Professional Documents
Culture Documents
Articles of Incorporation
-Unless otherwise stated, amendment
of the articles may be done
-Voted by the Board or written assent
by stockholders representing 2/3 of
the outstanding Capital Stock
-The dissent of minority will be
disregarded without prejudice
-Vote of 2/3 of members of a non-stock
corporation will not be honored
-Provisions required by the law shall
always be included
-Underscore changes made and
submit a copy certified by the
corporate secretary and the Board
-Amendment will take effect on date of
approval or on the date of filing if not
acted upon within 6 mos.
Power to Amend
-Sections 16, 37 and 38
Necessity of
Stockholders/Members Meeting
-May be affected by written assent of
stockholders representing 2/3 of
outstanding capital stock
*may be affected lang so di required
and written assent
Cases when meeting is necessary and
written assent is insufficient:
1. Extension or shortening of
corporate terms (sec 37)
2. In a close corporation, on
matters mentioned in Section
103
Limitations on Power to Amend
1. Amendments contrary to law
are invalid
2. Amendments must be for
legitimate purposes
3. Must be approved by required
vote
4. Both articles must contain
provisions required by law
5. Indicated changes and submit a
copy certified by the corporate
secretary and the Board
6. Changes will take effect on date
of approval or on date of filing if
not acted upon within 6 mos.
7. Corporations governed by
special laws (banks, banking
corps., building and loan, etc.)
must accompany their articles
with favorable recommendation
by the appropriate government
agency (section 17, par 2)
*Foreign corporations are only
required to file. Amendments
will take effect within 60 days.
Filing shall not of itself, enlarge
or alter the purpose for which it
is authorized. (secs. 130, 125)
Section 17 Grounds When
Articles of Incorporation or
Amendment May Be Rejected or
Disapproved
Corporations will be given time
to correct objectionable portions
Grounds:
1. Not substantially in accordance
with the prescribed form
2. Purpose of corporation is
unconstitutional, illegal,
immoral, or contrary to
government rules & regulations
3. Treasurers Affidavit regarding
the amount of capital stock is
false
4. Percentage of ownership of
capital stock to be owned by PH
citizens has not been complied
with
*grounds are not exclusive
Corporations governed by special laws
(banks, banking corporations, building
and loan, etc.) must accompany their
articles with favorable
recommendation by the appropriate
government agency
1. SEC is required to give
corporations reasonable time to
correct objectionable
portions/portions that did not
comply with the requirements of
the Code (sections 14-16)
2. Corporations governed by
special laws (banks, banking
corps., building and loan, etc.)
must accompany their articles
with favorable recommendation
by the appropriate government
agency
3. The Articles of Incorporation will
not be accepted without a
sworn statement by the
treasurer showing amount of
subscribed and paid
outstanding capital stock (Sec.
14, last par.)
Suspension or Revocation of the
Certificate of Registration of
Corporations
Presidential Decree No. 902-A
Grounds:
Section 19
Commencement of
Corporate Existence
A corporation has corporate existence
and juridical personality when
organized under the Code and when
SEC has issued a certificate of
incorporation under its official seal.
Members shall operate under the
corporate name for the period
mentioned.
Acquisition of Juridical Personality
1. Issuance of certificate of
incorporation
a. COI = final determination of
right to do business and to
enter into contracts
b. COI = charter/corporate
franchise from which
authority flows
c. Corporation must organize
within 2 years from date of
incorporation
2. Filing of articles of incorporation
- In case of religious
corporations, the SEC is not
required to issue a certificate
of incorporation
- Sec. 112: Chief Archbishop,
etc., = corporate sole after
filing the articles
3. Registration of Cooperatives
- Upon registration with
Cooperatives Development
Authority (RA no. 6938, sec.
16)
Section 20 De Facto
Corporations
De jure: according to law
-
Strict/substantial conformity
with requirements
De facto: in fact
-
Incorporators or a certain
number of them are not PH
residents
Acknowledgement of
certificate/articles of
incorporation is insufficient
or done before a person
without authority
Direct Attack
-
Collateral Attack
-
Incidental proceeding
Section 22 Effect of
Non-Use of Corporate
Charter and Continuous
Inoperation as a
Corporation
Failure to organize within 2
years after incorporation
Failure to operate for at least 5
years after organization
Not applicable if reason for
failure is beyond corporations
control