment
• After the corporation pays, SH dissenting shall transfer shares to the corporation
Sec. 83 Effect of Demand and Voting and dividend rights are suspended except SH right to be paid FMV
If dissenting SH is not paid within 30 days after the award, voting and dividend rights are
Termination of Right
immediately restored.
Period of effect: from demand of payment of FMV until:
• Abandonment of corporate action OR
• Purchase of the corporation of the shares
Sec. 84 When Right to No demand for payment under appraisal may be withdrawn unless corporation consents
HOWEVER, IF
Payment Ceases
• corporation consents OR
• proposed action is abandoned/ rescinded by corp OR
• disapproved by SEC (if approval was necessary) OR
• SEC determines that SH is not entitled to appraisal right
THEN
• Right of SH to be paid shall cease
• Status as SH will be restored
• All dividend distributions accrued on his shares shall be paid to him
Sec. 85 Who Bears Costs of GR: Borne by corporation
EX: FMV ascertained by appraisers is approx same price which corp may have offered to pay stock
Appraisal
holder
• Here, SH bears cost

If action to recover FMV, all costs and expenses shall be assessed against corp
UNLESS refusal of SH was unjustified
Sec. 86 Notation on Procedure
• Within ten (10) days after demanding payment, a disenting SH shall
Certificate(s); Right of
○ Submit his certs of stock to the corp FOR NOTATION as dissenting shares
Transferee
• Failure to do so:
○ Corp can terminate his appraisal rights

AFTER, If shares are already transferred and the certs cancelled:

• Rights of transferor as dissenting SH shall cease
• Transferee shall have all rights of regular SH
• Dividends accruing on such shares will be paid to transferree

Title XI - Non-Stock Corporations

Preliminaries
PROVISION CONCEPT EXPANSION
Sec. 87 Definition
Sec. 88 Purposes

Title XI - Non-Stock Corporations

Chapter 1
Members

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 Members
PROVISION CONCEPT EXPANSION
Sec. 89 Right to Vote
Sec. 90 Corporate Term
Sec. 91 Minimum Capital
Stock Required of
STOCK Corporations

Title XI - Non-Stock Corporations

Chapter 2
Trustees and Officers
PROVISION CONCEPT EXPANSION
Sec. 92 Election and Term of
Trustees
Sec. 93 Place of Meetings

Title XI - Non-Stock Corporations

Chapter 3
Distribution of Assets in Non-Stock Corporations
PROVISION CONCEPT EXPANSION
Sec. 94 Rules of Distribution
Sec. 95 Plan of Distribution of
Assets

Title XII
Close Corporations
PROVISION CONCEPT EXPANSION
Sec. 96 Definition and
Applicability of Title
Sec. 97 Articles of
Incorporation
Sec. 98 Validity of Restrictions
on Transfer of Shares
Sec. 99 Issuance or Transfer
of Stock of a Close
Corporation in Breach
of Qualifying
Conditions
Sec. 100 Agreements by
Stockholders
Sec. 101 When Board Meeting
is Unnecessary or
Improperly Held
Sec. 102 Amendment of Articles
of Incorporation
Sec. 103 Amendment of Articles
of Incorporation
Sec. 104 Deadlocks
Sec. 105

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 Sec. 105 Withdrawal of
Stockholder or
Dissolution of
Corporation

Title XIII - Special Corporations

Chapter 1
Educational Corporations
PROVISIO CONCEPT EXPANSION
N
Sec. 106 Incorporation
Sec. 107 Pre-requisites to
Incorporation
Sec. 108 Board of Trustees

Title XI
Chapter 2
Religious Corporations
PROVISION CONCEPT EXPANSION
Sec. 109 Class of Religious
Corporations
Sec. 110 Corporation Sole
Sec. 111 Articles of
Incorporation
Sec. 112 Submission of Articles
of Incorporation
Sec. 113 Acquisition and
Alienation of Property
Sec. 114 Filing of Vacancies
Sec. 115 Dissolution
Sec. 116 Religious Societies

Title XIV
Dissolution
PROVISION CONCEPT EXPANSION
Sec. 117 Methods of Dissolution
Sec. 118 Voluntary Dissolution
where no Creditors are
Affected
Sec. 119 Voluntary Dissolution
where Creditors are
Affected
Sec. 120 Dissolution by
Shortening Corporate
Term
Sec. 121 Involuntary Dissolution
Sec. 122 Corporate Liquidation

Title XV

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 Title XV
Foreign Corporations
PROVISION CONCEPT EXPANSION
Sec. 123 Definition and Rights
of Foreign
Corporations
Sec. 124 Application to Existing
Foreign Corporations
Sec. 125 Application for a
License
Sec. 126 Issuance of a License
Sec. 127 Who May Be a
Resident Agent
Sec. 128 Resident Agent;
Service of Process
Sec. 129 Law Applicable
Sec. 130 Amendments to
Articles of
Incorporation or By-
Laws of Foreign
Corporations
Sec. 131 Amended License
Sec. 132 Merger or
Consolidation
Involving a Foreign
Corporation Licensed
in the Philippines
Sec. 133 Doing Business
without License
Sec. 134 Revocation of License
Sec. 135 Issuance of Certificate
of Revocation
Sec. 136 Withdrawal of Foreign
Corporations

Title XVI
Miscellaneous Provisions
PROVISION CONCEPT EXPANSION

Sec. 137 Outstanding Capital

Stock Defined
Sec. 138 Designation of
Governing Boards
Sec. 139 Incorporation and
Other Fees
Sec. 140 Stock Ownership in
Certain Corporations
Sec. 141 Annual Report of

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 Corporations
Sec. 142 Confidential Nature of
Examination Results
Sec. 143 Rule-making Power of
the Securities and
Exchange Commission
Sec. 144 Violations of the Code
Sec. 145 Amendment or Repeal
Sec. 146 Repealing Clause
Sec. 147 Separability of
Provisions
Sec. 148 Applicability to Existing
Corporations
Sec. 149 Effectivity

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