Professional Documents
Culture Documents
(N/A)
(BP 68) (R.A. 11232)
Title I
Section 1. Title of the Code. – This Code shall Section 1. Title of the Code. – This Code shall be A 1. Change of title
be known as "The Corporation Code of the known as the "The Corporation Code of the
Philippines." (n) Philippines." (n) “Revised Corporation Code of the
Philippines”.
4. Incorporated Anti-
Dummy Law, Foreign
Investments Act of
1991, and other
pertinent laws
Section 8. Redeemable shares. – Redeemable Section 8. Redeemable shares. – Redeemable shares A 1. Subjected to rules
shares may be issued by the corporation when may be issued by the corporation when expressly and regulations issued
expressly so provided in the articles of provided in the articles of incorporation. They are by the Commission
incorporation. They may be purchased or shares which may be purchased by the corporation
taken up by the corporation upon the from the holders of such shares upon the expiration of
expiration of a fixed period, regardless of the a fixed period, regardless of the existence of
existence of unrestricted retained earnings in unrestricted retained earnings in the books of the
the books of the corporation, and upon such corporation, and upon such other terms and
other terms and conditions as may be stated in conditions stated in the articles of incorporation and
the articles of incorporation, which terms and the certificate of stock representing the shares, subject
conditions must also be stated in the certificate to the rules and regulations issued by the
of stock representing said shares. Commission.
Title II
Section 10. Number and qualifications of Section 10. Number and qualifications of A 1.
incorporators. – Any number of natural incorporators. – Any number of natural persons not Partnership,
persons not less than five (5) but not more than less than five (5) but not more than fifteen (15), all of association,
fifteen (15), all of legal age and a majority of legal age and a majority of whom are residents of the corporation,
whom are residents of the Philippines, may Philippines, may form a private corporation for any singly or jointly
form a private corporation for any lawful lawful purpose or purposes. with others may
purpose or purposes. Each of the incorporators now form a
Any person, partnership, association or corporation,
of a stock corporation must own or be a corporation.
singly or jointly with others but not more than fifteen
subscriber to at least one (1) share of the capital
(15) in number, may organize a corporation for any
stock of the corporation. (6a)
lawful purpose or purposes: Provided, That natural
persons who are licensed to practice a profession, and 2. Natural
partnerships or associations organized for the person who is
purpose of practicing a profession, shall not be licensed to
allowed to organize as a corporation unless otherwise practice a
provided under special laws. Incorporators who are profession and
natural persons must be of legal age. partnerships or
association
organized for the
Each of the incorporators of a stock corporation must purpose of
own or be a subscriber to at least one (1) share of the practicing a
capital stock of the corporation. profession are
not allowed to
organize a
corporation.
A corporation with a single stockholder is considered
Unless special
a One Person Corporation as described in Title XIII,
laws provide
Chapter III of this Code. otherwise.
3. Single
Stockholder
Corporation is
allowed, and
considered as
One Person
Corporation.
Section 11. Corporate term. – A corporation Section 11. Corporate term. – A corporation shall exist A 1. No more
shall exist for a period not exceeding fifty (50) for a period not exceeding fifty (50) years from the date term limit (may
(SUBSTANTIAL
years from the date of incorporation unless of incorporation unless sooner dissolved or unless said now have
CHANGES)
sooner dissolved or unless said period is period is extended. The corporate term as originally perpetual
extended. The corporate term as originally stated in the articles of incorporation may be extended existence);
stated in the articles of incorporation may be for periods not exceeding fifty (50) years in any single
extended for periods not exceeding fifty (50) instance by an amendment of the articles of 2. Corporations
years in any single instance by an amendment incorporation, in accordance with this Code; A with Certificates
of the corporation shall have perpetual existence unless its of incorporation
articles of incorporation, in accordance with articles of incorporation provides otherwise. issued prior to
this Code; Provided, That no extension can be the effectivity of
made earlier than five (5) years prior to the Corporations with certificates of incorporation issued this Code, shall
original or subsequent expiry date(s) unless prior to the effectivity of this Code, and which continue have perpetual
there are justifiable reasons for an earlier to exist, shall have perpetual existence, unless the existence;
extension as may be determined by the corporation, upon a vote of its stockholders
Securities and Exchange Commission. (6) representing a majority of its outstanding capital stock, 3. The
notifies the Commission that it elects to retain its stockholders
specific corporate term pursuant to its articles of representing the
incorporation: Provided, that any change in the majority of the
corporate term under this section is without prejudice Corporation’s
to the appraisal right of dissenting stockholders in Outstanding
accordance with the provisions of this Code. Capital Stock
(OCS) may elect
A corporate term for a specific period may be extended to retain their
or shortened by amending the articles of incorporation: specific
Provided, That no extension can be made earlier than corporate term
five (5) years prior to the original or subsequent expiry pursuant to its
date(s) unless there are justifiable reasons for an earlier Articles of
extension as may be determined by the Securities and Incorporation
Exchange Commission. Provided, That no extension (AOI).
may be made earlier than three (3) years prior to the
original or subsequent expiry date(s) unless there are 4. An extension
justifiable reasons for an earlier extension as may be of term may be
determined by the Commission: Provided, further, made 3 years
That such extension of the corporate term shall take prior to the
effect only on the day following the original or original term
subsequent expiry date(s). (under BP 68,
5yrs)
A corporation whose term has expired may apply for
a revival of its corporate existence, together with all 5. A
the rights and privileges under its certificate of corporation
incorporation and subject to all of its duties, debts whose term has
and liabilities existing prior to its revival. Upon expired may
approval by the Commission, the corporation shall apply for a
be deemed revived and a certificate of revival of revival of its
corporate existence shall be issued, giving it corporate
perpetual existence, unless its application for revival existence,
provides otherwise. certificate of
revival of
No application for revival of certificate of
corporate
incorporation of banks, banking and quasi-banking
existence shall
institutions, preneed, insurance and trust companies,
then be issued be
nonstock savings and loan associations, pawnshops,
corporations engaged in money service business, and issued, giving it
other financial intermediaries shall be approved by the perpetual
Commission unless accompanied by a favorable existence, unless
recommendation of the appropriate government its application
agency. for revival
provides
otherwise.
6. Application
for revival of
certificate of
incorporation of
banks, banking
and quasi-
banking
institutions,
preneed,
insurance and
trust companies,
nonstock
savings shall be
approved by the
Commission if
accompanied by
favorable
recommendatio
n of appropriate
government
agency.
Section 12. Minimum capital stock required of Section 12. Minimum capital stock required of stock
stock corporations. – Stock corporations corporations. – Stock corporations incorporated under
incorporated under this Code shall not be this Code shall not be required to have any minimum
required to have any minimum authorized authorized capital stock except as otherwise
capital stock except as otherwise specifically specifically provided for by special law, and subject to
provided for by special law, and subject to the the provisions of the following section.
provisions of the following section.
2. Added
conditions
The Commission, upon determination that the before the
corporate name is: (1) not distinguishable from a name commission may
already reserved or registered for the use of another issue a ceast and
corporation; (2) already protected by law; or (3) deist order
contrary to law, rules and regulations, may summarily against the
order the corporation to immediately cease and desist corporation from
from using such name and require the corporation to using such name
register a new one. and require the
corporation to
register a new
The Commission shall also cause the removal of all one.
visible signages, marks, advertisements, labels, prints
and other effects bearing such corporate name. Upon
the approval of the new corporate name, the 3. Commission
Commission shall issue a certificate of incorporation is also obligated
under the amended name. to cause the
removal of any
effects bearing
If the corporation fails to comply with the such corporate
Commission’s order, the Commission may hold the name;
corporation and its responsible directors or officers in
contempt and/or hold them administratively, civilly
and/or criminally liable under this Code and other 4. Right of the
applicable laws and/or revoke the registration of the commission to
corporation. hold th
corporation and
its responsible
officers in
contempt,
and/or hold
them civilly/or
criminally,
and/or
administratively
liable for failure
to comply with
its order.
Section 19. Commencement of corporate SEC. 18. Registration, Incorporation and A (The first 2
existence. – A private corporation formed or Commencement of Corporate Existence. – A person or paragraphs in
organized under this Code commences to have group of persons desiring to incorporate shall submit Sec. 18 of the
corporate existence and juridical personality the intended corporate name to the Commission for RCC are new
and is deemed incorporated from the date the verification. If the Commission finds that the name provisions and
Securities and Exchange Commission issues a is distinguishable from a name already reserved or the last
certificate of incorporation under its official registered for the use of another corporation, not paragraph is a
seal; and thereupon the incorporators, protected by law and is not contrary to law, rules and reiteration of
stockholders/members and their successors regulations, the name shall be reserved in favor of the Sec. 19 of BP 68)
shall constitute a body politic and corporate incorporators. The incorporators shall then submit
under the name stated in the articles of their articles of incorporation and bylaws to the
incorporation for the period of time mentioned Commission.
1. If the
therein, unless said period is extended or the commission
corporation is sooner dissolved in accordance finds the name
with law. (n) If the Commission finds that the submitted
submitted by a
documents and information are fully compliant with
corporation to be
the requirements of this Code, other relevant laws,
distinguishable
rules and regulations, the Commission shall issue the
from a name of
certificate of incorporation.
another
corporation, the
name shall be
A private corporation organized under this Code
reserved in favor
commences its corporate existence and juridical
of the
personality from the date the Commission issues the
incorporators;
certificate of incorporation under its official seal and
thereupon the incorporators, stockholders/members
and their successors shall constitute a body corporate 2. Upon full
under the name stated in the articles of incorporation compliance with
for the period of time mentioned therein, unless said the requirements
period is extended or the corporation is sooner of the code, the
dissolved in accordance with law. commission
shall then issue
the Certificate of
Incorporation.
Section 20. De facto corporations Section 19. De facto corporations Change as to its
section number
only
Section 21. Corporation by estoppel. – All SEC. 20. Corporation by Estoppel. – All persons who Change as to its
persons who assume to act as a corporation assume to act as a corporation knowing it to be without form
knowing it to be without authority to do so authority to do so shall be liable as general partners for
shall be liable as general partners for all debts, all debts, liabilities and damages incurred or arising as
liabilities and damages incurred or arising as a a result thereof: Provided, however, That when any
result thereof: Provided, however, That when such ostensible corporation is sued on any transaction
any such ostensible corporation is sued on any entered by it as a corporation or on any tort committed
transaction entered by it as a corporation or on by it as such, it shall not be allowed to use its lack of
any tort committed by it as such, it shall not be corporate personality as a defense.
allowed to use as a defense its lack of corporate
personality.
Anyone who assumes an obligation to an ostensible
corporation as such cannot resist performance thereof
One who assumes an obligation to an ostensible on the ground that there was in fact no corporation.
corporation as such, cannot resist performance
thereof on the ground that there was in fact no
corporation. (n)
Section 22. Effects on non-use of corporate SEC. 21. Effects of Non-Use of Corporate Charter and A 1. If not
charter and continuous inoperation of a Continuous Inoperation. – If a corporation does not formally
corporation. – If a corporation does not formally organize and commence its business within organized
formally organize and commence the five (5) years from the date of its incorporation, its within (now) 5
transaction of its business or the construction of certificate of incorporation shall be deemed revoked years, certificate
its works within two (2) years from the date of as of the day following the end of the five (5)-year of incorporation
its incorporation, its corporate powers cease period. (coi) is deemed
and the corporation shall be deemed dissolved. revoked.
However, if a corporation has commenced the
transaction of its business but subsequently However, if a corporation has commenced its business
becomes continuously inoperative for a period but subsequently becomes inoperative for a period of 2. Delinquent
of at least five (5) years, the same shall be a at least five (5) consecutive years, the Commission corporation is
ground for the suspension or revocation of its may, after due notice and hearing, place the given 2 years to
corporate franchise or certificate of corporation under delinquent status. resume it
incorporation. (19a) operation and
comply with all
A delinquent corporation shall have a period of two the requirements
This provision shall not apply if the failure to (2) years to resume operations and comply with all that the
organize, commence the transaction of its requirements that the Commission shall prescribe. commission may
businesses or the construction of its works, or to Upon compliance by the corporation, the prescribe, upon
continuously operate is due to causes beyond Commission shall issue an order lifting the compliance, the
the control of the corporation as may be delinquent status. delinquent
determined by the Securities and Exchange status is then
Commission. lifted.
Failure to comply with the requirements and resume
operations within the period given by the
Commission shall cause the revocation of the 3. Failure to
corporation’s certificate of incorporation. comply will
result to
revocation of
The Commission shall give reasonable notice to, and COI.
coordinate with the appropriate regulatory agency
prior to the suspension or revocation of the certificate
of incorporation of companies under their special
regulatory jurisdiction.
Title III
Section 23. The board of directors or trustees. Section 22. The Board of Directors or Trustees of a A 1. For non-stock
– Unless otherwise provided in this Code, the Corporation; Qualification and Term. – Unless corporation, trustees
corporate powers of all corporations formed otherwise provided in this Code, the corporate powers will now have a term
under this Code shall be exercised, all of all corporations formed under this Code shall be limit of 3 years.
business conducted and all property of such exercised, all business conducted and all property of
corporations controlled and held by the board such corporations controlled and held by the board of
of directors or trustees to be elected from directors or trustees to be elected from among the 2. There is now an
among the holders of stocks, or where there is holders of stocks, or where there is no stock, from "independent director"
no stock, from among the members of the among the members of the corporation, who shall hold for corporations vested
corporation, who shall hold office for one (1) office for one (1) year until their successors are elected with public interest.
year until their successors are elected and and qualified. (28a)
qualified. (28a)
Unless otherwise provided in the articles of In stock corporations, every stockholder stockholders
incorporation or in the by-laws, members of
entitled to vote shall have the right to vote in person or
corporations which have no capital stock may
cast as many votes as there are trustees to be by proxy the number of shares of stock standing , at the
elected but may not cast more than one vote time fixed in the by-laws, in his THEIR own names in
for one candidate.
the stock books of the corporation AT THE TIME
FIXED IN THE BY-LAWS or where the by-laws are
silent, at the time of the election.
Candidates receiving the highest number of
votes shall be declared elected. Any meeting
The said stockholder may: (a) vote such number of
of the stockholders or members called for an
election may adjourn from day to day or from shares for as many persons as there are directors to be
time to time but not sine die or indefinitely if, elected; (b) cumulate said shares and give one (1)
for any reason, no election is held, or if there
are not present or represented by proxy, at the candidate as many votes as the number of directors to
meeting, the owners of a majority of the be elected multiplied by the number of his shares shall
outstanding capital stock, or if there be no equal, the shares owned; or (c) distribute them on the
capital stock, a majority of the members
entitled to vote. (31a) same principle among as many candidates as he shall
MAY BE seen fit: Provided, That the total number of
votes cast shall not exceed the number of shares owned
by him THE STOCKHOLDERS as shown in the books
of the corporation multiplied by the whole number
of directors to be elected: Provided, however, That no
delinquent stock shall be voted. Unless otherwise
provided in the articles of incorporation or in the by-
laws, members of corporations which have no capital
stock NON-STOCK CORPORATIONS may cast as
many votes as there are trustees to be elected but may
not cast more than one (1) vote for one (1) candidate.
Candidates NOMINEES FOR DIRECTORS OR
TRUSTEES receiving the highest number of votes
shall be declared elected.
3. An additional
paragraph for
In no case shall the total yearly compensation of corporations vested
directors as such directors exceed ten percent (10%) with public interest
of the net income before income tax of the that are required to
corporation during the preceding year. submit an annual
report to the
Commission. The
DIRECTORS OR TRUSTEES SHALL NOT entire paragraph was
PARTICIPATE IN THE DETERMINATION OF not in the Old Code.
THEIR OWN PER DIEMS OR COMPENSATION.
CORPORATIONS VESTED WITH PUBLIC
INTEREST SHALL SUBMIT TO THEIR
SHAREHOLDERS AND THE COMMISSION, AN
ANNUAL REPORT OF THE TOTAL
COMPENSATION OF EACH OF THEIR
DIRECTORS OR TRUSTEES.
Section 31. Liability of directors, trustees or Section 30. Liability of Directors, Trustees or Officers. Change in style
officers. - Directors or trustees who willfully – Directors or trustees who willfully and knowingly
and knowingly vote for or assent to patently vote for or assent to patently unlawful acts of the
unlawful acts of the corporation or who are corporation or who are guilty of gross negligence or
guilty of gross negligence or bad faith in bad faith in directing the affairs of the corporation or
directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict
acquire any personal or pecuniary interest in with their duty as such directors or trustees shall be
liable jointly and severally for all damages resulting
conflict with their duty as such directors or
trustees shall be liable jointly and severally for therefrom suffered by the corporation, its stockholders
all damages resulting therefrom suffered by or members and other persons.
the corporation, its stockholders or members
and other persons.
3. That the contract is fair and reasonable C. That The contract is fair and reasonable under
under the circumstances; and the circumstances; 3. In order to be subject
of ratification the first 3
4. That in case of an officer, the contract D. IN CASE OF CORPORATIONS VESTED
conditions are required
has been previously authorized by the WITH PUBLIC INTEREST, MATERIAL
to be present and no
board of directors. CONTRACTS ARE APPROVED BY AT
longer limited to the
LEAST TWO-THIRDS (2/3) OF THE ENTIRE
first 2 conditions.
MEMBERSHIP OF THE BOARD, WITH AT
LEAST A MAJORITY OF THE
Where any of the first two conditions set forth
INDEPENDENT DIRECTORS VOTING TO
in the preceding paragraph is absent, in the APPROVE THE MATERIAL CONTRACT;
case of a contract with a director or trustee, and
such contract may be ratified by the vote of the
E. That In case of an officer, the contract has been
stockholders representing at least two-thirds
previously authorized by the board of
(2/3) of the outstanding capital stock or of at
directors.
least two-thirds (2/3) of the members in a
meeting called for the purpose: Provided, That
full disclosure of the adverse interest of the
directors or trustees involved is made at such Where any of the first two THREE (3) conditions set
meeting: Provided, however, That the contract forth in the preceding paragraph is absent, in the case
is fair and reasonable under the circumstances. of a contract with a director or trustee, such contract
(n) may be ratified by the vote of the stockholders
representing at least two-thirds (2/3) of the
outstanding capital stock or of at least two-thirds
(2/3) of the members in a meeting called for the
purpose: Provided, That full disclosure of the adverse
interest of the directors or trustees involved is made
at such meeting Provided however, That AND the
contract is fair and reasonable under the
circumstances.
Section 33. Contracts between corporations Section 32. Contracts between corporations with A Change in style
with interlocking directors. – Except in cases Interlocking Directors. – Except in cases of fraud, and
of fraud, and provided the contract is fair and provided the contract is fair and reasonable under the
reasonable under the circumstances, a circumstances, a contract between two (2) or more
contract between two (2) or more corporations corporations having interlocking directors shall not be
having interlocking directors shall not be invalidated on that ground alone: Provided, That if the
invalidated on that ground alone: Provided, interest of the interlocking director in one (1)
That if the interest of the interlocking director corporation is substantial and his
in one (1) corporation is substantial and his
THE interest in the other corporation or corporations
interest in the other corporation or
is merely nominal, he THE CONTRACT shall be
corporations is merely nominal, he shall be
subject to the provisions of the preceding section
subject to the provisions of the preceding
insofar as the latter corporation or corporations are
section insofar as the latter corporation or
concerned.
corporations are concerned.
9. To make reasonable donations, To establish pension, retirement, and other plans for
including those for the public welfare or the benefit of its directors, trustees, officers, and
for hospital, charitable, cultural, employees;and
scientific, civic, or similar purposes:
Provided, That no corporation, domestic
or foreign, shall give donations in aid of (k) To exercise such other powers as may be essential
any political party or candidate or for or necessary to carry out its purpose or purposes as
purposes of partisan political activity; stated in the articles of incorporation.
Title V
Section 46. Adoption of by-laws. – Every Section 45. Adoption of By-laws. – Every corporation A 1. The 1 year period to
corporation formed under this Code must, formed under this Code must, within (1) month after adopt by-laws
within (1) month after receipt of official notice receipt of official notice of the issuance of its reckoned from the
of the issuance of its certification of certification of incorporation by the Securities and issuance of certificate
incorporation by the Securities and Exchange Exchange Commission, adopt a code of by-laws for of incorporation is now
Commission, adopt a code of by-laws for its its government not inconsistent with this Code. For removed.
government not inconsistent with this Code. the adoption of by- laws by the corporation, the
affirmative vote of the stockholders representing at
least a majority of the outstanding capital stock, or of
For the adoption of by-laws by the at least a majority of the members in case of non-stock
corporation the affirmative vote of the corporations, shall be necessary. The bylaws shall be
stockholders representing at least a majority signed by the stockholders or members voting for
of the outstanding capital stock, or of at least them and shall be kept in the principal office of the
a majority of the members in case of non-stock corporation, subject to the inspection of the
corporations, shall be necessary. The by-laws stockholders or members during office hours. A copy
shall be signed by the stockholders or thereof, duly certified to by a majority of the directors
members voting for them and shall be kept in or trustees and countersigned by the secretary of the
the principal office of the corporation, subject corporation, shall be filed with the Securities and
to the inspection of the stockholders or Exchange Commission which shall be
members during office hours. A copy thereof, COMMISSION AND attached to the original
duly certified to by a majority of the directors articles of incorporation.
or trustees countersigned by the secretary of
the corporation, shall be filed with the
Securities and Exchange Commission which Notwithstanding the provisions of the preceding
shall be attached to the original articles of paragraph, by-laws may be adopted and filed prior
to incorporation; in such case, such by-laws shall be
incorporation. approved and signed by all the incorporators and
submitted to the Securities and Exchange
Commission COMMISSION, together with the
Notwithstanding the provisions of the articles of incorporation.
preceding paragraph, by- laws may be
adopted and filed prior to incorporation; in
such case, such by-laws shall be approved and In all cases, by-laws shall be effective only upon the
signed by all the incorporators and submitted issuance by the Securities and Exchange Commission
to the Securities and Exchange Commission, COMMISSION of a certification that the by-laws are
together with the articles of incorporation. not inconsistent IN ACCORDANCE with this Code.
In all cases, by-laws shall be effective only The Securities and Exchange Commission
upon the issuance by the Securities and COMMISSION shall not accept for filing the by-
Exchange Commission of a certification that laws or any amendment thereto of any bank, banking
the by-laws are not inconsistent with this institution, building and loan association, trust
Code. company, insurance company, public utility,
educational institution, or other special corporations
governed by special laws, unless accompanied by a
The Securities and Exchange Commission certificate of the appropriate government agency to
shall not accept for filing the by-laws or any the effect that such bylaws or amendments are in
amendment thereto of any bank, banking accordance with law.
institution, building and loan association,
trust company, insurance company, public
utility, educational institution or other special
corporations governed by special laws, unless
accompanied by a certificate of the
appropriate government agency to the effect
that such by-laws or amendments are in
accordance with law. (20a)
Section 47. Contents of by-laws – Subject to Section. 46. Contents of By-laws. – Subject to the A 1. Content letter (d) is a
the provisions of the Constitution, this Code, provisions of the Constitution, this Code, other new one, not provided
other special laws, and the articles of special laws, and the articles of incorporation, A in the Old Code.
incorporation, a private corporation may private corporation may provide the following in its
provide in its by- laws for: by-laws:
2. Content letter (f) is
1. The time, place and manner of calling
modified to include
and conducting regular or special
a. The time, place and manner of calling and guidelines for settling
meetings of the directors or trustees;
conducting regular or special meetings of the the compensation and
2. The time and manner of calling and directors or trustees; board representations
conducting regular or special meetings to be given to an
b. The time and manner of calling and conducting
of the stockholders or members; "Independent
regular or special meetings AND MODE OF
Director".
3. The required quorum in meetings of NOTIFYING of the stockholders or members
stockholders or members and the thereof;
manner of voting therein;
c. The required quorum in meetings of 3. Content letter (j) is
4. The form for proxies of stockholders stockholders or members and the manner of modified.
and members and the manner of voting voting therein;
them;
d. THE MODES BY WHICH A
4. An arbitration
5. The qualifications, duties and STOCKHOLDER, MEMBER, DIRECTOR,
agreement can now be
compensation of directors or trustees, OR TRUSTEE MAY ATTEND MEETINGS
AND CAST THEIR VOTES; provided in the by-
officers and employees;
laws. This is not in the
6. The time for holding the annual election e. The form for proxies of stockholders and Old Code.
of directors of trustees and the mode or members and the manner of voting them;
manner of giving notice thereof; f. The qualifications, duties and compensation of
directors or trustees, officers and employees;
7. The manner of election or appointment
THE DIRECTORS’ OR TRUSTEES’
and the term of office of all officers other
QUALIFICATIONS, DUTIES, AND
than directors or trustees; RESPONSIBILITIES, THE GUIDELINES
8. The penalties for violation of the by- FOR SETTLING THE COMPENSATION OF
laws; DIRECTORS’ OR TRUSTEES’ AND
OFFICERS, AND THE MAXIMUM
9. In the case of stock corporations, the NUMBER OF OTHER BOARD
manner of issuing stock certificates; and REPRESENTATIONS THAT AN
INDEPENDENT DIRECTOR OR TRUSTEE
10. Such other matters as may be necessary
MAY HAVE WHICH SHALL, IN NO CASE,
for the proper or convenient transaction
BE MORE THAN THE NUMBER
of its corporate business and affairs. PRESCRIBED BY THE COMMISSION;
(21a)
g. The time for holding the annual election of
directors or trustees and the mode or manner
of giving notice thereof;
Section 49. Kinds of meetings. - Meetings of Section 48. Kinds of Meetings. – Meetings of directors, A No Change
directors, trustees, stockholders, or members trustees, stockholders, or members may be regular or
may be regular or special. (n) special
Section 50. Regular and special meetings of Section 49. Regular and Special Meetings of A 1. April 15 of every
stockholders or members. - Regular meetings Stockholders or Members. – Regular meetings of year is the default date
of stockholders or members shall be held stockholders or members shall be held annually on a fixed for the regular
annually on a date fixed in the by-laws, or if not date fixed in the bylaws, or if not so fixed, on any date meetings of
so fixed, on any date in April of every year as after April 15 of every year as determined by the board stockholders or
determined by the board of directors or of directors or trustees: Provided, That members, in the
trustees: Provided, That written notice of writtennoticeofregularmeetingsshallbesenttoallstockh absence of any date
regular meetings shall be sent to all olders or members of record at least twenty-one (21) fixed in the by laws
stockholders or members of record at least two days prior to the meeting, unless a different period is
(2) weeks prior to the meeting, unless a required in the by laws, law, or regulation: Provided,
different period is required by the by-laws. further, That written notice of regular meetings may be 2. Written notice
sent to all stockholders or members of should be 21 days prior
Special meetings of stockholders or members
recordthroughelectronicmailorsuchothermannerasthe to the meeting
shall be held at any time deemed necessary or
Commission shall allow under itsguidelines.
as provided in the by-laws: Provided, however,
That at least one (1) week written notice shall be
sent to all stockholders or members, unless 3. Written notice may
At each regular meeting of stockholders or members, be sent electronically or
otherwise provided in the by-laws.
the board of directors or trustees shall endeavor to in such other manner
present to stockholders or members the following: allowed by the
Commission
Notice of any meeting may be waived,
expressly or impliedly, by any stockholder or
(a) The minutes of the most recent regular meeting
member.
which shall include, among others: 4. Provides for matters
to be presented by the
Section 51. Place and time of meetings of Section 50. Place and Time of Meetings of A 1. Metro Cebu, Metro
stockholders of members. - Stockholder's or Stockholders or Members. – Stockholders’ or Davao, and other
member's meetings, whether regular or special, members’ meetings, whether regular or special, shall Metropolitan areas are
shall be held in the city or municipality where be held in the principal office of the corporation as set considered a city or
the principal office of the corporation is located, forth in the articles of incorporation, or, if not municipality.
and if practicable in the principal office of the practicable,in the city or municipality where the
2. Provides for the
corporation: Provided, That Metro Manila principal office of the corporation is located: Provided,
manner of sending the
shall, for purposes of this section, be considered That any city or municipality in Metro Manila, Metro
notice and what it
a city or municipality. Cebu, Metro Davao, and other Metropolitan areas
should be accompanied
shall, for purposes of this section, be considered a city
with
or municipality.
Notice of meetings shall be in writing, and the 3. Includes the proviso
time and place thereof stated therein. that the stockholder or
Notice of meetings shall be sent through the means of member’s attendance is
communication provided in the bylaws, which notice for the purposes of
All proceedings had and any business shall state the time, place and purpose of the meetings. objection
transacted at any meeting of the stockholders or
members, if within the powers or authority of
the corporation, shall be valid even if the Each notice of meeting shall further be accompanied by
meeting be improperly held or called, provided the following:
all the stockholders or members of the
corporation are present or duly represented at
the meeting. (24 and 25) (a) The agenda for the meeting;
(b) A proxy form which shall be submitted to the
corporate secretary within a reasonable time prior to
the meeting;
Section 55. Right to vote of pledgors, Section 54. Right to Vote of Secured Creditors and A Grammatical Change
mortgagors, and administrators. - In case of Administrators.– In case a stockholder grants security
pledged or mortgaged shares in stock interest in his or her shares in stock corporations, the
corporations, the pledgor or mortgagor shall stockholder-grantor shall have the right to attend and
have the right to attend and vote at meetings of vote at meetings of stockholders, unless the secured
stockholders, unless the pledgee or mortgagee creditor is expressly given by the stockholder-grantor
is expressly given by the pledgor or mortgagor such right in writing which is recorded in the
such right in writing which is recorded on the appropriate corporate books.
appropriate corporate books. (n)
Section 57. Voting right for treasury shares. - Section 56. Voting Right for Treasury Shares. – A No Change
Treasury shares shall have no voting right as Treasury shares shall have no voting right as long as
long as such shares remain in the Treasury. (n) such shares remain in the Treasury.
Section 58. Proxies. - Stockholders and Section 57. Manner of Voting; Proxies. – Stockholders A 1. Allows
members may vote in person or by proxy in all and members may vote in person or by proxy in all participation in
meetings of stockholders or members. Proxies meetings of stockholders or members. meetings through
shall in writing, signed by the stockholder or remote communication
member and filed before the scheduled meeting or in absentia
with the corporate secretary. Unless otherwise When so authorized in the bylaws or by a majority of
2. Participation
provided in the proxy, it shall be valid only for the board of directors, the stockholders or members
through remote
the meeting for which it is intended. No proxy of corporations may also vote through remote
communication or in
shall be valid and effective for a period longer communication or in absentia:Provided,That the
absentia is deemed
than five (5) years at any one time. (n) votes are received before the corporation finishes the
present for purposes of
tally of votes.
a quorum
Section 60. Subscription contract. – Any SEC. 59. Subscription Contract. – Any contract for the
contract for the acquisition of unissued stock in acquisition of unissued stock in an existing corporation No changes
an existing corporation or a corporation still to or a corporation still to be formed shall be deemed a
be formed shall be deemed a subscription subscription within the meaning of this Title,
within the meaning of this Title, notwithstanding the fact that the parties refer to it as a
notwithstanding the fact that the parties refer to purchase or some other contract.
it as a purchase or some other contract. (n)
Shares of stock so issued are personal property Shares of stock so issued are personal property and
and may be transferred by delivery of the may be transferred by delivery of the certificate or
certificate or certificates indorsed by the owner certificates indorsed by the owner, his attorney-in-
or his attorney-in-fact or other person legally fact, or any other person legally authorized to make
authorized to make the transfer. the transfer.
Section 65. Liability of directors for watered SEC. 64. Liability of Directors for Watered Stocks. – 1. Changed its
stocks. – Any director or officer of a corporation A director or officer of a corporation who: form while
consenting to the issuance of stocks for a director’s
(a) consents to the issuance of stocks for a
consideration less than its par or issued value liabilities for
consideration less than its par or issued value;
or for a consideration in any form other than watered stocks
cash, valued in excess of its fair value, or who, (b) consents to the issuance of stocks for a remained the
having knowledge thereof, does not forthwith consideration other than cash, valued in excess of its same. .
express his objection in writing and file the fair value; or
same with the corporate secretary, shall be
solidarily, liable with the stockholder (c) having knowledge of the insufficient
concerned to the corporation and its creditors consideration, does not file a written objection with
for the difference between the fair value the corporate secretary, shall be liable to the
received at the time of issuance of the stock and corporation or its creditors, solidarily with the
the par or issued value of the same. (n) stockholder concerned for the difference between the
value received at the time of issuance of the stock and
the par or issued value of the same.
Section 66. Interest on unpaid subscriptions. – SEC. 65. Interest on Unpaid Subscriptions. – 1. Rate of interest is no
Subscribers for stock shall pay to the Subscribers to stocks shall be liable to the corporation longer based on what is
corporation interest on all unpaid subscriptions for interest on all unpaid subscriptions from the date A fixed in the by-laws
from the date of subscription, if so required by, of subscription, if so required by and at the rate of but what is fixed in the
and at the rate of interest fixed in the by-laws. If interest fixed in the subscription contract. If no rate of subscription contract.
no rate of interest is fixed in the by-laws, such interest is fixed in the subscription contract, the
rate shall be deemed to be the legal rate. (37) prevailing legal rate shall apply.
Section 67. Payment of balance of SEC. 66. Payment of Balance of Subscription. –
subscription. – Subject to the provisions of the Subject to the provisions of the subscription contract,
contract of subscription, the board of directors the board of directors may, at any time, declare due 1. Merely changed its
of any stock corporation may at any time and payable to the corporation unpaid subscriptions A form.
declare due and payable to the corporation and may collect the same or such percentage thereof,
unpaid subscriptions to the capital stock and in either case, with accrued interest, if any, as it may 2. Provided on when
may collect the same or such percentage deem necessary.Payment of unpaid subscription or interest should be
thereof, in either case with accrued interest, if percentage thereof, together with any interest accrued, computed which is
any, as it may deem necessary. Payment of any shall be made on the date specified in the subscription from the date specified
unpaid subscription or any percentage thereof, contract or on the date stated in the call made by the until the full payment
together with the interest accrued, if any, shall board. Failure to pay on such date shall render the of the subscription.
be made on the date specified in the contract of entire balance due and payable and shall make the
subscription or on the date stated in the call stockholder liable for interest at the legal rate on such
made by the board. Failure to pay on such date balance, unless a different interest rate is provided in
shall render the entire balance due and payable the subscription contract.
and shall make the stockholder liable for
The interest shall be computed from the date
interest at the legal rate on such balance, unless
specified, until full payment of the subscription. If no
a different rate of interest is provided in the by-
payment is made within thirty (30) days from the said
laws, computed from such date until full
date, all stocks covered by the subscription shall
payment. If within thirty (30) days from the said
thereupon become delinquent and shall be subject to
date no payment is made, all stocks covered by
sale as hereinafter provided, unless the board of
said subscription shall thereupon become
directors orders otherwise.
delinquent and shall be subject to sale as
hereinafter provided, unless the board of
directors orders otherwise. (38)
Section 68. Delinquency sale. – The board of SEC. 67. Delinquency Sale. – The board of directors 1. Allowed other
directors may, by resolution, order the sale of may, by resolution, order the sale of delinquent stock means in giving notice
delinquent stock and shall specifically state the and shall specifically state the amount due on each of sale which is
amount due on each subscription plus all subscription plus all accrued interest, and the date, provided in the by
accrued interest, and the date, time and place of time and place of the sale which shall not be less than laws.
A
the sale which shall not be less than thirty (30) thirty (30) days nor more than sixty (60) days from
days nor more than sixty (60) days from the the date the stocks become delinquent.
date the stocks become delinquent.
Notice of said sale, with a copy of the Notice of the sale, with a copy of the resolution,
resolution, shall be sent to every delinquent shall be sent to every delinquent stockholder either
stockholder either personally or by registered personally, by registered mail, or through other
mail. The same shall furthermore be published means provided in the by laws. The same shall be
once a week for two (2) consecutive weeks in a published once a week for two (2) consecutive weeks
newspaper of general circulation in the in a newspaper of general circulation in the province
province or city where the principal office of the or city where the principal office of the corporation
corporation is located. is located.
Section 70. Court action to recover unpaid SEC. 69. Court Action to Recover Unpaid
subscription. – Nothing in this Code shall Subscription. – Nothing in this Code shall prevent the No changes.
prevent the corporation from collecting by corporation from collecting through court action, the
action in a court of proper jurisdiction the amount due on any unpaid subscription, with accrued
amount due on any unpaid subscription, with interest, costs and expenses.
accrued interest, costs and expenses. (49a)
Section 71. Effect of delinquency. – No SEC. 70. Effect of Delinquency. – No delinquent
delinquent stock shall be voted for or be stock shall be voted for, be entitled to vote, or be
entitled to vote or to representation at any represented at any stockholder’s meeting, nor shall No changes.
stockholder’s meeting, nor shall the holder the holder thereof be entitled to any of the rights of a
thereof be entitled to any of the rights of a stockholder except the right to dividends in
stockholder except the right to dividends in
accordance with the provisions of this Code, until
accordance with the provisions of this Code,
and unless payment is made by the holder of such
until and unless he pays the amount due on his
delinquent stock for the amount due on the
subscription with accrued interest, and the
subscription with accrued interest, and the costs and
costs and expenses of advertisement, if any.
expenses of advertisement, if any.
(50a)
Section 72. Rights of unpaid shares. – Holders SEC. 71. Rights of Unpaid Shares, Non-delinquent. No changes.
of subscribed shares not fully paid which are – Holders of subscribed shares not fully paid which
not delinquent shall have all the rights of a are not delinquent shall have all the rights of a
stockholder. (n) stockholder.
Section 73. Lost or destroyed certificates. – The SEC. 72. Lost or Destroyed Certificates. – The
following procedure shall be followed for the following procedure shall be followed by a No changes.
issuance by a corporation of new certificates of corporation in issuing new certificates of stock in lieu
stock in lieu of those which have been lost, of those which have been lost, stolen or destroyed:
stolen or destroyed:
1. The registered owner of a certificate of stock (a) The registered owner of a certificate of stock
in a corporation or his legal representative shall in a corporation or such person’s legal
file with the corporation an affidavit in representative shall file with the corporation an
triplicate setting forth, if possible, the affidavit in triplicate setting forth, if possible, the
circumstances as to how the certificate was lost, circumstances as to how the certificate was lost,
stolen or destroyed, the number of shares stolen or destroyed, the number of shares
represented by such certificate, the serial represented by such certificate, the serial number of
number of the certificate and the name of the the certificate and the name of the corporation
corporation which issued the same. He shall which issued the same. The owner of such certificate
also submit such other information and of stock shall also submit such other information
evidence which he may deem necessary; and evidence as may be deemed necessary;
The board of directors or trustees of each The board of directors or trustees of each
corporation, party to the merger or corporation, party to the merger or consolidation,
consolidation, shall approve a plan of merger shall approve a plan of merger or consolidation NO CHANGES
or consolidation setting forth the following: setting forth the following:
1. The names of the corporations (a) The names of the corporations proposing
proposing to merge or consolidate, hereinafter to merge or consolidate, hereinafter referred to
referred to as the constituent corporations; as the constituent corporations;
2. The terms of the merger or (b) The terms of the merger or consolidation
consolidation and the mode of carrying the and the mode of carrying the same into effect;
same into effect;
(c) A statement of the changes, if any, in the
3. A statement of the changes, if any, in articles of incorporation of the surviving
the articles of incorporation of the surviving corporation in case of merger; and, in case of
corporation in case of merger; and, with consolidation, all the statements required to be
respect to the consolidated corporation in case set forth in the articles of incorporation for
of consolidation, all the statements required to corporations organized under this Code; and
be set forth in the articles of incorporation for
Such other provisions with respect to the proposed
corporations organized under this Code; and
merger or consolidation as are deemed necessary or
4. Such other provisions with respect to desirable.
the proposed merger or consolidation as are
deemed necessary or desirable. (n)
Section 77. Stockholder's or member's SEC. 76. Stockholders’ or Members’ Approval. – Upon A Emphasized that the
approval. - Upon approval by majority vote of approval by a majority vote of each of the board of notice of such meeting
each of the board of directors or trustees of the directors or trustees of the constituent corporations of must be given in the
constituent corporations of the plan of merger the plan of merger or consolidation, the same shall be same manner as giving
or consolidation, the same shall be submitted submitted for approval by the stockholders or notice of regular or
for approval by the stockholders or members of members of each of such corporations at separate special meetings. (refer
each of such corporations at separate corporate corporate meetings duly called for the purpose.
to Sec. 49)
meetings duly called for the purpose. Notice of NOTICE OF SUCH MEETINGS SHALL BE GIVEN
such meetings shall be given to all stockholders TO ALL STOCKHOLDERS OR MEMBERS OF THE
or members of the respective corporations, at RESPECTIVE CORPORATIONS IN THE SAME
least two (2) weeks prior to the date of the MANNER AS GIVING NOTICE OF REGULAR OR
meeting, either personally or by registered SPECIAL MEETINGS UNDER SECTION 49 OF
mail. Said notice shall state the purpose of the THIS CODE. The notice shall state the purpose of the
meeting and shall include a copy or a summary meeting and include a copy or a summary of the plan
of the plan of merger or consolidation. The of merger or consolidation.
affirmative vote of stockholders representing at
The affirmative vote of stockholders representing at
least two-thirds (2/3) of the outstanding capital
least two-thirds (2/3) of the outstanding capital stock
stock of each corporation in the case of stock
of each corporation in the case of stock corporations or
corporations or at least two-thirds (2/3) of the at least two-thirds (2/3) of the members in the case of
members in the case of non-stock corporations non-stock corporations shall be necessary for the
shall be necessary for the approval of such plan. approval of such plan. Any dissenting stockholder
Any dissenting stockholder in stock
may exercise the right of appraisal in accordance with
corporations may exercise his appraisal right in
this Code: Provided, That if after the approval by the
accordance with the Code: Provided, That if
stockholders of such plan, the board of directors
after the approval by the stockholders of such
decides to abandon the plan, the right of appraisal shall
plan, the board of directors decides to abandon be extinguished.
APPRAISAL RIGHT
Section 81. Instances of appraisal right. – Any SEC. 80. When the Right of Appraisal May Be Addition of letter D
stockholder of a corporation shall have the right Exercised. – Any stockholder of a corporation shall
to dissent and demand payment of the fair have the right to dissent and demand payment of the
value of his shares in the following instances: fair value of the shares in the following instances:
1. In case any amendment to the articles of (a) In case an amendment to the articles of
incorporation has the effect of changing or incorporation has the effect of changing or restricting
restricting the rights of any stockholder or class the rights of any stockholder or class of shares, or of
of shares, or of authorizing preferences in any authorizing preferences in any respect superior to
respect superior to those of outstanding shares those of outstanding shares of any class, or of
of any class, or of extending or shortening the extending or shortening the term of corporate
term of corporate existence; existence;
2. In case of sale, lease, exchange, transfer, (b) In case of sale, lease, exchange, transfer,
mortgage, pledge or other disposition of all or mortgage, pledge or other disposition of all or
substantially all of the corporate property and substantially all of the corporate property and assets as
assets as provided in the Code; and provided in this Code;
TITLE XI
Section 87. Definition. – For the purposes of this SEC. 86. Definition. – For purposes of this Code and A 1. Omitted a
Code, a non-stock corporation is one where no phrase
subject to its provisions on dissolution, a non-stock
part of its income is
corporation is one where no part of its income is “subject to the
distributable as dividends to its members, distributable as dividends to its members, trustees, or provisions of this code”
trustees, or officers, subject to the provisions of officers subject to the provisions of this Code on
this Code on dissolution: Provided, dissolution: Provided, That any profit which a non-
stock corporation may obtain incidental to its
That any profit which a non-stock corporation
operations shall, whenever necessary or proper, be
may obtain as an incident to its operations shall,
used for the furtherance of the purpose or purposes for
whenever necessary or proper be used for the
which the corporation was organized, subject to the
furtherance of the purpose or purposes for
provisions of this Title.
which the corporation was organized, subject to
the provisions of this Title. The provisions governing stock corporations, when
No person shall be elected as trustee unless Unless otherwise provided in the articles of
he is a member of the corporation. incorporation or the bylaws, the members may
directly elect officers of a nonstock corporation.
1. All liabilities and obligations of the (a) All liabilities and obligations of the
corporation shall be paid, satisfied corporation shall be paid, satisfied and discharged,
and discharged, or adequate or adequate provision shall be made therefor;
provision shall be made therefore;
(b) Assets held by the corporation upon a
condition requiring return, transfer or conveyance,
and which condition occurs by reason of the
2. Assets held by the corporation upon
dissolution, shall be returned, transferred or
a condition requiring return, transfer
conveyed in accordance with such requirements;
or conveyance, and which condition
occurs by reason of the dissolution,
shall be returned, transferred or
(c) Assets received and held by the
conveyed in accordance with such
corporation subject to limitations permitting their
requirements;
use only for charitable, religious, benevolent,
educational or similar purposes, but not held upon a
condition requiring return, transfer or conveyance
3. Assets received and held by the
by reason of the dissolution, shall be transferred or
corporation subject to limitations
conveyed to one (1) or more corporations, societies
permitting their use only for
or organizations engaged in activities in the
charitable, religious, benevolent,
educational or similar purposes, but Philippines substantially similar to those of the
not held upon a condition requiring dissolving corporation according to a plan of
return, transfer or conveyance by distribution adopted pursuant to this Chapter;
reason of the dissolution, shall be
transferred or conveyed to one or more
corporations, societies or (d) Assets other than those mentioned in the
organizations engaged in activities in preceding paragraphs, if any, shall be distributed in
the Philippines substantially similar to accordance with the provisions of the articles of
those of the dissolving corporation incorporation or the bylaws, to the extent that the
according to a plan of distribution articles of incorporation or the bylaws determine the
adopted pursuant to this Chapter; distributive rights of members, or any class or
classes of members, or provide for distribution; and
1. No meeting of
stockholders need be
called to elect directors;
3. The stockholders of
the corporation shall be
subject to all liabilities of
directors.
5. The provisions of
subsection (4) shall not be
applicable if the transfer of
stock, though contrary to
subsections (1), (2) or (3),
has been consented to by
all the stockholders of the
close corporation, or if the
close corporation has
amended its articles of
incorporation in
accordance with this Title.
7. The provisions of
this section shall not
impair any right which the
transferee may have to
rescind the transfer or to
recover under any
applicable warranty,
express or implied.
Section 100. Agreements by SEC. 99. Agreements by Stockholders. – same 1. Changed in form
stockholders. - only
4. A written
agreement among some or
all of the stockholders in a
close corporation shall not
be invalidated on the
ground that it so relates to
the conduct of the business
and affairs of the
corporation as to restrict or
interfere with the
discretion or powers of the
board of directors:
Provided, That such
agreement shall impose on
the stockholders who are
parties thereto the
liabilities for managerial
acts imposed by this Code
on directors.
Section 103. Amendment of articles of SEC. 102. Amendment of Articles of Same 1. Changed in form
incorporation. – Any amendment to the Incorporation. – Any amendment to the articles of only
articles of incorporation which seeks to incorporation which seeks to delete or remove any
delete or remove any provision required by provision required by this Title or to reduce a
this Title to be contained in the articles of quorum or voting requirement stated in said articles
incorporation or to reduce a quorum or of incorporation shall require the affirmative vote of
voting requirement stated in said articles of at least two- thirds (2/3) of the outstanding capital
incorporation shall not be valid or effective stock, whether with or without voting rights, or of
unless approved by the affirmative vote of such greater proportion of shares as may be
at least two-thirds (2/3) of the outstanding specifically provided in the articles of incorporation
capital stock, whether with or without for amending, deleting or removing any of the
voting rights, or of such greater proportion aforesaid provisions, at a meeting duly called for the
of shares as may be specifically provided purpose.
in the articles of incorporation for
amending, deleting or removing any of the
aforesaid provisions, at a meeting duly
called for the purpose.
Section 104. Deadlocks. – Notwithstanding SEC. 103. Deadlocks. – Notwithstanding any Same 1. Changed in form
any contrary provision in the articles of contrary provision in the close corporation’s only
incorporation or by-laws or agreement of articles of incorporation, bylaws, or stockholders’
stockholders of a close corporation, if the agreement, if the directors or stockholders are so
directors or stockholders are so divided divided on the management of the corporation’s
respecting the management of the business and affairs that the votes required for a
corporation’s business and affairs that the corporate action cannot be obtained, with the
votes required for any corporate action consequence that the business and affairs of the
cannot be obtained, with the consequence corporation can no longer be conducted to the
that the business and affairs of the advantage of the stockholders generally, the
corporation can no longer be conducted Commission, upon written petition by any
to the advantage of the stockholders stockholder, shall have the power to arbitrate the
generally, the Securities and Exchange dispute.
Commission, upon written petition by any
stockholder, shall have the power to
arbitrate the dispute. In the exercise of such power, the Commission
shall have authority to make appropriate orders,
such as: (a) cancelling or altering any provision
contained in the articles of incorporation, bylaws,
In the exercise of such power, the
or any stockholders’ agreement; (b) cancelling,
Commission shall have authority to make
altering or enjoining a resolution or act of the
such order as it deems appropriate,
corporation or its board of directors, stockholders,
including an order: (1) cancelling or
or officers; (c) directing or prohibiting any act of the
altering any provision contained in the
corporation or its board of directors, stockholders,
articles of incorporation, by-laws, or any
officers, or other persons party to the action; (d)
stockholder’s agreement; (2) cancelling,
requiring the purchase at their fair value of shares
altering or enjoining any resolution or act
of any stockholder, either by the corporation
of the corporation or its board of directors, regardless of the availability of unrestricted
stockholders, or officers; (3) directing or
retained earnings in its books, or by the other
prohibiting any act of the corporation or its
stockholders; (e) SEC. 103. Deadlocks. –
board of directors, stockholders, officers, or
Notwithstanding any contrary provision in the
other persons party to the action; (4)
close corporation’s articles of incorporation,
requiring the purchase at
bylaws, or stockholders’ agreement, if the directors
their fair value of shares of any or stockholders are so divided on the management
stockholder, either by the of the corporation’s business and affairs that the
votes required for a corporate action cannot be
corporation regardless of the availability
obtained, with the consequence that the business
of unrestricted retained earnings in its
and affairs of the corporation can no longer be
books, or by the other stockholders;
conducted to the advantage of the stockholders
(5) appointing a provisional generally, the Commission, upon written petition
director; (6) dissolving the by any stockholder, shall have the power to
corporation; or (7) granting such arbitrate the dispute.
other relief as the circumstances
may warrant.
In the exercise of such power, the Commission
shall have authority to make appropriate orders,
A provisional director shall be an impartial such as: (a) cancelling or altering any provision
person who is neither a stockholder nor a contained in the articles of incorporation, bylaws,
creditor of the corporation or of any or any stockholders’ agreement; (b) cancelling,
subsidiary or affiliate of the corporation, altering or enjoining a resolution or act of the
and whose further qualifications, if any, corporation or its board of directors, stockholders,
may be determined by the Commission. A
provisional director is not a receiver of the or officers; (c) directing or prohibiting any act of the
corporation and does not have the title and corporation or its board of directors, stockholders,
powers of a custodian or receiver. A officers, or other persons party to the action; (d)
provisional director shall have all the rights requiring the purchase at their fair value of shares
and powers of a duly elected director of the of any stockholder, either by the corporation
corporation, including the right to notice of
regardless of the availability of unrestricted
and to vote at meetings of directors, until
such time as he shall be removed by order retained earnings in its books, or by the other
of the Commission or by all the stockholders; (e)
stockholders. His compensation shall be
determined by agreement between him
and the corporation subject to approval of
the Commission, which may fix his
compensation in the absence of agreement
or in the event of disagreement between the
provisional director and the corporation.
Section 105. Withdrawal of stockholder or SEC. 104. Withdrawal of Stockholder or same
dissolution of corporation. – In addition and Dissolution of Corporation. – In addition and
without prejudice to other rights and without prejudice to other rights and remedies
remedies available to a stockholder under available under this Title, any stockholder of a
this Title, any stockholder of a close close corporation may, for any reason, compel the
corporation may, for any reason, compel corporation to purchase shares held at fair value,
the said corporation to purchase his shares which shall not be less than the par or issued value,
at their fair value, which shall not be less when the corporation has sufficient assets in its
than their par or issued value, when the books to cover its debts and liabilities exclusive of
corporation has sufficient assets in its capital stock: Provided, That any stockholder of a
books to cover its debts and liabilities close corporation may, by written petition to the
exclusive of capital stock: Provided, That Commission, compel the dissolution of such
any stockholder of a close corporation may, corporation whenever any acts of the directors,
by written petition to the Securities and officers, or those in control of the corporation are
Exchange Commission, compel the illegal, fraudulent, dishonest, oppressive or
dissolution of such corporation whenever unfairly prejudicial to the corporation or any
stockholder, or whenever corporate assets are being
any of acts of the directors, officers or those
misapplied or wasted.
in
CHAPTER I
EDUCATIONAL CORPORATIONS
RELIGIOUS CORPORATION
Section 109. Classes of religious SEC. 107. Classes of Religious Corporations. – Same
corporations. – Religious corporations Religious corporations may be incorporated by
may be incorporated by one or more one (1) or more persons. Such corporations may
persons. Such corporations may be be classified into corporations sole and religious
classified into corporations sole and societies. Religious corporations shall be
religious societies. Religious corporations governed by this Chapter and by the general
shall be governed by this Chapter and by provisions on nonstock corporations insofar as
the general provisions on non-stock applicable.
corporations insofar as they may be
applicable. (n)
Section 110. Corporation sole. – For the SEC. 108. Corporation Sole. – For the purpose of Same
purpose of administering and managing, administering and managing, as trustee, the
as trustee, the affairs, property and affairs, property and temporalities of any religious
temporalities of any religious denomination, sect or church, a corporation sole
denomination, sect or church, a may be formed by the chief archbishop, bishop,
corporation sole may be formed by the priest, minister, rabbi, or other presiding elder of
chief archbishop, bishop, priest, minister, such religious denomination, sect or church.
rabbi or other presiding elder of such
religious denomination, sect or church.
(154a)
Section 111. Articles of incorporation. – SEC. 109. Articles of Incorporation. – In order to Grammatical change
In order to become a corporation sole, the become a corporation sole, the chief archbishop,
chief archbishop, bishop, priest, minister, bishop, priest, minister, rabbi, or presiding elder
rabbi or presiding elder of any religious of any religious denomination, sect or church
denomination, sect or church must file must file with the Commission articles of
with the Securities and Exchange incorporation setting forth the following:
Commission articles of incorporation
setting forth the following:
3. That as such chief archbishop, bishop, (c) That such chief archbishop, bishop, priest,
priest, minister, rabbi or presiding elder, minister, rabbi, or presiding elder is charged with
he is charged with the administration of the administration of the temporalities and the
the temporalities and the management of management of the affairs, estate and properties
the affairs, estate and properties of his of the religious denomination, sect, or church
religious denomination, sect or church within the territorial jurisdiction, so described
within his territorial jurisdiction, succinctly in the articles of incorporation;
describing such territorial jurisdiction;
DISSOLUTION
Section 117. Methods of dissolution. – A SEC. 133. Methods of Dissolution. – A corporation Same Provision 1. Renumbered
corporation formed or organized under the formed or organized under the provisions of this Code
provisions of this Code may be dissolved may be dissolved voluntarily or involuntarily.
voluntarily or involuntarily.
Section 118. Voluntary dissolution where no SEC. 134. Voluntary Dissolution Where No Creditors are N l.
creditors are affected. – If dissolution of a Affected. – If dissolution of a corporation does not Resolut
corporation does not prejudice the rights of any prejudice the rights of any creditor having a claim ion
creditor having a claim against it, the against it, the dissolution may be effected by majority adopte
dissolution may be effected by majority vote of vote of the board of directors or trustees, and by a d to
the board of directors or trustees, and by a resolution adopted by the affirmative vote of the effect
resolution duly adopted by the affirmative vote stockholders owning at least majority of the dissolut
of the stockholders owning at least two-thirds outstanding capital stock or majority of the members ion
(2/3) of the outstanding capital stock or of at of a meeting to be held upon the call of the directors require
least two-thirds (2/3) of the members of a or trustees. s
meeting to be held upon call of the directors or affirma
trustees after publication of the notice of time, tive
place and object of the meeting for three (3) At least twenty (20) days prior to the meeting, notice vote of
consecutive weeks in a newspaper published in shall be given to each shareholder or member of the
the place where the principal office of said record personally, by registered mail, or by any stockho
corporation is located; and if no newspaper is means authorized under its bylaws, whether or not lders
published in such place, then in a newspaper of entitled to vote at the meeting, in the manner owning
general circulation in the Philippines, after provided in Section 50 of this Code and shall state 2/3 of
sending such notice to each stockholder or that the purpose of the meeting is to vote on the the
member either by registered mail or by dissolution of the corporation. outstan
personal delivery at least thirty (30) days prior ding
to said meeting. capital
Notice of the time, place, and object of the meeting stock
shall be published once prior to the date of the (OCS)
A copy of the resolution authorizing the meeting in a newspaper published in the place where or at
dissolution shall be certified by a majority of the principal office of said corporation is located, or if least
the board of directors or trustees and no newspaper is published in such place, in a 2/3 of
countersigned by the secretary of the newspaper of general circulation in the Philippines. the
corporation. The Securities and Exchange membe
Commission shall thereupon issue the rs of a
certificate of dissolution. (62a) A verified request for dissolution shall be filed with meetin
Section 119. Voluntary dissolution where creditors SEC. 135. Voluntary Dissolution Where Creditors are A 1. RCC now requires a
are affected. – Where the dissolution of a Affected; Procedure and Contents of Petition. – Where the verified petition.
corporation may prejudice the rights of any dissolution of a corporation may prejudice the rights of
creditor, the petition for dissolution shall be any creditor, a verified petition for dissolution shall
filed with the Securities and Exchange be filed with the Commission. 2. OCC allows other
Commission. officers having the
management of its
The petition shall be signed by a majority of its
The petition shall be signed by a majority of the affairs to sign the
board of directors or trustees or other officers
corporation’s board of directors or trustees, verified by petition, RCC deleted
having the management of its affairs, verified
its president or secretary or one of its directors or the phrase.
by its president or secretary or one of its
trustees, and shall set forth all claims and demands
directors or trustees, and shall set forth all
against it, and that its dissolution was resolved upon
claims and demands against it, and that its
by the affirmative vote of the stockholders 3. RCC expressly
dissolution was resolved upon by the
representing at least two-thirds (2/3) of the provides for the
affirmative vote of the stockholders
outstanding capital stock or at least two-thirds (2/3) of contents of the petition
representing at least two-thirds (2/3) of the
the members at a meeting of its stockholders or and documents to be
outstanding capital stock or by at least two-
members called for that purpose. submitted including:
thirds (2/3) of the members at a meeting of its
stockholders or members called for that (1) copy of the
purpose. resolution authorizing
The petition shall likewise state: (a) the reason for the
If the petition is sufficient in form and the dissolution,
dissolution; (b) the form, manner, and time when the
substance, the Commission shall, by an order notices were given; and (c) the date, place, and time certified by a majority
reciting the purpose of the petition, fix a date on of the meeting in which the vote was made. The of the board of directors
or before which objections thereto may be filed corporation shall submit to the Commission the or trustees and
by any person, which date shall not be less than following: (1) a copy of the resolution authorizing the countersigned by the
thirty (30) days nor more than sixty (60) days dissolution, certified by a majority of the board of secretary of the
after the entry of the order. Before such date, a directors or trustees and countersigned by the corporation; and
copy of the order shall be published at least secretary of the corporation; and (2) a list of all its
(2) a list of all its
once a week for three (3) consecutive weeks in creditors.
creditors.
a newspaper of general circulation published in
the municipality or city where the principal
office of the corporation is situated, or if there If the petition is sufficient in form and substance, the
be no such newspaper, then in a newspaper of 4. Express provision
Commission shall, by an order reciting the purpose of
general circulation in the Philippines, and a only upon the issuance
the petition, fix a deadline for filing objections to the
similar copy shall be posted for three (3) by the Commission of a
petition which date shall not be less than thirty (30)
consecutive weeks in three (3) public places in certificate of dissolution
days nor more than sixty (60) days after the entry of the
such municipality or city. that it shall take effect.
order. Before such date, a copy of the order shall be
published at least once a week for three (3) consecutive
Upon five (5) day’s notice, given after the date
weeks in a newspaper of general circulation published
on which the right to file objections as fixed in
in the municipality or city where the principal office of
the order has expired, the Commission shall
the corporation is situated, or if there be no such
proceed to hear the petition and try any issue
newspaper, then in a newspaper of general circulation
made by the objections filed; and if no such
in the Philippines, and a similar copy shall be posted
objection is sufficient, and the material
for three (3) consecutive weeks in three (3) public
allegations of the petition are true, it shall
places in such municipality or city.
render judgment dissolving the corporation
and directing such disposition of its assets as
justice requires, and may appoint a receiver to
Upon five (5) days’ notice, given after the date on
collect such assets and pay the debts of the
which the right to file objections as fixed in the order
corporation. (Rule 104, RCa)
has expired, the Commission shall proceed to hear the
petition and try any issue raised in the objections filed;
and if no such objection is sufficient, and the material
allegations of the petition are true, it shall render
judgment dissolving the corporation and directing
such disposition of its assets as justice requires, and
may appoint a receiver to collect such assets and pay
the debts of the corporation.
3. RCC
provide
(2) Committed or aided in the commission of securities
s for 5
violations, smuggling, tax evasion, money laundering,
ground
or graft and corrupt practices, and its stockholders
s for
knew of the same; and
involun
(3) Repeatedly and knowingly tolerated the tary
commission of graft and corrupt practices or other dissolut
fraudulent or illegal acts by its directors, trustees, ion, old
officers, or employees. Code
doesn’t.
5. Need for
notice
and
coordin
ation
by SEC
with
approp
riate
regulat
ory
agencie
s prior
to the
involun
tary
dissolut
ion of
compa
nies
under
their
special
regulat
ory
jurisdic
tion.
Section 122. Corporate liquidation. – Every SEC. 139. Corporate Liquidation. – Except for banks, A 1. Banks specifically
corporation whose charter expires by its own which shall be covered by the applicable provisions excepted from
limitation or is annulled by forfeiture or of Republic Act No. 7653, otherwise known as the corporate liquidation
otherwise, or whose corporate existence for “New Central Bank Act”, as amended, and Republic provision in the RCC;
other purposes is terminated in any other Act No. 3591, otherwise known as the “Philippine banks are covered by
manner, shall nevertheless be continued as a Deposit Insurance Corporation Charter”, as R.A. No. 7653 aka the
body corporate for three (3) years after the time amended, every corporation whose charter expires “New Central Bank
when it would have been so dissolved, for the pursuant to its articles of incorporation, is annulled Act”, as amended, and
purpose of prosecuting and defending suits by by forfeiture, or whose corporate existence is R.A. No. 3591, aka the
or against it and enabling it to settle and close terminated in any other manner, shall nevertheless “Philippine Deposit
its affairs, to dispose of and convey its property remain as a body corporate for three (3) years after the Insurance Corporation
and to distribute its assets, but not for the effective date of dissolution, for the purpose of Charter”, as amended.
purpose of continuing the business for which it prosecuting and defending suits by or against it and
enabling it to settle and close its affairs, dispose of and 2. OCC:
was established.
convey its property, and distribute its assets, but not
- phrase used charter
At any time during said three (3) years, the for the purpose of continuing the business for which it
expires on its own
corporation is authorized and empowered to was established.
limitation
convey all of its property to trustees for the
benefit of stockholders, members, creditors, - continues to be a body
and other persons in interest. From and after coporate for 3 years
At any time during said three (3) years, the corporation
any such conveyance by the corporation of its after the time when it
is authorized and empowered to convey all of its
property in trust for the benefit of its would have been dissolved
property to trustees for the benefit of stockholders,
stockholders, members, creditors and others in
members, creditors and other persons in interest. After
interest, all interest which the corporation had
any such conveyance by the corporation of its property
in the property terminates, the legal interest 3. RCC:
in trust for the benefit of its stockholders, members,
vests in the trustees, and the beneficial interest creditors and others in interest, all interest which the
in the stockholders, members, creditors or other - charter expires
persons in interest. corporation had in the property terminates, the legal pursuant to its articles of
interest vests in the trustees, and the beneficial interest incorporation
Upon the winding up of the corporate affairs,
in the stockholders, members, creditors or other
any asset distributable to any creditor or - remain as a body
persons-in-interest.
stockholder or member who is unknown or corporate for 3 years
cannot be found shall be escheated to the city or after the effective date of
municipality where such assets are located. dissolution (more
Except as otherwise provided for in Sections 93 and specific)
Except by decrease of capital stock and as 94 of this Code, upon the winding up of corporate
otherwise allowed by this Code, no corporation affairs, any asset distributable to any creditor or
shall distribute any of its assets or property stockholder or member who is unknown or cannot be
4. Reference to Sections
except upon lawful dissolution and after found shall be escheated in favor of the national
93 & 94 as exceptions to
payment of all its debts and liabilities. government.
the escheat in favor of
the national
government for any
Except by decrease of capital stock and as otherwise
asset distributable to
allowed by this Code, no corporation shall distribute
any creditor or
any of its assets or property except upon lawful
stockholder or member
dissolution and after payment of all its debts and
who is unknown or
liabilities. cannot be found upon
winding up.
TITLE XV
FOREIGN CORPORATIONS
Section 123. Definition and rights of foreign SEC. 140. Definition and Rights of Foreign A Change in form
corporations. – For the purposes of this Code, a Corporations. – For purposes of this Code, a foreign
foreign corporation is one formed, organized corporation is one formed, organized or existing under
or existing under any laws other than those of laws other than those of the Philippines’ and whose
the Philippines and whose laws allow Filipino laws allow Filipino citizens and corporations to do
citizens and corporations to do business in its business in its own country or State. It shall have the
own country or state. It shall have the right to right to transact business in the Philippines after
transact business in the Philippines after it obtaining a license for that purpose in accordance with
shall have obtained a license to transact this Code and a certificate of authority from the
business in this country in accordance with appropriate government agency.
this Code and a certificate of authority from
the appropriate government agency. (n)
3. The name and (e) The specific purpose or purposes which the
address of its corporation intends to pursue in the transaction
resident agent of its business in the Philippines: Provided, That
authorized to said purpose or purposes are those specifically
accept summons stated in the certificate of authority issued by
and process in all the appropriate government agency;
legal proceedings
Section 126. Issuance of a license. – If the SEC. 143. Issuance of a License. – If the Commission A 1. The adding of any
Securities and Exchange Commission is is satisfied that the applicant has complied with all financial instrument
satisfied that the applicant has complied with the requirements of this Code and other special determined suitable
all the requirements of this Code and other laws, rules and regulations, the Commission shall by the SEC as
special laws, rules and regulations, the issue a license to transact business in the acceptable kind of
Commission shall issue a license to the Philippines to the applicant for the purpose or security.
applicant to transact business in the purposes specified in such license.
2. The increase of
Philippines for the purpose or purposes
actual market value
specified in such license. Upon issuance of the
of securities from
license, such foreign corporation may Upon issuance of the license, such foreign
P100,000 to P500,000.
commence to transact business in the corporation may commence to transact business in
Philippines and continue to do so for as long the Philippines and continue to do so for as long as it 3. The requirement that
as it retains its authority to act as a corporation retains its authority to act as a corporation under the the SEC has given to
under the laws of the country or state of its laws of the country or State of its incorporation, the licensee that
incorporation, unless such license is sooner unless such license is sooner surrendered, revoked, within six months
surrendered, revoked, suspended or annulled suspended, or annulled in accordance with this Code after each fiscal year,
in accordance with this Code or other special or other special laws. the latter has to
laws. deposit additional
securities or financial
Within sixty (60) days after the issuance of the license instruments
Within sixty (60) days after the issuance of the to transact business in the Philippines, the licensee, equivalent in actual
license to transact business in the Philippines, except foreign banking or insurance corporations, market value to 2%
the license, except foreign banking or shall deposit with the Commission for the benefit of of the amount by
insurance corporation, shall deposit with the present and future creditors of the licensee in the which the licensee’s
Securities and Exchange Commission for the Philippines, securities satisfactory to the gross income for that
benefit of present and future creditors of the Commission, consisting of bonds or other evidence fiscal year exceeds
licensee in the Philippines, securities of indebtedness of the Government of the P10,000,000. This
satisfactory to the Securities and Exchange Philippines, its political subdivisions and used to be P5,000,000
Commission, consisting of bonds or other instrumentalities, or of government-owned or - under the old code.
evidence of indebtedness of the Government controlled corporations and entities, shares of stock
4. The emphasis that
of the Philippines, its political subdivisions or debt securities that are registered under Republic
the computation of
and instrumentalities, or of government- Act No. 8799, otherwise known as “The Securities
the securities
owned or controlled corporations and entities, Regulation Code”, shares of stock in domestic
deposit, the
shares of stock in "registered enterprises" as corporations listed in the stock exchange, shares of
composition of gross
this term is defined in Republic Act No. 5186, stock in domestic insurance companies and banks,
income and
shares of stock in domestic corporations any financial instrument determined suitable by
allowable
registered in the stock exchange, or shares of the Commission, or any combination thereof with an
deductions
stock in domestic insurance companies and actual market value of at least Five hundred
therefrom shall be in
banks, or any combination of these kinds of thousand pesos (P500,000.00) or such other amount
accordance with the
securities, with an actual market value of at that may be set by the Commission: Provided,
rules of the SEC.
least one hundred thousand (P100,000.) pesos; however, That within six (6) months after each fiscal
Provided, however, That within six (6) year of the licensee, the Commission shall require the
months after each fiscal year of the licensee, licensee to deposit additional securities or financial
the Securities and Exchange Commission instruments equivalent in actual market value to two
shall require the licensee to deposit additional percent (2%) of the amount by which the licensee’s
securities equivalent in actual market value gross income for that fiscal year exceeds Ten
to two (2%) percent of the amount by which million pesos (P10,000,000.00).
the
2. Failure to appoint and (c) Failure, after change of its resident agent or
maintain a resident agent in address, to submit to the Commission a statement of
the Philippines as required by such change as required by this Title;
this Title;
SEC. 167. Engaging Intermediaries for Graft and new No counterpart in CC (BP
Corrupt Practices; Penalties. – A corporation that 68)
appoints an intermediary who engages in graft and
corrupt practices for the corporation’s benefit or
interest shall be punished with a fine ranging from One
hundred thousand pesos (P100,000.00) to One million
pesos (P1,000,000.00).
SEC. 168. Tolerating Graft and Corrupt Practices; new No counterpart in CC (BP
Penalties. – A director, trustee, or officer who 68)
knowingly fails to sanction, report, or file the
appropriate action with proper agencies, allows or
tolerates the graft and corrupt practices or fraudulent
acts committed by a corporation’s directors, trustees,
officers, or employees shall be punished with a fine
ranging from Five hundred thousand pesos
(P500,000.00) to One million pesos (P1,000,000.00).
SEC. 172. Liability of Aiders and Abettors and Other new No counterpart in CC (BP
Secondary Liability. – Anyone who shall aid, abet, 68)
counsel, command, induce, or cause any violation of
this Code, or any rule, regulation, or order of the
Commission shall be punished with a fine not
exceeding that imposed on the principal offenders, at
the discretion of the court, after taking into account
their participation in the offense.
MISCELL
Section 137. Outstanding capital stock SEC. 173. Outstanding Capital Stock Defined. – The Same
defined. – The term "outstanding capital term “outstanding capital stock”, as used in this Code,
stock", as used in this Code, means the total shall mean the total shares of stock issued under
shares of stock issued under binding binding subscription contracts to subscribers or
subscription agreements to subscribers or stockholders, whether fully or partially paid, except
stockholders, whether or not fully or partially treasury shares.
paid, except treasury shares. (n)
Section 138. Designation of governing SEC. 174. Designation of Governing Boards. – The Same
boards. – The provisions of specific provisions provisions of specific provisions of this Code to the
of this Code to the contrary notwithstanding, contrary notwithstanding, nonstock or special
non-stock or special corporations may, corporations may, through their articles of
through their articles of incorporation or their incorporation or their bylaws, designate their
by-laws, designate their governing boards by governing boards by any name other than as board of
any name other than as board of trustees. (n) trustees.
Section 139. Incorporation and other fees. – SEC. 175. Collection and Use of Registration, A CC: SEC is authorized to
The Securities and Exchange Commission is Incorporation and Other Fees. – For a more effective collect and receive fees
hereby authorized to collect and receive fees implementation of this Code, the Commission is only
as authorized by law or by rules and hereby authorized to collect, retain, and use fees,
RCC: SEC is authorized
regulations promulgated by the fines, and other charges pursuant to this Code and its
to collect, retain, and use
Commission.(n) rules and regulations. The amount collected shall be
fees, fines and other
deposited and maintained in a separate account which
charges
shall form a fund for its modernization and to augment
its operational expenses such as, but not limited to,
capital outlay, increase in compensation and benefits
comparable with prevailing rates in the private sector, CC: No mention on the
reasonable employee allowance, employee health care purpose of the fees
services, and other insurance, employee career collected
advancement and professionalization, legal assistance,
RCC: Such amount be
seminars, and other professional fees.
maintained in separate
account which shall form
a fund for modernization
and augmentation of
operational expenses
Section 140. Stock ownership in certain SEC. 176. Stock Ownership in Corporations. – A Change in form
corporations. – Pursuant to the duties Pursuant to the duties specified by Article XIV of the
specified by Article XIV of the Constitution, Constitution, the National Economic and
the National Economic and Development Development Authority shall, from time to time, CC: Batasang Pambansa
Authority shall, from time to time, make a determine if the corporate vehicle has been used by
determination of whether the corporate any RCC: Congress
vehicle has been used by any corporation or
corporation, business, or industry to frustrate the
by business or industry to frustrate the
provisions of this Code or applicable laws, and shall
provisions thereof or of applicable laws, and
submit to Congress, whenever deemed necessary, a
shall submit to the Batasang Pambansa,
report of its findings, including recommendations for
whenever deemed necessary, a report of its
their prevention or correction.
findings, including recommendations for
their prevention or correction.
CC: No mention
(1) A director or trustee compensation report; regarding reports with
confidential information
(2) A director or trustee appraisal or performance RCC: Gives any person
report and the standards or criteria used to assess each required to file a report
director or trustee. with confidential
information to redact
such statements,
The reportorial requirements shall be submitted provided, such
annually and within such period as may be prescribed confidential information
by the Commission. be filed n a supplemental
report prominently
labelled “confidential”,
The Commission may place the corporation under together with a request
delinquent status in case of failure to submit the for confidential
reportorial requirements three (3) times, consecutively treatment of the report
or intermittently, within a period of five (5) years. The and the specific grounds
Commission shall give reasonable notice to and for the grant thereof.
coordinate with the appropriate regulatory agency
prior to placing on delinquent status companies under
their special regulatory jurisdiction.
Section 146. Repealing clause. – Except as SEC. 187. Repealing Clause. – Batas Pambansa Blg. 68, Same
expressly provided by this Code, all laws or otherwise known as “The Corporation Code of the
parts thereof inconsistent with any provision Philippines”, is hereby repealed. Any law, presidential
of this Code shall be deemed repealed. (n) decree or issuance, executive order, letter of
instruction, administrative order, rule or regulation
contrary to or inconsistent with any provision of this
Act is hereby repealed or modified accordingly.
Section 147. Separability of provisions. – SEC. 186. Separability Clause. – If any provision of A Change in form
Should any provision of this Code or any part this Act is declared invalid or unconstitutional, the
thereof be declared invalid or other provisions hereof which are not affected thereby
unconstitutional, the other provisions, so far shall continue to be in full force and effect.
as they are separable, shall remain in force. (n)
Section 148. Applicability to existing SEC. 185. Applicability to Existing Corporations. – A Same
corporations. – All corporations lawfully corporation lawfully existing and doing business in the
existing and doing business in the Philippines Philippines affected by the new requirements of this
on the date of the effectivity of this Code and Code shall be given a period of not more than two (2)
heretofore authorized, licensed or registered years from the effectivity of this Act within which to
by the Securities and Exchange Commission, comply.
shall be deemed to have been authorized,
licensed or registered under the provisions of
this Code, subject to the terms and conditions
of its license, and shall be governed by the
provisions hereof: Provided, That if any such
corporation is affected by the new
requirements of this Code, said corporation
shall, unless otherwise herein provided, be
given a period of not more than two (2) years
from the effectivity of this Code within which
to comply with the same. (n)
Section 149. Effectivity. – This Code shall take SEC. 188. Effectivity. – This Act shall take effect upon
effect immediately upon its approval. completion of its publication in the Official Gazette or
in at least two (2) newspapers of general circulation.