every other share, except as otherwise provided in the articles Shares of capital stock issued without par value

value shall be
REPUBLIC ACT of incorporation. Each share shall be equal in all respects to
every other share, except as otherwise provided in the articles
deemed fully paid and nonassessable and the holder of such
shares shall not be liable to the corporation or to its creditors
No. 11232 of incorporation and in the certificate of stock. in respect thereto: Provided, That no-par value shares must
be issued for a consideration of at least Five pesos (₱5.00)
An Act Providing for the Revised Corporation Code of the The share stock corporations may be divided into classes or per share: Provided, further, That the entire consideration
Philippines series of shares, or both. No share may be deprived of voting received by the corporation for its no-par value shares shall
rights except those classified and issued as "preferred" or be treated as capital and shall not be available for distribution
"redeemable" shares, unless otherwise provided in this as dividends.
TITLE I: Code: Provided, That there shall be a class or series of
shares with complete voting rights. A corporation may further classify its shares for the purpose of
GENERAL PROVISIONS ensuring compliance with constitutional or legal requirements.
DEFINITIONS AND CLASSIFICATIONS Holders of nonvoting shares shall nevertheless be entitled to
vote on the following matters; Section 7. Founders' Shares. - Founders' shares may be
Section 1. Title of the Code. - This Code shall be known as
(a) Amendment of the articles of incorporation; given certain rights and privileges not enjoyed by the owners
the "Revised Corporation Code of the Philippines".
(b) Adoption and amendment of bylaws; of other stock. Where the exclusive right to vote and be voted
(c) Sale, lease, exchange, mortgage, pledge, or other for in the election of directors is granted, it must be for a
Section 2. Corporation Defined. - A corporation is an artificial
disposition of all or substantially all of the corporate limited period not to exceed five (5) years from the date of
being created by operation of law, having the right of
property; incorporation: Provided, That such exclusive right shall not be
succession and the powers, attributes, and properties
(d) Incurring, creating, or increasing bonded indebtedness; allowed if its exercise will violate Commonwealth Act No. 108,
expressly authorized by law or incidental to its existence.
(e) Increase or decrease of authorized capital stock; otherwise known as the "Anti-Dummy Law"; Republic Act No.
(f) Merger or consolidation of the corporation with another 7042, otherwise known as the "Foreign Investments Act of
Section 3. Classes of Corporations. - Corporations formed or
corporation or other corporations; 1991"; and otherwise known as "Foreign Investments Act of
organized under this Code may be stock or nonstock
(g) Investment of corporate funds in another corporation or 1991"; and other pertinent laws.
corporations. Stock corporations are those which have capital
business in accordance with this Code; and
stock divided into shares and are authorized to distribute to
(h) Dissolution of the corporation. Section 8. Redeemable Shares. - Redeemable shares may
the holders of such shares, dividends, or allotments of the
be issued by the corporation when expressly provided in the
surplus profits on the basis of the shares held. All other
Except as provided in the immediately preceding paragraph, articles of incorporation. They are shares which may be
corporations are nonstock corporations.
the vote required under this Code to approve a particular purchased by the corporation. They are shares which may be
corporate act shall be deemed to refer only to stocks with purchased by the corporation from the holders of such shares
Section 4. Corporations Create by Special Laws or
voting rights. upon the expiration of a fixed period, regardless of the
Charters. - Corporations created by special laws or charters
existence of unrestricted retained earnings in the books of the
shall be governed primarily by the provisions of the special
The shares or series of shares may or may not have a par corporation, and upon such other terms and conditions stated
law or charter creating them or applicable to them,
value: Provided, That banks, trust, insurance, and preneed in the articles of incorporation and the certificate of stock
supplemented by the provisions of this Code, insofar as they
companies, public utilities, building and loan associations, and representing the shares, subject to rules and regulations
are applicable.
other corporations authorized to obtain or access funds from issued by the Commission.
the public whether publicly listed or not, shall not be permitted
Section 5. Corporators and Incorporators, Stockholders and
to issue no-par value shares of stock. Section 9. Treasury Shares. - Treasury shares are shares of
Members. - Corporators are those who compose a
stock which have been issued and fully paid for, but
corporation, whether as stockholders or shareholders in a
Preferred shares of stock issued by a corporation may be subsequently reacquired by the issuing corporation through
stock corporation or as a members in a nonstock
given preference in the distribution of dividends and in the purchase, redemption, donation, or some other lawful means.
corporations. Incorporators are those stockholders or
distribution of corporate assets in case of liquidation, or such Such shares may again be disposed of for a reasonable price
members mentioned in the articles of incorporation as
other preferences: Provided, That preferred shares of stock fixed by the board of directors.
originally forming and composing the corporation and who are
may be issued only with a stated par value. The board of
signatories thereof.
directors, where authorized in the articles of incorporation,
may fix the terms and conditions of preferred shares of stock
or any series thereof: Provided, further, That such terms and
Section 6. Classification of Shares. - The classification of
conditions shall be effective upon filing of a certificate thereof
shares, their corresponding rights, privileges, restrictions, and
with the Securities and Exchange Commission, hereinafter
their stated par value, if any, must be indicated in the articles
referred to as the "Commission".
of incorporations. Each share shall be equal in all respects to

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 Upon approval by the Commission, the corporation shall be subscription, and a statement that some or all of the
TITLE II: deemed revived and a certificate of revival of corporate shares are without par value, if applicable;
existence shall be issued, giving it perpetual existence, unless (i) If it be a nonstock corporation, the amount of its capital,
INCORPORATION AND its application for revival provides otherwise. the names, nationalities, and residence addresses of the
contributors, and amount contributed by each; and
ORGANIZATION OF No application for revival of certificate of incorporation of (j) Such other matters consistent with law and which the
banks, banking and quasi-banking institutions, preneed, incorporators may deem necessary and convenient.
PRIVATE CORPORATIONS insurance and trust companies, non-stock savings and loan
Section 10. Number and Qualifications of Incorporators. - Any associations (NSSLAs), pawnshops, corporations engaged in An arbitration agreement may be provided in the articles of
person, partnership, association or corporation, singly or money service business, and other financial intermediaries incorporation pursuant to Section 181 of this Code.1âwphi1
jointly with others but not more than fifteen (15) in number, shall be approved by the Commission unless accompanied by The Articles of incorporation and applications for amendments
may organize a corporation for any lawful purpose or a favorable recommendation of the appropriate government thereto may be filed with the Commission in the form of an
purposes: Provided, That natural persons who are licensed to agency. electronic document, in accordance with the Commission's
practice a profession, and partnerships or associations rule and regulations on electronic filing.
organized for the purpose of practicing a profession, shall not Section 12. Minimum Capital Stock Not Required of Stock
be allowed to organize as a corporation unless otherwise Corporations. - Stock corporations shall not be required to Section 14. Form of Articles of Incorporation. - Unless
provided under special laws. Incorporators who are natural have minimum capital stock, except as otherwise specially otherwise prescribed by special law, the articles of
persons must be of legal age. provided by special law. incorporation of all domestic corporations shall comply
substantially with the following form:
Each incorporator of a stock corporation must own or be a Section 13. Contents of the Articles of Incorporation. - All
subscriber to at least one (1) share of the capital stock. corporations shall file with the Commission articles of Articles of Incorporation
A corporation with a single stockholder is considered a One incorporation in any of the official languages, duly signed and of
Person Corporation as described in Title XIII, Chapter III of acknowledged or authenticated, in such form and manner as _____________________
this Code. may be allowed by the Commission, containing substantially (Name of Corporation)
the following matters, except as otherwise prescribed by this
Section 11. Corporate Term. - A corporation shall have Code or by special law: The undersigned incorporators, all of legal age, have
perpetual existence unless its articles of incorporation (a) The name of corporation; voluntarily agreed to form a (stock) (nonstock) corporation
provides otherwise. (b) The specific purpose or purposes for which the under the laws of the Republic of the Philippines and certify
corporation is being formed. Where a corporation has the following:
Corporations with certificates of incorporation issued prior to more than one stated purpose, the articles of
the effectivity of this Code and which continue to exist shall incorporation hsall indicate the primary purpose and the First: That the name of said corporation shall be
have perpetual existence, unless the corporation, upon a vote secondary purpose or purposes: Provided, That a "_________________", Inc. Corporation or OPC";
of its stockholders representing a majority of its articles of nonstock corporation may not include a purpose which
incorporation: Provided, That any change in the corporate would change or contradict its nature as such; Second: That the purpose or purposes for which such
right of dissenting stockholders in accordance with the (c) The place where the principal office of the corporation is corporation is incorporated are: (If there is more than one
provisions of this Code. to be located, which must be within the Philippines; purpose, indicate primary and secondary purposes);
(d) The term for which the corporation is to exist, if the
A corporate term for a specific period may be extended or corporation has not elected perpetual existence; Third: That the principal office of the corporation is located in
shortened by amending the articles of (e) The names, nationalities, and residence addresses of the the City/Municipality of _______________, Province of
incorporation: Provided, That no extension may be made incorporators; ______________________, Philippines;
earlier than three (3) years prior to the original or subsequent (f) The number of directors, which shall not be more than
expiry date(s) unless there are justifiable reasons for an fifteen (15) or the number of trustees which may be more Fourth: That the corporation shall have perpetual existence or
earlier extension as may be determined by the than fifteen (15); a term of ___________ years from the date of issuance of the
Commission: Provided, further, That such extension of the (g) The names, nationalities, and residence addresses of certificate of incorporation;
corporate term shall take effect only on the day following the persons who shall act as directors or trustees until the first
original or subsequent expiry date(s). regular directors or trustees are duly elected and qualified Fifth: That the names, nationalities, and residence addresses
in accordance with this Code; of the incorporators of the corporation are as follows:
A corporation whose term has expired may apply for revival of (h) If it be a stock corporation, the amount of its authorized
its corporate existence, together with all the rights and capital stock, number of shares into which it is divided, NAME NATIONALITY RESIDENCE
privileges under its certificate of incorporation and subject to the par value of each, names, nationalities, and ________ ____________ ____________
all of its duties, debts and liabilities existing prior to its revival. subscribers, amount subscribed and paid by each on the ________ ____________ ____________

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________ ____________ ____________ information set forth in the seventh and eighth clauses above, incorporation. Amendments to the articles shall be indicated
and that the paid-up portion of the subscription in cash and/or by underscoring the change or changes made, and a copy
Sixth: That the number if directors or trustees of the property for the benefit and credit of the corporation has been thereof duly certified under oath by the corporate secretary
corporation shall be ___________________; and the names, duly received. and a majority of the directors or trustees, with a statement
nationalities, and residence addresses of the first directors or that the amendments have been duly approved by the
trustees of the corporation are as follows: Tenth: That the incorporators undertake to change the name required vote of the stockholders or members, shall be
of the corporation immediately upon receipt of notice from the submitted to the Commission.
NAME NATIONALITY RESIDENCE Commission that another corporation, partnership or person
________ ____________ ____________ has acquired a prior right to the use of such name, that the The amendments shall take effect upon their approval by the
________ ____________ ____________ name has been declared not distinguishable from a Commission or from the date of filing with the said
________ ____________ ____________ corporation, or that it is contrary to law, public morals, good Commission if not acted upon within six (6) months from the
customs or public policy. date of filing for a cause not attributable to the corporation.
Seventh: That the authorized capital stock of the corporation
is ____________________ PESOS (₱______), dividend into Eleventh: (Corporations which will engage in any business or Section 16. Grounds When Articles of Incorporation or
____ shares with the par value of ___________________ activity reserved for Filipino citizens shall provide the Amendment May be Disapproved. The Commission may
PESOS (₱_____________) per share. (In case all the shares following): disapprove the articles of incorporation or any amendment
are without par value): That the capital stock of the "No transfer of stock or interest which shall reduce the thereto if the same is not compliant with the requirements of
corporation is __________________ shares without par ownership of Filipino citizens to less than the required this Code: Provided, That the Commission shall give the
value. percentage of capital stock as provided by existing laws shall incorporators, directors, trustees, or officers as reasonable
(In case some shares have par value and some are without be allowed or permitted to be recorder in the proper books of time from receipt of the disapproval within which to modify the
par value): That the capital stock of said corporation consists the corporation, and this restriction shall be indicated in all objectionable portions of the articles or amendment. The
of ________________________________ shares, of which stock certificates issued by the corporation." following are ground for such disapproval:
_______________________ shares have a par value of (a) The articles of incorporation or any amendment thereto is
___________________________PESOS (₱_______) each, IN WITNESS WHEREOF, we have hereunto signed these not substantially in accordance with the form prescribed
and of which ____________________ shares are without par Articles of Incorporation, this ______ day of _____, 20___ in herein;
value. the City/Municipality of _________________, Province of (b) The purpose or purposes of the corporation are patently
Eight: That the number of shares of the authorized capital ________________, Republic of the Philippines. unconstitutional, illegal, immoral or contrary to
stock-stated has been subscribed as follows: government rules and regulations;
____________________ ____________________ (c) The certification concerning the amount of capital stock
Name of Nationality No. of Amount Amount ____________________ ____________________ subscribed and/or paid is false; and
Subscribe Shares Subscribe Paid ____________________ ____________________ (d) The required percentage of Filipino ownership of the
r Subscribed d
capital stock under existing laws or the Constitution has
(Names and signatures of the incorporators) not been complied with.
____________________________
(Name and signature of Treasurer) No articles of incorporation or amendment to articles of
(Modify No. 8 if shares are with no-par value. In case the incorporation of banks, banking and quasi-banking
corporation is nonstock, Nos. 7 and 8 of the above articles Section 15. Amendment of Articles of Incorporation. - Unless institutions, preneed, insurance and trust companies,
may be modified accordingly, and it is sufficient if the articles otherwise prescribed by this Code or by special law, and for NSSLAs, pawnshops and other financial intermediaries shall
may be modified accordingly, and it is sufficient if the articles legitimate purposes, any provision or matter stated in the be approved by the Commission unless accompanied by a
state the amount of capital or money contributed or donated articles of incorporation may be amended by a majority vote of favorable recommendation of the appropriate government
by specified persons, stating the names, nationalities, and the board of directors or trustees and the vote or written agency to the effect that such articles or amendment is in
residence addresses of the contributors or donors and the assent of the stockholders representing at least two-thirds accordance with law.
respective amount given by each.) (2/3) of the outstanding capital stock, without prejudice to the
appraisal right of dissenting stockholders in accordance with Section 17. Corporation Name. - No corporate name shall be
Ninth: That _______________________ has been elected by the provisions of this Code. The articles of incorporation of a allowed by the Commission if it is not distinguishable from that
the subscribers as Treasurer of the Corporation to act as such nonstock corporation may be amended by the vote or written already reserved or registered for the use if another
until after the successor is duly elected and qualified in assent of majority of the trustees and at least two-thirds (2/3) corporation, or if such name is already protected by law, rules
accordance with the bylaws, that as Treasurer, authority has of the members. and regulations.
been given to receive in the name and for the benefit of the
corporation, all subscriptions, contributions or donations paid The original and amended articles together shall contain all A name is not distinguishable even if it contains one or more
or given by the subscribers or members, who certifies the provisions required by law to be set out in the articles of of the following:

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(a) The word "corporation", "company", incorporated",
"limited", "limited liability", or an abbreviation ofone if such Section 19. De facto Corporations. - The due incorporation of
words; and any corporation claiming in good faith to be a corporation
(b) Punctuations, articles, conjunctions, contractions, under this Code, and its right to exercise corporate powers,
prepositions, abbreviations, different tenses, spacing, or shall not be required into collaterally in any private suit to
number of the same word or phrase. which such corporation may be a party. Such inquiry may be
made by the Solicitor General in a quo warranto proceeding.
The Commission upon determination that the corporate name
is: (1) not distinguishable from a name already reserved or Section 20. Corporation by Estoppel. - All persons who
registered for the use of another corporation; (2) already assume to act as a corporation knowing it to be without the
protected by law; or (3) contrary to law, rules and regulations, authority to do so shall be liable as general partners for all
may summarily order the corporation to immediately cease debts, liabilities and damages incurred or arising as a result
and desist from using such name and require the corporation thereof: Provided, however, That when any such ostensible
to register a new one. The Commission shall also cause the corporation is sued on any transaction entered by its as a
removal of all visible signages, marks, advertisements, labels corporation or on any tort committed by it as such, it shall not
prints and other effects bearing such corporate name. Upon be allowed to use on any its lack of corporate personality as a
the approval of the new corporate name, the Commission defense. Anyone who assumes an obligation to an ostensible
shall issue a certificate of incorporation under the amended corporation as such cannot resist performance thereof on the
name. ground that there was in fact no corporation.
If the corporation fails to comply with the Commission's order,
the Commission may hold the corporation and its responsible Section 21. Effects of Non-Use of Corporate Charter and
directors or officers in contempt and/or hold them Continuous Inoperation. - If a corporation does not formally
administratively, civilly and/or criminally liable under this Code organize and commence its business within five (5) year from
and other applicable laws and/or revoke the registration of the the date of its incorporation, its certificate of incorporation
corporation. shall be deemed revoked as of the day following the end of
the five (5)-year period.
Section 18. Registration, Incorporation and Commencement
of Corporation Existence. - A person or group of persons However, if a corporation has commence its business but
desiring to incorporate shall submit the intended corporate subsequently becomes inoperative for a period of at least five
name to the Commission for verification. If the Commission (5) consecutive years, the Commission may, after due notice
finds that the name is distinguishable from a name already and hearing, place the corporation under delinquent status.
reserved or registered for the use of another corporation, not
protected by law and is not contrary to law, rules and A delinquent corporation shall have a period of two (2) years
regulation, the name shall be reserved in favor of the to resume operations and comply with all requirements that
incorporators. The incorporators shall then submit their the Commission shall prescribed. Upon the compliance by the
articles of incorporation and bylaws to the Commission. corporation, the Commission shall issue an order lifting the
delinquent status. Failure to comply with the requirements and
If the Commission finds that the submitted document s and resume operations within the period given by the Commission
information are fully compliant with the requirements of this shall cause the revocation of the corporation's certificate of
Code, other relevant laws, rules and regulations, the incorporation.
Commission shall issue the certificate of incorporation.
The Commission shall give reasonable notice to, and
A private corporation organized under this Code commences coordinate with the appropriate regulatory agency prior to the
its corporate existence and juridical personality from the date suspension or revocation of the certificate of incorporation of
the Commission issues the certificate of incorporation under companies under their special regulatory jurisdiction.
its official seal thereupon the incorporators, stockholders/
members and their successors shall constitute a body
corporate under the name stated in the articles of
incorporation for the period of time mentioned therein, unless
said period is extended or the corporation is sooner dissolved
in accordance with law.

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 relationship which could, or could reasonable be received to number of votes cast shall not exceed the number of shares
materially interfere with the exercise of independent judgment owned by the stockholders as shown in the books of the
TITLE III: in carrying out the responsibilities as a director. corporation multiplied by the whole number of directors to be
elected: Provided, however, That no delinquent stock shall be
BOARD OF Independent directors must be elected by the shareholders voted. Unless otherwise provided in the articles of
present or entitled to vote in absentia during the election of incorporation or in the bylaws, members of nonstock
DIRECTORS/TRUSTEE AND directors. Independent directors shall be subject to rules and corporations may cast as many votes as there are trustees to
regulations governing their qualifications, disqualifications, be elected by may not cast more than one (1) vote for one (1)
OFFICERS voting requirements, duration of term and term limit, maximum candidate. Nominees for directors or trustees receiving the
Section 22. The Board of Directors or Trustees of a number of board membership and other requirements that the highest number of votes shall be declared elected.
Corporation; Qualification and Term. - Unless otherwise Commission will prescribed to strengthen their independence If no election is held, or the owners of majority of the
provided in this Code, the board of directors or trustees shall and align with international best practices. outstanding capital stock or majority of the members entitled
exercise the corporate powers, conduct all business, and to vote are not present in person, by proxy, or through remote
control all properties of the corporation. Section 23. Election of Directors or Trustees. - Except when communication or not voting in absentia at the meeting, such
the exclusive right is reserved for holders of founders' shares meeting may be adjourned and the corporation shall proceed
Directors shall be elected for a term of one (10 Year from under Section 7 of this Code, each stockholder or member in accordance with Section 25 of this Code.
among the holders of stocks registered in the corporation's shall have the right to nominate any director or trustee who
book while trustees shall be elected for a term not exceeding possesses all of the qualifications and none of the The directors or trustees elected shall perform their duties as
three (3) years from among the members of the corporation. disqualifications and none of the disqualifications set forth in prescribed by law, rules of good corporate governance, and
Each director and trustee shall hold office until the successor this Code. bylaws of the corporation.
is elected and qualified. A director who ceases to own at least
one (1) share of stock or a trustee who ceases to be a At all elections of directors or trustees, there must be present, Section 24. Corporate Officers. - Immediately after their
member of the corporation shall cease to be such. either in person or through a representative authorized to act election, the directors of a corporation must formally organize
by written proxy, the owners of majority of the outstanding an elect: (a) a president, who must be a director; (b) a
The board of the following corporations vested with public capital stock, or if there be no capital stock, a majority of the treasurer, who must be a resident; (c) a secretary, who must
interest shall have independent directors constituting at least members entitled to vote. When so authorized in the bylaws be a citizen and resident of the Philippines; and (d) such other
twenty percent (20%) of such board: or by a majority of the board of directors, the stockholders or officers as may be provided in the bylaws. If the corporation is
(a) Corporations covered by Section 17.2 of Republic Act No. members may also vote through remote communication or in vested with public interest, the board shall also elect
8799, otherwise known as "The Securities Regulation absentia: Provided, That the right to vote through such modes compliance officer. The same person may hold two (2) or
Code", namely those whose securities are registered with may be exercised in corporations vested with public interest, more positions concurrently, except that no one shall act as
the Commission, corporations listed with an exchange or notwithstanding the absence of a provision in the bylaws of president and secretary or as president and treasurer at the
with assets of at least Fifty million pesos (50,000,000.00) such corporations. same time, unless otherwise allowed in this Code.
and having two hundred (200) or more holders of shares,
each holding at least one hundred (100) shares of a class A stockholder or member who participates through remote The officers shall manage the corporation and perform such
of its equity shares; communication or in absentia, shall be deemed present for duties as may be provided in the bylaws and/or as resolved by
(b) Banks and quasi-banks, NSSLAs, pawnshops, purposes of quorum. the board of directors.
corporations engaged in money service business,
preneed, trust and insurance companies and other The election must be by ballot if requested by any voting Section 25. Report of Election of Directors, Trustees and
financial intermediaries; and stockholder or member. Officers, Non-holding of Election and Cessation from Office. -
(c) Other corporations engaged in businesses vested with Within thirty (30) days after the election of the directors,
public interest similar to the above, as may be determined In stock corporations, stockholders entitled to vote shall have trustees and officers of the corporation, the secretary, or any
by the Commission, after taking into account relevant the right to vote the number of shares of stock standing in other officer of the corporation, the secretary, or any other
factors which are germane to the objective and purpose of their own names in the stock books of the corporation at the officer of the corporation, shall submit to the Commission, the
requiring the election of an independent director, such as time fixed in the bylaws or where the bylaws are silent at the names, nationalities, shareholdings, and residence addresses
the extent of minority ownership, type of financial products time of the election. The said stockholder may: (a) vote such of the directors, trustees and officers elected.
or securities issued or offered to investors, public interest number of shares for as many persons as there are directors
involved in the nature of business operations, and other to be elected; (b) cumulate said shares and give one (1) The non-holding of elections and the reasons therefor shall be
analogous factors. candidate as many votes as the number of directors to be reported to the Commission within thirty (30) days from the
elected multiplied by the number of shares owned; or (c) date of the scheduled election. The report shall specify a new
An independent director is a person who apart from distribute them on the same principle among as many date for the election, which shall not be later than sixty (60)
shareholdings and fees received from any business or other candidates as may be seen fit: Provided, That the total days from the scheduled date.

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 member entitled to vote: Provided, That such removal shall held no later than forty-five (45) days from the time the
If no new date has been designated, or if the rescheduled take place either at a regular meeting of the corporation or at vacancy arose. A director or trustee elected to fill vacancy
election is likewise not held, the Commission may, upon the a special meeting called for the purpose, and in either case, shall be referred to as replacement director or trustee elected
application of a stockholder, member, director or trustee, and after previous notice to stockholders or members of the to fill a vacancy shall be referred to as replacement director or
after verification of the unjustifiable non-holding of the corporation of the intention to propose such removal at the trustee and shall serve only for the unexpired term of the
election, summarily order that an election be held. The meeting. A special meeting of the stockholders or members predecessor in office.
Commission shall have the power to issue such orders as for the purpose of removing any director or trustee must be
may be appropriate, including other directing the issuance of a called by the secretary on order of the president, or upon However, when the vacancy prevents the remaining directors
notice stating the time and place of the election, designated written demand of stockholders representing or holding at from consituting a quorum and emergency action is required
presiding officer, and the record date or dates for the least a majority of the outstanding capital stock, or a majority to prevent grave, substantial, and irreparable loss or damage
determination of stockholders or members entitled to vote. of the members entitled to vote. If there is no secretary, or the to the corporation, the vacancy may be temporarily filled from
secretary, despite demand, fails or refuses to call the special among the officers of the corporation by unanimous vote of
Notwithstanding any provision of the articles of incorporation meeting or to give notice thereof, the stockholder or member the remaining directors or trustees. The action by the
or by laws to the contrary, the shares of stock or membership of the corporation signing the demand may call the special designated director or trustee shall be limited to the
represented at such meeting and entitled to vote shall meeting or to give notice thereof, the stockholder or member emergency action necessary, and the term shall cease within
constitute a quorum for purposes of conducting an election of the corporation signing the demand may call for the a reasonable time form the termination of the emergency or
under this section. meeting by directly addressing the stockholders or members. upon election of the replacement director or trustee,
Notice of the time and place of such meeting, as well as of the whichever comes earlier. The corporation must notify the
Should a director, trustee or officer die, resign or in any intention to propose such removal, must be given by Commission within three (3) days from the creation of the
manner case to hold office, the secretary or the director, publication or by written notice prescribed in this Code. emergency board, stating therein the reason for its creation.
trustee or officer of the corporation, shall, within seven (7) Removal may be with or without cause: Provided, That
days form knowledge thereof, report in writing such fact to the removal without cause may not be used to deprive minority Any directorship or trusteeship to be filled by a reason of an
Commission. stockholders or members of the right representation to which increase in the number of directors or trustees shall be filled
they may be entitled under Section 23 of this Code. only by an election at a regular or at a special meeting of
Section 26. Disqualification of Directors, Trustees or stockholders or members duly called for the purpose, or in the
Officers. - A person shall be disqualified from being a director, The Commission shall, motu propio or upon verified same meeting authorizing the increase of directors or trustees
trustee or officer of any corporation if, within five (5) years complaint, and after due notice and hearing, order the if so stated in the notice of the meeting.
prior to the election or appointment as such, the person was: removal of a director or trustee elected despite the
(a) Convicted by final judgment: disqualification, or whose disqualification arose or is In all elections to fill vacancies under this section, the
(1) Of an offense punishable by imprisonment for a discovered subsequent to an election. The removal of a procedure set forth in Section 23 and 25 of this Code shall
period exceeding six (6) years; disqualified director shall be without prejudice to other apply.
(2) For violating this Code; and sanctions that the Commission may impose on the board of
(3) For violating Republic Act No. 8799, otherwise known directors or trustees who, with knowledge of the Section 29. Compensation of Directors or Trustees. - In the
as "The Securities Regulation Code"; disqualification, failed to remove such director or trustee. absence of any provision in the bylaws fixing their
(b) Found administratively liable for any offense involving compensation, the directors or trustees shall not received any
fraudulent acts; and Section 28. Vacancies in the Office of Director or Trustee; compensation in their capacity as such, except for reasonable
(c) By a foreign court or equivalent foreign regulatory Emergency Board. - Any vacancy occurring in the board of per diems: Provided, however, That the stockholders
authority for acts, violations or misconduct similar to those directors or trustees other that by removal or expiration of representing at least a majority of the outstanding capital
enumerated in paragraphs (a) and (b) above. term may be filled by the vote of at least a majority of the stock or majority of the members may grant directors or
remaining directors or trustees, if still constituting a quorum; trustees with compensation and approve the amount thereof
The foregoing is without prejudice to qualifications or other otherwise, said vacancies must be filled by the stockholders at a regular or special meeting.
disqualifications, which the Commission, the primary or members in a regular or special meeting called for that
regulatory agency, or Philippine Competition Commission may purpose. In no case shall the total yearly compensation of directors
impose in its promotion of good corporate governance or as a exceed ten percent (10%) of the net income before income
sanction in its administrative proceedings. When the vacancy is due to term expiration, the election shall tax of the corporation during the preceding year.
be held no later that the day of such expiration at a meeting
Section 27. Removal of Director or Trustees. - Any director or called for that purpose. When the vacancy arises as a result Directors or trustees shall not participate in the determination
trustee of a corporation may be removed fro office by vote of of removal by the stockholders or members, the election may of their own per diems or compensation.
the stockholders holding or representing at least two-thirds be held on the same day of the meeting authorizing the
(2/3) of the outstanding capital stock, or in a nonstock removal and this fact must be so stated in the agenda and
corporation, by a vote of at least two-thirds (2/3) of the notice of said meeting. In all other cases, the election must be

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Corporations vested with public interest shall submit to their trustees involved is made at such meeting and the contract is
shareholders and the Commission, an annual report of the fair and reasonable under the circumstances.
total compensation of each of their directors or trustees.
Section 32. Contracts Between Corporations with Interlocking
Section 30. Liability of Directors, Trustees or Officers. - Directors. - Except in cases of fraud, and provided the
Directors or trustees who willfully and knowingly vote for or contract is fair and reasonable under the circumstances a
assent to patently unlawful acts of the corporation or who are contract between two (2) or more corporations having
guilty of gross negligence or bad faith in directing the affairs of interlocking directors shall not be invalidated on that ground
the corporation or acquire any personal or pecuniary interest alone: Provided, That if the interest of the interlocking director
in conflict with their duty as such directors or trustees shall be in one (1) corporation is substantial and the interest in the
liable jointly and severally for all damages resulting therefrom other corporation or corporations is merely nominal, the
suffered by the corporation, its stockholders or members and contract shall be subject to the provisions of the preceding
other persons. section insofar as the latter corporation or corporations are
concerned.
A director, trustee or officer shall not attempt to acquire, or
any interest adverse to the corporation in respect of any Stockholding exceeding twenty percent (20%) of the
matter which has been reposed in them in confidence, and outstanding capital stock shall be considered substantial for
upon which, equity imposes a disability upon themselves to purposes of interlocking directors.
deal in their own behalf; otherwise, the said director, trustee or
officer shall be liable as a trustee for the corporation and must Section 33. Disloyalty of a Director. - Where a director, by
account for the profits which otherwise would have accrued to virtue of such office, acquires a business opportunity which
the corporation. should belong to the corporation, thereby obtaining profits to
the prejudice of such corporation, the director must account
Section 31. Dealings of Directors, Trustees or Officers with for and refund to the latter all such profits, unless the act has
the Corporation. - A contract of the corporation with one (1) or been ratified by a vote of the stockholders owning or
more of its directors, trustees, officers or their spouses and representing at least two-thirds (2/3) of the outstanding capital
relatives within the fourth civil degree of consanguinity or stock. This provision shall be applicable, notwithstanding the
affinity is voidable, at the option of such corporation, unless all fact that the director risked one's own funds in the venture.
the following conditions are present:
(a) The presence of such director or trustee in the board Section 34. Executive Management, and Other Special
meeting in which the contract was approved was not Committees. - If the bylaws so provide, the board may create
necessary to constitute a quorum for such meeting; an executive committee composed of at least three (3)
(b) The vote of such director or trustee was not necessary for directors. Said committee may act, by majority of vote of all its
the approval of the contract; members, on such specific matters within the competence of
(c) The contract is fair and reasonable under the the board, as may be delegated to it in the bylaws or by
circumstances; majority vote of the board, except with respect to the: (a)
(d) In case of corporations vested with public interest, approval of any action for which shareholders' approval is also
material contracts are approved by at least a majority of required; (b) filing of vacancies in the board; (c) amendment
the independent directors voting to approved the material or repeal of bylaws or the adoption of new bylaws; (d)
contract; and amendment or term is not amendable or repealable; and (e)
(e) In case of an officer, the contract has been previously distribution of cash dividends to the shareholders.
authorized by the board of directors.
The board of directors may create special committees of
Where any of the first three (3) conditions set forth in the temporary or permanent nature and determine the members'
preceding paragraph is absent, in the case of a contract with a term, composition, compensation, powers, and
director or trustee, such contract may be ratified by the vote of responsibilities.
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

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 Section 36. Power to Extend or Shorten Corporate Term. - A the purpose of making effective stock dividend therefor
private corporation may extend or shorten its term as stated in authorized;
the articles of incorporation when approved by a majority vote (d) Any bonded indebtedness to be incurred, created to
of the board of directors or trustees, and ratified at a meeting increased;
by the stockholders or members representing at least two- (e) The amount of stock represented at the meeting; and
thirds (2/3) of the outstanding capital stock or of its members. (f) The vote authorizing the increase or decrease of capital
TITLE IV: Written notice of the proposed action and the time and place stock, or incurring, creating or increasing of bonded
of the meeting shall be sent to the stockholders or members indebtedness.
POWERS OF THE at their respective place of residence as shown in the books of Any increase or decrease in the capital stock or the incurring,
the corporation, and must be deposited to the addressee in creating or increasing of any bonded indebtedness shall
CORPORATIONS the post office with postage prepaid, served personally, or require prior approval of the Commission and where
Section 35. Corporate Powers and Capacity. - Every when allowed in the bylaws or done with the consent of the appropriate, of the Philippine Competition Commission. The
corporation incorporated under this Code has the power and stockholder, sent electronically in accordance with the rules application with the Commission shall be made within six (6)
capacity: and regulations of the Commission on the use of electronic months from the date of approval of the board of directors and
(a) To sue and be sued in its corporate name; data messages. In case of extension of corporate term, a stockholders, which period may be extended for justifiable
(b) To have perpetual existence unless the certificate of dissenting stockholder may exercise the right of appraisal reasons.
incorporation provides otherwise; under the conditions provided in this Code.
(c) To adopt and use a corporate seal; Copies of the certificate shall be kept on file in the office of the
(d) To amend its articles of incorporation in accordance with Section 37. Power to increase or Decrease Capital Stock; corporation and filed with the Commission and attached to the
the provisions of this Code; Incur, Create or Increase Bonded Indebtedness. - No original articles of incorporation. After approval by the
(e) To adopt bylaws, not contrary to law, morals or public corporation shall increase or decrease its capital stock or Commission and the issuance by the Commission of its
policy, and to amend or repeal the same in accordance incur, create or increase any bonded indebtedness unless certificate of filing may declare: Provided, That the
with this Code; approved by a majority vote of the board of directors and by Commission shall not accept for filing any certificate of
(f) In case of stock corporations, to issue or sell stocks to two-thirds (2/3) of the outstanding capital stock at a increase of capital stock unless accompanied by a sworn
subscribers and to sell treasury stocks in accordance with stockholders' meeting duly called for the purpose. Written statement of the treasurer of the corporation accompanied by
the provisions of this Code; and to admit members to the notice of the time and place of the stockholders' meeting and a sworn statement of the treasurer of the corporation lawfully
corporation if it be a nonstock corporation; the purpose for said meeting must be sent to the stockholders holding office at the time of the filing of the certificate, showing
(g) To purchase, receive, take or grant, hold, convey, sell, at their places of residence as shown in the books of the that at least twenty-five percent (25%) of the increase in
lease, pledge, mortgage, and otherwise deal with such corporation served on the stockholders personally, or through capital stock has been subscribed and that at least twenty-five
real and personal property, including securities and bonds electronic means recognized in the corporation's bylaws percent (25%) of the amount subscribed has been paid in
of other corporations, as the transaction of the lawful and/or the Commission's rules as a valid mode for service of actual cash to the corporation or that property, the valuation of
business of the corporation may reasonably and notices. which is equal to twenty-five percent (25%) of the
necessarily require, subject to the limitations prescribed subscription, has been transferred to the
by law and the constitution; A certificate must be signed by a majority of the directors of corporation: Provided, further, That no decrease in capital
(h) To enter into a partnership, joint venture, merger, the corporation and countersigned by the chairperson and stock shall be approved by the Commission if its effect shall
consolidation, or any other commercial agreement with secretary of the stockholders' meeting, setting forth: prejudice the rights of corporate creditors.
natural and juridical persons; (a) That the requirements of this section have been complied
(i) To make reasonable donations, including those for the with; Nonstock corporations may incur, create or increase bonded
public welfare or for hospital, charitable, cultural, scientific, (b) The amount of the increase or decrease of the capital indebtedness when approved by a majority of the board of
civic, or similar purposes: Provided, That no foreign stock; trustees and of at least two-thirds (2/3) of the members in a
corporation shall give donations in aid of any political (c) In case of an increase of the capital stock, the amount of meeting duly called for the purpose.
party or candidate or for purpose s of partisan political capital stock or number of shares of no-par stock thereof
activity; actually subscribed, the names nationalities and Bonds issued by a corporation shall be registered with the
(j) To establish pension, retirement, and other plans for the addresses of the persons subscribing, the amount of Commission, which shall have the authority to determine the
benefit of its directors, trustees, officers, and employees; capital stock or number of no-par stock subscribed, the sufficiency of the terms thereof.
and names, nationalities and addresses of the persons
(k) To exercise such other powers as may be essential or subscribing, the amount of capital stock or number of no- Section 38. Power to Deny Preemptive Right. - All
necessary to carry out its purpose or purposes as stated par stock subscribed by each, and the amount paid by stockholders of a stock corporation shall enjoy preemptive
in the articles of incorporation. each on the subscription in cash or property, or the right to subscribe to all issues or disposition of shares of any
amount of capital stock or number of shares of no-par class, in proportion to their respective shareholdings, unless
stock allotted to each stockholder if such increase is for such right is denied by the articles of incorporation or an

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amendment thereto: Provided, That such preemptive right After such authorization or approval by the stockholders or bylaws or done with the consent of the
shall not extend to shares issued in compliance with laws members, the board of directors or trustees may, stockholders: Provided, That any dissenting stockholder shall
requiring stock offerings or minimum stock ownership by the nevertheless, in its discretion, abandon such sale, lease, have appraisal right as provided in this Code: Provided,
public; or to shares issued in good faith with the approval of exchange, mortgage, pledge, or other disposition of property however, That where the investment by the corporation is
the stockholders representing two-thirds (2/3) of the and assets, subject to the rights of third parties under any reasonably necessary to accomplish its primary purpose as
outstanding capital stock in exchange for property needed for contract relating thereto, without further action or approval by stated in the articles of incorporation, the approval of the
corporate purposes or in payment of previously contracted the stockholders or members. stockholders or members shall not be necessary.
debt.
Nothing in this section is intended to restrict the power of any Section 42. Power to Declare Dividends. - The board of
Section 39. Sale or Other Disposition of Assets. - Subject to corporation, without the authorization by the stockholders or directors of a stock corporation may declare dividends out of
the provisions of Republic Act No. 10667, otherwise known as members, to sell, lease, exchange, mortgage, pledge, or the unrestricted retained earnings which shall be payable in
the "Philippine Competition Act", and other related laws a otherwise dispose of any of its property and assets if the cash, property, or in stock to all stockholders on the basis of
corporation may, by a majority vote of its board of directors or same is necessary in the usual and regular course of outstanding stock held by them: Provided, That any cash
trustees, sell, lease, exchange, mortgage, pledge, or business of the corporation or if the proceeds of the sale or dividends due on delinquent stock shall be first be applied to
otherwise dispose of its property and assets, upon such terms other disposition of such property and assets shall be the unpaid balance on the subscription plus costs and
and conditions and for such consideration, which may be appropriated for the conduct of its remaining business. expenses, while stock holders until their unpaid subscription is
money, stock, bonds, or other instruments for the payment of fully paid: Provided, further, That no stock dividend shall be
money or other property or consideration, as its board of Section 40. Power to Acquire Own Shares. - Provided, That issued without the approval of stockholders representing at
directors or trustees may deem expedient. the corporation has unrestricted retained earnings in its books least two-thirds (2/3)of the outstanding capital stock at a
to cover the shares to be purchased or acquired, a stock regular or special meeting duly called for the purpose.
A sale of all or substantially all of the corporation's properties corporation shall have the power to purchased or acquired, a
and assets, including its goodwill, must be authorized by the stock corporation shall have the power to purchase or acquire Stock corporations are prohibited from restraining surplus
vote of stockholders representing at least two-thirds (2/3) of its own shares for a legitimate corporate purpose or purposes, profits in excess of one hundred percent (100%} of their paid-
the outstanding capital stock, or at least two-thirds (2/3) of the including the following cases: in capital stock, except:
members, meeting duly called for the purpose. (a) To eliminate fractional shares arising out of stock (a) when justified by the definite corporate expansion projects
dividends; or programs approved by the board of directors; or
In nonstock corporations where there are no members with (b) To collect or compromise an indebtedness to the (b) when the corporation is prohibited under any loan
voting rights, the vote of at least a majority of the trustees in corporation, arising out of unpaid subscription, in a agreement with financial institutions or creditors, whether
office will be sufficient authorization for the corporation to delinquency sale, and to purchase delinquent shares sold local or foreign, from declaring dividends without their
enter into any transaction authorized by this section. during said sale; and consent, and such consent has not yet been secured; or
(c) To pay dissenting or withdrawing stockholders entitled to (c) when it can be clearly shown that such retention is
The determination of whether or not the sale involves all or payment for their shares under the provisions of this necessary under special circumstances obtaining in the
substantially all of the corporation's properties and assets Code. corporation, such as when there is need for special
must be computed based on its net asset value, as shown in reserve for probable contingencies.
its latest financial statements. A sale or other disposition shall Section 41. Power to Invest Corporate Funds in Another
be deemed to cover substantially all the corporate property Corporation or Business or for Any Other Purpose. - Subject Section 43. Power to Enter into Management Contract. - No
and assets if thereby the corporation would be rendered to the provisions of this Code, a private corporation may corporation shall conclude a management contract with
incapable of continuing the business or accomplishing the invest its funds in any other corporation, business, or for any another corporation unless such contract is approved by the
purpose of which it was incorporated. purpose other than the primary purpose for which it was board of directors and by the stockholders owning at least the
organized, when approved by a majority of the board of majority of the outstanding capital stock, or by at least a
Written notice of the proposed action and of the time and directors or trustees and ratified by the stockholders majority of the members in the case of a nonstock
place for the meeting shall be addressed to stockholders or representing at least two-thirds (2/3) of the outstanding capital corporation, or both the managing and the managed
members at their places of residence as shown in the books stock, or by at least two-thirds (2/3) of the outstanding capital corporation, at a meeting duly called for the
of the corporation and deposited to the addressee in the post stock, or by at least two-thirds (2/3) of the members in the purpose: Provided, That
office with postage prepaid, served personally, or when case of nonstock corporations at a meeting duly called for the (a) where a stockholder or stockholders representing the
allowed by the bylaws or done with the consent of the purpose. Notice of the proposed investment and the time same interest of both the managing and the managed
stockholder, sent electronically: Provided, That any dissenting place of residence as shown in the books of the corporation corporations own or control more than one-third (1/3) of
stockholder may exercise the right of appraisal under the and deposited to the addressee in the post office with the the total outstanding capital stock entitled to vote of the
conditions provided in this Code. postage prepaid. Served personally, or sent electronically in managing corporation; or
accordance with the rules and regulations of the Commission (b) where a majority if the members of the board of directors
on the use of electronic data message, when allowed by the of the managing corporation also constitute a majority of

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 the members of the board of directors of the managed (b) The time and manner of calling and conducting regular or
corporation, then the management contract must be special meetings and mode of notifying the stockholders
approved by the stockholders of the managed corporation or members thereof;
owning at least two-thirds (2/3) of the total outstanding (d) The required quorum in meetings of stockholders or
capital stock entitled to vote, or by at least two-thirds (2/3) members and the manner of voting therein;
of the members in the case of a nonstock corporation. (e) The modes by which a stockholder, member, director or
trustees may attend meetings and cast their votes;
These shall apply to any contract whereby a corporation (f) The form for proxies of stockholders and members and
undertakes to manage or operate all or substantially all of the the manner of voting them;
called services contracts, operating agreements or (g) The directors' or trustees' qualifications, duties and
otherwise: Provided, however, That such service contracts or responsibilities, the guidelines for setting the
operating agreements which relate to the exploration, compensation of directors or trustees and officers, and the
development exploitation or utilization of natural resources maximum number of other board representations that an
may entered into such periods as may be provided by the TITLE V: independent director or trustee may have which shall, in
pertinent laws or regulations. no case, be more than the number prescribed by the
No management contracts shall be entered into for period BYLAWS Commission;
longer that five (5) years for any one term. Section 45. Adoption of Bylaws. - For the adoption of bylaws (h) The time for holding the annual election of directors or
by the corporation, the affirmative vote of the stockholders trustees and the mode or manner of giving notice thereof;
Section 44. Ultra Vires Acts of the Corporations. - No representing at least a majority of the outstanding capital (a) (h)The manner of election or appointment and the term of
corporation shall possess or exercise corporate powers other stock, or of at least a majority of the members in case on officers other than directors or trustees;
than those conferred by this Code or by its articles of nonstock corporations, shall be necessary. The bylaws shall (i) The penalties for violation of the bylaws;
incorporation and except as necessary or incidental to the be signed by the stockholders or members voting for them (j) In the case of stock corporations, the manner of issuing
exercise of the powers conferred. and shall be kept in the principal office of the corporation, stock certificates; and
subject to the inspection of the stockholders or members (k) Such other matters as may be necessary for the proper or
during office hours. A copy thereof, duly certified by a majority convenient transaction of its corporate affairs for the
of the directors or trustees and countersigned by the secretary promotion of good governance and anti-graft and
of the corporation, shall be filed with the Commission and corruption measures.
attached to the original articles of incorporation.
An arbitration agreement maybe provided in the bylaws
Notwithstanding the provisions of the preceding paragraph, pursuant to Section 181 of this Code .
bylaws maybe adopted and filed prior to incorporation; in such
case, such bylaws shall be approved and signed by all Section 47. Amendment to Bylaws. - A majority of the board
incorporators and submitted to the Commission, together with of directors or trustees, and the owners of at least a majority
the articles of incorporation. of the outstanding capital stock, or at least a majority of the
members of a nonstock corporation, at a regular or special
In all cases, bylaws shall be effective only upon the issuance meeting duly called for the purpose, may amend or repeal the
by the Commission of a certification that the bylaws are in bylaws or adopt new bylaws. The owner of two-thirds (2/3) of
accordance with this Code. the outstanding capital stock or two-third (2/3) of the members
in a nonstock corporation mat delegate to the board of
The Commission shall not accept for filing the bylaws or any directors or trustees the power to amend or repeal the bylaws
amendment thereto of any bank, banking institution, building or adopt new bylaws: Provided, That any power delegated to
and loan association, trust company, insurance company, the board of directors or trustee to amend or repeal the
public utility, educational institution, or any other corporations bylaws or adopt new bylaws shall be considered as revoke
governed by special laws, unless accompanied by a certificate whenever stockholders owning or representing a majority of
of the appropriate government agency to the effect that such the outstanding capital stock or majority of the members shall
by laws or amendments are in accordance with law. so vote at a regular or special meeting.

Section 46. Contents of Bylaws. - A private corporation may Whenever the bylaws are amended or new bylaws are
provide the following in its bylaws; adopted, the corporation shall file with the Commission such
(a) The time, place and manner of calling and conducting amended or new bylaws and, if applicable, the stockholders'
regular or special meetings of the directors or trustees; or members' resolution authorizing the delegation of the

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power to amend and/or adopt new bylaws, duly certified under include information on any material change in the purpose of objecting to the transaction of any business
oath by the corporate secretary and majority of the directors corporation's business strategy, and other affairs; because the meeting is not lawfully called or convened.
or trustees. (m) A financial report for the preceding year, which shall
The amended or new bylaws shall only be effective upon the include financial statements duly signed and certified in Whenever for any cause, there is no person authorized or the
issuance by the Commission of certification that the same is in accordance wit this Code and the rules and the person authorized unjustly refuses to call a meeting, the
accordance with this Code and other relevant laws. Commission may prescribe, a statement on the adequacy Commission, upon petition of a stockholder or member on a
of the corporation's internal controls or risk management showing of good cause therefor, may issue an order, directing
systems, and a statement of all external audit and non- the petitioning stockholder or member to call a meeting of he
audit fees; corporation by giving proper notice required by this Code or
(n) An explanation of the dividend policy and the fact of the bylaws. The petitioning stockholder or member shall
payment of dividends or the reasons for nonpayment preside thereat until at least a majority of the stockholders or
thereof; members present have chosen from among themselves, a
TITLE VI: (o) Director or trustee profiles which shall include, among presiding officer.
others, their qualifications and relevant experience, length
MEETINGS of service in the corporation, trainings and continuing Unless the bylaws provide for a longer period, the stock and
Section 48. Kinds of Meetings. - Meeting of the directors, education attended, and their board representation in transfer book or membership book shall be closed at least
trustees, stockholders, or members may be regular or special. other corporations; twenty (20) days for regular meetings and seven (7) days for
(p) A director or trustee attendance report, indicating the special meetings before the scheduled sate of the meeting.
Section 49. Regular and Special Meetings of Stockholders or attendance of each of the meetings of the board and its
Members. - Regular meetings of stockholders or members committees and in regular or special stockholder In case of postponement of stockholders' or members' regular
shall be held annually on a date fixed in the bylaws, or if not meetings; meetings, written notice thereof and the reason therefor shall
so fixed in the bylaws, or if not so fixed, on any date After April (q) Appraisals and performance reports for the board and the be sent to all stockholders or members of record at least two
15 of every year as determined by the board of directors or criteria and procedure for assessment; (2) weeks prior to the date of the meeting, unless a different
trustees: Provided, further, That written notice of regular (r) A director or trustee compensation report prepared in period is required under the bylaws, law or regulation.
meetings may be sent to all stockholders or members of accordance with this Code and the rules the Commission
record through electronic mail or such other manner as the may prescribe; The right to vote of stockholders or members may be
Commission shall allow under its guidelines. (s) Director disclosures on self-dealings and related party exercised in person, through remote communication or in
transactions; and/or absentia. The Commission shall issue the rules and
At each regular meeting of stockholders or members, the (t) The profiles of directors nominated in seeking election or regulations governing participation and voting through remote
board of directors or trustees shall endeavor to present to reelection. communication or in absentia, taking into account the
stockholders or members the following: company’s scale, number of stockholders or members,
(a) The minutes of the most recent regular meeting which A director, trustee, stockholder, or member may propose any structure, and other factors consistent with the protection and
shall include, among others: other matter for inclusion in the agenda at may regular promotion of shareholders' or members' meetings.
(1) A description of the voting and the vote tabulation meeting of stockholders or members.
procedures used in the previous meetings; Section 50. Place and Time of Meetings of Stockholders or
(2) A description of the opportunity given to stockholders Special meetings of stockholders or members shall be held at Members. - Stockholders' or members' meetings, whether
or members to ask questions and record of the any time deemed necessary or as provided in the regular or special, shall be held in the principal office of the
question s asked and answers given; bylaws: Provided, however, That at least one (1) week written corporation as set forth in the articles of incorporation, or if not
(3) The matters discussed and resolutions reached; notice shall be sent to all stockholders or members, unless a practicable, in the city or municipality where the principal
(4) A record of the voting results for each agenda item; different period is provided in the bylaws, law or regulation. office of the corporation is located: Provided, That any city of
(5) A list of the director or trustees, officers and municipality in Metro Manila, Metro Cebu, Metro Davao, and
stockholders or members who attended the meeting; A stockholder or member may propose the holding of a other Metropolitan areas shall, for purposes of this section, be
and special meeting and items to be included in the agenda. considered a city or municipality.
(6) Such other items that the Commission may require in
the interest of good corporate governance and Notice of any meeting may be waived, expressly or impliedly, Notice of meetings shall be sent through the means of
protection of minority stockholders; by any stockholder or member: Provided, That general communication provided in the bylaws, which notice shall
(b) A members' list for nonstock corporations and, for stock waivers of notice in the articles of incorporation or the bylaws state the time, place and purpose of the meetings.
corporations, material information on the current shall not be allowed: Provided, further, That attendance at a
stockholders, and their voting rights; meeting shall constitute a waiver of notice of such meeting, Each notice of meeting shall further be accompanied by the
(l) A detailed, descriptive, balanced and comprehensible except when the person attends a meeting for the express following:
assessment of the corporation's performance, which shall (a) The agenda for the meeting;

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(b) A proxy which shall be submitted to the corporate bylaws. A director or trustee may waive this requirement, When so authorized in the bylaws or by a majority of the
secretary within a reasonable time prior to the meeting; either expressly or impliedly. board of directors, the stockholders or members of
(c) When attendance, participation, and voting are allowed by corporations may also vote through remote communication
remote communication or in absentia, the requirements Directors or trustees who cannot physically attend or vote at or in absentia: Provided, That the votes are received before
and procedures to be followed when a stockholder or board meetings can participate and vote through remote the corporation finishes the tally of votes.
member elects either option; and communication such as videoconferencing, teleconferencing,
(d) When the meeting is for the election of directors or or other alternative modes of communication that allow them A stockholder or member who participates through remote
trustees, the requirements and procedure for nomination reasonable opportunities to participate. Directors or trustees communication or in absentia shall be deemed present for
and election. cannot attend or vote by proxy at board meetings. purposes of quorum.

All proceedings and any business transacted at a meeting of A director or trustee who has a potential interest in any related The corporation shall establish the appropriate requirements
the stockholders or members, if within the powers or authority party transaction must recuse from voting on the approval of and procedures for voting through remote communication and
of the corporation, shall be valid even if the meeting is the related party transaction without prejudice to compliance in absentia, taking into account the company's scale, number
improperly held or called: Provided, That all the stockholders with the requirements of Section 31 of this Code. of shareholders or members, structure and other factors
or members of the corporation are present or duly consistent with the basic right of corporate suffrage.
represented at the meeting and not one of them expressly Section 53. Who Shall Preside at Meetings. - The chairman
states at the beginning of the meeting that the purpose of their or, in his absence, the president shall preside at all meetings Proxies shall be in writing, signed and filed, by the stockholder
attendance is to object to the transaction of any business of the directors or trustees as well as of the stockholders or or member, in any form authorized in the bylaws and received
because the meeting is not lawfully called or convened. members, unless the bylaws provide otherwise. by the corporate secretary within a reasonable time before the
scheduled meeting. Unless otherwise provided in the proxy
Section 51. Quorum in Meetings. - Unless otherwise provided Section 54. Right to Vote of Secures Creditors and form, it shall be valid only for the meeting for which it is
in this Code or in the bylaws, a quorum shall consist of the Administrators. - In case a stockholder grants security interest intended. No proxy shall be valid and effective for a period
stockholders representing a majority of the outstanding capital in his or her shares in stock corporations, the stockholder- longer than five (5) years at any one time.
stock pr a majority of the members in the case of nonstock grantor shall have the right to attend and vote at meetings of
corporations. stockholders, unless the secured creditor is expressly given Section 58. Voting Trusts. - One or more stockholders of
by the stockholder-grantor such right in writing which is stock corporation may create a voting trust for the purpose of
Section 52. Regular and Special Meetings of Directors or recorded in the appropriate corporate books. conferring upon a trustee or trustees the right to vote and
Trustees; Quorum. - Unless the articles of incorporation or the other rights pertaining to the shares for a period not exceeding
bylaws provides for a greater majority, a majority of the Executors, administrators, receivers, and other legal five (5) years at any time: Provided, That in the case of a
directors or trustees as stated in the articles of incorporation representatives duly appointed by the court may attend and voting trust specially required as a condition in a loan
shall constitute a quorum to transact corporate business, and vote on behalf of the stockholders or members without need agreement, said voting trust may be for a period exceeding
every decision reached by at least a majority of the directors of any written proxy. five (5) years but shall automatically expire upon full payment
or trustees constituting a quorum, except for the election of of the load. A voting trust agreement must be in writing and
officers which shall require the vote of a majority of all the Section 55. Voting in Case of Joint Ownership of Stock. - The notarized, and shall specify the terms and conditions thereof.
members of the board, shall be valid as a corporate act. consent of all the co-owners shall be necessary in voting
shares of stock owned jointly by two (2) or more persons, A certified copy of such agreement shall be filed with the
Regular meetings of the board of directors or trustees of every unless there is a written proxy, signed by all the co-owners, corporation and with the Commission; otherwise, the
corporation shall be held monthly, unless the bylaws provide authorizing one (1) or some of them or any other person to agreement is ineffective and unenforceable. The certificate or
otherwise. vote such share or shares: Provided, That when the shares certificates of stock covered by the voting trust agreement
are owned in an "and/or" capacity by the holders thereof, any shall be cancelled and new ones shall be issued pursuant to
Special meetings of the board of directors or trustees may be one of the joint owners can vote said shares or appoint a said agreement. The books of the corporation shall state that
held at any time upon the call of the president or as provided proxy therefor. the transfer in the name of the trustee or trustees is made
in the bylaws. pursuant to the voting trust agreement.
Section 56. Voting Right for Treasury Shares. - Treasury
Meetings of directors or trustees of corporations may be held shares shall have no voting right as long as such shares The trustee or trustees shall execute and deliver to the
anywhere in or outside the Philippines, unless the bylaws remain in the Treasury. transferors, voting trust certificates, which shall be
provide otherwise. Notice of regular or special meetings transferable in the same manner and with the same effect as
stating the date, time and place of the meeting must be sent Section 57. Manner of Voting; Proxies. - Stockholders and certificates of stock.
to every director or trustee at least two (2) days prior to the members may vote in person or proxy in all meetings of
scheduled meeting, unless a longer time is provided in the stockholders or members The voting trust agreement filed with the corporation shall be
subject to examination by any stockholder of the corporation

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in the same manner as any other corporate book or Shares of stock shall not be issued in exchange for
record: Provided, That both the trustor and the trustee or promissory notes or future service. The same considerations
trustees may exercise the right of inspection of all corporate provided in this section, insofar as applicable, may be used for
books and records in accordance with the provisions of this the issuance or bonds by the corporation.
Code.
The issued price of no-par value shares may be fixed in the
Any other stockholder may transfer the shares to the same TITLE VII: articles of incorporation or by the board of directors pursuant
trustee or trustees upon the term and conditions stated in the to authority conferred by the articles of incorporation or the
voting trust agreement, and thereupon shall be bound by all STOCKS AND bylaws, or if not so fixed, by the stockholders representing at
the provisions of said agreement. least a majority of the outstanding capital stock at a meeting
STOCKHOLDERS duly called for the purpose.
No voting trust agreement shall be entered into for purposes Section 59. Subscription Contract. - Any contract for the
of circumventing the laws against anti-competitive acquisition of unissued stock in an existing corporation or a Section 62. Certificate of Stock and Transfer of Shares. - The
agreements, abuse of dominant position, anti-competitive corporation still to be formed shall be deemed a subscription capital stock of corporations shall be divided into shares for
mergers and acquisitions, violation of nationality and capital within the meaning of this Title, notwithstanding the fact that which certificates signed by the president or vice president,
requirements, or for the perpetuation of fraud. the parties refer to it as a purchase or some other contract. countersigned by the secretary or assistant secretary, and
sealed with the seal of the corporation shall be issued in
Unless expressly renewed, all rights granted in a voting trust Section 60. Pre-incorporation Subscription. - A subscription of accordance with the bylaws. Shares of stock so issued are
agreement shall automatically expire at the end of the agreed shares in a corporation till to be formed shall be irrevocable personal property and may be transferred by delivery of the
period. The voting trust certificates as well as the certificate of for a period of at least six (6) months from the date of certificate or certificates indorsed by the owner, his attorney-
stock in the name of the trustees shall thereby be deemed subscription, unless all of the other subscribers consent to the in-fact, or any other person legally authorized to make the
cancelled and new certificates of stock shall be reissued in the revocation, or the corporation fails to incorporate within the transfer. No transfer, however, shall be valid, except as
name of the trustors. same period or within a longer period stipulated in the contract between the parties, until the transfer is recorded in the books
of subscription. No pre-incorporation is submitted to the of the corporation showing the names of the parties to the
The voting trustee or trustees may vote by proxy or in any Commission . transaction, the date of the transfer, the number of the
manner authorized under the bylaws unless the agreement certificate or certificates, and the number of shares
provides otherwise. Section 61. Consideration for Stocks. - Stocks shall not be transferred. The Commission may require corporations whose
issued for a consideration less than the par or issued price securities are traded in trading markets and which can
thereof. Consideration for the issuance of stock may be: reasonably demonstrate their capability to do so to issue their
(a) Actual cash paid to the corporation; securities or shares of stocks in uncertificated or scripless
(b) Property, tangible or intangible, actually received by the form in accordance with the rules of the Commission.
corporation and necessary or convenient for its use and
lawful purposes at a fair valuation equal to the par or No shares of stock against which the corporation holds any
issued value of the stock issued; unpaid claim shall be transferable in the books of the
(c) Labor performed for or services actually rendered to the corporation.
corporation;
(d) Previously incurred indebtedness of the corporation; Section 63. Issuance of Stock Certificates. - No certificate of
(e) Amounts transferred from unrestricted retained earnings stock shall be issued to a subscriber until the full amount of
to stated capital; subscription together with interest and expenses (in case of
(f) Outstanding shares exchanged for stocks in the event of delinquent shares), if any is due, has been paid.
reclassification or conversion;
(g) Shares of stock in another corporation; and/or Section 64. Liability of Directors for Watered Stocks. - A
(h) Other generally accepted form of consideration. director or officer of a corporation who:
(a) consents to the issuance of stocks for a consideration less
Where the consideration is other than actual cash, or consists than its par or issued value:
of intangible property such as patents or copyrights, the (b) consents to the issuance of stocks for the consideration
valuation thereof shall initially be determined by the other than cash, valued in excess of its fair value; or
stockholders or the board of directors, subject to the approval (c) having knowledge of the insufficient consideration, does
of the Commission. not file written objection with the corporate secretary, shall
be liable to the corporation or its creditors, solidarily with
the stockholder concerned for the difference between the

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 value receive at the time of issuance of the stock and the accrued interest, costs of advertisement and expenses of Section 71. Rights of Unpaid Shares, Nondelinquent. -
par or issued value of the same. sale, or unless the board of directors otherwise orders, said Holders of subscribed shares not fully paid which are not
delinquent stock shall be sold at a public auction to such delinquent shall have all the rights of a stockholder.
Section 65. Interest on Unpaid Subscriptions. - Subscribers to bidder who shall offer to pay the full amount of the balance on
stock shall be liable to the corporation for interest on all the subscription together with accrued interest, costs of Section 72. Lost or Destroyed Certificates. The following
unpaid subscriptions from the date of subscription, if so advertisement and expenses of sale, for the smallest number procedure shall be followed by a corporation in issuing new
required by and at the rate of interest fixed in the subscription of shares or fraction of a share. The stock so purchased shall certificates of stock in lieu of those which have been lost,
contract. If no rate of interest is fixed in the subscription be transferred to such purchaser in the books of the stolen or destroyed:
contract. If no rate of interest is fixed in the subscription corporation and a certificate for such stock shall be issued in (a) The registered owner of a certificate of stock in a
contract, the prevailing legal rate shall apply. the purchaser's favor. The remaining shares, if any, shall be corporation or such person's legal representative shall file
credited in favor of the delinquent stockholder who shall with the corporation an affidavit in triplicate setting forth, if
Section 66. Payment of Balance of Subscription. - Subject to likewise be entitled to the issuance of a certificate of stock possible, the circumstances as to how the certificate was
the provisions of the subscription contract, the board of covering such shares. lost, stolen or destroyed, the number of shares
directors may, at any time, declare due and payable to the represented by such certificate, the serial number of the
corporation unpaid subscription and may collect the same or Should there be no bidder at the public auction who offers to certificate and the name of the corporation which issued
such percentage thereof, in either case, with accrued interest, pay the full amount of the balance on the subscription the same. The owner of such certificate of stock shall also
if any, as it may dem necessary. together with accrued interest, costs of advertisement, and submit such other information and evidence as may be
expenses of sale, for the smallest number of shares or deemed necessary; and
Payment of unpaid subscription or any percentage thereof, fraction of a share, the corporation may, subject to the (b) After verifying the affidavit and other information and
together with any interest accrued, shall be made on the date provisions of this Code, bid for the same, and the total amount evidence with the books of the corporation shall publish a
specified in the subscription contract or on the date stated in due shall be credited as fully paid in the books of the notice in a newspaper of general circulation in the place
the call made by the board. Failure to pay on such date shall corporation. Title to all the shares of stock covered by the where the corporation has its principal office, once a week
render the entire balance due and payable and shall make the subscription shall be vested in the corporation as treasury for three (3) consecutive weeks at the expense of the
stockholder liable for interest at the legal rate on such shares and may be disposed of by said corporation in registered owner of the certificate of stock which has been
balance, unless a different interest at the legal rate on such accordance with the provisions of this Code. lost, stolen or destroyed. The notice shall state the name
balance, unless a different interest rate is provided in the of the corporation, the name of the registered owner, the
subscription contract. The interest shall be computed from the Section 68. When Sale May be Questioned. - No action to serial number of the certificate, the number of shares
date specified, until full payment of the subscription. If no recover delinquent stock sold can be sustained upon the represented by such certificate, and shall state that after
payment is made within thirty (30) days from the said sate, all ground of irregularity or defect in the notice of sale, or in the the expiration of one (1) year from the date of the last
stocks covered by the subscription shall thereupon become sale itself of the delinquent stock, unless the party seeking to publication, if no contest has been presented to the
delinquent and shall be subject to sale as hereinafter maintain such action first pays or tenders to the party holding corporation regarding the certificate of stock, the right to
provided, unless the board of directors orders otherwise. the sum for which the same was sold with interest from the make such contest shall be barred and the corporation
date of sale at the legal rate. No such action shall be shall cancel the lost, destroyed or stolen certificate of
Section 67. Delinquency Sale. - The board of directors may, maintained unless a complaint is filed within six (6) months stock, the right to make such contest shall be barred and
by resolution, order the sale of delinquent stock and shall from the date of sale. the corporation shall cancel the lost, destroyed or stolen
specifically state the amount due on each subscription plus all certificate of stock in its books. In lieu thereof, the
accrued interest, and the date, time and place of the sale Section 69. Court Action to Recover Unpaid Subscription. - corporation shall issue a new certificate of stock, unless
which shall not be less than thirty (30) days nor more than Nothing in this Code shall prevent the corporation from the registered owner files a bond or other security as may
sixty (60) days from the date the stock become delinquent. collecting through court action, the amount due on any unpaid be required, effective for a period of one (1) year, for such
subscription, with accrued interest, costs and expenses. amount and in such form and with such sureties as may
Notice of the salem, with a copy of the resolution, shall be be satisfactory to the board of directors, in which case a
sent to every delinquent stockholder either personally, by Section 70. Effect of Delinquency. - No delinquent stock shall new certificate may be issued even before the expiration
registered mail, or through other means provided in the be voted for, be entitled to vote, or be represented at any of one (1) year period provided herein. If a contest has
bylaws. The same shall be published once a week for two (2) stockholder's meeting, nor shall the holder thereof be entitled been presented to the corporation or if an action is
consecutive weeks in newspaper of general circulation in the to any of the rights of a stockholder except the right to pending in court regarding the ownership of the certificate
province or city where the principal office of the corporation is dividends in accordance with the provisions of this Code, until of stock which has been lost, stolen in lieu thereof shall be
located. and unless payment is made by the holder of such delinquent suspended until the court renders a final decision
stock for the amount due on the distribution with accrued regarding the ownership of the certificate of stock which
Unless the delinquent stockholder pays to the corporation, o interest, and the costs and expenses of advertisement, if any. has been lost, stolen ore destroyed.
or before the date specified for the sale of the delinquent
stock, the balance due on the former's subscription, plus

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Except in case of fraud, bad faith, or negligence on the part of stockholder at their expense, for copies of such records or Stock corporations must also keep a stock and transfer book,
the corporation and its officers, no action may be brought excerpts from said records. The inspecting or reproducing which shall contain a record of all stocks in the names of the
against any corporation which shall have issued certificate of party shall remain bound by confidentiality rules under stockholders alphabetically arranged; the installments paid
stock in lieu of those lost, stolen or destroyed pursuant to the prevailing laws, such as the rules on trade secrets or and unpaid on all stocks for which subscription has been
procedure above-described. processes under Republic Act No. 8293, otherwise known as made, and the date of payment of any installment; a
the "Intellectual Property Code of the Philippines", as statement of every alienation, sale or transfer of stock made,
amended, Republic Act No. 10173, otherwise known as the the date thereof, by and to whom made; and such other
"Data Privacy Act of 2012" Republic Act No. 8799, otherwise entries as the bylaws may prescribed, The stock and transfer
TITLE VIII: known as "The Securities Regulation Code", and the Rules of book shall be kept in the principal office of the corporation or
Court. in the office of its stock transfer agent and shall be open or
CORPORATE BOOKS AND inspection by any director or stockholder of the corporation at
A requesting party who is not a stockholder or member of reasonable hours on business days.
RECORDS record, or is a competitor, director, officer, controlling
Section 73. Books to be Kept; Stock Transfer Agent. - Every stockholder or otherwise represents the interests of a A stock transfer agent or one engaged principally in the
corporation shall keep and carefully preserve at its principal competitor shall have no right to inspect or demand business of registering transfers of stocks in behalf of a stock
office all information relating to the corporation including, but reproduction of corporate records. corporation shall be allowed to operate in the Philippines upon
not limited to: securing a license from the Commission and the payment of a
(a) The articles of incorporation and bylaws of the corporation Any stockholder who shall abuse the rights granted under this fee to be fixed by the Commission, which shall be renewable
and all their amendments; section shall be penalized under Section 158 of this Code, annually: Provided, That a stock corporation is not precluded
(b) The current ownership structure and voting rights of the without prejudice to the provisions of Republic Act No. 8293, from performing or making transfer of its own stocks, in which
corporation, including lists of stockholders or members otherwise known as the "Intellectual Property Code of the case all the rules and regulations imposed on stock transfer
group structures, intra-group relations, ownership data, Philippines", as amended, and Republic Act No. 10173, agents, except the payment of a license fee herein provided,
and beneficial ownership. otherwise known as the "Data Privacy Act of 2012". shall be applicable: Provided, further, That the Commission
(c) The names and addresses of all the members of the may require stock corporations which transfer and/or trade
board of directors or trustees and the executive officers; Any officer or agent of the corporation who shall refuse to stocks in secondary markets to have an independent transfer
(d) A record of all business transactions; allow the inspection and/or reproduction of records in agent.
(e) A record of the resolutions of the board of directors or accordance with the provisions of this Code shall be liable to
trustees and of the stockholders or members; such director, trustee, stockholder or member for damages, Section 74. Right to Financial Statements. - A corporation
(f) Copies of the latest reportorial requirements submitted to and in addition, shall be guilty of an offense which shall be shall furnish a stockholder or member, within ten (10) days
the Commission; and punishable under Section 161 of this Code: Provided, That if from receipt of their written request, its most recent financial
(g) The minutes of all meetings of stockholders or members, such refusal is made pursuant to a resolution or order of the statement, in the form and substance of the financial reporting
or of the board of directors or trsutees. Such minutes shall board of directors or trustees, the liability under this section for required by the Commission.
set forth in detail among others; the time and the place of such action shall be imposed upon the directors or trustees
the meeting held, how it was authorized, the notice given, who voted for such refusal: Provided, further, That it shall be a At the regular meeting of stockholders or members, the board
the agenda therefor, whether the meeting was regular or defense to any action under this section that the person of directors or trustees shall present to such stockholders or
special, its object if special, those present and absent, demanding to examine and copy excerpts from the members a financial report of the operations of the
and every act done or ordered done at the meeting. Upon corporation's record or minutes of such corporation or of any corporation for the preceding year, which shall include
the demand of a director trustee, stockholder or member, other corporation, or was not acting in good faith or of any financial statements, duly signed and certified in accordance
the time when any director, trustee, stockholder or other corporation or was not acting in good faith or for a with this Code, and the rules the Commission may prescribe.
member entered or left the meeting must be noted in the legitimate purpose in making the demand to examine or
minutes; and on a similar demand, the yeas and nays reproduce corporate records or is a competitor, director, However, if the total assets or total liabilities of the corporation
must be taken on any motion or proposition, and a record officer, controlling stockholder or otherwise represents the are less than Six hundred thousand pesos (₱600,000.00), or
thereof carefully made. The protest of a director, trustee, interest of a competitor. such other amount as may be determined appropriate by the
stock holder or member on any action or proposed action Department of Finance, the financial statements may be
must be recorded in full upon their demand. If the corporation denies or does not act on a demand for certified under oath by the treasurer and the president.
inspection and/or reproduction, the aggrieved party may
Corporate records, regardless of the form in which they are report such denial or inaction to the Commission Within five
stored, shall be open to inspection by any director, trustee, (5) days from receipt of such report, the Commission shall
stockholder or member of the corporation in person or by a conduct a summary investigation and issue an order directing
representative at reasonable hours on business days, and a the inspection or reproduction of the requested records.
demand in writing may be made by such director, trustee or

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 corporations governed by special laws, the favorable
The affirmative vote of stockholders representing at least two- recommendation of the appropriate government agency shall
thirds (2/3) of the outstanding capital stock of each first be obtained. If the Commission is satisfied that the
corporation in the case of stock corporations or at least two- merger or consolidation of the corporations concerned is
thirds (2/3) of the members in the case of nonstock consistent with the provisions of this Code and existing laws, it
corporations shall be necessary for the approval of such plan. shall issue a certificate approving the articles and plan or
Any dissenting stockholder may exercise the right of appraisal merger or of consolidation, at which time the merger or
in accordance with this Code: Provided, That if after the consolidation shall be effective.
approval by the stockholders of such plan, the board of
TITLE IX: directors decides to abandon the plan, the right of appraisal If upon investigation, the Commission has reason to believe
shall be extinguished. that the proposed merger or consolidation is contrary to or
MERGER AND Any amendment to the plan of merger or consolidation may inconsistent with he provisions of this Code or existing laws, it
be made: Provided, That such amendment is approved by a shall set a hearing to give the corporations concerned the
CONSOLIDATION majority vote of the respective boards of directors or trustees opportunity to be heard. Written notice of the date, time, and
Section 75. Plan of Merger or Consolidation. - Two (2) or of all the constituents corporations and ratified by the place of hearing shall be given to each constituent corporation
more corporations may merge into a single corporation which affirmative vote of stockholders representing at least two- at least two (2) weeks before said hearing. The Commission
shall be one of the constituents corporations or may thirds (2/3) of the outstanding capital stock or of two-thirds shall thereafter proceed as provided in this Code.
consolidate into a new single corporation which shall be the (2/3) of the members of each of the constituents corporations.
consolidated corporation. Such plan, together with any amendment, shall be considered Section 79. Effects of Merger or Consolidation. - The merger
as the agreement of merger or consolidation. of consolidation shall have the following effects:
The board of directors or trustees of each corporation, party to (a) The constituent corporations shall become a single
the merger or consolidation, shall approved a plan of merger Section 77. Articles of Merger or Consolidation. - After the corporation shall become a single corporation which, in
or consolidation, shall approved a plan of merger or approval by the stockholders or members as required by the case of merger, shall be the surviving corporation
consolidation, shall approve a plan of merger or consolidation preceding section, articles of merger or articles of designated in the plan of merger; and in case of
setting forth the following: consolidation shall be executed by each of the constituent consolidation, shall be the consolidated corporation
(a) The names of the corporations proposing to merge or corporations, to be signed by the president or vice president designated in the plan of consolidation;
consolidate hereinafter referred to as the constituent and certified by the secretary or assistant secretary of each (b) The separate existence of the constituent corporations
corporations; corporation setting forth shall cease, except that of the surviving or the
(b) The terms of the merger or consolidation and the mode of (a) The plan of the merger or the plan of consolidation; consolidated corporation;
carrying the same into effect; (b) As to stock corporations, the number of shares (c) The surviving or the consolidated corporation shall
(c) A statement of the changes, if any, in the articles of outstanding, or in the case of nonstock corporations, the possess all the right, privileges, immunities and franchises
incorporation of the surviving corporation in case of number of members; of each constituent corporation; and all real or personal
merger; and, in case of consolidation, all the statements (c) As to each corporation, the number of shares or members property, all receivables due on whatever account,
required to be set forth in the articles of incorporation for voting for or against such plan, respectively; including subscriptions to shares and other choses in
corporations organized under this Code; and (d) The carrying amounts and fair values of the assets and action, and every other interest of, belonging to, or due to
(d) Such other provisions with respect to the proposed liabilities of the respective companies as of the agreed each constituents corporation, shall be deemed
merger or consolidation as are deemed necessary or cut-off date; transferred to and vested in such surviving or
desirable. (e) The method to be used in the merger or consolidation of consolidated corporation as though such surviving or
accounts of the companies; consolidated corporation had itself incurred such liabilities
Section 76. Stockholders' or Members' Approval. - Upon (f) The provisional or pro forma values, as merged or or obligations; and any pending claim, action or
approval by a majority vote of each of the board of directors or consolidated, using the accounting method; and proceeding brought by or against any constituent
trustees of the constituent corporations of the plan of merger (g) Such other information as may be prescribed by the corporation may be prosecuted by or against the surviving
or consolidation, the same shall be submitted for approval by Commission. or consolidated corporation. The rights of creditors or liens
the stockholders or members of each of such corporations at upon the property of such constituent corporations shall
separate corporate meetings duly called for the purpose. Section 78. Effectivity of Merger or Consolidation. - The not be impaired by the merger or consolidation.
Notice of such meetings shall be given to all stockholders or articles of merger or of consolidation, signed and certified as
members of the respective corporations in the same manner required by this Code, shall be submitted to the Commission
as giving notice of regular or special meetings under Section for its approval: Provided, That in the case of merger or
49 of this Code. The notice shall state the purpose of the consolidation of banks or banking institutions, loan
meeting and include a copy or a summary of the plan of associations, trust companies, insurance companies, public
merger or consolidation. utilities, educational institutions, and other special

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 thirty (30) days after such award is made: Provided, That no transferee shall have all the rights of a regular stockholder;
payment shall be made to any dissenting stockholder or and all dividend distributions which would have accrued on
unless the corporation has unrestricted retained earnings in its such shares shall be paid to the transferee.
books to cover such payment: Provided, further, That upon
payment by the corporation of the agreed or awarded price,
the stockholder shall forthwith transfer the shares to the
corporation.
TITLE XI:
Section 82. Effect of Demand and Termination of Right. -
TITLE X: From the time of demand for payment of the fair value of a NONSTOCK CORPORATION
stockholder's shares until either the abandonment of the Section 86. Definition. - For purposes of this Code and
APPRAISAL RIGHT corporate action involved or the purchase of the said shares subject to its provisions on dissolution, a nonstock corporation
Section 80. When the Right of Appraisal May Be Exercised. - by the corporation, all rights accruing to such shares, is one where no part of its income is distributable as dividends
Any stockholder of a corporation shall have the right to dissent including voting and dividend rights shall immediately be to its members, trustees, or officers: Provided, That any profit
and demand payment of the fair value of the shares in the restored. which a nonstock corporation may obtain incidental to its
following instances: operations shall, whenever necessary or proper, be used for
(a) In case an amendment to the articles of incorporation has Section 83. When Right to Payment Ceases. – No demand the furtherance of the purpose of purposes for which the
the effect of changing or restricting the rights of any for payment under this Title may be withdrawn unless the corporation was organized, subject to the provisions of this
stockholder or class of shares, or of authorizing corporation consents thereto. If, however, such demand for Title.
preferences in any respect superior to those of payment is withdrawn with the consent of the corporation, or if
outstanding shares of any class, or of extending or the proposed corporate action is abandoned or rescinded by The provisions governing the stock corporations, when
shortening the term of corporate existence; the corporation or disapproved by the Commission where pertinent, shall be applicable to nonstock corporations except
(b) In case of sale, lease, exchange, transfer, mortgage, such approval is necessary, or if the Commission where such as may be covered by specific provisions of this Title.
pledge or other disposition of all or substantially all of the stockholder is not entitled to the appraisal right, then the right
corporate property and assets as provided in this Code; of the stockholder to be paid the fair value of the shares shall Section 87. Purposes. - Nonstock corporations may be
(c) In case of merger or consolidation; and cease, the status as the stockholder shall be restored, and all formed or organized for charitable, religious, educational,
(d) In case of investment of corporate funds for any purpose dividend distributions which would have accrued on the professional, cultural, fraternal, literary, scientific, social, civic
other than the primary purpose of the corporation. shares shall be paid to the stockholder. service, or similar purposes. like trade industry, agricultural
and like chambers, or any combination thereof, subject to the
Section 81. How Right is Exercised. - The dissenting Section 84. Who Bears Costs of Appraisal. - The costs and special provisions of this Title governing particular classes of
stockholder who votes against a proposed corporate action expenses of appraisal shall be borne by the corporation, nonstock corporations.
may exercise the right of appraisal by making a written unless the fair value ascertained by appraisers is
demand on the corporation for the payment of the fair value of approximately the same as the price which the corporation CHAPTER I:
shares held within thirty (30) days from the date on which the may have offered to pay the stockholder, in which the
vote was taken: Provided, That failure to make the demand corporation may have offered to pay the stockholder, in which MEMBERS
within such periods shall be deemed a waiver of the appraisal case they shall be borne by the latter. In the case of an action Section 88. Right to Vote. - The right of the members of any
right. If the proposed corporate action is implemented, the to recover such fair value, all costs and expenses shall be class or classes to vote may be limited, broadened, or denied
corporation shall pay the stockholder, upon surrender of the assessed against the corporation, unless the refusal of the to the extent specified in the articles of incorporation or the
certificate or certificates of stock representing the stockholder or receive payment was unjustified. bylaws. Unless so limited, broadened, or denied, each
stockholder's shares, the fair value thereof as of the day member, regardless of class, shall be entitled to one (1) vote.
before the vote was taken excluding any appreciation or Section 85. Notation on Certificates; Rights of Transferee. - Unless otherwise provided in the articles of incorporation or
depreciation in anticipation of such corporate action. Within ten (10) days after demanding payment for shares the bylaws, a member may vote by proxy, in accordance with
held, a dissenting stockholder shall submit the certificates of the provisions of this Code. The bylaws may likewise
If, within sixty (60) days form the approval of the corporate stock representing the shares to the corporation for notation authorize voting through remote communication and/or in
action by the stockholders, the withdrawing stockholder and that such representing the shares to the corporation for absentia.
the corporation cannot agree on the fair value of the shares, it notation that such shares are dissenting shares. Failure to do
shall be determined and appraised by three (3) disinterested so shall, at the option of the corporation, terminate the rights Section 89. Nontransferability of Membership. - Membership
persons, one of whom shall be named by the stockholder, under this Title. If shares represented by the certificates in a nonstock corporation and all rights arising therefrom are
another by the corporation and the third by the two (2) thus bearing such notation are transferred, and the certificates personal and nontransferable, unless the articles of
chosen. The findings of the majority of the appraisers shall be consequently cancelled, the rights of the transferor as a incorporation or the bylaws otherwise provide.
final, and their award shall be paid by the corporation within dissenting stockholder under this Title shall cease and the

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Section 90. Termination of Membership. - Membership shall (b) Assets held by the corporation upon a condition requiring
be terminated in the manner and for the cause provided in the return, transfer or conveyed in accordance with such
articles of incorporation or the bylaws. Termination of requirements;
membership shall extinguish all rights of a member in the (c) Assets received and held by the corporation subject to
corporation or in its property, unless otherwise provided in the limitations permitting their use only for charitable religious,
articles of incorporation or the bylaws. benevolent, educational or similar purpose, but not held
upon a condition requiring return, transfer or conveyance
CHAPTER II: by reason of the dissolution, shall be transferred or
conveyed to one (1) or more corporations, societies or
TRUSTEES AND OFFICERS organizations engaged in activities in the Philippines TITLE XII:
Section 91. Election and Term of Trustees. - The number of substantially similar to those of the dissolving corporation
trustees shall be fixed in the articles of incorporation or bylaw according to a plan of distribution adopted pursuant to this CLOSE CORPORATIONS
which may or may not be more than fifteen (15). They shall Chapter; Section 95. Definition and Applicability of Title. - A close
hold office for not more than three (3) years until their (d) Assets other than those mentioned in the preceding corporation, within the meaning of this Code, is one whose
successors are elected and qualified. Trustees elected to fill paragraphs, if any, shall be distributed in accordance with articles of incorporation provides that: (a) all the corporation's
vacancies occurring before the expiration of a particular term the provisions of the articles of incorporation or the issued stock of all classes, exclusive of treasury shares, shall
shall hold office for the unexpired period. bylaws, to the extent that the articles of incorporation or be held of record by not more than a specified number of
the bylaws extent that the articles of incorporation or the persons, not exceeding twenty (20); (b) all the issued stock of
Except with respect to independent trustees of nonstock bylaws determine the distributive rights of members, or all classes shall be subject to one (1) or more specified
corporation shall be elected as trustee. any class or classes of members, or provide for restrictions on transfer permitted by this Title; and (c) the
distribution; and corporation shall not list in any stock exchange or make any
Unless otherwise provided in the articles of incorporation or (e) In any other case, assets may be distributed to such public offering of its stocks of any class. Nothwithstanding the
the bylaws, the members may directly elect officers of a person, societies, organizations or corporations, whether foregoing, a corporation shall not be deemed a close
nonstock corporation. or not organized for profit, as may be specified in a plan of corporation when at least two-thirds (2/3) of its voting stock or
distribution adopted pursuant to this Chapter. voting rights is owned or controlled by another corporation
Section 92. List of Members and Proxies, Place of which is not a close corporation within the meaning of this
Meetings. - The corporation shall, at all times, keep a list of its Section 94. Plan of Distribution of Assets. - A plan providing Code.
members and their proxies of record twenty (20) days prior to for the distribution of assets, consistent with the provisions of
any scheduled election. The bylaws may provide that the this Title, may be adopted by a nonstock corporation in the Any corporation may be incorporated as a close corporation,
members of a nonstock corporation may hold their regular or process of dissolution in the following manner: except mining or oil companies, stock exchanges, banks,
special meetings at any place even outside the place where (a) The board of trustees shall, by majority vote, adopt a insurance companies, public utilities, educational institutions
the principal office of the corporation is resolution recommending a plan of distribution and and corporations declared to be vested with public interest in
located: Provided, That proper notice is sent to all members directing the submission thereof to a vote at a regular or accordance with the provisions of this Code.
indicating the date, time, and place of meeting: Provided, special meeting of members having voting rights;
further, That the place of meeting shall be within the Philippine (b) Each member entitled to vote shall be given a written The provisions of this Title shall primarily govern close
territory. notice setting forth the proposed plan of distribution or corporations: Provided, That other Titles shall primarily govern
summary thereof and the date, time and place of such close corporations: Provided, That other Titles in this Code
CHAPTER III: meeting within the time and in the manner provided in this shall apply suppletorily, except as otherwise provided under
Code for the giving of notice of meetings; and this Title.
DISRIBUTION OF ASSETS IN (c) Such plan of distribution shall be adopted upon approval
NONSTOCK CORPORATIONS of at least two-thirds (2/3) of the members having voting Section 96. Articles of Incorporation. - The articles of
rights present or represented by proxy at such meeting. incorporation of a close corporation may provide for:
Section 93. Rules of Distribution. - The assets of a nonstock
(a) A classification of shares or rights, the qualifications for
corporation undergoing the process of dissolution for reasons
owning or holding the same, and restrictions on their
other than those set forth in Section 139 of this Code shall be
transfers, subject to the provisions of the following
applied and distributed as follows:
section;
(a) All liabilities and obligations of the corporation shall be
(b) A classification of director into one (1) or more classes,
paid, satisfied and discharged, or adequate provision shall
each of whom may be voted for and elected solely by a
be made therefor:
particular class of stock; and
(c) Greater quorum or voting requirements in the meetings of
stockholders or directors than those provided in this Code.

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 have notice of the fact that the stock was acquired in the stockholders who are parties thereto the liabilities for
The articles of incorporation of a close corporation may violation of the restriction. managerial acts imposed on directors by this Code.
provide that the business of the corporation may provide that (d) Whenever a person to whom stock of a close corporation (e) Stockholders actively engaged in the management or
the business of the corporation shall be managed by the has been issued or transferred has or is conclusively operation of the business and affairs of a close
stockholders of the corporation rather than by a board of presumed under this section to have notice of: (1) the corporation shall be held to strict fiduciary duties to each
directors. So long as this provision continues in effect, no person's ineligibility to be a stockholder of the corporation; other and among themselves. The stockholders shall be
meeting of stockholders need be called to elect or (2) that the transfer of stock would cause the stock of personally liable for corporate torts unless the corporation
directors: Provided, That the stockholders of the corporation the corporation to be held by more than the number of has obtained reasonably adequate liability insurance.
shall be deemed to be directors for the purpose of applying persons permitted under its articles of incorporation ; or
the provisions of this Code, unless the context clearly requires (3) that the transfer violates a restriction on transfer of Section 100. When a Board Meeting is Unnecessary or
otherwise: Provided, further, That the stockholders of the stock, the corporation may, at its option, refuse to register Improperly Held. - Unless the bylaws provide otherwise, any
corporation shall be subject to all liabilities of directors. the tansfer in the name of the transferee. action taken by the directors of a close corporation without a
The articles of incorporation may likewise provide that all (e) The provisions of subsection (d) shall not be applicable if meeting called properly and with due notice shall nevertheless
officers or employees or that specified officers or employees the transfer of stock, though contrary to subsections (a), be deemed valid if:
shall be elected or appointed by the stockholders, instead of (b) or (c), has been consented to by all stockholders of the (a) Before or after such action is taken, a written consent
by the board of directors. close corporation, or if the close corporation has amended thereto is signed by all the directors; or
its articles of incorporation in accordance with this Title. (b) All the stockholders have actual or implied knowledge of
Section 97. Validity of Restrictions on Transfer of Shares. - (f) The term "transfer", as used in this section, is not limited the action and make no prompt objection in writing; or
Restrictions on the right to transfer shares must appear in the to a transfeer for value. (c) The directors are accustomed to take informal action with
articles of incorporation, in the bylaws, as well as in the (g) The provisions of this section shall not impair any right the express or implied acquiescence of all the
certificate of stock; otherwise, the same shall not be binding which the transferee may have to either rescind the stockholders; or
on any purchaser in good faith. Said restrictions shall not transfer or recover the stock under any express or implied (d) All the directors have express or implied knowledge of the
more onerous than granting the existing stockholders or the warranty. action in question and none of them makes prompt
corporation the option to purchase the shares of the objection in writing.
transferring stockholder may sell their shares to any third Section 99. Agreements by Stockholders. -
person. (a) Agreements duly signed and executed by and among all An action within the corporate powers taken at a meeting held
stockholders before the formation and organization of a without proper call or notice is deemed ratified by a director
Section 98. Effects if Issuance or Transfer of Stock in Breach close corporation shall survive the incorporation and shall who failed to attend, unless after having knowledge thereof,
of Qualifying Conditions. - continue to be valid and binding between such the director promptly files his written objection with the
(a) If a stock of a close corporation is issued or transferred to stockholders, if such be their intent, to the extent that such secretary of the corporation.
any person who is not eligible to be a holder thereof under agreements are consistent with the articles of
any provision of the articles of incorporation, and if the incorporation, irrespective of where the provisions of such Section 101. Preemptive Right in Close Corporations. - The
certificate for such stock conspicuously shows the agreements are contained except those required by this preemptive right of stockholders in close corporations shall
qualifications of the persons entitled to be holders of Title to be embodied in said articles of incorporation. extend to all stock to be issues, including reissuance of
record thereof, such person is conclusively presumed to (b) A written agreement signed by two (2) or more services, or in payment or corporate debts, unless the article s
have notice of the fact of the ineligibility to be a stockholders may provide that in exercising any voting of incorporation provide otherwise.
stockholder. right, the shares held by them shall be voted as provided
(b) If the articles of incorporation of a close corporation states or as agreed, or in accordance with a procedure agreed Section 102. Amendment of Articles of Incorporation. - Any
the number of persons, not exceeding twenty (20), who upon by them. amendment to the articles of incorporation which seeks to
are entitled to be stockholders of record, and if the (c) No provision in a written agreement signed by the delete or remove any provision required by this Title or to
certificate for such stock conspicuously states such stockholders, relating to any phase of corporate affairs, reduce a quorum or voting requirement stated in said articles
number, and the issuance or transfer of stock to any shall be invalidated between the parties on the ground of incorporation shall require affirmative vote of at least two-
person would cause the stock to be held by more than that its effect is to make them partners among thirds (2/3) of the outstanding capital, whether with or without
such number of persons, the person to whom such stock themselves. voting rights, or of such greater proportion of shares as may
is issued of transferred is conclusively presumed to have (d) A written agreement among some or all the stockholders be specifically provided in the articles of incorporation for
notice of this fact. in a close corporation shall not be invalidated on the amending, deleting or removing any of the aforesaid
(c) If a stock certificate of a close corporation conspicuously ground that it relates to the conduct of the business and provisions, at a meeting duly called for this purpose.
shows a restriction on transfer of the corporation has been affairs of the corporation as to restrict or interfere with the
issued or transferred has or is conclusively presumed to discretion or powers of the board of Section 103. Deadlocks. Notwithstanding any contrary
have notice of the fact that the stock in violation of such directors: Provided, That such agreement shall impose on provision in the close corporation's articles of incorporation,
restriction, the transferee is conclusively presumed to bylaws, or stockholders' agreement, if the directors or

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stockholders are so divided on the management of the Religious corporations shall be governed by this Chapter and
corporation's business and affairs that the votes required for a by the general provisions on nonstock corporations insofar as
corporate action cannot be obtained, with the consequence applicable.
that the business and affairs that the votes required for that
the business of the corporation can lo longer be conducted to Section 108. Corporation Sole. - For the purpose of
the advantage of the stockholders generally, the Commission, administering and managing, as trustee, the affairs, property
upon written petition by any stockholder, shall have the power and temporalities of any religious denomination, sect or
to arbitrate the dispute. In the exercise o such power, the church, a corporation sole may be formed by the chief
Commission shall have authority to make appropriate orders, archbishop, bishop, priest, minister, rabbi, or other presiding
such as: (a) cancelling or altering any provision contained in elder of such religious denomination, sect or church.
the articles of incorporation, bylaws, ot any stockholders' TITLE XIII:
agreement; (b) cancelling, altering or enjoining a resolution or Section 109. Articles of Incorporation. - In order to become a
act of the corporation or its board of directors, stockholders, SPECIAL CORPORATIONS corporation sole, the chief archbishop, bishop, priest, minister,
officers, or other person party to the action; (d) requiring the CHAPTER I: rabbi, or presiding elder of any religious denomination, sect or
purchase at their fair value of shares of any stockholder, church must file with the Commission articles of incorporation
either by the corporation regardless of the availability or EDUCATIONAL CORPORATIONS setting forth the following:
unrestricted retained earnings in its, books or by the other Section 105. Incorporation. - Education corporations shall be (a) That the applicant chief archbishop, bishop, priest.
stockholder; (e) appointing a provisional director; (f) dissolving governed by special laws and by the general provisions of this Minister, rabbi, or presiding elder represents the religious
the corporation; or (g) granting such other relief as the Code. denomination, set or church which desires to become a
circumstances may warrant. corporation sole;
Section 106. Board of Trustees. - Trustees of educational (b) That the rules, regulations and discipline of the religious
A provisional director shall be an impartial person who is institutions organized as nonstock corporations shall not be denomination, sect or church are consistent with
neither a stockholder nor a creditor of the corporation or any less than five (5) nor more than fifteen (15): Provided, That becoming a corporation sole and do not forbid it;
of its subsidiaries or affiliates, and whose further the number of trustees shall be in multiples of five (5). (c) That such chief archbishop, bishop, priest, minister, rabbi
qualifications, if any, may be determined by the Commission. or presiding elder is charged with the administration of the
A provisional director is not a receiver of the corporation and Unless otherwise provided in the articles of incorporation or temporalities and the management of the affairs, estate
does not have the title and powers of a custodian or receiver. bylaws, the board of trustees of incorporated schools, and properties of the religious denomination, sect or
A provisional director shall have all the rights and powers of a colleges, or other institutions of learning shall, as soon as church within the territorial jurisdiction, so described
duly elected director, including the right to be notified of and to organized, so classify themselves that the term of office of succinctly in the articles of incorporation;
vote at meetings of directors until removed by order of the one-fifth (1/5) of their number shall expire every year. (d) The manner by which vacancy occurring in the office of
Commission pr by all the stockholders. The compensation of Trustees thereafter elected to fill vacancies, occurring before chief archbishop, bishop, priest, rabbi or presiding elder is
the provisional director shall be determined by agreement the expiration of a particular term shall hold office only for the required to be filled, according to the rules, regulations or
between such provisional director and the corporation. unexpired period. Trustees elected thereafter to fill vacancies discipline of the religious denomination, sect or church;
caused by expiration of term shall hold office for five (5) years. and
Section 104. Withdrawal of Stockholder or Dissolution of A majority of the trustees shall constitute a quorum for the (e) The place where the principals office of the corporation
Corporation. - In addition and without prejudice to other rights transaction of business. The powers and authority of trustees sole is to be established and located, which place must be
and remedies available under this Title, any stockholder of a shall be defined in the bylaws. within the territory of the Philippines.
close corporation may, for any reason, compel the corporation
to purchase shares held at fair value, which shall not be less For institutions organized as stock corporations, the number The articles of incorporation may include any other provisions
than the par or issued value, when the corporation has and term of directors shall be governed by the provisions on not contrary to law for the regulation of the affairs of the
sufficient assets in its books to cover its debts and liabilities stock corporations. corporation.
exclusive of capital stock: Provided, That any stockholder of a
close corporation may, by written petition to the Commission, CHAPTER II Section 110. Submission of the Articles of Incorporation. -
compel the dissolution of such corporation whenever any acts The articles of the incorporation must be verified, by affidavit
of the directors, officers or those in control whenever any acts RELIGIOUS CORPORATIONS or affirmation of the chief archbishop, bishop, priest, minister,
of the directors, officers, or those in control of the corporation Section 107. Classes of Religious Corporations. - Religious rabbi, presiding elder, as the case may be, and accompanied
are illegal, fraudulent, dishonest, oppressive or unfairly corporations may be incorporated by one (1) or more persons. by a copy of the commission, certificate of election or letter of
prejudicial to the corporation or any stockholder, or whenever Such corporations may be classified into corporations sole appointment of such chief archbishop, bishop, priest, minister,
corporate assets are being misapplied or wasted. and religious societies. rabbi or presiding elder, as the case may be, and
accompanied by a copy of the commission, certificate of
election or letter of appointment of such chief archbishop,

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bishop, priest, minister, rabbi, or presiding elder, duly certified During any vacancy in the office of chief archbishop, bishop, (d) That the religious society or religious order, or diocese,
to be correct by any notary public. priest, minister, rabbi, or presiding elder of any denomination, synod, or district organization desires to incorporate for
sect or church incorporated as a corporate sole, the person or the administration of its affairs, properties and estate;
From and after filing with the Commission of the said articles persons authorized by the rules, regulations or discipline of (e) The place within the Philippines where the principal office
of incorporation, verified by affidavit or affirmation, and the religious denomination, sect or church represented by the of the corporation is to be established and located; and
accompanied by the documents mentioned in the preceding corporation sole to administer the temporalities and manage (f) The names, nationalities, and residence addresses of the
paragraph, such chief archbishop, bishop, priest, minister, the affairs, estate, and properties of the corporation sole shall trustees, not less than five (5) no more than fifteen (15),
rabbi, or presiding elder shall become a corporation sole and exercise all the powers and authority of the corporation sole elected by the religious society or religious order, or the
all temporalities, estate and properties of the religious during such vacancy. diocese, synod or district organization to serve for the first
denomination, sect or church theretofore administered or year or such other period as may be prescribed by the
manage as such chief archbishop, bishop, priest, minister, Section 113. Dissolution. - A corporation sole may be laws of the religious society or religious order, or of the
rabbi, or presiding elder shall be personally held in trust as a dissolve and its affairs settled voluntarily by submitting to the diocese, synod, or district organization.
corporation sole, for the use, purpose, exclusive benefit and Commission a verified declaration of dissolution, setting forth:
on behalf of the religious denomination, sect or church, (a) The name of the corporation; CHAPTER III:
including hospitals, schools, colleges, orphan asylums (b) The reason of dissolution and winding up;
parsonages, and cemeteries thereof. (c) The authorization for the dissolution of the corporation by ONE PERSON CORPORATIONS
the particular religious denomination, sect or church; and Section 115. Applicability of Provisions to One Person
Section 111. Acquisition and Alienation of Property. - A (d) The names and addresses of the persons who are to Corporations. - The provisions of this Title shall primarily apply
corporation sole may purchase and hold real estate and supervise the winding up of the affairs of the corporation. to One Person Corporations. Other provisions of this Code
personal property for each church, charitable, benevolent, or apply suppletory, except as otherwise provided in this Title.
educational purposes, and may received bequests or gifts for Upon approval of such declaration of dissolution by the
such purposes. Such corporation may sell or mortgage real Commission, the corporation shall cease to carry on its Section 116. One Person Corporation. - A One Person
property held by it by obtaining an order for that purpose from operations except for the purpose of winding up its affairs. Corporation is a corporation with a single
the Regional Trial Court of the province where the property is stockholder: Provided, That only a natural person, trust, or an
situated upon proof that the notice of the application for leave Section 114. Religious Societies. - Unless forbidden by the estate may form a One Person Corporation.
to sell or mortgage has been made through publication or as competent authority, the Constitution, pertinent, rules, Banks and quasi-banks, preneed, trust, insurance, public and
directed by the Court, and that it is in the interest of the regulations, or discipline of the religious denomination, sect or publicly-listed companies, and non-chartered government-
corporation that leave to sell or mortgage be granted. The church of which it is part, any religious society, religious order, owned and -controlled corporations may not incorporate as
application for leave to sell or mortgage must be made by diocese, or synod, or district organization of any religious One Person Corporations: Provided, further, That a natural
petition, duly verified, by the chief archbishop, bishop, priest, denomination, sect or church, may, upon written consent person who is licensed to exercise a profession may not
minister, rabbi, or presiding elder acting as corporation sole, and/or by an affirmative vote at a meeting called for the organize as a One Person Corporation for the purpose of
and may be opposed by any member of the religious purpose of at least two-thirds (2/3) of its membership, exercising such profession except as otherwise provided
denomination, sect or church represented by the corporation incorporate for the administration of its temporalities or for the under special laws.
sole: Provided, That in cases where the rules, regulations, management of its affairs, properties, and estate by filing the
and discipline of the religious denomination, set or church, management of its affairs, properties, and estate by filing with Section 117. Minimum Capital Stock Not Required for One
religious society, or colder concerned represented by such the Commission, articles of incorporation verified by the Person Corporation. - A One Person Corporation shall not be
corporation sole regulate the method of acquiring, holding, affidavit of the presiding elder, secretary, or clerk or other required to have a minimum authorized capital stock except
selling, and mortgaging real estate and personal property, member of such religious society or religious denomination, as otherwise provided by special law.
such rules, regulations and discipline shall govern, and the sect or church, setting forth the following:
intervention of the courts shall not be necessary. (a) That the religious society or religious order, or diocese, Section 118. Articles of Incorporation. A One Person
synod, or district organization is a religious organization of Corporation shall file articles of incorporation in accordance
Section 112. Filling of Vacancies. - The successor in the religious denomination, sect or church; with the requirements under Section 14 of this Code. It shall
office of any chief archbishop, bishop, priest, minister, rabbi, (b) That at least two-thirds (2/3) of its membership has given likewise substantially contain the following:
or presiding elder in a corporation sole shall become the written consent or has voted to incorporate, at a duly (a) If the single stockholder is a trust or an estate, the name,
corporation sole on their accession to office and shall be convened meeting of the body; nationality, and residence of the trustee, administrator,
permitted to transact business as such upon filing a copy of (c) That the incorporation of the religious society or religious executor, guardian, conservator, custodian, or other
their commission, certificate of election, or letters of order, or diocese, synod, or district organization is not person exercising fiduciary duties together with the proof
appointment, duly certified by any notary public with the forbidden by competent, authority or by the Constitution, of such authority to act on behalf of the trust or estate;
Commission. rules, regulations or discipline of the religious and
denomination, sect or church of which it forms part;

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(b) Name, nationality, residence of the nominee and alternate amendment of the articles of incorporation, and other Section 129. Reportorial Requirements. - The One Person
nominee, and the extent, coverage and limitation of the ancillary and/or consequential matters. Corporation shall submit the following within such period as
authority. the Commission may prescribe:
Section 124. Nominee and Alternate Nominee. - The single (a) Annual financial statements audited by an independent
Section 119. Bylaws. - The One Person Corporation is not stockholder shall designate a nominee and an alternate certified public accountant: Provided, That if the total
required to submit and file corporate bylaws. nominee who shall, in the event of the single stockholder's assets or total liabilities of the corporation are less than
death or incapacity, take the place of the single stockholder as Six hundred thousand pesos (₱600,000.00), the financial
Section 120. Display of Corporate Name. - A One Person director and shall manage the corporation's affairs. statements shall be certified under oath by the
Corporation shall indicate the letters "OPC" either below or at corporation's treasurer and president;
the end of its corporate name. The articles of incorporation shall state the names, residence (b) A report containing explanations or comments by the
addresses and contact details of the nominee and alternate president on every qualification, reservation, or adverse
Section 121. Single Stockholder as Director, President. - The nominee, as well as the extent and limitations of their authority remark or disclaimer made by the auditor in the latter's
single stockholder shall be the sole director and president of in managing the affairs of the One Person Corporation until report;
the One Person Corporation. the stockholder, by self-determination, regains the capacity to (c) A disclosure of all self-dealings and related party
assume such duties. transactions entered into between the One Person
Section 122. Treasurer, Corporate Secretary, and Other Corporation and the single stockholder; and
Officers. - Within fifteen (15) days from the issuance of its In case of death or permanent incapacity of the single (d) Other reports as the Commission may require.
certificate or incorporation, the One Person Corporation shall stockholder, the nominee shall sot as director and manage the
appoint a treasurer, corporate secretary, and other officers as affairs of the One Person Corporation until the legal heirs of For the purpose of this provision, the fiscal year of a One
it may deem necessary, and notify the Commission thereof the single stockholder have been lawfully determined, and the Person Corporation shall be that set forth in its articles of
within five (5) days from appointment. heirs have designated one of them or have agreed that the incorporation or, in the absence thereof, the calendar year.
estate shall be the single stockholder of the One Person
The single stockholder may not be appointed as the corporate Corporation. The Commission may place the corporation fail to submit the
secretary. The alternate nominee shall sit as director and manage the reportorial requirements three (3) times, consecutively or
One Person Corporation in case of the nominee's inability, intermittently, within a period of five (5) years.
A single stockholder who is likewise the self-appointed incapacity, death, or refusal to discharge the functions as
treasurer of the corporation shall give a bond to the director and manager of the corporation, and only for the Section 130. Liability of Single Shareholder. - A sole
Commission in such a sum as may be same term and under the same conditions applicable to the shareholder claiming limited liability has the burden of
required: Provided, That the said stockholder/treasurer shall nominee. affirmatively showing that the corporation was adequately
undertake in writing to faithfully administer the One person financed.
Corporation's funds to be received as treasurer, and to Section 126. Change of Nominee or Alternate Nominee. -
disburse and invest the same according to the articles of The singe stockholder may, at any time, change its nominee Where the single stockholder cannot prove that the property
incorporation as approved by the Commission. The bond shall and alternate nominee by submitting to the Commission the of the One Person Corporation is independent of the
be renewed every two (2) years or as often as may be names of the new nominees and their corresponding written stockholder's personal property, the stockholder shall be
required. consent. For this purpose, the articles of incorporation need jointly and severally liable for the debts and other liabilities of
not be amended. the One Person Corporation.
Section 123. Special Functions of the Corporate Secretary. -
In addition to the functions designated by the One Person Section 127. Minute Book. - A One Person Corporation shall The principles of piercing the corporate veil applies with equal
Corporation, the corporate secretary shall: maintain a minutes book which shall contain all actions, force to One Person Corporations as with other corporations.
(a) Be responsible for maintaining the minutes book and/or decisions, and resolutions taken by the One Person
records of the corporation; Corporation. Section 131. Conversion from an Ordinary Corporation to a
(b) Notify the nominee or alternate nominee of the death or One Person Corporation. When a single stockholder acquires
incapacity of the single stockholder, which notice shall be Section 128. Records in Lieu of Meetings. - When action is all the stocks of an ordinary stock corporation, the later may
given no later than five (5) days from such occurrence; needed on any matter, it shall be sufficient to prepare a apply for conversion into a One Person Corporation, subject
(c) Notify the Commission of the death of the single written resolution, signed and dated by the single stockholder; to the submission of such documents as the Commission may
stockholder within five (5) days from such occurrence and and recorded in the minutes book of the One Person require. If the application for conversion is approved, the
stating in such notice he names, residence addresses, Corporation. The date of recording in the minutes for all Commission shall issue a certificate of filing of amended
and contact details of all known legal heirs; and purposes under this Code. articles of incorporation reflecting the conversion. The One
(d) Call the nominee or alternate nominee and the known Person Corporation converted from an ordinary stock
legal heir to meeting and advise the legal heirs with corporation shall succeed the later and be legally responsible
regard to, among others, the election of a new director,

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for all the latter's outstanding liabilities as of the date of (e) details of publication.
conversion.
The corporation shall submit the following to the Commission:
Section 132. Conversion from One Person Corporation to an (1) a copy of the resolution authorizing the dissolution,
Ordinary Stock Corporation. - A One Person Corporation may certified by a majority of the board of directors or trustees
be converted into an ordinary stock corporation after due and countersigned by the secretary of the corporation;
notice to the Commission of such fact and of the (2) proof of publication; and
circumstances leading to the conversion, and after (3) favorable recommendation form the appropriate
compliance with all other requirements for stock corporations regulatory agency, when necessary.
under this Code and applicable rules. Such notice shall be
filed with the Commission within sixty (60) days from the Within fifteen (15) days from receipt of the verified request for
occurrence of the circumstances leading to the conversion dissolution, and in the absence of any withdrawal within said
into an ordinary stock corporation. If all requirement a have period, the Commission shall approved the request and issue
been complied with, the Commission shall issue a certificate the certificate of dissolution. The dissolution shall take effect
of filing or amended articles of incorporation reflecting the only upon the issuance by the Commission of certificate of
conversion. TITLE XIV: dissolution.

In case of death if the single stockholder, the nominee or DISSOLUTION No application for dissolution of banks, banking and quasi-
alternate nominee shall transfer the shares to the duly Section 133. Methods of Dissolution. - A corporation formed banking institutions, preneed, insurance and trust companies,
designated legal heir or estate within seven (7) days from or organized under the provisions of this Code may be NSSLAs, pawnshops, and other financial intermediaries shall
receipt of either an affidavit of heirship or self-adjudication dissolved voluntarily or involuntarily. be approved by the Commission unless accompanied by a
executed by a sole heir, or any other legal document declaring favorable recommendation of the appropriate government
the legal heirs of the single stockholder and notify the Section 134. Voluntarily Dissolution Where No Creditors are agency.
Commission of the transfer. Within sixty (60) days from the Affected. - If dissolution of a corporation does not prejudice
transfer of the shares, the legal heirs shall notify the the rights of any creditor having a claim against it, the Section 135. Voluntary Dissolution Where Creditors are
Commission of their decision to either wind up and dissolve dissolution may be effected by majority vote of the board of Affected; Procedure and Contents of Petition. - Where the
the One Person Corporation or convert it into an ordinary directors or trustees, and by a resolution adopted by the dissolution of a corporation may prejudice the rights of any
stock corporation. affirmative vote of the stockholders owning at least majority of creditor; a verified petition for dissolution shall be filed with the
the outstanding capital stock or majority of the members of a Commission. The petition shall be signed by a majority of the
The ordinary stock corporation converted from One Person meeting to be held upon the call of the directors or trustees. corporation's board of directors or trustees, verified by its
Corporation shall succeed the latter and be legally responsible president or secretary or one of its director or trustees, and
for all the latter's outstanding liabilities as of the date of At least twenty (20) days prior to the meeting, notice shall be shall set forth all claims and demands against it, and that its
conversion. given to each shareholder or member of record personally, by dissolution was resolved upon by the affirmative vote of the
registered mail, or by any means authorized under its bylaws, stockholders representing at least two-thirds (2/3) of the
whether or not entitled to vote at the meeting, in the manner outstanding capital stock or at least two-thirds (2/3) of the
provided in Section 50 of this Code and shall state that the member at a meeting of its stockholder or members called for
purpose of the meeting is to vote on the dissolution of the that purpose. The petition shall likewise state:
corporation. Notice of the time, place and object of the (a) the reason for the dissolution;
meeting shall be published once prior to the date of the (b) the form, manner, and time when the notices where given;
meeting in a newspaper published in the place where the and
principal office of said corporation is located, or if general (c) the date, place and time of the meeting in which vote was
circulation in the Philippines. made. The corporation shall submit to the Commission
the following:
A verified request for dissolution shall be filed with the (1) a copy of the resolution authorizing the dissolution,
Commission stating: certified by a majority of the board of directors or
(a) the reason for the dissolution; trustees and countersigned by the secretary of the
(b) the form, manner, and time when the notices were given; corporation; and
(c) names of the stockholders and directors or members and (2) a list of all its creditors.
trustees who approved the dissolution;
(d) the date, place, and time of the meeting in which the vote If the petition is sufficient in form and substance, the
was made; and Commission shall by an order reciting the purpose of the

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petition, fix a deadline for filing objections to the petition which The withdrawal shall be submitted no later than fifteen (15)
date shall not be less than thirty (30) days nor more than sixty days from receipt by the Commission of the request for The Commission shall give reasonable notice to, and
(60) days after the entry of the order. Before such date, a dissolution, the Commission shall withhold action on the coordinate with, the appropriate regulatory agency prior to the
copy of the order shall be published at lease one week for request for dissolution and shall, after investigation: involuntary dissolution of companies under their special
three (3) consecutive weeks in a newspaper of general (a) make a pronouncement that the request for dissolution is regulatory jurisdiction.
circulation published in the municipality or city where the deemed withdrawn;
principal office of the corporation is situated, or if there be no (b) direct joint meeting of the board of directors or trustees Section 139. Corporate Liquidation. - Except for banks, which
such newspaper, then in a newspaper of general circulation in and the stockholders or members for the purpose of shall be covered by the applicable provisions of Republic Act
the Philippines, and a similar copy shall be posted for three ascertaining whether to proceed with dissolution; or No. 7653, otherwise known as "The New Central Bank Act",
(3) consecutive weeks in three (3) public places in such (c) issue such other orders as it may deem appropriate. as amended, and Republic Act No. 3591, otherwise known as
municipality or city. the Philippine Deposit Insurance Corporation Charter, as
A withdrawal of the petition for dissolution shall be in the form amended, every corporation whose charter expires pursuant
Upon five (5) days' notice given after the date on which the of a motion and similar in substance to a withdrawal of to its article of incorporation is annulled by forfeiture, or whose
right to file objections as fixed in the order has expired, the request for dissolution but shall be verified and filed prior to corporate existence is terminated in any other manner, shall
Commission shall proceed to hear the petition and try any publication of the order setting the deadline for filing nevertheless remain as a body corporate for three (3) years
issue raised in the objections filed; and if no such objection is objections to the petition. after the effective date of dissolution, for the purpose of
sufficient, and the material allegations of the petition are true, prosecuting and defending suits by or against it and enabling
it shall render judgment dissolving the corporation and Section 138. Involuntary Dissolution. - A corporation may be it to settle and close its affairs, dispose of and convey its
directing such disposition of its assets as justice requires, and dissolve by the Commission motu propio or upon filing of a property, and distribute its assets, but not for the purpose of
may appoint a receiver to collect such assets and pay the verified complaint by any interested party. The following may continuing the business for which it was established.
debts of the corporation. be grounds for dissolution of the corporation:
(a) None-use of corporate charter as provided under Section At any time during said three (3) years, the corporation is
The dissolution shall take effect only upon the issuance by the 21 of his Code; authorized and empowered to convey all of its property to
Commission of a certificate of dissolution. (b) Continuous inoperation of a corporation as provided under trustees for the benefit of stockholders, members, creditors,
Section 21 of this Code; and other persons in interest. After any such conveyance by
Section 136. Dissolution by Shortening Corporation Term. - A (c) Upon receipt of a lawful court order dissolving the the corporation of its property in trust for the benefit of its
voluntary dissolution may be effected by amending the articles corporation; stockholders, members, creditors and others in interest, all
of incorporation to shorten the corporate term pursuant to the (d) Upon finding by the final judgment that the corporation interest which the corporation had in the property terminates,
provisions of this Code. A copy of the amended articles of procured its incorporation through fraud; the legal interest vests in the trustees, and the beneficial
incorporation shall be submitted to the Commission in (e) Upon finding by final judgment that the corporation: interest in the stockholders, members, creditors or other
accordance with this Code. (1) Was created for the purpose of committing, persons-in-interest.
concealing or aiding the commission of securities
Upon the expiration of the shortened term, as stated in the violation, smuggling, tax evasion, money laundering, Except as otherwise provided for in Section 93 and 94 of this
approved amended articles of incorporation, the corporation or graft and corrupt practices; Code, upon the winding up of corporate affairs, any asset
shall be deemed dissolve without any further proceedings, (2) Committed or aided in the commission of securities distributable to any creditor or stockholder or member who is
subject to the provisions of this Code on liquidation. violations, smuggling, tax evasion, money laundering, unknown or cannot be found shall be escheated in favor of the
or graft and corrupt practices, and its stockholders national government.
In the case of expiration of corporate term, dissolution shall knew of the same; and
automatically take effect on the day of the following the last (3) Repeatedly and knowingly tolerated the commission Except by decrease of capital stock and as otherwise allowed
day of the corporate term stated in the articles of incorporation of graft and corrupt practices or other fraudulent or by this Code, no corporation shall distribute any of its assets
without the need for the issuance by the Commission of a illegal acts by its directors, trustees, officers, or or property except upon lawful dissolution and after payment
certificate of dissolution. employees. of all its debts and liabilities.

Section 137. Withdrawal of Request and Petition for If the corporation is ordered dissolved by final judgment
Dissolution. - A withdrawal of the request for dissolution shall pursuant to the grounds set forth in subparagraph (e) hereof,
be made in writing, duly verified by any incorporator, director, its assets, after payment of its liabilities, shall upon petition of
trustees, shareholder, or member and signed by the same the Commission with the appropriate court, be forfeited in
number of incorporators, directors, trustees, shareholder, or favor of the national government. Such forfeiture shall be
member and signed by the same number of incorporators, without prejudice to the rights of innocent stockholders and
directors, trustees, shareholders, or members necessary to employees for services rendered, and to the application for
request for dissolution as set forth in the foregoing sections. other penalty or sanction under this Code or other laws.

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 (e) The specific purpose or purposes which the corporation Section 143. Issuance of a License. - If the Commission is
intends to pursue in the transaction of its business in the satisfied that the applicant has complied with all the
Philippines: Provided, That said purpose or purposes are requirements of this Code and other special laws, rules and
those specifically stated in the certificate of authority regulations, the Commission shall issue a license to transact
issued by the appropriate government agency; business in the Philippines to the applicant for the purpose or
(f) The names and addresses of the present directors and purposes specified in such license. Upon issuance of the
officers of the corporation; license, such foreign corporation may commence to transact
(g) A statement of its authorized capital stock and the business in the Philippines and continue to do so for as long
aggregate number of shares which the corporation has as it retains authority to act as a corporation under the laws of
authority to issue, itemized by class, par value of shares, the country or State of its incorporation, unless such license is
shares without par value, and series, if any; sooner surrendered, revoked suspended, or annulled in
(h) A statement of its outstanding capital stock and the accordance with this Code or other special laws. Within sixty
aggregate number of shares which the corporation has (60) days after the issuance of the license to transact
TITLE XV: issued, itemized by class, par value of shares, shares business in the Philippines, the licensee, except foreign
without par value, and series, if any; banking or insurance corporations, shall deposit with the
FOREIGN CORPORATIONS (i) A statement of the amount actually paid in; and Commission for the benefit of present and future creditors of
Section 140. Definition of Righs of Foreign Corporations. - (j) Such additional information as may be necessary or the licensee in the Philippines, securities satisfactorily to the
For purposes of this Code, a foreign corporation is one appropriate in order to enable the Commission to Commission, consisting of bonds or other evidence of the
formed, organized or existing under laws other than those of determine whether such corporation is entitled to a license indebtedness of the Government of the Philippines, its political
the Philippines' and whose laws allow Filipino citizens and to transact business in the Philippines, and determine and subdivisions and instrumentalities, or of government-owned or
corporations to do business in its own country or State. It shall assess the fees payable. -controlled corporations and entities, shares of stock or debt
have the right to transact business in the Philippines after securities that are registered under Republic Act No. 8799,
obtaining a license for that purpose in accordance with this Attached to the application for license shall be a certificate otherwise known as "The Securities Regulation Code", shares
Code and certificate of authority from the appropriate under oath duly executed by the authorized official or officials of stock in domestic corporations listed in the stock exchange,
government agency. of the jurisdiction of its incorporation, attesting to the fact the shares of stock in domestic insurance companies and banks,
laws of the country or State of the applicant allow Filipino any financial instrument determined suitable by the
Section 141. Application to Existing Foreign Corporations. - citizens and corporations to do business therein, and that the Commission, or any combination thereof with an actual
Every foreign corporation which, on the date of the effectivity applicant is an existing corporation in good standing. If the market value of at least Five hundred thousand pesos
of this Code, is authorized to do business in the Philippines certificate is in a foreign language, a translation thereof in (₱500,000.00) or such other amount that may be set by the
under a license issued to it shall continue to have such English under oath of the translator shall be attached to the Commission: Provided, however, That within six (6) months
authority under the terms and conditions of its license, subject application. after each fiscal year of the licensee, the Commission shall
to the provisions of this Code and other special laws. require the licensee to deposit additional securities or financial
The application for a license to transact business in the instruments equivalent in actual market value to two percent
Section 142. Application for a License. - A foreign corporation Philippines shall likewise be accompanied by a statement (2%) of the amount by which the licensee's gross income for
applying for a license to transact business in the Philippines under oath of the president or any other person authorized by that fiscal year exceeds Ten million pesos (₱10,000,000.00).
shall submit to the Commission a copy of its articles of the corporation, showing to the satisfaction of the Commission The Commission shall also require the licensee to deposit
incorporation and bylaws, certified in accordance with law, and when appropriate, other governmental agencies that the additional securities financial instruments if the actual market
and their translation to an official language of the Philippines, applicant is solvent and in sound financial condition, setting of the deposited securities or financial instruments has
if necessary. The application shall be under oath and, unless forth the assets and liabilities of the corporation as of the date decreased by at least ten percent (10%) of their actual market
already stated in its articles of incorporation, shall specifically not exceeding one (1) year immediately prior to the filing of value at the time they were deposited, The Commission may,
set forth the following: the application. at its discretion, release part of the additional deposit if the
(a) The date and term of incorporation; gross income of the licensee has decreased, or if the actual
(b) The address including the street number, of the principal Foreign banking, financial, and insurance corporations shall, market value of the total deposit has increased, by more than
office of the corporation in the country or State of in addition to the above requirements, comply with the ten percent (10%) of their actual market value at the time they
incorporation; provisions of existing laws applicable to them. In the case of were deposited. The Commission may, from time to time,
(c) The name and address of its resident agent authorized to all other foreign corporations, no application for license to allow the licensee to make substitute deposits of those
accept summons and process in all legal proceedings and transact business in the Philippines shall be accepted by the already on deposit as long as the licensee is solvent. Shall
all notices affecting the corporation, pending the Commission without previous authority from the appropriate licensee is entitled to collect the interest or dividends on such-
establishment of a local office; government agency, whether required by law. deposits. In the event the licensee ceases to do business in
(d) The place in the Philippines where the corporation intends the Philippines, its deposits shall be returned, upon the
to operate; licensee's application and upon proof to the satisfaction of the

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Commission that the licensee has no liability to the Philippine expenses incurred by the Commission for such service shall law authorizing its incorporation, such foreign corporation
residents, including the Government of the Republic of the be paid in advance by the party at whose instance the service shall, within sixty (60) days after the effectivity of such merger
Philippines. For purposes of computing the securities is made. or consolidation, file with the Commission, and in proper
deposits, the composition of gross income and allowable cases, with the appropriate government agency, a copy of the
deductions therefrom shall be in accordance with the rules of It shall be the duty of the resident agent to immediately notify articles of merger or consolidation was effected: Provided,
the Commission. the Commission in writing of any change in the resident however, That if the absorbed corporation is the foreign
agent's address. corporation doing business in the Philippines, the latter shall
Section 144. Who May be a Resident Agent. - A resident at the same time file a petition for withdrawal of its license in
agent may be either an individual residing in the Philippines or Section 146. Law Applicable. - A foreign corporation lawfully accordance with this Title.
a domestic corporation lawfully transacting business in the doing business in the Philippines shall be bound by all laws,
Philippines: Provided, That an individual resident agent must rules and regulations applicable to domestic corporations of Section 150. Doing Business Without a License. - No foreign
be of good moral character and of sound financial the same class, except those which provide for the creation, corporation transacting business in the Philippines without a
standing: Provided, further, That in case of a domestic formation, organization or dissolution of corporations or those license, or its successor or assigns, shall be permitted to
corporation who will act as a resident agent, it must be which fix the relations, liabilities, responsibilities, or duties of maintain or intervene in any action, suit or proceeding in any
likewise be of sound financial standing and must show proof stockholders, members or officers of corporations to each court or administrative agency of the Philippines; but such
that it is in good standing as certified by the Commission. other or to the corporation. corporation may be sued or proceeded against before the
Philippine courts or administrative tribunals on any valid cause
Section 145. Resident Agent; Service of Process. - As a Section 147. Amendments to Articles of Incorporation or of action recognized under Philippine laws.
condition to the issuance of the license for a foreign Bylaws of Foreign Corporations. - Whenever the article of
corporation to transact business in the Philippines, such incorporation or bylaws of a foreign corporation authorized to Section 151. Revocation of License. - Without prejudice to
corporation shall file with the Commission a written power of transact business in the Philippines are amended, such other grounds provided under special laws, the license of a
attorney designating a person who must be a resident of the foreign corporation shall, within sixty (60) days after the foreign corporation to transact business in the Philippines may
Philippines, on whom summons and other legal processes amendment becomes effective, file with the Commission, and be revoked or suspended by the Commission upon any of the
may be served in all actions or other legal processes may be in proper cases, with the appropriate government agency, a following grounds:
served in all actions or legal proceedings against such duly authenticated copy of the amendment articles of (a) Failure to file its annual report or pay any fees as required
corporation, and consenting that service upon such resident incorporation or bylaws, indicating clearly in capital letters or by this Code;
agent shall be admitted and held as valid if served upon the underscoring the change or changes made, duly certified by (b) Failure to appoint and maintain a resident agent in the
duly authorized officers of foreign corporation shall likewise the authorized official or officials of the country or State of Philippines as required by this Title;
execute and file with the Commission an agreement or incorporation. Such filing shall not in itself enlarge or alter the (c) Failure, after change of its resident agent or address, to
stipulation, executed by the proper authorities of said purpose or purposes for which such corporation is authorized submit to the Commission a statement of such change as
corporation, in form and substance as follows: to transact business in the Philippines. required by this Title;
(d) Failure to submit to the Commission an authenticated
"The (name of foreign corporation) hereby stipulates and Section 148. Amended License. - A foreign corporation copy of any amendment to its articles of incorporation or
agrees, in consideration of being granted a license to transact authorized to transact business in the Philippines shall obtain bylaws or of any articles of merger or consolidation within
business in the Philippines, that if the corporation shall cease an amended license in the event it changes its corporate the time prescribed by this Title;
to transact business in the Philipines, or shall be without any name, or desires to pursue other or additional purposes in the (f) A misrepresentation of any material mater in any
resident agent in the Philippines on whom any summons or Philippines, by submitting an application with the Commission, application, report, affidavit or other document submitted
other legal process may be served, then service of any favorably endorsed by the appropriate government agency in by such corporation pursuant to this Title;
summons or other legal process may be made upon the the proper cases. (g) Failure to pay any and all taxes, imposts, assessments or
Commission in any action or proceeding arising out of any penalties, if any, lawfully due to the Philippine
business or transaction which occurred in the Philippines and Section 149. Merger or Consolidation Involving a Foreign Government or any of its agencies or political
such service shall have the same force and effect as if made Corporation Licensed in the Philippines. - One or more foreign subdivisions;
upon the duly authorized officers of the corporation at its corporations authorized to transact business in the Philippines (h) Transacting business in the Philippines outside of the
home office." may merge or consolidate with any domestic corporation or purpose or purposes for which such corporation is
corporations if permitted under Philippine laws and by the law authorized under its license;
Whenever such service of summons or other process is made of its incorporation: Provided, That the requirements on (i) Transacting business in the Philippines as agent of or
upon the Commission, the Commission shall, within ten (10) merger or consolidation as provided in this Code are followed. acting on behalf of any foreign corporation or entity not
days thereafter, transmit by mail a copy of such summons or duly licensed to do business in the Philippine; or
other legal process to the corporation at its home or principal Whenever a foreign corporation authorized to transact (j) Any other ground as would render it unfit to transact
office. The sending of such copy by the Commission shall be business in the Philippines shall be a party to merger or business in the Philippines.
necessary part of and shall complete such service. All consolidation in its home country or State as permitted by the

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Section 152. Issuance of Certificate of Revocation. - Upon The Commission may issue a cease and desist order ex
the revocation of the license to transact business in the parte to enjoin an act or practice which is fraudulent or can be
Philippines, the Commission shall issue a corresponding reasonably expected to cause significant, imminent, and
certificate of revocation, furnishing a copy thereof to the irreparable danger or injury to public safety or welfare. The ex
appropriate government agency in the proper cases. parte order shall be valid for a maximum period of twenty (20)
says, without prejudice to the order being made permanent
The Commission shall also mail the notice and copy of the after due notice and hearing.
certificate of revocation to the corporation, at its registered
office in the Philippines. Thereafter the Commission may proceed administratively
against such person in accordance with Section 158 of this
Section 153. Withdrawal of Foreign Corporations. - Subject to Code, and/or transmit evidence to the Department of Justice
existing laws and regulations, a foreign corporation licensed for preliminary investigation or criminal prosecution and/or
to transact business in the Philippines may be allowed to initiate criminal prosecution for any violation of this Code, rule,
withdraw from the Philippines by filing a petition for withdrawal TITLE XVI: or regulation.
of license. No certificate of withdrawal shall be issued by the
Commission unless all the following requirements are met: INVESTIGATIONS, Section 157. Contempt. - Any person who, without justifiable
(a) All claims which have accrued in the Philippines have cause, fails or refuses to comply with any lawful order,
been paid, compromised or settled; OFFENSES, AND decision, or subpoena issued by the Commission shall, after
(b) All taxes, imposts, assessments, and penalties, if due notice and hearing, be held in contempt and fined in an
any, agencies or political subdivisions, have been paid; PENALTIES amount not exceeding Thirty thousand pesos (₱30,000.00).
and Section 154. Investigation and Prosecution of Offenses. - The When the refusal amounts to clear and open defiance of the
(c) The petition for withdrawal of license has been published Commission may investigate an alleged violation of this Code, Commission's order, decision, or subpoena, the Commission
once a week for three (3) consecutive weeks in a or of a rule, regulation, or order of the Commission. may impose a daily fine of One thousand pesos (₱1,000.00)
newspaper of general circulation in the Philippines. until the order, decision, or subpoena is complied with.
The Commission may publish its findings, orders, opinions,
advisories, or information concerning any such violation, as Section 158. Administrative Sanctions. - If, after due notice
may be relevant to the general public or to the parties and hearing, the Commission finds that any provision of this
concerned, subject to the provisions of Republic Act No. Code, rules or regulations, or any of the Commission's orders
10173, otherwise known as the "Data Privacy Act of 2012", has been violated, the Commission may impose any or all of
and other pertinent laws. the following sanctions, taking into consideration the extent of
participation, nature, effects, frequency and seriousness of the
The Commission shall give reasonable notice to and violation:
coordinate with the appropriate regulatory agency prior to any (a) Imposition of a fine ranging from Five thousand pesos
such publication involving companies under their regulatory (₱5,000.00) to Two million pesos (₱2,000,000.00), and
jurisdiction. not more that One thousand pesos (₱1,000.00) for each
day of continuing violation but in no case to exceed Two
Section 155. Administration of Oaths, Subpoena of million pesos (₱2,000,000.00);
Witnesses and Documents. - The Commission, through its (b) Issuance of the permanent cease and desist order;
designated officer, may administer oaths and affirmations, (c) Suspension or revocation of the certificate of
issue subpoena and subpoena duces tecum, take testimony incorporation; and
in any inquiry or investigation, and may perform other acts (d) Dissolution of the corporation and forfeiture of its assets
necessary to the proceedings or to the investigation. under the conditions in Title XIV of this Code.

Section 156. Cease and Desist Orders. - Whenever the Section 159. Unauthorized Use of Corporate Name;
Commission has reasonable basis to believe that a person Penalties. - The unauthorized use of corporate name shall be
has violated, or is about to violate this Code, a rule, punished with a fine ranging from Ten thousand pesos
regulation, or order of the Commission, it may direct such (₱10,000.00) to Two hundred thousand pesos (₱200,000.00).
person to desist from committing the act constituting the
violation. Section 160. Violation of Disqualification Provision;
Penalties. - When, despite the knwoledge of the existence of
a ground for disqualification as provided in Section 26 of this

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Code, a director, trustee or officer willfully holds office, or thousand pesos (₱500,000.00). When the statement or report agencies, allows or tolerates the graft and corrupt practices or
willfully conceals such disqualification, such director, trustee certified is fraudulent, or has the effect of causing injury to the fraudulent acts committed by a corporation's directors,
or officer shall be punished with a fine ranging from Ten general public, the auditor or responsible officer may be trustees, officers, or employees shall be punished with a fine
thousand pesos (₱10,000.00) to Two hundred thousand punished with a fine ranging from One hundred thousand ranging from Five hundred thousand pesos (₱500,000.00) to
pesos (₱200,000.00) at the discretion of the court, and shall pesos (₱100,000.00) to Six hundred thousand pesos One million pesos (₱1,000,000.00).
be permanently disqualified from being a director, trustee or (₱600,000.00).
officer of any corporation. When the violation of this provision Section 164. Obtaining Corporate Registration Through Section 169. Retaliation Against Whistleblowers. - A
is injurious or detrimental to the public, the penalty shall be a Fraud; Penalties. - Those responsible for the formation of a whistleblower refers to any person who provides truthful
fine ranging from Twenty thousand pesos (₱20,000.00) to corporation through fraud, or who assisted directly or indirectly information relating to the commission or possible commission
Four hundred thousand pesos (₱400,000.00). therein, shall be punished with a fine ranging from Two of any offense or violation under this Code. Any person who,
hundred thousand pesos (₱200,000.00) to Two million pesos knowingly and with intent to retaliate, commits acts
Section 161. Violation of Duty to Maintain Records, to Allow (₱2,000,000.00). When the violation of this provision is detrimental to a whistleblower such as interfering with the
their Inspection or Reproduction; Penalties. - The unjustified injurious or detrimental to the public, the penalty is a fine lawful employment or livelihood of the whistleblower, shall, at
failure or refusal by the corporation, or by those responsible ranging from Four hundred thousand pesos (₱400,000.00) to the discretion of the court, be punished with a fine ranging
for keeping and maintaining corporate records, to comply with Five million pesos, (₱5,000,000.00). from One hundred thousand (₱100,000.00) to One million
Section s 45, 73, 92, 128, 177 and other pertinent rules and (₱1,000,000.00).
provisions of this Code on inspection and reproduction of Section 165. Fraudulent Conduct of Business; Penalties. - A
records shall be punished with a fine ranging from Ten corporation that conduct its business through fraud shall be Section 170. Other Violations of the Code; Separate
thousand pesos (₱10,000.00) to Two hundred thousand punished with a fine ranging from Two hundred thousand Liability. - Violation of any of the other provisions of this Code
pesos (₱200,000.00), at the discretion of the court, taking into pesos (₱200,000.00) to Two million pesos (₱2,000,000.00). or its amendments not otherwise specifically penalized therein
consideration the seriousness of the violation and its When the violation of this provision is injurious or detrimental shall be punished by a fine of not less than Ten thousand
implications. When the violation of this provision is injurious or to the public, the penalty is a fine ranging from Four hundred pesos (₱10,000.00) but not more than One million pesos
detrimental to the public, the penalty is a fine ranging from thousand pesos (₱400,000.00) to Five million pesos (₱1,000,000.00). If the violation is committed by a corporation,
Twenty thousand pesos (₱20,000.00) to Four hundred (₱5,000,000.00). the same may, after notice and hearing, be dissolved in
thousand pesos (₱400,000.00). appropriate proceedings before the
Section 166. Acting as Intermediaries for Graft and Corrupt Commission; Provided, That such dissolution shall not
The penalties impose under this section shall be without Practices; Penalties. - A corporation used for fraud, or for preclude the institution of appropriate action against the
prejudice to the Commission's exercise of its contempt powers committing or concealing graft and corrupt practices as director, trustee, or officer of the corporation responsible for
under Section 157 hereof. defined under pertinent statutes, shall be liable for a fine said violation: Provided, further, That nothing in this section
ranging from One hundred thousand pesos (₱100,000.00) to shall be construed to repeal the other causes for dissolution of
Section 162. Willful Certification of Incomplete, Inaccurate, Five million pesos (₱5,000,000.00). corporation provided in this Code.
False; or Misleading Statements or Reports; Penalties. - Any
person who willfully certifies a report required under this When there is a finding that any of its directors, officers, Liability for any of the foregoing offenses shall be separate
Code, knowing that the same contains incomplete, employees, agents, or representatives are engaged in graft from any other administrative, civil, or criminal liability under
inaccurate, false, or misleading information or statements, and corrupt practices, the corporation's failure to install: this Code and other laws.
shall be punished with a fine ranging from Twenty thousand (a) safeguards for the transparent and lawful delivery of
pesos (₱20,000.00) to Two hundred thousand pesos services; and Section 171. Liability of Directors, Trustees, Officers, or
(₱200,000.00). When the wrongful certification is injurious or (b) policies, code of ethics, and procedures against graft and Other Employees. - If the offender is a corporation, the
detrimental to the public, the auditor or the responsible person corruption shall be prima facie evidence of corporate penalty may, at the discretion of the court, be imposed upon
may also be punished with a fine ranging from Forty thousand liability under this section. such corporation and/or upon its directors, trustees,
pesos (₱40,000.00) to Four hundred thousand pesos stockholders. members, officers, or employees responsible for
(₱400,000.00). Section 167. Engaging Intermediaries for Graft and Corrupt the violation or indispensable to its commission.
Practices; Penalties. - A corruption that appoints an
Section 163. Independent Auditor Collusion; Penalties. - An intermediary who engages in graft and corrupt practices for Section 172. Liability of Aiders and Abettors and Other
independent auditor who, in collusion with the corporation's the corporation's benefit or interest shall be punished with a Secondary Liability. - Anyone who shall aid, abet, counsel,
directors or representatives, certifies the corporation's fine ranging from One hundred thousand pesos (₱100,000.00) command, induce, or cause any violation of this Code, or any
financial statements despite its incompleteness or inaccuracy, to One million pesos (₱1,000,000.00). rule regulation or order of the Commission shall be punished
its failure to give a fair and accurate presentation of the with a fine not exceeding that imposed on the principal
corporation's condition, or despite containing false or Section 168. Tolerating Graft and Corrupt Practices; offenders, at the discretion of the court, after taking into
misleading statements, shall be punished with a fine ranging Penalties. - A director, trustee, or officer who knowingly fails to account their participation in the offense.
from Eighty thousand pesos (₱80,000.00) to Five hundred sanction, report, or file the appropriate action with proper

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 provisions of this Code or applicable laws, and shall submit to of five (5) years. The Commission shall give reasonable notice
Congress, whenever deemed necessary, a report of its to and coordinate with the appropriate regulatory agency prior
findings, including recommendations for their prevention or to placing on delinquent status companies under their special
correction. regulatory jurisdiction.

The Congress of the Philippines may set maximum limits for Any person required to file a report with the Commission may
stock ownership of individuals or groups of individuals related redact confidential information from such required
to each other by consanguinity, affinity, or by close business report: Provided, That such confidential information shall be
interests, in corporations declared to be vested with public filed in a supplemental report prominently labelled
interest pursuant to the provisions of this section, or whenever "confidential", together with a request for confidential
necessary to prevent anti-competitive practices as provided in treatment of the report and the specific grounds for the grant
Republic Act No. 10667, otherwise known as the "Philippine thereof.
Competition Act", or to implement national economic policies
designed to promote general welfare and economic Section 178. Visitorial Power and Confidential Nature of
development, as declared in laws, rules and regulations. Examination Results. - The Commission shall exercise
TITLE XVII: visitorial powers over all corporations, which powers shall
In recommending to the Congress which corporations, include the examination and inspection of records, regulation
MISCELLANEOUS PROVISIONS businesses and industries will be declared as vested with and supervision of activities, enforcement of compliance, and
Section 173. Outstanding Capital Stock Defined. - The term public interest, and in formulating proposals for limitations on imposition of sanctions in accordance with this Code.
"outstanding capital stock", as used in this Code, shall mean stock ownership, the NEDA shall consider the type and nature
the total shares of stock issued under binding subscription of the industry, size of the enterprise, economies of scale, Should the corporation, without justifiable cause, refuse or
contracts to subscribers or stockholders, whether fully or geographic location, extent of Filipino ownership, labor obstruct the Commission’s exercise of its visitorial powers, the
partially paid, except treasury shares. intensity of the activity, export potential, as well as other Commission may revoke its certificate of incorporation,
factors which are germane to the realization and promotion of without prejudice to the imposition of other penalties and
Section 174. Designation of Governing Boards. - The business and industry. sanctions under this Code.
provisions of specific provisions of this Code to the contrary
notwithstanding, nonstock or special corporations may, Section 177. Reportorial Requirements of Corporations. - All interrogatories propounded by the Commission and the
through their articles of incorporation pr their bylaws, Except as otherwise provided in this Code or in the rules answers thereto, as well as the results of any examination
designated their governing boards by any other than as board issued by the Commission, every corporation, domestic or made by the Commission or by any other official authorized
of trustees. foreign, doing business in the Philippines shall submit to the by law to make an examination of the operations, books, and
Commission: records of any corporation, shall be kept strictly confidential,
Section 175. Collection and Use of Registration, (a) Annual financial statements audited by an independent except when the law requires the same to be made public,
Incorporation and Other Fees. - For a more implementation of certified public accountant: Provided, That if the total when necessary for the Commission to take action to protect
this Code, the Commission is hereby authorized to collect, assets or total liabilities of the corporation are less than the public or to issue orders in the exercise of its powers
retain and use fees, fines, and other charges pursuant to this Six hundred thousand pesos (₱600,000.00), the financial under this Code, or where such interrogatories, answers or
Code and its rules and regulations. The amount collected statements shall be certified under oath by the results are necessary to be presented as evidence before any
shall be deposited and maintained in a separate account corporation’s treasurer or chief financial officer; and court.
which shall form a fund for its modernization and to augment (b) A general information sheet.
its operational expenses such as, but not limited to, capital Section 179. Powers, Functions, and Jurisdiction of the
outlay, increase in compensation and benefits comparable Corporations vested with public interest must also submit the Commission. - The Commission shall have the power and
with prevailing rates in the private sector, reasonable following: authority to:
employee allowance, employee health care services, and (1) A director or trustee compensation report; and (a) Exercise supervision and jurisdiction over all corporations
other insurance, employee career advancement and (2) A director or trustee appraisal or performance report and and persons acting on their behalf, except as otherwise
professionalization, legal assistance, seminars, and other the standards or criteria used to assess each, director or provided under this Code;
professional fees. trustee. (b) Pursuant to Presidential Decree No. 902-A, retain
jurisdiction over pending cases involving intra-corporate
Section 176. Stock Ownership in Corporations. - Pursuant to The reportorial requirements shall be submitted annually and disputes submitted for final resolution. The Commission
the duties specified by Article XIV of the Constitution, the within such period as may be prescribed by the Commission. shall retain jurisdiction over pending suspension of
National Economic and Development Authority (NEDA) shall, The Commission may place the corporation under delinquent payment/rehabilitation cases filed as of 30 June 2000 until
from time to time, determine if the corporate vehicle has been status in case of failure to submit the reportorial requirements finally disposed;
used by any corporation, business, or industry to frustrate the three (3) times, consecutively or intermittently, within a period

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(c) Impose sanctions for the violation of this Code, its No court below the Court of Appeals shall have jurisdiction to prevent a miscarriage of justice, or otherwise protect the rights
implementing rules and orders of the Commission; issue a restraining order, preliminary injunction, or preliminary of the parties.
(d) Promote corporate governance and the protection of mandatory injunction in any case, dispute, or controversy that
minority investors, through, among others, the issuance of directly or indirectly interferes with the exercise of the powers, A final arbitral award under this section shall be executory
rules and regulations consistent with international best duties and responsibilities of the Commission that falls after the lapse of fifteen (15) days from receipt thereof by the
practices; exclusively within its jurisdiction. parties and shall be stayed only by the filing of a bond or the
(e) Issue opinions to clarify the application of laws, rules and issuance by the appellate court of an injunctive writ.
regulations; Section 180. Development and Implementation of Electronic
(f) Issue cease and desist orders ex parte to prevent Filing and Monitoring System. - The Commission shall The Commission shall formulate the rules and regulations,
imminent fraud or injury to the public; develop and implement an electronic filing and monitoring which shall govern arbitration under this section, subject to
(g) Hold corporations in direct and indirect contempt; system. The Commission shall promulgate rules to facilitate existing laws on arbitration.
(h) Issue subpoena duces tecum and summon witnesses to and expedite, among others, corporate name reservation and
appear in proceedings before the Commission; registration, incorporation, submission of reports, notices, and Section 182. Jurisdiction Over Party-List Organizations. - The
(i) In appropriate cases, order the examination, search and documents required under this Code, and sharing of pertinent powers, authorities, and responsibilities of the Commission
seizure of documents, papers, files and records, and information with other government agencies. involving party-list organizations are transferred to the
books of accounts of any entity or person under Commission on Elections (COMELEC).
investigation as may be necessary for the proper Section 181. Arbitration for Corporations. - An arbitration
disposition of the cases, subject to the provisions of agreement may be provided in the articles of incorporation or Within six (6) months after the effectivity of this Act, the
existing laws; bylaws of a corporation. When such an agreement is in place, monitoring, supervision, and regulation of such corporations
(j) Suspend or revoke the certificate of incorporation after disputes between the corporation, its stockholders or shall be deemed automatically transferred to the COMELEC.
proper notice and hearing; members, which arise from the implementation of the articles
(k) Dissolve or impose sanctions on corporations, upon final of incorporation or bylaws, or from intra-corporate relations, For this purpose, the COMELEC, in coordination with the
court order, for committing, aiding in the commission of, or shall be referred to arbitration. A dispute shall be non Commission, shall promulgate the corresponding
in any manner furthering securities violations, smuggling, arbitrable when it involves criminal offenses and interests of implementing rules for the transfer of jurisdiction over the
tax evasion, money laundering, graft and corrupt third parties. abovementioned corporations.
practices, or other fraudulent or illegal acts;
(l) Issue writs of execution and attachment to enforce The arbitration agreement shall be binding on the corporation, Section 183. Applicability of the Code. - Nothing in this Act
payment of fees, administrative fines, and other dues its directors, trustees, officers, and executives or managers. shall be construed as amending existing provisions of special
collectible under this Code; laws governing the registration, regulation, monitoring and
(m) Prescribe the number of independent directors and the To be enforceable, the arbitration agreement should indicate supervision of special corporations such as banks, nonbank
minimum criteria in determining the independence of a the number of arbitrators and the procedure for their financial institutions and insurance companies.
director; appointment. The power to appoint the arbitrators forming the
(n) Impose or recommend new modes by which a arbitral tribunal shall be granted to a designated independent Notwithstanding any provision to the contrary, regulators such
stockholder, member, director, or trustee may attend third party. Should the third party fail to appoint the arbitrators as the Bangko Sentral ng Pilipinas and the Insurance
meetings or cast their votes, as technology may allow, in the manner and within the period specified in the arbitration Commission shall exercise primary authority over special
taking into account the company’s scale, number of agreement, the parties may request the Commission to corporations such as banks, nonbank financial institutions,
shareholders or members, structure, and other factors appoint the arbitrators. In any case, arbitrators must be and insurance companies under their supervision and
consistent with the basic right of corporate suffrage; accredited or must belong to organizations accredited for the regulation.
(o) Formulate and enforce standards, guidelines, policies, purpose of arbitration.
rules and regulations to carry out the provisions of this Section 184. Effect of Amendment or Repeal of This Code, or
Code; and The arbitral tribunal shall have the power to rule on its own the Dissolution of a Corporation. - No right or remedy in favor
(p) Exercise such other powers provided by law or those jurisdiction and on questions relating to the validity of the of or against any corporation, its stockholders, members,
which may be necessary or incidental to carrying out the arbitration agreement. When an intra-corporate dispute is filed directors, trustees, or officers, nor any liability incurred by any
powers expressly granted to the Commission. with a Regional Trial Court, the court shall dismiss the case such corporation, stockholders, members, directors, trustees,
before the termination of the pretrial conference, if it or officers, shall be removed or impaired either by the
In imposing penalties and additional monitoring and determines that an arbitration agreement is written in the subsequent dissolution of said corporation or by any
supervision requirements, the Commission shall take into corporation’s articles of incorporation, bylaws, or in a separate subsequent amendment or repeal of this Code or of any part
consideration the size, nature of the business, and capacity of agreement. thereof.
the corporation.
The arbitral tribunal shall have the power to grant interim Section 185. Applicability to Existing Corporations. - A
measures necessary to ensure enforcement of the award, corporation lawfully existing and doing business in the

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Philippines affected by the new requirements of this Code
shall be given a period of not more than two (2) years from the
effectivity of this Act within which to comply.

Section 186. Separability Clause. - If any provision of this Act

is declared invalid or unconstitutional, the other provisions
hereof are not affect thereby shall continue to be in full force
and effect.

Section 187. Repealing Clause. - Batas Pambansa Blg. 68,

otherwise known as "The Corporation Code of the
Philippines", is hereby repealed. Any law, presidential 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 188. Effectivity. - This Act shall take effect upon

completion of its publication in the Official Gazette or in at
least two (2) newspaper of general circulation.

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