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2019 RCC - Booklet
2019 RCC - Booklet
CONTENTS
OVERVIEW OF RCC
REVISED
CORPORATION
CODE
FOREWORD
SALIENT MANAGEMENT
POINTS TEAM
Foreword
The enactment of Republic Act No. 11232, otherwise
known as The Revised Corporation Code of
the Philippines, is one giant leap forward. It fills
the gaps in the almost four-decade-old Batas
Pambansa Blg. 68 and supersedes provisions that
have become obsolete and even hindersome in a
fast-paced and highly competitive environment.
In such situations, the vacancy may be temporarily filled from among It requires the Commission to facilitate and expedite, among others,
the officers of the corporation by a unanimous vote of the remaining corporate name reservation and registration, incorporation, submission
directors or trustees. The corporation must then notify the Commission of reports, notices, documents required under the Code, and sharing of
within three days from the creation of the emergency board. The action pertinent information with other government agencies with the use of an
by the designated director or trustee shall be limited to the emergency electronic filing and monitoring system.
action necessary, and his or her term shall cease within a reasonable The provision affirms the Commission’s ongoing efforts to streamline
time from the termination of the emergency or upon the election of the processes and procedures by, among others, adopting a fully automated
replacement director or trustee. and online company registration system for the pre-processing of
corporations and partnerships, licensing of foreign corporations,
Remote communication amendments of the articles of incorporation and other corporate
The Revised Corporation Code also provides for more mechanisms applications requiring its approval.
to ensure optimal participation in the governance of corporations by
allowing the use of remote communication such as videoconferencing Alternative dispute resolution
and teleconferencing in stockholder and board meetings. In addition, it The Revised Corporation Code also provides for the efficient settlement
allows stockholders to participate and vote in absentia. of intra-corporate disputes, except those involving criminal offenses and
interests of third parties.
Section 23, for one, acknowledges the participation of stockholders in
the election of directors or trustees through remote communication or in Section 181 states that corporations may include arbitration agreements
absentia. Section 49 further states that stockholders or members may in their articles of incorporation or bylaws. To be enforceable, such
exercise their right to vote through a proxy or remote communication in agreements must indicate the number of arbitrators and the procedure
regular and special meetings. for their appointment.
For board meetings, Section 52 allows directors or trustees who cannot The power to appoint arbitrators shall be granted to a designated
physically attend to participate and vote through remote communication. independent third party. The parties may request the Commission to
However, directors or trustees cannot participate or vote in such appoint arbitrators should the third party fail to appoint arbitrators in the
meetings by proxy. manner and within the period specified in the arbitration agreement. In
any case, arbitrators must be accredited or must belong to organizations
Electronic filing and monitoring vaccredited for the purpose of arbitration.
Deterrence to abuses, fraud and corruption
Furthermore, the Revised Corporation Code instills a greater sense of
and the House of Representatives for the passage of the
Revised Corporation Code. The Commission also acknowledges
the Department of Finance, other government agencies and
organizations that have supported the measure.
1
PERPETUAL TERM also participate and vote in absentia.
There’s forever with the Revised Corporation
Code! Section 115 provides that corporations
are now allowed to exist beyond the 50-
year term provided in the old code. This will
eliminate the possibility of legitimate and EMERGENCY BOARD
5
productive business prematurely closing down Be more decisive in times of emergency.
only because they have failed to renew their Amendment also includes the provision of an
registration. emergency board when a vacancy in a corporation’s
board of directors prevents the remaining directors
from consulting a quorum and consequently from
ONE-PERSON CORPORATION making emergency action required to prevent grave,
2
Build your corporation on your own, literally. The RCC substantial and irreperable loss or damage.
removed the minimum number of incorporators
required to organize a corporation and allowed the
formation of one-person corporation, a corporation
with a single stockholder and without a minimum ELECTRONIC FILING AND
authorized capital stock required. MONITORING SYSTEM
6
Register, apply or file online. As part of efforts
NO MINIMUM CAPITAL STOCK
3
of doing business in the country, the
Revised Corporation Code mandated
Start your business with as little capital or the Commission to develop
funding possible. Section 12 provides that and implement an electronic
Corporations shall not be required to have a filing and monitoring system.
minimum capital stock, except as otherwise So far, the Commission has
specifically provided by special law. implemented an online company
registration system.
REVISED CORPORATION CODE
On February 23, 2019, Republic Act No. 11232 or the Revised
Corporation Code became effective, replacing Batas Pambansa
Blg. 68. The law introduces fresh and progressive concepts aimed
at improving the ease of doing business in the country, promoting
good corporate governance and afford protection to corporations,
investors and consumers alike, amid a fast-evolving business
landscape. Here are some of the key provisions of the new Code
TITLE I TITLE III
GENERAL PROVISIONS BOARD OF DIRECTORS, TRUSTEES, OFFICERS
DEFINITIONS AND CLASSIFICATIONS
Section 22. The Board of Directors or Trustees; Qualification and Term.
Section 1. Title of the Code. Section 23. Election of Directors or Trustees.
Section 2. Corporation Defined. Section 24. Corporate Officers.
Section 3 Classes of Corporations. Section 25. Report of Election of Directors, Trustees and Officers, Non-
Section 4. Corporations Created by Special Laws or Charters. holding of Election
Section 5. Corporators and Incorporators, Stockholders and Members. and Cessation from Office.
Section 6. Classification of Shares. Section 26. Disqualification of Directors, Trustees or Officers.
Section 7. Founders’ Shares. Section 27. Removal of Directors or Trustees.
Section 8. Redeemable Shares. Section 28. Vacancies in the Office of Director or Trustee; Emergency
Section 9. Treasury Shares. Board.
TITLE II Section 29. Compensation of Directors or Trustees.
INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS Section 30. Liability of Directors, Trustees or Officers.
Section 31. Dealings of Directors, Trustees or Officers with the Corporation.
Section 10. Number and Qualifications of Incorporators. Section 32. Contracts Between Corporations with Interlocking Directors.
Section 11. Corporate Term. Section 33. Disloyalty of a Director.
Section 12. Minimum Capital Stock Not Required of Stock Corporations. Section 34. Executive, Management and Other Special Committees.
Section 13. Contents of the Articles of Incorporation.
Section 14. Form of Articles of Incorporation. TITLE IV
Section 15. Amendment of Articles of Incorporation. POWERS OF CORPORATION
Section 16. Grounds When Articles of Incorporation or Amendment May
Be Disapproved. Section 35. Corporate Powers and Capacity.
Section 17. Corporate Name. Section 36. Power to Extend or Shorten Corporate Term
Section 18. Registration, Incorporation and Commencement of Corporate Section 37. Power to Increase or Decrease Capital Stock; Incur, Create or
Existence. Increase Bonded Indebtedness.
Section 19. De Facto Corporations. Section 38. Power to Deny Pre-Emptive Right.
Section 20. Corporation by Estoppel. Section 39. Sale or Other Disposition of Assets.
Section 21. Effects of Non-Use of Corporate Charter and Continuous Section 40. Power to Acquire Own Shares.
Inoperation. Section 41. Power to Invest Corporate Funds in Another Corporation or
Business or For Any Other Purpose. TITLE VII
Section 42. Power to Declare Dividends. STOCKS AND STOCKHOLDERS
Section 43. Power to Enter Into Management Contract.
Section 44. Ultra Vires Acts of Corporations. Section 60. Pre-Incorporation Subscription.
Section 61. Consideration for Stocks.
TITLE Section 62. Certificate of Stock and Transfer of Shares.
BY-LAWS Section 63. Issuance of Stock Certificates.
Section 64. Liability of Directors for Watered Stocks.
Section 45. Adoption of By-Laws. Section 65. Interest on Unpaid Subscriptions.
Section 46. Contents of By-Laws. Section 66. Payment of Balance of Subscription.
Section 47. Amendment to By-Laws. Section 67. Delinquency Sale.
Section 68. When Sale May Be Questioned.
TITLE VI Section 69. Court Action to Recover Unpaid Subscription.
MEETINGS Section 70. Effect of Delinquency.
Section 71. Rights of Unpaid Shares, Non-Delinquent.
Section 48. Kinds of Meetings. Section 72. Lost or Destroyed Certificates.
Section 49. Regular and Special Meetings of Stockholders or Members.
Section 50. Place and Time of Meetings of Stockholders or Members. TITLE VIII
Section 51. Quorum in Meetings. CORPORATE BOOKS AND RECORDS
Section 52. Regular and Special Meetings of Directors or Trustees;
Quorum. Section 73. Books to be Kept; Stock Transfer Agent.
Section 53. Who Shall Preside at Meetings. Section 74. Right to Financial Statements.
Section 54. Right to Vote of Secured Creditors and Administrators.
Section 55. Voting in Case of Joint Ownership of Stock. TITLE IX
Section 56. Voting Right for Treasury Shares. MERGER AND CONSOLIDATION
Section 57. Manner of Voting; Proxies.
Section 58. Voting Trusts. Section 75. Plan of Merger or Consolidation.
Section 59. Subscription Contract. Section 76. Stockholders’ or Members’ Approval.
Section 77. Articles of Merger or Consolidation.
Section 78. Effectivity of Merger or Consolidation.
Section 79. Effects of Merger or Consolidation.
TITLE X TITLE XII
APPRAISAL RIGHT CLOSE CORPORATIONS
Section 80. When the Right of Appraisal may be Exercised. Section 95. Definition and Applicability of Title.
Section 81. How Right is Exercised. Section 96. Articles of Incorporation.
Section 82. Effect of Demand and Termination of Right. Section 97. Validity of Restrictions on Transfer of Shares.
Section 83. When Right to Payment Ceases. Section 98. Effects of Issuance or Transfer of Stock in Breach of Qualifying
Section 84. Who Bears Costs of Appraisal. Conditions.
Section 85. Notation on Certificates; Rights of Transferee. Section 99. Agreements by Stockholders.
Section 100. When Board Meeting is Unnecessary or Improperly Held.
TITLE XI Section 101. Pre-Emptive Right in Close Corporations.
NON-STOCK CORPORATION Section 102. Amendment of Articles of Incorporation.
Section 103. Deadlocks.
Section 86. Definition. Section 104. Withdrawal of Stockholder or Dissolution of Corporation.
Section 87. Purposes.
CHAPTER I – MEMBERS TITLE XIII
Section 88. Right to Vote. SPECIAL CORPORATIONS
Section 89. Non-Transferability of Membership. CHAPTER I – EDUCATIONAL CORPORATIONS
Section 90. Termination of Membership.
Section 105. Incorporation.
CHAPTER II – TRUSTEES AND OFFICERS Section 106. Board of Trustees.
TITLE XVII
MISCELLANEOUS PROVISIONS
Antonieta F. Ibe
Commissioner
SEC MAnAGEMENT Ephyro Luis B. Amatong
Commissioner