Philippine Special Commercial Laws

8/19/2019 Philippine Special Commercial Laws

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Batas Pambansa Bilang 68

THE CORPORATION CODE OF THE

PHILIPPINES

Be it enacted by the Batasang Pambansa in sessionassembled:

TITLE I

GENERAL PROVISIONS

DEFINITIONS AND CLASSIFICATIONS

Sectin !" Title of the Code. – This Code shall be

known as "The Corporation Code of the Philippines."

(n)

Sectin #" Corporation defined. – A corporation is anartificial being created by operation of law, haing

the right of s!ccession and the powers, attrib!tes and properties epressly a!thori#ed by law or incident toits eistence. ($)

Sectin $" Classes of corporations. – Corporations

for%ed or organi#ed !nder this Code %ay be stock or

non&stock corporations. Corporations which haecapital stock diided into shares and are a!thori#ed to

distrib!te to the holders of s!ch shares diidends or

allot%ents of the s!rpl!s profits on the basis of theshares held are stock corporations. All other

corporations are non&stock corporations. ('a)

Sectin %" Corporations created by special laws or

charters. – Corporations created by special laws orcharters shall be goerned pri%arily by the proisions

of the special law or charter creating the% or

applicable to the%, s!pple%ented by the proisionsof this Code, insofar as they are applicable. (n)

Sectin &" Corporators and incorporators,

stockholders and members. – Corporators are those

who co%pose a corporation, whether as stockholdersor as %e%bers. ncorporators are those stockholders

or %e%bers %entioned in the articles of incorporation

as originally for%ing and co%posing the corporation

and who are signatories thereof.

Corporators in a stock corporation are called

stockholders or shareholders. Corporators in a non&

stock corporation are called %e%bers. (a)

Sectin 6" Classification of shares. – The shares of

stock of stock corporations %ay be diided intoclasses or series of shares, or both, any of which

classes or series of shares %ay hae s!ch rights,

priileges or restrictions as %ay be stated in the

articles of incorporation* Proided, That no share%ay be depried of oting rights ecept those

classified and iss!ed as "preferred" or "redee%able"shares, !nless otherwise proided in this Code*Proided, f!rther, That there shall always be a class

or series of shares which hae co%plete oting rights

Any or all of the shares or series of shares %ay hae a par al!e or hae no par al!e as %ay be proided for

in the articles of incorporation* Proided, howeer,

That banks, tr!st co%panies, ins!rance co%panies,

p!blic !tilities, and b!ilding and loan associationsshall not be per%itted to iss!e no&par al!e shares of

stock.

Preferred shares of stock iss!ed by any corporation

%ay be gien preference in the distrib!tion of theassets of the corporation in case of li+!idation and in

the distrib!tion of diidends, or s!ch other

preferences as %ay be stated in the articles ofincorporation which are not iolatie of the

proisions of this Code* Proided, That preferred

shares of stock %ay be iss!ed only with a stated paral!e. The board of directors, where a!thori#ed in the

articles of incorporation, %ay fi the ter%s and

conditions of preferred shares of stock or any seriesthereof* Proided, That s!ch ter%s and conditions

shall be effectie !pon the filing of a certificate

thereof with the ec!rities and -change

Co%%ission.

hares of capital stock iss!ed witho!t par al!e shall

be dee%ed f!lly paid and non&assessable and the

holder of s!ch shares shall not be liable to the

corporation or to its creditors in respect thereto*Proided That shares witho!t par al!e %ay not be

iss!ed for a consideration less than the al!e of fie(P/.00) pesos per share* Proided, f!rther, That theentire consideration receied by the corporation for

its no&par al!e shares shall be treated as capital and

shall not be aailable for distrib!tion as diidends.

A corporation %ay, f!rther%ore, classify its sharesfor the p!rpose of ins!ring co%pliance with

constit!tional or legal re+!ire%ents.


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-cept as otherwise proided in the articles of

incorporation and stated in the certificate of stock,each share shall be e+!al in all respects to eery other

share.

here the articles of incorporation proide for non&

oting shares in the cases allowed by this Code, the

holders of s!ch shares shall neertheless be entitledto ote on the following %atters*

1. A%end%ent of the articles of incorporation

$. Adoption and a%end%ent of by&laws

'. ale, lease, echange, %ortgage, pledge orother disposition of all or s!bstantially all of the

corporate property

. nc!rring, creating or increasing bondedindebtedness

/. ncrease or decrease of capital stock

2. 3erger or consolidation of the corporation

with another corporation or other corporations

4. nest%ent of corporate f!nds in another

corporation or b!siness in accordance with thisCode and

5. 6issol!tion of the corporation.

-cept as proided in the i%%ediately preceding

paragraph, the ote necessary to approe a partic!lar

corporate act as proided in this Code shall bedee%ed to refer only to stocks with oting rights. (/a)

Sectin '" Founders’ shares. – 7o!nders8 shares

classified as s!ch in the articles of incorporation %ay be gien certain rights and priileges not en9oyed by

the owners of other stocks, proided that where theecl!sie right to ote and be oted for in the election

of directors is granted, it %!st be for a li%ited periodnot to eceed fie (/) years s!b9ect to the approal of

the ec!rities and -change Co%%ission. The fie&

year period shall co%%ence fro% the date of theaforesaid approal by the ec!rities and -change

Co%%ission. (n)

Sectin 8" edeemable shares. – :edee%able shares

%ay be iss!ed by the corporation when epressly so

proided in the articles of incorporation. They %ay be p!rchased or taken !p by the corporation !pon the

epiration of a fied period, regardless of the

eistence of !nrestricted retained earnings in the

books of the corporation, and !pon s!ch other ter%sand conditions as %ay be stated in the articles of

incorporation, which ter%s and conditions %!st also be stated in the certificate of stock representing saidshares. (n)

Sectin (" Treasury shares. – Treas!ry shares are

shares of stock which hae been iss!ed and f!lly paid

for, b!t s!bse+!ently reac+!ired by the iss!ingcorporation by p!rchase, rede%ption, donation or

thro!gh so%e other lawf!l %eans. !ch shares %ay

again be disposed of for a reasonable price fied bythe board of directors. (n)

TITLE II

INCORPORATION AND ORGANI)ATION OF

PRIVATE CORPORATIONS

Sectin !*" !umber and "ualifications ofincorporators. – Any n!%ber of nat!ral persons not

less than fie (/) b!t not %ore than fifteen (1/), all of

legal age and a %a9ority of who% are residents of thePhilippines, %ay for% a priate corporation for any

lawf!l p!rpose or p!rposes. -ach of the incorporators

of s stock corporation %!st own or be a s!bscriber toat least one (1) share of the capital stock of the

corporation. (2a)

Sectin !!" Corporate term. – A corporation shall

eist for a period not eceeding fifty (/0) years fro%the date of incorporation !nless sooner dissoled or

!nless said period is etended. The corporate ter% as

originally stated in the articles of incorporation %ay be etended for periods not eceeding fifty (/0) years

in any single instance by an a%end%ent of the

articles of incorporation, in accordance with thisCode Proided, That no etension can be %adeearlier than fie (/) years prior to the original or

s!bse+!ent epiry date(s) !nless there are 9!stifiable

reasons for an earlier etension as %ay be deter%ined by the ec!rities and -change Co%%ission. (2)

Sectin !#" #inimum capital stock re"uired of stock

corporations. – tock corporations incorporated

!nder this Code shall not be re+!ired to hae any


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%ini%!% a!thori#ed capital stock ecept as

otherwise specifically proided for by special law,and s!b9ect to the proisions of the following section.

Sectin !$" $mount of capital stock to be subscribed

and paid for the purposes of incorporation. – At least

twenty&fie percent ($/;) of the a!thori#ed capital

stock as stated in the articles of incorporation %!st bes!bscribed at the ti%e of incorporation, and at least

twenty&fie ($/;) per cent of the total s!bscription

%!st be paid !pon s!bscription, the balance to be payable on a date or dates fied in the contract of

s!bscription witho!t need of call, or in the absence of

a fied date or dates, !pon call for pay%ent by the board of directors* Proided, howeer, That in no

case shall the paid&!p capital be less than fie

Tho!sand (P/,000.00) pesos. (n)

Sectin !%" Contents of the articles of incorporation. – All corporations organi#ed !nder this code shall file

with the ec!rities and -change Co%%ission

articles of incorporation in any of the officiallang!ages d!ly signed and acknowledged by all of

the incorporators, containing s!bstantially the

following %atters, ecept as otherwise prescribed bythis Code or by special law*

1. The na%e of the corporation

$. The specific p!rpose or p!rposes for which thecorporation is being incorporated. here a

corporation has %ore than one stated p!rpose,the articles of incorporation shall state which is

the pri%ary p!rpose and which is


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(a%e of Corporation)

@ A?? 3- DE TF-- P:--T*

The !ndersigned incorporators, all of legal age and a

%a9ority of who% are residents of the Philippines,hae this day ol!ntarily agreed to for% a (stock)

(non&stock) corporation !nder the laws of the:ep!blic of the Philippines

A6 - F-:-DE C-:T7E*

7:T* That the na%e of said corporation shall be

"BBBBBBBBBBBBBBBBBBBBB, C. or

C@:P@:AT@"

-C@6* That the p!rpose or p!rposes for whichs!ch corporation is incorporated are* (f there is %ore

than one p!rpose, indicate pri%ary and secondary p!rposes)

TF:6* That the principal office of the corporation islocated in the City:TF* That the ter% for which said corporation isto eist is BBBBBBBBBBBBB years fro% and after the

date of iss!ance of the certificate of incorporation

77TF* That the na%es, nationalities and residencesof the incorporators of the corporation are as follows*

AT@A?TE :-6-C-

BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB





GTF* That the n!%ber of directors or tr!stees of

the corporation shall be BBBBBBB and the na%es,

nationalities and residences of the first directors ortr!stees of the corporation are as follows*

AT@A?TE :-6-C-

BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBB





-H-TF* That the a!thori#ed capital stock of the

corporation is BBBBBBBBBBBBBBBBBBBBBB(PBBBBBBBBBBB) P-@ in lawf!l %oney of the

Philippines, diided into BBBBBBBBBB shares with the

par al!e of BBBBBBBBBBBBBBBBBBBB

(PBBBBBBBBBBBBB) Pesos per share.

(n case all the share are witho!t par al!e)*

That the capital stock of the corporation is

BBBBBBBBBBBBBB shares witho!t par al!e. (n case

so%e shares hae par al!e and so%e are witho!t paral!e)* That the capital stock of said corporation

consists of BBBBBBBBBBBBB shares of which

BBBBBBBBBBBBBB shares are of the par al!e of BBBBBBBBBBBBBBBBB (PBBBBBBBBBBBB) P-@ each

and of which BBBBBBBBBBBBBBBBB shares are witho!t

par al!e.

-IFTF* That at least twenty fie ($/;) per cent ofthe a!thori#ed capital stock aboe stated has been

s!bscribed as follows*

ationality o. of hares

!bscribed

A%

!

BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB BB

BBBBBBBBBBBBBBBBB BB

BB BB

BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB

BB

BBBBBBBBBBBBBBBBB

BB

BB

BB


BB

BBBBBBBBBBBBBBBBB

BB

BB

BB

BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB BB

BBBBBBBBBBBBBBBBB BB

BB BB


BB

BBBBBBBBBBBBBBBBB

BB

BB

BB


BB

BBBBBBBBBBBBBBBBB

BB

BB

BB


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TF* That the aboe&na%ed s!bscribers hae paid

at least twenty&fie ($/;) percent of the totals!bscription as follows*

A%o!nt !bscribedTotal

Paid&n

BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB BBBBBB BBBBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBB




(3odify os. 5 and = if shares are with no par al!e.

n case the corporation is non&stock, os. 4, 5 and =of the aboe articles %ay be %odified accordingly,

and it is s!fficient if the articles state the a%o!nt ofcapital or %oney contrib!ted or donated by specified

persons, stating the na%es, nationalities andresidences of the contrib!tors or donors and the

respectie a%o!nt gien by each.)

T-TF* That BBBBBBBBBBBBBBBBBBBBB has beenelected by the s!bscribers as Treas!rer of the

Corporation to act as s!ch !ntil his s!ccessor is d!ly

elected and +!alified in accordance with the by&laws,

and that as s!ch Treas!rer, he has been a!thori#ed to

receie for and in the na%e and for the benefit of thecorporation, all s!bscription (or fees) or contrib!tions

or donations paid or gien by the s!bscribers or%e%bers.

-?-H-TF* (Corporations which will engage in any

b!siness or actiity resered for 7ilipino citi#ens

shall proide the following)*

"o transfer of stock or interest which shall red!ce

the ownership of 7ilipino citi#ens to less than the

re+!ired percentage of the capital stock as proided by eisting laws shall be allowed or per%itted to berecorded in the proper books of the corporation and

this restriction shall be indicated in all stock

certificates iss!ed by the corporation."

T- F-:-@7, we hae here!nto signed

these Articles of ncorporation, this BBBBBBBBBB day

of BBBBBBBBBBBBBBBB, 1= BBBBBB in the

City:-:8 A776AHT

:-P>D?C @7 TF- PF?PP-)

CTECPA?TE @7 ) ..

P:@HC- @7 )

, BBBBBBBBBBBBBBBBBBBB, being d!ly sworn, depose

and say*

That hae been elected by the s!bscribers of the

corporation as Treas!rer thereof, to act as s!ch !ntil

%y s!ccessor has been d!ly elected and +!alified inaccordance with the by&laws of the corporation, and

that as s!ch Treas!rer, hereby certify !nder oath that

at least $/; of the a!thori#ed capital stock of the

corporation has been s!bscribed and at least $/; ofthe total s!bscription has been paid, and receied by

%e, in cash or property, in the a%o!nt of not less than

P/,000.00, in accordance with the Corporation Code.

BBBBBBBBBBBBBBBBBBBB

(ignat!re of Treas!rer)

>DC:D-6 A6 @: to before %e, a

otary P!blic, for and in the City


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BBBBBBBBBBBBBBBBBBBBBBB on BBBBBBBBBBBB, 1=

BBBBBB

@TA:E P>D?C

3y co%%ission epires on BBBBBBBBB, 1= BBBBB

6oc. o. BBBBBBBBB

Page o. BBBBBBBBB

Dook o. BBBBBBBB

eries of 1=BBBB (4a)

Sectin !6" $mendment of $rticles of %ncorporation.

– >nless otherwise prescribed by this Code or byspecial law, and for legiti%ate p!rposes, any

proision or %atter stated in the articles ofincorporation %ay be a%ended by a %a9ority ote ofthe board of directors or tr!stees and the ote or

written assent of the stockholders representing at

least two&thirds ($


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Sectin !(" Commencement of corporate e)istence. –

A priate corporation for%ed or organi#ed !nder thisCode co%%ences to hae corporate eistence and

9!ridical personality and is dee%ed incorporated fro%

the date the ec!rities and -change Co%%ission

iss!es a certificate of incorporation !nder its officialseal and there!pon the incorporators,

stockholdersnless otherwise proided in this Code, the corporate

powers of all corporations for%ed !nder this Code

shall be eercised, all b!siness cond!cted and all property of s!ch corporations controlled and held by

the board of directors or tr!stees to be elected fro%a%ong the holders of stocks, or where there is nostock, fro% a%ong the %e%bers of the corporation,

who shall hold office for one (1) year !ntil their

s!ccessors are elected and +!alified. ($5a)

-ery director %!st own at least one (1) share of thecapital stock of the corporation of which he is a

director, which share shall stand in his na%e on the

books of the corporation. Any director who ceases to be the owner of at least one (1) share of the capital

stock of the corporation of which he is a director shallthereby cease to be a director. Tr!stees of non&stock

corporations %!st be %e%bers thereof. A %a9ority ofthe directors or tr!stees of all corporations organi#ed

!nder this Code %!st be residents of the Philippines.

Sectin #%" +lection of directors or trustees. – At all

elections of directors or tr!stees, there %!st be present, either in person or by representatie

a!thori#ed to act by written proy, the owners of a

%a9ority of the o!tstanding capital stock, or if there

be no capital stock, a %a9ority of the %e%bersentitled to ote. The election %!st be by ballot if

re+!ested by any oting stockholder or %e%ber. nstock corporations, eery stockholder entitled to ote

shall hae the right to ote in person or by proy the

n!%ber of shares of stock standing, at the ti%e fiedin the by&laws, in his own na%e on the stock books of

the corporation, or where the by&laws are silent, at the

ti%e of the election and said stockholder %ay ote

s!ch n!%ber of shares for as %any persons as there


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are directors to be elected or he %ay c!%!late said

shares and gie one candidate as %any otes as then!%ber of directors to be elected %!ltiplied by the

n!%ber of his shares shall e+!al, or he %ay distrib!te

the% on the sa%e principle a%ong as %any

candidates as he shall see fit* Proided, That the totaln!%ber of otes cast by hi% shall not eceed the

n!%ber of shares owned by hi% as shown in the books of the corporation %!ltiplied by the wholen!%ber of directors to be elected* Proided, howeer,

That no delin+!ent stock shall be oted. >nless

otherwise proided in the articles of incorporation orin the by&laws, %e%bers of corporations which hae

no capital stock %ay cast as %any otes as there are

tr!stees to be elected b!t %ay not cast %ore than one

ote for one candidate. Candidates receiing thehighest n!%ber of otes shall be declared elected.

Any %eeting of the stockholders or %e%bers called

for an election %ay ad9o!rn fro% day to day or fro%ti%e to ti%e b!t not sine die or indefinitely if, for any

reason, no election is held, or if there are not present

or represented by proy, at the %eeting, the owners of a %a9ority of the o!tstanding capital stock, or if there

be no capital stock, a %a9ority of the %e%bers

entitled to ote. ('1a)

Sectin #&" Corporate officers, "uorum. –%%ediately after their election, the directors of a

corporation %!st for%ally organi#e by the election of

a president, who shall be a director, a treas!rer who%ay or %ay not be a director, a secretary who shall be

a resident and citi#en of the Philippines, and s!ch

other officers as %ay be proided for in the by&laws.

Any two ($) or %ore positions %ay be heldconc!rrently by the sa%e person, ecept that no one

shall act as president and secretary or as president and

treas!rer at the sa%e ti%e.

The directors or tr!stees and officers to be electedshall perfor% the d!ties en9oined on the% by law and

the by&laws of the corporation. >nless the articles ofincorporation or the by&laws proide for a greater%a9ority, a %a9ority of the n!%ber of directors or

tr!stees as fied in the articles of incorporation shall

constit!te a +!or!% for the transaction of corporate b!siness, and eery decision of at least a %a9ority of

the directors or tr!stees present at a %eeting at which

there is a +!or!% shall be alid as a corporate act,ecept for the election of officers which shall re+!ire

the ote of a %a9ority of all the %e%bers of the

board.

6irectors or tr!stees cannot attend or ote by proy a

board %eetings. (''a)

Sectin #6" eport of election of directors, trusteesand officers. – ithin thirty ('0) days after the

election of the directors, tr!stees and officers of thecorporation, the secretary, or any other officer of thecorporation, shall s!b%it to the ec!rities and

-change Co%%ission, the na%es, nationalities and

residences of the directors, tr!stees, and officerselected. ho!ld a director, tr!stee or officer die,

resign or in any %anner cease to hold office, his heirs

in case of his death, the secretary, or any other officerof the corporation, or the director, tr!stee or officer

hi%self, shall i%%ediately report s!ch fact to the

ec!rities and -change Co%%ission. (n)

Sectin #'" *is"ualification of directors, trustees orofficers. – o person conicted by final 9!dg%ent of

an offense p!nishable by i%prison%ent for a period

eceeding si (2) years, or a iolation of this Code

co%%itted within fie (/) years prior to the date ofhis election or appoint%ent, shall +!alify as a

director, tr!stee or officer of any corporation. (n)

Sectin #8" emo(al of directors or trustees. – Anydirector or tr!stee of a corporation %ay be re%oed

fro% office by a ote of the stockholders holding orrepresenting at least two&thirds ($


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is no secretary, the call for the %eeting %ay be

addressed directly to the stockholders or %e%bers byany stockholder or %e%ber of the corporation signing

the de%and. otice of the ti%e and place of s!ch

%eeting, as well as of the intention to propose s!ch

re%oal, %!st be gien by p!blication or by writtennotice prescribed in this Code. :e%oal %ay be with

or witho!t ca!se* Proided, That re%oal witho!tca!se %ay not be !sed to deprie %inoritystockholders or %e%bers of the right of

representation to which they %ay be entitled !nder

ection $ of this Code. (n)

Sectin #(" -acancies in the office of director ortrustee. – Any acancy occ!rring in the board of

directors or tr!stees other than by re%oal by the

stockholders or %e%bers or by epiration of ter%,%ay be filled by the ote of at least a %a9ority of the

re%aining directors or tr!stees, if still constit!ting a+!or!% otherwise, said acancies %!st be filled by

the stockholders in a reg!lar or special %eeting calledfor that p!rpose. A director or tr!stee so elected to fill

a acancy shall be elected only or the !nepired ter%

of his predecessor in office.

Any directorship or tr!steeship to be filled by reason

of an increase in the n!%ber of directors or tr!stees

shall be filled only by an election at a reg!lar or at a

special %eeting of stockholders or %e%bers d!ly

called for the p!rpose, or in the sa%e %eetinga!thori#ing the increase of directors or tr!stees if so

stated in the notice of the %eeting. (n)

Sectin $*" Compensation of directors. – n the

absence of any proision in the by&laws fiing their

co%pensation, the directors shall not receie any

co%pensation, as s!ch directors, ecept forreasonable per die%s* Proided, howeer, That any

s!ch co%pensation other than per die%s %ay be

granted to directors by the ote of the stockholders

representing at least a %a9ority of the o!tstandingcapital stock at a reg!lar or special stockholders8

%eeting. n no case shall the total yearlyco%pensation of directors, as s!ch directors, eceed

ten (10;) percent of the net inco%e before inco%e

ta of the corporation d!ring the preceding year. (n)

Sectin $!" iability of directors, trustees orofficers.& 6irectors or tr!stees who willf!lly and

knowingly ote for or assent to patently !nlawf!l acts

of the corporation or who are g!ilty of gross

negligence or bad faith in directing the affairs of thecorporation or ac+!ire any personal or pec!niary

interest in conflict with their d!ty as s!ch directors or

tr!stees shall be liable 9ointly and seerally for all

da%ages res!lting therefro% s!ffered by thecorporation, its stockholders or %e%bers and other

persons.

hen a director, tr!stee or officer atte%pts to ac+!ire

or ac+!ire, in iolation of his d!ty, any interestaderse to the corporation in respect of any %atter

which has been reposed in hi% in confidence, as to

which e+!ity i%poses a disability !pon hi% to deal inhis own behalf, he shall be liable as a tr!stee for the

corporation and %!st acco!nt for the profits which

otherwise wo!ld hae accr!ed to the corporation. (n)

Sectin $#" *ealings of directors, trustees or officerswith the corporation. – A contract of the corporation

with one or %ore of its directors or tr!stees or

officers is oidable, at the option of s!ch corporation,!nless all the following conditions are present*

1. That the presence of s!ch director or tr!stee in

the board %eeting in which the contract was

approed was not necessary to constit!te a+!or!% for s!ch %eeting

$. That the ote of s!ch director or tr!stee wasnot necessary for the approal of the contract

'. That the contract is fair and reasonable !nderthe circ!%stances and

. That in case of an officer, the contract has

been preio!sly a!thori#ed by the board of

directors.

here any of the first two conditions set forth in

the preceding paragraph is absent, in the case ofa contract with a director or tr!stee, s!ch contract

%ay be ratified by the ote of the stockholdersrepresenting at least two&thirds ($


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!nder the circ!%stances. (n)

Sectin $$" Contracts between corporations with

interlocking directors. – -cept in cases of fra!d, and proided the contract is fair and reasonable !nder the

circ!%stances, a contract between two or %ore

corporations haing interlocking directors shall not

be inalidated on that gro!nd alone* Proided, That if the interest of the interlocking director in one

corporation is s!bstantial and his interest in the other

corporation or corporations is %erely no%inal, heshall be s!b9ect to the proisions of the preceding

section insofar as the latter corporation or

corporations are concerned.

tockholdings eceeding twenty ($0;) percent of the

o!tstanding capital stock shall be considered

s!bstantial for p!rposes of interlocking directors. (n)

Sectin $%" *isloyalty of a director. – here adirector, by irt!e of his office, ac+!ires for hi%self a

b!siness opport!nity which sho!ld belong to the

corporation, thereby obtaining profits to the pre9!dice

of s!ch corporation, he %!st acco!nt to the latter forall s!ch profits by ref!nding the sa%e, !nless his act

has been ratified by a ote of the stockholders

owning or representing at least two&thirds ($


11/78

11

11. To eercise s!ch other powers as %ay be

essential or necessary to carry o!t its p!rpose or p!rposes as stated in the articles of incorporation.

(1'a)

Sectin $'" Power to e)tend or shorten corporate

term. – A priate corporation %ay etend or shorten

its ter% as stated in the articles of incorporation whenapproed by a %a9ority ote of the board of directors

or tr!stees and ratified at a %eeting by the

stockholders representing at least two&thirds ($


12/78

1$

-change Co%%ission shall not accept for filing

any certificate of increase of capital stock !nlessacco%panied by the sworn state%ent of the

treas!rer of the corporation lawf!lly holding

office at the ti%e of the filing of the certificate,

showing that at least twenty&fie ($/;) percentof s!ch increased capital stock has been

s!bscribed and that at least twenty&fie ($/;) percent of the a%o!nt s!bscribed has been paideither in act!al cash to the corporation or that

there has been transferred to the corporation

property the al!ation of which is e+!al totwenty&fie ($/;) percent of the s!bscription*

Proided, f!rther, That no decrease of the capital

stock shall be approed by the Co%%ission if its

effect shall pre9!dice the rights of corporatecreditors.

on&stock corporations %ay inc!r or create bonded indebtedness, or increase the sa%e, with

the approal by a %a9ority ote of the board oftr!stees and of at least two&thirds ($


13/78

1'

%a9ority of the tr!stees in office will be s!fficient

a!thori#ation for the corporation to enter into anytransaction a!thori#ed by this section.

Sectin %!" Power to ac"uire own shares. – A stock

corporation shall hae the power to p!rchase or

ac+!ire its own shares for a legiti%ate corporate

p!rpose or p!rposes, incl!ding b!t not li%ited to thefollowing cases* Proided, That the corporation has

!nrestricted retained earnings in its books to coer

the shares to be p!rchased or ac+!ired*

1. To eli%inate fractional shares arising o!t of

stock diidends

$. To collect or co%pro%ise an indebtedness to

the corporation, arising o!t of !npaids!bscription, in a delin+!ency sale, and to

p!rchase delin+!ent shares sold d!ring said saleand

'. To pay dissenting or withdrawing stockholdersentitled to pay%ent for their shares !nder the

proisions of this Code. (a)

Sectin %#" Power to in(est corporate funds in

another corporation or business or for any other purpose. – !b9ect to the proisions of this Code, a

priate corporation %ay inest its f!nds in any other

corporation or b!siness or for any p!rpose other thanthe pri%ary p!rpose for which it was organi#ed when

approed by a %a9ority of the board of directors or

tr!stees and ratified by the stockholders representingat least two&thirds ($


14/78

1

then the %anage%ent contract %!st be approed by

the stockholders of the %anaged corporation owningat least two&thirds ($


15/78

1/

giing notice thereof

4. The %anner of election or appoint%ent and the

ter% of office of all officers other than directorsor tr!stees

5. The penalties for iolation of the by&laws

=. n the case of stock corporations, the %anner

of iss!ing stock certificates and

10. !ch other %atters as %ay be necessary forthe proper or conenient transaction of its

corporate b!siness and affairs. ($1a)

Sectin %8" $mendments to bylaws. – The board of

directors or tr!stees, by a %a9ority ote thereof, andthe owners of at least a %a9ority of the o!tstanding

capital stock, or at least a %a9ority of the %e%bers ofa non&stock corporation, at a reg!lar or special%eeting d!ly called for the p!rpose, %ay a%end or

repeal any by&laws or adopt new by&laws. The owners

of two&thirds ($


16/78

12

otice of %eetings shall be in writing, and the ti%e

and place thereof stated therein.

All proceedings had and any b!siness transacted atany %eeting of the stockholders or %e%bers, if

within the powers or a!thority of the corporation,

shall be alid een if the %eeting be i%properly held

or called, proided all the stockholders or %e%bersof the corporation are present or d!ly represented at

the %eeting. ($ and $/)

Sectin " 2uorum in meetings. – >nless otherwise proided for in this Code or in the by&laws, a +!or!%

shall consist of the stockholders representing a

%a9ority of the o!tstanding capital stock or a %a9orityof the %e%bers in the case of non&stock corporations.

(n)

Sectin &$" egular and special meetings ofdirectors or trustees. – :eg!lar %eetings of the boardof directors or tr!stees of eery corporation shall be

held %onthly, !nless the by&laws proide otherwise.

pecial %eetings of the board of directors or tr!stees

%ay be held at any ti%e !pon the call of the presidentor as proided in the by&laws.

3eetings of directors or tr!stees of corporations %ay

be held anywhere in or o!tside of the Philippines,

!nless the by&laws proide otherwise. otice ofreg!lar or special %eetings stating the date, ti%e and

place of the %eeting %!st be sent to eery director or

tr!stee at least one (1) day prior to the sched!led%eeting, !nless otherwise proided by the by&laws. A

director or tr!stee %ay waie this re+!ire%ent, either

epressly or i%pliedly. (n)

Sectin &%" 3ho shall preside at meetings. – The president shall preside at all %eetings of the directors

or tr!stee as well as of the stockholders or %e%bers,

!nless the by&laws proide otherwise. (n)

Sectin &&" ight to (ote of pledgors, mortgagors,and administrators. – n case of pledged or

%ortgaged shares in stock corporations, the pledgor

or %ortgagor shall hae the right to attend and ote at%eetings of stockholders, !nless the pledgee or

%ortgagee is epressly gien by the pledgor or

%ortgagor s!ch right in writing which is recorded on

the appropriate corporate books. (n)

-ec!tors, ad%inistrators, receiers, and other legal

representaties d!ly appointed by the co!rt %ayattend and ote in behalf of the stockholders or

%e%bers witho!t need of any written proy. ($4a)

Sectin &6" -oting in case of 'oint ownership of

stock. – n case of shares of stock owned 9ointly by

two or %ore persons, in order to ote the sa%e, theconsent of all the co&owners shall be necessary,

!nless there is a written proy, signed by all the co&

owners, a!thori#ing one or so%e of the% or any other person to ote s!ch share or shares* Proided, That

when the shares are owned in an "and


17/78

14

corporation, it shall be noted that the transfer in the

na%e of the tr!stee or tr!stees is %ade p!rs!ant tosaid oting tr!st agree%ent.

The tr!stee or tr!stees shall eec!te and delier to the

transferors oting tr!st certificates, which shall be

transferable in the sa%e %anner and with the sa%e

effect as certificates of stock.

The oting tr!st agree%ent filed with the corporation

shall be s!b9ect to ea%ination by any stockholder of

the corporation in the sa%e %anner as any othercorporate book or record* Proided, That both the

transferor and the tr!stee or tr!stees %ay eercise the

right of inspection of all corporate books and recordsin accordance with the proisions of this Code.

Any other stockholder %ay transfer his shares to the

sa%e tr!stee or tr!stees !pon the ter%s andconditions stated in the oting tr!st agree%ent, andthere!pon shall be bo!nd by all the proisions of said

agree%ent.

o oting tr!st agree%ent shall be entered into for

the p!rpose of circ!%enting the law against%onopolies and illegal co%binations in restraint of

trade or !sed for p!rposes of fra!d.

>nless epressly renewed, all rights granted in a

oting tr!st agree%ent shall a!to%atically epire atthe end of the agreed period, and the oting tr!st

certificates as well as the certificates of stock in the

na%e of the tr!stee or tr!stees shall thereby bedee%ed cancelled and new certificates of stock shall

be reiss!ed in the na%e of the transferors.

The oting tr!stee or tr!stees %ay ote by proy

!nless the agree%ent proides otherwise. ('2a)

TITLE VII

STOC0S AND STOC0HOLDERS

Sectin 6*" 0ubscription contract. – Any contract for

the ac+!isition of !niss!ed stock in an eisting

corporation or a corporation still to be for%ed shall be dee%ed a s!bscription within the %eaning of this

Title, notwithstanding the fact that the parties refer to

it as a p!rchase or so%e other contract. (n)

Sectin 6!" Preincorporation subscription. – A

s!bscription for shares of stock of a corporation still

to be for%ed shall be irreocable for a period of atleast si (2) %onths fro% the date of s!bscription,

!nless all of the other s!bscribers consent to the

reocation, or !nless the incorporation of said

corporation fails to %ateriali#e within said period orwithin a longer period as %ay be stip!lated in the

contract of s!bscription* Proided, That no pre&incorporation s!bscription %ay be reoked after thes!b%ission of the articles of incorporation to the

ec!rities and -change Co%%ission. (n)

Sectin 6#" Consideration for stocks. – tocks shall

not be iss!ed for a consideration less than the par oriss!ed price thereof. Consideration for the iss!ance of

stock %ay be any or a co%bination of any two or

%ore of the following*

1. Act!al cash paid to the corporation

$. Property, tangible or intangible, act!ally

receied by the corporation and necessary or

conenient for its !se and lawf!l p!rposes at a

fair al!ation e+!al to the par or iss!ed al!e ofthe stock iss!ed

'. ?abor perfor%ed for or serices act!ally

rendered to the corporation

. Preio!sly inc!rred indebtedness of thecorporation

/. A%o!nts transferred fro% !nrestricted retained

earnings to stated capital and

2. @!tstanding shares echanged for stocks in theeent of reclassification or conersion.

here the consideration is other than act!al

cash, or consists of intangible property s!ch as

patents of copyrights, the al!ation thereof shallinitially be deter%ined by the incorporators or

the board of directors, s!b9ect to approal by the

ec!rities and -change Co%%ission.

hares of stock shall not be iss!ed in echangefor pro%issory notes or f!t!re serice.

The sa%e considerations proided for in this

section, insofar as they %ay be applicable, %ay


18/78

15

be !sed for the iss!ance of bonds by the

corporation.

The iss!ed price of no&par al!e shares %ay befied in the articles of incorporation or by the

board of directors p!rs!ant to a!thority conferred

!pon it by the articles of incorporation or the by&

laws, or in the absence thereof, by thestockholders representing at least a %a9ority of

the o!tstanding capital stock at a %eeting d!ly

called for the p!rpose. (/ and 12)

Sectin 6$" Certificate of stock and transfer of

shares. – The capital stock of stock corporations shall

be diided into shares for which certificates signed bythe president or ice president, co!ntersigned by the

secretary or assistant secretary, and sealed with the

seal of the corporation shall be iss!ed in accordance

with the by&laws. hares of stock so iss!ed are personal property and %ay be transferred by deliery

of the certificate or certificates indorsed by the owner

or his attorney&in&fact or other person legallya!thori#ed to %ake the transfer. o transfer, howeer,

shall be alid, ecept as between the parties, !ntil the

transfer is recorded in the books of the corporationshowing the na%es of the parties to the transaction,

the date of the transfer, the n!%ber of the certificate

or certificates and the n!%ber of shares transferred.

o shares of stock against which the corporationholds any !npaid clai% shall be transferable in the

books of the corporation. ('/)

Sectin 6%" %ssuance of stock certificates. – o

certificate of stock shall be iss!ed to a s!bscriber!ntil the f!ll a%o!nt of his s!bscription together with

interest and epenses (in case of delin+!ent shares), if

any is d!e, has been paid. ('4)

Sectin 6&" iability of directors for watered stocks.

– Any director or officer of a corporation consentingto the iss!ance of stocks for a consideration less than

its par or iss!ed al!e or for a consideration in anyfor% other than cash, al!ed in ecess of its fair

al!e, or who, haing knowledge thereof, does not

forthwith epress his ob9ection in writing and file thesa%e with the corporate secretary, shall be solidarily,

liable with the stockholder concerned to the

corporation and its creditors for the difference

between the fair al!e receied at the ti%e of

iss!ance of the stock and the par or iss!ed al!e of

the sa%e. (n)

Sectin 66" %nterest on unpaid subscriptions. –!bscribers for stock shall pay to the corporation

interest on all !npaid s!bscriptions fro% the date of

s!bscription, if so re+!ired by, and at the rate of

interest fied in the by&laws. f no rate of interest isfied in the by&laws, s!ch rate shall be dee%ed to be

the legal rate. ('4)

Sectin 6'" Payment of balance of subscription. –!b9ect to the proisions of the contract of

s!bscription, the board of directors of any stock

corporation %ay at any ti%e declare d!e and payableto the corporation !npaid s!bscriptions to the capital

stock and %ay collect the sa%e or s!ch percentage

thereof, in either case with accr!ed interest, if any, as

it %ay dee% necessary.

Pay%ent of any !npaid s!bscription or any

percentage thereof, together with the interest accr!ed

if any, shall be %ade on the date specified in the

contract of s!bscription or on the date stated in thecall %ade by the board. 7ail!re to pay on s!ch date

shall render the entire balance d!e and payable and

shall %ake the stockholder liable for interest at thelegal rate on s!ch balance, !nless a different rate of

interest is proided in the by&laws, co%p!ted fro%

s!ch date !ntil f!ll pay%ent. f within thirty ('0) daysfro% the said date no pay%ent is %ade, all stocks

coered by said s!bscription shall there!pon beco%e

delin+!ent and shall be s!b9ect to sale as hereinafter proided, !nless the board of directors orders

otherwise. ('5)

Sectin 68" *elin"uency sale. – The board of

directors %ay, by resol!tion, order the sale ofdelin+!ent stock and shall specifically state the

a%o!nt d!e on each s!bscription pl!s all accr!ed

interest, and the date, ti%e and place of the salewhich shall not be less than thirty ('0) days nor %orethan sity (20) days fro% the date the stocks beco%e

delin+!ent.

otice of said sale, with a copy of the resol!tion,shall be sent to eery delin+!ent stockholder either

personally or by registered %ail. The sa%e shall

f!rther%ore be p!blished once a week for two ($)

consec!tie weeks in a newspaper of general


19/78

1=

circ!lation in the proince or city where the principal

office of the corporation is located.

>nless the delin+!ent stockholder pays to thecorporation, on or before the date specified for the

sale of the delin+!ent stock, the balance d!e on his

s!bscription, pl!s accr!ed interest, costs of

adertise%ent and epenses of sale, or !nless the board of directors otherwise orders, said delin+!ent

stock shall be sold at p!blic a!ction to s!ch bidder

who shall offer to pay the f!ll a%o!nt of the balanceon the s!bscription together with accr!ed interest,

costs of adertise%ent and epenses of sale, for the

s%allest n!%ber of shares or fraction of a share. Thestock so p!rchased shall be transferred to s!ch

p!rchaser in the books of the corporation and a

certificate for s!ch stock shall be iss!ed in his faor.The re%aining shares, if any, shall be credited in

faor of the delin+!ent stockholder who shalllikewise be entitled to the iss!ance of a certificate of

stock coering s!ch shares.

ho!ld there be no bidder at the p!blic a!ction who

offers to pay the f!ll a%o!nt of the balance on the

s!bscription together with accr!ed interest, costs ofadertise%ent and epenses of sale, for the s%allest

n!%ber of shares or fraction of a share, the

corporation %ay, s!b9ect to the proisions of this

Code, bid for the sa%e, and the total a%o!nt d!e shall

be credited as paid in f!ll in the books of thecorporation. Title to all the shares of stock coered by

the s!bscription shall be ested in the corporation astreas!ry shares and %ay be disposed of by said

corporation in accordance with the proisions of this

Code. ('=a&2a)

Sectin 6(" 3hen sale may be "uestioned. – oaction to recoer delin+!ent stock sold can be

s!stained !pon the gro!nd of irreg!larity or defect in

the notice of sale, or in the sale itself of the

delin+!ent stock, !nless the party seeking to %aintains!ch action first pays or tenders to the party holding

the stock the s!% for which the sa%e was sold, withinterest fro% the date of sale at the legal rate and no

s!ch action shall be %aintained !nless it is

co%%enced by the filing of a co%plaint within si

(2) %onths fro% the date of sale. (4a)

Sectin '*" Court action to reco(er unpaid

subscription. – othing in this Code shall preent the

corporation fro% collecting by action in a co!rt of

proper 9!risdiction the a%o!nt d!e on any !npaids!bscription, with accr!ed interest, costs and

epenses. (=a)

Sectin '!" +ffect of delin"uency. – o delin+!ent

stock shall be oted for or be entitled to ote or to

representation at any stockholder8s %eeting, nor shallthe holder thereof be entitled to any of the rights of a

stockholder ecept the right to diidends in

accordance with the proisions of this Code, !ntil and!nless he pays the a%o!nt d!e on his s!bscription

with accr!ed interest, and the costs and epenses of

adertise%ent, if any. (/0a)

Sectin '#" ights of unpaid shares. – Folders of

s!bscribed shares not f!lly paid which are not

delin+!ent shall hae all the rights of a stockholder.

(n)

Sectin '$" ost or destroyed certificates. – The

following proced!re shall be followed for the

iss!ance by a corporation of new certificates of stock

in lie! of those which hae been lost, stolen ordestroyed*

1. The registered owner of a certificate of stock

in a corporation or his legal representatie shallfile with the corporation an affidait in triplicate

setting forth, if possible, the circ!%stances as tohow the certificate was lost, stolen or destroyed,

the n!%ber of shares represented by s!chcertificate, the serial n!%ber of the certificate

and the na%e of the corporation which iss!ed the

sa%e. Fe shall also s!b%it s!ch otherinfor%ation and eidence which he %ay dee%

necessary

$. After erifying the affidait and other

infor%ation and eidence with the books of the

corporation, said corporation shall p!blish anotice in a newspaper of general circ!lation

p!blished in the place where the corporation hasits principal office, once a week for three (')

consec!tie weeks at the epense of the

registered owner of the certificate of stock whichhas been lost, stolen or destroyed. The notice

shall state the na%e of said corporation, the na%e

of the registered owner and the serial n!%ber of

said certificate, and the n!%ber of shares


20/78

$0

represented by s!ch certificate, and that after the

epiration of one (1) year fro% the date of thelast p!blication, if no contest has been presented

to said corporation regarding said certificate of

stock, the right to %ake s!ch contest shall be

barred and said corporation shall cancel in its books the certificate of stock which has been

lost, stolen or destroyed and iss!e in lie! thereofnew certificate of stock, !nless the registeredowner files a bond or other sec!rity in lie!

thereof as %ay be re+!ired, effectie for a period

of one (1) year, for s!ch a%o!nt and in s!ch for%and with s!ch s!reties as %ay be satisfactory to

the board of directors, in which case a new

certificate %ay be iss!ed een before the

epiration of the one (1) year period proidedherein* Proided, That if a contest has been

presented to said corporation or if an action is

pending in co!rt regarding the ownership of saidcertificate of stock which has been lost, stolen or

destroyed, the iss!ance of the new certificate of

stock in lie! thereof shall be s!spended !ntil thefinal decision by the co!rt regarding the

ownership of said certificate of stock which has

been lost, stolen or destroyed.

-cept in case of fra!d, bad faith, or negligenceon the part of the corporation and its officers, no

action %ay be bro!ght against any corporation

which shall hae iss!ed certificate of stock inlie! of those lost, stolen or destroyed p!rs!ant to

the proced!re aboe&described. (:.A. $01a)

TITLE VIII

CORPORATE BOO0S AND RECORDS

Sectin '%" Books to be kept/ stock transfer agent . –-ery corporation shall keep and caref!lly presere at

its principal office a record of all b!siness

transactions and %in!tes of all %eetings of

stockholders or %e%bers, or of the board of directorsor tr!stees, in which shall be set forth in detail the

ti%e and place of holding the %eeting, howa!thori#ed, the notice gien, whether the %eeting was

reg!lar or special, if special its ob9ect, those present

and absent, and eery act done or ordered done at the

%eeting. >pon the de%and of any director, tr!stee,stockholder or %e%ber, the ti%e when any director,

tr!stee, stockholder or %e%ber entered or left the

%eeting %!st be noted in the %in!tes and on a

si%ilar de%and, the yeas and nays %!st be taken on

any %otion or proposition, and a record thereofcaref!lly %ade. The protest of any director, tr!stee,

stockholder or %e%ber on any action or proposed

action %!st be recorded in f!ll on his de%and.

The records of all b!siness transactions of the

corporation and the %in!tes of any %eetings shall beopen to inspection by any director, tr!stee,

stockholder or %e%ber of the corporation at

reasonable ho!rs on b!siness days and he %ayde%and, in writing, for a copy of ecerpts fro% said

records or %in!tes, at his epense.

Any officer or agent of the corporation who shallref!se to allow any director, tr!stees, stockholder or

%e%ber of the corporation to ea%ine and copy

ecerpts fro% its records or %in!tes, in accordance

with the proisions of this Code, shall be liable tos!ch director, tr!stee, stockholder or %e%ber for

da%ages, and in addition, shall be g!ilty of an

offense which shall be p!nishable !nder ection 1of this Code* Proided, That if s!ch ref!sal is %ade

p!rs!ant to a resol!tion or order of the board of

directors or tr!stees, the liability !nder this sectionfor s!ch action shall be i%posed !pon the directors or

tr!stees who oted for s!ch ref!sal* and Proided,

f!rther, That it shall be a defense to any action !nder

this section that the person de%anding to ea%ine

and copy ecerpts fro% the corporation8s records and%in!tes has i%properly !sed any infor%ation sec!red

thro!gh any prior ea%ination of the records or%in!tes of s!ch corporation or of any other

corporation, or was not acting in good faith or for a

legiti%ate p!rpose in %aking his de%and.

tock corporations %!st also keep a book to beknown as the "stock and transfer book", in which

%!st be kept a record of all stocks in the na%es of the

stockholders alphabetically arranged the install%ents

paid and !npaid on all stock for which s!bscriptionhas been %ade, and the date of pay%ent of any

install%ent a state%ent of eery alienation, sale ortransfer of stock %ade, the date thereof, and by and to

who% %ade and s!ch other entries as the by&laws

%ay prescribe. The stock and transfer book shall be

kept in the principal office of the corporation or in theoffice of its stock transfer agent and shall be open for

inspection by any director or stockholder of the

corporation at reasonable ho!rs on b!siness days.


21/78

$1

o stock transfer agent or one engaged principally in

the b!siness of registering transfers of stocks in behalf of a stock corporation shall be allowed to

operate in the Philippines !nless he sec!res a license

fro% the ec!rities and -change Co%%ission and

pays a fee as %ay be fied by the Co%%ission, whichshall be renewable ann!ally* Proided, That a stock

corporation is not precl!ded fro% perfor%ing or%aking transfer of its own stocks, in which case allthe r!les and reg!lations i%posed on stock transfer

agents, ecept the pay%ent of a license fee herein

proided, shall be applicable. (/1a and '$a P.D. o.$25.)

Sectin '&" ight to financial statements. – ithin

ten (10) days fro% receipt of a written re+!est of any

stockholder or %e%ber, the corporation shall f!rnishto hi% its %ost recent financial state%ent, which shall

incl!de a balance sheet as of the end of the lasttaable year and a profit or loss state%ent for said

taable year, showing in reasonable detail its assetsand liabilities and the res!lt of its operations.

At the reg!lar %eeting of stockholders or %e%bers,

the board of directors or tr!stees shall present to s!chstockholders or %e%bers a financial report of the

operations of the corporation for the preceding year,

which shall incl!de financial state%ents, d!ly signed

and certified by an independent certified p!blic

acco!ntant.

Foweer, if the paid&!p capital of the corporation is

less than P/0,000.00, the financial state%ents %ay becertified !nder oath by the treas!rer or any

responsible officer of the corporation. (n)

TITLE I1

/ERGER AND CONSOLIDATION

Sectin '6" Plan or merger of consolidation. – Two

or %ore corporations %ay %erge into a singlecorporation which shall be one of the constit!ent

corporations or %ay consolidate into a new singlecorporation which shall be the consolidated

corporation.

The board of directors or tr!stees of each corporation,

party to the %erger or consolidation, shall approe a plan of %erger or consolidation setting forth the

following*

1. The na%es of the corporations proposing to

%erge or consolidate, hereinafter referred to asthe constit!ent corporations

$. The ter%s of the %erger or consolidation and

the %ode of carrying the sa%e into effect

'. A state%ent of the changes, if any, in thearticles of incorporation of the s!riingcorporation in case of %erger and, with respect

to the consolidated corporation in case of

consolidation, all the state%ents re+!ired to beset forth in the articles of incorporation for

corporations organi#ed !nder this Code and

. !ch other proisions with respect to the

proposed %erger or consolidation as are dee%ednecessary or desirable. (n)

Sectin ''" 0tockholder’s or member’s appro(al. –

>pon approal by %a9ority ote of each of the board

of directors or tr!stees of the constit!ent corporationsof the plan of %erger or consolidation, the sa%e shall

be s!b%itted for approal by the stockholders or

%e%bers of each of s!ch corporations at separatecorporate %eetings d!ly called for the p!rpose.

otice of s!ch %eetings shall be gien to all

stockholders or %e%bers of the respectiecorporations, at least two ($) weeks prior to the date

of the %eeting, either personally or by registered%ail. aid notice shall state the p!rpose of the

%eeting and shall incl!de a copy or a s!%%ary of the plan of %erger or consolidation. The affir%atie ote

of stockholders representing at least two&thirds ($


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$$

affir%atie ote of stockholders representing at least

two&thirds ($


23/78

$'

s!riing or consolidated corporation. The rights

of creditors or liens !pon the property of any ofs!ch constit!ent corporations shall not be

i%paired by s!ch %erger or consolidation. (n)

TITLE 1

APPRAISAL RIGHT

Sectin 8!" nstances of appraisal right. – Anystockholder of a corporation shall hae the right to

dissent and de%and pay%ent of the fair al!e of his

shares in the following instances*

1. n case any a%end%ent to the articles ofincorporation has the effect of changing or

restricting the rights of any stockholder or class

of shares, or of a!thori#ing preferences in anyrespect s!perior to those of o!tstanding shares of

any class, or of etending or shortening the ter%of corporate eistence

$. n case of sale, lease, echange, transfer,%ortgage, pledge or other disposition of all or

s!bstantially all of the corporate property and

assets as proided in the Code and

'. n case of %erger or consolidation. (n)

Sectin 8#" 4ow right is e)ercised. – The appraisal

right %ay be eercised by any stockholder who shallhae oted against the proposed corporate action, by

%aking a written de%and on the corporation withinthirty ('0) days after the date on which the ote was

taken for pay%ent of the fair al!e of his shares*

Proided, That fail!re to %ake the de%and withins!ch period shall be dee%ed a waier of the appraisal

right. f the proposed corporate action is i%ple%ented

or affected, the corporation shall pay to s!chstockholder, !pon s!rrender of the certificate or

certificates of stock representing his shares, the fair

al!e thereof as of the day prior to the date on whichthe ote was taken, ecl!ding any appreciation or

depreciation in anticipation of s!ch corporate action.

f within a period of sity (20) days fro% the date the

corporate action was approed by the stockholders,the withdrawing stockholder and the corporation

cannot agree on the fair al!e of the shares, it shall be

deter%ined and appraised by three (') disinterested

persons, one of who% shall be na%ed by the

stockholder, another by the corporation, and the third

by the two th!s chosen. The findings of the %a9orityof the appraisers shall be final, and their award shall

be paid by the corporation within thirty ('0) days

after s!ch award is %ade* Proided, That no pay%ent

shall be %ade to any dissenting stockholder !nlessthe corporation has !nrestricted retained earnings in

its books to coer s!ch pay%ent* and Proided,f!rther, That !pon pay%ent by the corporation of theagreed or awarded price, the stockholder shall

forthwith transfer his shares to the corporation. (n)

Sectin 8$" +ffect of demand and termination of

right. – 7ro% the ti%e of de%and for pay%ent of thefair al!e of a stockholder8s shares !ntil either the

abandon%ent of the corporate action inoled or the

p!rchase of the said shares by the corporation, allrights accr!ing to s!ch shares, incl!ding oting and

diidend rights, shall be s!spended in accordancewith the proisions of this Code, ecept the right of

s!ch stockholder to receie pay%ent of the fair al!ethereof* Proided, That if the dissenting stockholder

is not paid the al!e of his shares within '0 days after

the award, his oting and diidend rights shalli%%ediately be restored. (n)

Sectin 8%" 3hen right to payment ceases. – o

de%and for pay%ent !nder this Title %ay be

withdrawn !nless the corporation consents thereto. f,

howeer, s!ch de%and for pay%ent is withdrawnwith the consent of the corporation, or if the proposed

corporate action is abandoned or rescinded by thecorporation or disapproed by the ec!rities and

-change Co%%ission where s!ch approal is

necessary, or if the ec!rities and -changeCo%%ission deter%ines that s!ch stockholder is not

entitled to the appraisal right, then the right of said

stockholder to be paid the fair al!e of his shares

shall cease, his stat!s as a stockholder shall there!pon be restored, and all diidend distrib!tions which

wo!ld hae accr!ed on his shares shall be paid tohi%. (n)

Sectin 8&" 3ho bears costs of appraisal. – The costs

and epenses of appraisal shall be borne by the

corporation, !nless the fair al!e ascertained by the

appraisers is approi%ately the sa%e as the pricewhich the corporation %ay hae offered to pay the

stockholder, in which case they shall be borne by the

latter. n the case of an action to recoer s!ch fair


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$

al!e, all costs and epenses shall be assessed against

the corporation, !nless the ref!sal of the stockholderto receie pay%ent was !n9!stified. (n)

Sectin 86" !otation on certificates/ rights of

transferee. – ithin ten (10) days after de%anding

pay%ent for his shares, a dissenting stockholder shall

s!b%it the certificates of stock representing hisshares to the corporation for notation thereon that

s!ch shares are dissenting shares. Fis fail!re to do so

shall, at the option of the corporation, ter%inate hisrights !nder this Title. f shares represented by the

certificates bearing s!ch notation are transferred, and

the certificates conse+!ently cancelled, the rights ofthe transferor as a dissenting stockholder !nder this

Title shall cease and the transferee shall hae all the

rights of a reg!lar stockholder and all diidenddistrib!tions which wo!ld hae accr!ed on s!ch

shares shall be paid to the transferee. (n)

TITLE 1I

NON2STOC0 CORPORATIONS

Sectin 8'" 6efinition. – 7or the p!rposes of thisCode, a non&stock corporation is one where no part of

its inco%e is distrib!table as diidends to its

%e%bers, tr!stees, or officers, s!b9ect to the proisions of this Code on dissol!tion* Proided,

That any profit which a non&stock corporation %ay

obtain as an incident to its operations shall, wheneer necessary or proper, be !sed for the f!rtherance of the

p!rpose or p!rposes for which the corporation was

organi#ed, s!b9ect to the proisions of this Title.

The proisions goerning stock corporation, when pertinent, shall be applicable to non&stock

corporations, ecept as %ay be coered by specific

proisions of this Title. (n)

Sectin 88" P!rposes. – on&stock corporations %ay

be for%ed or organi#ed for charitable, religio!s,ed!cational, professional, c!lt!ral, fraternal, literary,

scientific, social, ciic serice, or si%ilar p!rposes,like trade, ind!stry, agric!lt!ral and like cha%bers, or

any co%bination thereof, s!b9ect to the special

proisions of this Title goerning partic!lar classes of non&stock corporations. (n)

CHAPTER I

/E/BERS

Sectin 8(" ight to (ote. – The right of the %e%bers

of any class or classes to ote %ay be li%ited, broadened or denied to the etent specified in the

articles of incorporation or the by&laws. >nless so

li%ited, broadened or denied, each %e%ber,

regardless of class, shall be entitled to one ote.

>nless otherwise proided in the articles ofincorporation or the by&laws, a %e%ber %ay ote by

proy in accordance with the proisions of this Code.

(n)

Hoting by %ail or other si%ilar %eans by %e%bers of

non&stock corporations %ay be a!thori#ed by the by&

laws of non&stock corporations with the approal of,and !nder s!ch conditions which %ay be prescribed

by, the ec!rities and -change Co%%ission.

Sectin (*" on&transferability of %e%bership. –3e%bership in a non&stock corporation and all rightsarising therefro% are personal and non&transferable,

!nless the articles of incorporation or the by&laws

otherwise proide. (n)

Sectin (!" Ter%ination of %e%bership. –3e%bership shall be ter%inated in the %anner and

for the ca!ses proided in the articles of

incorporation or the by&laws. Ter%ination of%e%bership shall hae the effect of eting!ishing all

rights of a %e%ber in the corporation or in its property, !nless otherwise proided in the articles of

incorporation or the by&laws. (n)

CHAPTER II

TR,STEES AND OFFICES

Sectin (#" +lection and term of trustees. – >nless

otherwise proided in the articles of incorporation orthe by&laws, the board of tr!stees of non&stock

corporations, which %ay be %ore than fifteen (1/) in

n!%ber as %ay be fied in their articles ofincorporation or by&laws, shall, as soon as organi#ed,

so classify the%seles that the ter% of office of one&

third (1


25/78

$/

!nepired period.

o person shall be elected as tr!stee !nless he is a

%e%ber of the corporation.

>nless otherwise proided in the articles ofincorporation or the by&laws, officers of a non&stock

corporation %ay be directly elected by the %e%bers.(n)

Sectin ($" Place of meetings. – The by&laws %ay

proide that the %e%bers of a non&stock corporation

%ay hold their reg!lar or special %eetings at any

place een o!tside the place where the principaloffice of the corporation is located* Proided, That

proper notice is sent to all %e%bers indicating the

date, ti%e and place of the %eeting* and Proided,f!rther, That the place of %eeting shall be within the

Philippines. (n)

CHAPTER III

DISTRIB,TION OF ASSETS IN NON2STOC0

CORPORATIONS

Sectin (%" ules of distribution. – n case

dissol!tion of a non&stock corporation in accordance

with the proisions of this Code, its assets shall beapplied and distrib!ted as follows*

1. All liabilities and obligations of thecorporation shall be paid, satisfied and

discharged, or ade+!ate proision shall be %adetherefore

$. Assets held by the corporation !pon a

condition re+!iring ret!rn, transfer orconeyance, and which condition occ!rs by

reason of the dissol!tion, shall be ret!rned,

transferred or coneyed in accordance with s!ch

re+!ire%ents

'. Assets receied and held by the corporation

s!b9ect to li%itations per%itting their !se only

for charitable, religio!s, beneolent, ed!cational

or si%ilar p!rposes, b!t not held !pon acondition re+!iring ret!rn, transfer or

coneyance by reason of the dissol!tion, shall be

transferred or coneyed to one or %orecorporations, societies or organi#ations engaged

in actiities in the Philippines s!bstantially

si%ilar to those of the dissoling corporation

according to a plan of distrib!tion adopted p!rs!ant to this Chapter

. Assets other than those %entioned in the

preceding paragraphs, if any, shall be distrib!ted

in accordance with the proisions of the articles

of incorporation or the by&laws, to the etent thatthe articles of incorporation or the by&laws,

deter%ine the distrib!tie rights of %e%bers, or

any class or classes of %e%bers, or proide fordistrib!tion and

/. n any other case, assets %ay be distrib!ted to

s!ch persons, societies, organi#ations orcorporations, whether or not organi#ed for profit,

as %ay be specified in a plan of distrib!tion

adopted p!rs!ant to this Chapter. (n)

Sectin (&" Plan of distribution of assets. – A plan proiding for the distrib!tion of assets, not

inconsistent with the proisions of this Title, %ay be

adopted by a non&stock corporation in the process of

dissol!tion in the following %anner*

The board of tr!stees shall, by %a9ority ote, adopt a

resol!tion reco%%ending a plan of distrib!tion and

directing the s!b%ission thereof to a ote at a reg!laror special %eeting of %e%bers haing oting rights.

ritten notice setting forth the proposed plan ofdistrib!tion or a s!%%ary thereof and the date, ti%e

and place of s!ch %eeting shall be gien to each%e%ber entitled to ote, within the ti%e and in the

%anner proided in this Code for the giing of notice

of %eetings to %e%bers. !ch plan of distrib!tionshall be adopted !pon approal of at least two&thirds

($


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$2

restrictions on transfer per%itted by this Title and (')

The corporation shall not list in any stock echangeor %ake any p!blic offering of any of its stock of any

class. otwithstanding the foregoing, a corporation

shall not be dee%ed a close corporation when at least

two&thirds ($


27/78

$4

transferred is concl!siely pres!%ed to hae

notice of this fact.

'. f a stock certificate of any close corporationconspic!o!sly shows a restriction on transfer of

stock of the corporation, the transferee of the

stock is concl!siely pres!%ed to hae notice of

the fact that he has ac+!ired stock in iolation ofthe restriction, if s!ch ac+!isition iolates the

restriction.

. heneer any person to who% stock of aclose corporation has been iss!ed or transferred

has, or is concl!siely pres!%ed !nder this

section to hae, notice either (a) that he is a person not eligible to be a holder of stock of the

corporation, or (b) that transfer of stock to hi%

wo!ld ca!se the stock of the corporation to be

held by %ore than the n!%ber of persons per%itted by its articles of incorporation to hold

stock of the corporation, or (c) that the transfer of

stock is in iolation of a restriction on transfer ofstock, the corporation %ay, at its option, ref!se to

register the transfer of stock in the na%e of the

transferee.

/. The proisions of s!bsection () shall not beapplicable if the transfer of stock, tho!gh

contrary to s!bsections (1), ($) or ('), has been

consented to by all the stockholders of the closecorporation, or if the close corporation has

a%ended its articles of incorporation in

accordance with this Title.

2. The ter% "transfer", as !sed in this section, isnot li%ited to a transfer for al!e.

4. The proisions of this section shall not i%pair

any right which the transferee %ay hae to

rescind the transfer or to recoer !nder any

applicable warranty, epress or i%plied.

Sectin !**" $greements by stockholders. &

1. Agree%ents by and a%ong stockholders

eec!ted before the for%ation and organi#ationof a close corporation, signed by all stockholders,

shall s!rie the incorporation of s!ch

corporation and shall contin!e to be alid and

binding between and a%ong s!ch stockholders, if

s!ch be their intent, to the etent that s!ch

agree%ents are not inconsistent with the articlesof incorporation, irrespectie of where the

proisions of s!ch agree%ents are contained,

ecept those re+!ired by this Title to be

e%bodied in said articles of incorporation.

$. An agree%ent between two or %orestockholders, if in writing and signed by the

parties thereto, %ay proide that in eercising

any oting rights, the shares held by the% shall be oted as therein proided, or as they %ay

agree, or as deter%ined in accordance with a

proced!re agreed !pon by the%.

'. o proision in any written agree%ent signed

by the stockholders, relating to any phase of the

corporate affairs, shall be inalidated as between

the parties on the gro!nd that its effect is to %akethe% partners a%ong the%seles.

. A written agree%ent a%ong so%e or all of the

stockholders in a close corporation shall not be

inalidated on the gro!nd that it so relates to thecond!ct of the b!siness and affairs of the

corporation as to restrict or interfere with the

discretion or powers of the board of directors*Proided, That s!ch agree%ent shall i%pose on

the stockholders who are parties thereto the

liabilities for %anagerial acts i%posed by thisCode on directors.

/. To the etent that the stockholders are actiely

engaged in the %anage%ent or operation of the

b!siness and affairs of a close corporation, thestockholders shall be held to strict fid!ciary

d!ties to each other and a%ong the%seles. aid

stockholders shall be personally liable forcorporate torts !nless the corporation has

obtained reasonably ade+!ate liability ins!rance.

Sectin !*!" 3hen board meeting is unnecessary or

improperly held.& >nless the by&laws proideotherwise, any action by the directors of a close

corporation witho!t a %eeting shall neertheless be

dee%ed alid if*

1. Defore or after s!ch action is taken, writtenconsent thereto is signed by all the directors or


28/78

$5

$. All the stockholders hae act!al or i%plied

knowledge of the action and %ake no pro%ptob9ection thereto in writing or

'. The directors are acc!sto%ed to take infor%al

action with the epress or i%plied ac+!iescence

of all the stockholders or

. All the directors hae epress or i%pliedknowledge of the action in +!estion and none of

the% %akes pro%pt ob9ection thereto in writing.

f a director8s %eeting is held witho!t proper call or

notice, an action taken therein within the corporate powers is dee%ed ratified by a director who failed to

attend, !nless he pro%ptly files his written ob9ection

with the secretary of the corporation after haingknowledge thereof.

Sectin !*#" Preempti(e right in close corporations.

– The pre&e%ptie right of stockholders in close

corporations shall etend to all stock to be iss!ed,incl!ding reiss!ance of treas!ry shares, whether for

%oney, property or personal serices, or in pay%ent

of corporate debts, !nless the articles of incorporation proide otherwise.

Sectin !*$" $mendment of articles of incorporation.

– Any a%end%ent to the articles of incorporation

which seeks to delete or re%oe any proisionre+!ired by this Title to be contained in the articles of

incorporation or to red!ce a +!or!% or oting

re+!ire%ent stated in said articles of incorporationshall not be alid or effectie !nless approed by the

affir%atie ote of at least two&thirds ($


29/78

$=

books to coer its debts and liabilities ecl!sie of

capital stock* Proided, That any stockholder of aclose corporation %ay, by written petition to the

ec!rities and -change Co%%ission, co%pel the

dissol!tion of s!ch corporation wheneer any of acts

of the directors, officers or those in control of thecorporation is illegal, or fra!d!lent, or dishonest, or

oppressie or !nfairly pre9!dicial to the corporationor any stockholder, or wheneer corporate assets are being %isapplied or wasted.

TITLE 1III

SPECIAL CORPORATIONS

CHAPTER I 2 ED,CATIONAL

CORPORATIONS

Sectin !*6" %ncorporation. – -d!cational

corporations shall be goerned by special laws and by

the general proisions of this Code. (n)

Sectin !*'" Prere"uisites to incorporation. –

-cept !pon faorable reco%%endation of the

3inistry of -d!cation and C!lt!re, the ec!rities and

-change Co%%ission shall not accept or approethe articles of incorporation and by&laws of any

ed!cational instit!tion. (125a)

Sectin !*8" Board of trustees. – Tr!stees ofed!cational instit!tions organi#ed as non&stock

corporations shall not be less than fie (/) nor %orethan fifteen (1/)* Proided, howeer, That the

n!%ber of tr!stees shall be in %!ltiples of fie (/).

>nless otherwise proided in the articles of

incorporation on the by&laws, the board of tr!stees of

incorporated schools, colleges, or other instit!tions of

learning shall, as soon as organi#ed, so classifythe%seles that the ter% of office of one&fifth (1


30/78

'0

filled, according to the r!les, reg!lations or

discipline of the religio!s deno%ination, sect orch!rch to which he belongs and

/. The place where the principal office of the

corporation sole is to be established and located,

which place %!st be within the Philippines.

The articles of incorporation %ay incl!de anyother proision not contrary to law for the

reg!lation of the affairs of the corporation. (n)

Sectin !!#" 0ubmission of the articles of

incorporation. – The articles of incorporation %!st beerified, before filing, by affidait or affir%ation of

the chief archbishop, bishop, priest, %inister, rabbi or

presiding elder, as the case %ay be, and acco%panied by a copy of the co%%ission, certificate of election or

letter of appoint%ent of s!ch chief archbishop, bishop, priest, %inister, rabbi or presiding elder, d!lycertified to be correct by any notary p!blic.

7ro% and after the filing with the ec!rities and

-change Co%%ission of the said articles of

incorporation, erified by affidait or affir%ation, andacco%panied by the doc!%ents %entioned in the

preceding paragraph, s!ch chief archbishop, bishop,

priest, %inister, rabbi or presiding elder shall beco%ea corporation sole and all te%poralities, estate and

properties of the religio!s deno%ination, sect orch!rch theretofore ad%inistered or %anaged by hi%

as s!ch chief archbishop, bishop, priest, %inister,rabbi or presiding elder shall be held in tr!st by hi%

as a corporation sole, for the !se, p!rpose, behalf and

sole benefit of his religio!s deno%ination, sect orch!rch, incl!ding hospitals, schools, colleges, orphan

asyl!%s, parsonages and ce%eteries thereof. (n)

Sectin !!$" $c"uisition and alienation of property. –

Any corporation sole %ay p!rchase and hold real

estate and personal property for its ch!rch, charitable, beneolent or ed!cational p!rposes, and %ay receie

be+!ests or gifts for s!ch p!rposes. !ch corporation%ay sell or %ortgage real property held by it by

obtaining an order for that p!rpose fro% the Co!rt of

7irst nstance of the proince where the property issit!ated !pon proof %ade to the satisfaction of the

co!rt that notice of the application for leae to sell or

%ortgage has been gien by p!blication or otherwise

in s!ch %anner and for s!ch ti%e as said co!rt %ay

hae directed, and that it is to the interest of the

corporation that leae to sell or %ortgage sho!ld begranted. The application for leae to sell or %ortgage

%!st be %ade by petition, d!ly erified, by the chief

archbishop, bishop, priest, %inister, rabbi or

presiding elder acting as corporation sole, and %ay beopposed by any %e%ber of the religio!s

deno%ination, sect or ch!rch represented by thecorporation sole* Proided, That in cases where ther!les, reg!lations and discipline of the religio!s

deno%ination, sect or ch!rch, religio!s society or

order concerned represented by s!ch corporation solereg!late the %ethod of ac+!iring, holding, selling and

%ortgaging real estate and personal property, s!ch

r!les, reg!lations and discipline shall control, and the

interention of the co!rts shall not be necessary.(1/=a)

Sectin !!%" Filling of (acancies. – The s!ccessors inoffice of any chief archbishop, bishop, priest,

%inister, rabbi or presiding elder in a corporation soleshall beco%e the corporation sole on their accession

to office and shall be per%itted to transact b!siness as

s!ch on the filing with the ec!rities and -changeCo%%ission of a copy of their co%%ission,

certificate of election, or letters of appoint%ent, d!ly

certified by any notary p!blic.

6!ring any acancy in the office of chief archbishop,

bishop, priest, %inister, rabbi or presiding elder ofany religio!s deno%ination, sect or ch!rch

incorporated as a corporation sole, the person or persons a!thori#ed and e%powered by the r!les,

reg!lations or discipline of the religio!s

deno%ination, sect or ch!rch represented by thecorporation sole to ad%inister the te%poralities and

%anage the affairs, estate and properties of the

corporation sole d!ring the acancy shall eercise all

the powers and a!thority of the corporation soled!ring s!ch acancy. (1/5a)

Sectin !!&" *issolution. – A corporation sole %ay

be dissoled and its affairs settled ol!ntarily bys!b%itting to the ec!rities and -change

Co%%ission a erified declaration of dissol!tion.

The declaration of dissol!tion shall set forth*

1. The na%e of the corporation


31/78

'1

$. The reason for dissol!tion and winding !p

'. The a!thori#ation for the dissol!tion of the

corporation by the partic!lar religio!sdeno%ination, sect or ch!rch

. The na%es and addresses of the persons who

are to s!perise the winding !p of the affairs ofthe corporation.

>pon approal of s!ch declaration of dissol!tion

by the ec!rities and -change Co%%ission, the

corporation shall cease to carry on its operations

ecept for the p!rpose of winding !p its affairs.(n)

Sectin !!6" eligious societies. – Any religio!s

society or religio!s order, or any diocese, synod, or

district organi#ation of any religio!s deno%ination,sect or ch!rch, !nless forbidden by the constit!tion,

r!les, reg!lations, or discipline of the religio!s

deno%ination, sect or ch!rch of which it is a part, or by co%petent a!thority, %ay, !pon written consent

and


32/78

'$

certified by a %a9ority of the board of directors or

tr!stees and co!ntersigned by the secretary of thecorporation. The ec!rities and -change

Co%%ission shall there!pon iss!e the certificate of

dissol!tion. (2$a)

Sectin !!(" Hol!ntary dissol!tion where creditors

are affected. – here the dissol!tion of a corporation%ay pre9!dice the rights of any creditor, the petition

for dissol!tion shall be filed with the ec!rities and

-change Co%%ission. The petition shall be signed by a %a9ority of its board of directors or tr!stees or

other officers haing the %anage%ent of its affairs,

erified by its president or secretary or one of itsdirectors or tr!stees, and shall set forth all clai%s and

de%ands against it, and that its dissol!tion was

resoled !pon by the affir%atie ote of thestockholders representing at least two&thirds ($pon fie (/) day8s notice, gien after the date on

which the right to file ob9ections as fied in the order

has epired, the Co%%ission shall proceed to hearthe petition and try any iss!e %ade by the ob9ections

filed and if no s!ch ob9ection is s!fficient, and the%aterial allegations of the petition are tr!e, it shall

render 9!dg%ent dissoling the corporation and

directing s!ch disposition of its assets as 9!stice

re+!ires, and %ay appoint a receier to collect s!chassets and pay the debts of the corporation. (:!le

10, :Ca)

Sectin !#*" *issolution by shortening corporate

term. – A ol!ntary dissol!tion %ay be effected bya%ending the articles of incorporation to shorten the

corporate ter% p!rs!ant to the proisions of this

Code. A copy of the a%ended articles of

incorporation shall be s!b%itted to the ec!rities and-change Co%%ission in accordance with this Code.

>pon approal of the a%ended articles ofincorporation of the epiration of the shortened ter%,as the case %ay be, the corporation shall be dee%ed

dissoled witho!t any f!rther proceedings, s!b9ect to

the proisions of this Code on li+!idation. (n)

Sectin !#!" %n(oluntary dissolution. – A corporation%ay be dissoled by the ec!rities and -change

Co%%ission !pon filing of a erified co%plaint and

after proper notice and hearing on the gro!nds proided by eisting laws, r!les and reg!lations. (n)

Sectin !##" Corporate li"uidation. – -ery

corporation whose charter epires by its own

li%itation or is ann!lled by forfeit!re or otherwise, orwhose corporate eistence for other p!rposes is

ter%inated in any other %anner, shall neertheless be

contin!ed as a body corporate for three (') years afterthe ti%e when it wo!ld hae been so dissoled, for

the p!rpose of prosec!ting and defending s!its by or

against it and enabling it to settle and close its affairs,

to dispose of and coney its property and to distrib!te

its assets, b!t not for

Documents

Philippine Special Commercial Laws