Professional Documents
Culture Documents
Sections 36 45 TCCP
A corporation has only such powers as are expressly granted and those that are necessarily implied from those expressly granted or those that are incident to its existence.
2. Of succession by its corporate name for the period of time stated in the articles of incorporation and the certificate of incorporation;
4. To amend its articles of incorporation in accordance with the provisions of this Code;
5. To adopt by-laws, not contrary to law, morals, or public policy, and to amend or repeal the same in accordance with this Code;
6. In case of stock corporations, to issue or sell stocks to subscribers and to sell stocks to subscribers and to sell treasury stocks in accordance with the provisions of this Code; and to admit members to the corporation if it be a non-stock corporation;
7. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise deal with such real and personal property, including securities and bonds of other corporations,
as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the Constitution;
8. To enter into merger or consolidation with other corporations as provided in this Code;
9. To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity;
10. To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees; and
11. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in the articles of incorporation.
Dissolved corporation after the three (3) year winding up period cannot sue or be sued
Foreign corporations transacting in the Philippines with no license from SEC cannot sue in Philippines courts
Seal Device to identify or replace the signature of an individual or organization and to authenticate written matter purportedly emanating from such individual or organization. (May be an emblem, symbol, or word)
a. Limitations as to area
CSR Corporate Social Responsibility: Corporations are not only money making machines but also economic and social institutions with public responsibility
It is the corporations responsibility to provide comfort, health and well being of its employees
May be effected by amending the Articles of Incorporation approved by majority vote of the board of directors/trustees and ratified at a meeting of the stockholders representing at least 2/3 of the outstanding capital stock or by at least 2/3 of the members in case of non-stock corporations. Mere written assent is not sufficient, there must be a meeting and the proposal must be put to a vote.
Appraisal right
Right of stockholder in the cases provided by law to demand payment of the fair value of his shares on case of an extension of corporate term.
Power must be expressly conferred by law and upon prior approval by the SEC
requirements
in
case
Suppose that ACS is PhP 1,000,000.00 divided into 100,000 shares therefore the par value per share is PhP 10.00
A corporation cannot release persons who subscribed (considered creditors of the corporation) from paying the subscription
Illustration of rules
Suppose that ACS is PhP 1,000,000.00 divided into 100,000 shares therefore the par value per share is P10.00
Bonded debt - The part of the entire indebtedness of a corporation that is represented by the bonds that it has issued. Also considered to be debt that is contracted under the obligation of a bond.
The of a Corporation
Board
of
Directors/Trustees/Officers
Sec. 23 - [T]he corporate powers of all corporationsshall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees
Selection of Board
BUT, stockholders have no authority over the board once they are elected: They have the sole authority to determine policy and conduct the ordinary business of the corporation
Contracts must be entered into by the Board not by the stockholders or members
Stockholders resolution disowning a corporate act done by the Board has no effect
2. They cannot perform consitutent acts (Those that involve fundamental changes in the corporation)
3. When the act was ratified (express or implied) in a subsequent board meeting
6. In a close corporation
Delegation of powers
Power of the board may be delegated either expressly or impliedly to other officers or agents of the corporation
Term of Office
By express provision of law: One (1) year and until their successors are elected and qualified
If there is no one is elected and qualified, the director continues to function as such in a hold over capacity
Exceptions:
Stock:
Non-stock:
2. Owners of the majority of the outstanding capital stock or majority of the members must be present personally or by a representative authorized to act by written proxy
Other rules
a. The AI or the BL can not limit a stockholders statutory right to use any of the methods of voting
d. Election must be conducted, if for any reason it is not held, meeting may be adjourned from day to day or from time to time but not sine die
Straight Voting
Officers
Per TCCP
1. President
2. Secretary
3. Treasurer
Positions may be concurrently held except President and Secretary at the same time and President and Treasurer at the same time
Other Officers
1. Vice president
2. General Manager
3. Comptroller
4. Others
Term: May be fixed in the by laws or officers may be removed at any time by the board
They are agents of the corporation, unlike the board who cannot bind the corporation except through board resolutions
As agents of the corporation, corporate officers have the power to bind the corporation by their acts as long as it is within their ACTUAL, APPARENT, or INHERENT authority
a. Statute
b. AI
c. BL
What is a quorum?
Definition: Such number of the membership of a collective body as is competent to transact its business or do any other corporate act
Illustration
No.
Board of Directors or trustees must attend meetings in person and personally exercise their judgment
Must be submitted to the SEC within thirty (30) days from election
Disqualification of DTO
1. Must not have been convicted by final judgment of any offense punishable by imprisonment for a period not exceeding six (6) years; or,
2. Must not have been convicted by final judgment of violation of TCCP committed within five (5) years prior to the date of election or appointment
Court cannot remove a director or trustee unless it acquires jurisdiction to appoint a receiver
1. Must take place either ar a regular meeting of the corporation or at a special meeting called for that purpose
2. Previous notice to the stockholders or members of the corporation and intention to propose the removal must be given
3. Removal must be by a vote of stockholders holding or representing two-thirds (2/3) of the outstanding capital stock (2/3 of members for non-stock)
Vacancies
1. If vacancy results from the removal by the stockholders or members or the expiration of the term
2. If vacancy occurs other than be removal or by expiration of term such as death, resignation, abandonment, or disqualification IF the remaining directors or trustees do not constitute a quorum for the purpose of filling the vacany
3. If the vacancy may be filled by the remaining directors or trustees but the board refers the matter to the stockholders or members
Vacancies
Provided they still have a quorum and the vacancy which occurred was other than by removal by the stockholders or member or by expiration of term
Compensation
Allowed:
2. Compensation granted by stockholders vote which shall not exceed ten (10%) of the net income before income tax of the corporation during the preceding year
Contract between DTO and Corporation is voidable at the option of the latter unless:
1. Presence of the DT in the Board Meeting was not necessary to constitute a quorum for such meeting
2. Vote of such DT was not necessary for the approval of the contract
4. In case of an officer, the contract has been previously authorized by the board
*** If any of 1&2 is not present contract may be ratified by stockholders representing 2/3 capital stock provided that full disclosure is made and contract complies with no. 3
between
corporation
Interlocking directors: One, some or all of the directors in one corporation is/are also director/directors in another corporation
Valid as long as there is no fraud and the contract is fair and reasonable under the circumstances
* However: if interest of director is substantial (i.e. more than 20%) he will be subjected to the test applied for directors dealing with the corporation (preceding slide)
A director who, by virtue of his office, acquires for himself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, is guilty of disloyalty and should, therefore, account to the latter for all such profits by refunding the same, notwithstanding that he risked his funds in the venture.
Except if his act is ratified by stockholders vote representing atleast 2/3 fo the outstanding capital stock
Executive Committee
The by-laws of a corporation may create an executive committee, composed of not less than three members of the board, to be appointed by the board. Said committee may act, by majority vote of all its members, on such specific matters within the competence of the board, as may be delegated to it in the by-laws or on a majority vote of the board,
(1) approval of any action for which shareholders approval is also required;
(4) the amendment or repeal of any resolution of the board which by its express terms is not so amendable or repealable; and