RULES ON THE LENGTHENING OR SHORTENING OF CORPORATE TERM

A CORPORATE TERM FOR A SPECIFIC PERIOD MAY BE EXTENDED OR SHORTENED BY AMENDING THE
ARTICLES OF INCORPORATION: PROVIDED, THAT NO EXTENTION MAY BE MADE EARLIER THAN 3
YEARS PRIOR TO THE ORIGINAL OR SUBSEQUENT EXPIRY DATE(S) UNLESS THERE ARE
JUSTIFIABLE REASONS FOR EARLIER EXTENSION AS MAY BE DETERMINED BY THE SEC.

000

A CERTIFICATE ISSUED TO A CORPORATION (WHOSE TERM HAS EXPIRED) UPON SUCCESSFUL

APPLICATION WITH THE SEC FOR A REVIVAL OF ITS CORPORATE EXISTENCE.

CERTIFICATE OF REVIVAL OF CORPORATE EXISTENCE

000

PROVISION APPLICABLE TO BANKS AND OTHER SPECIFIED FINANCIAL INSTITUTIONS AS REGARDS

THE REVIVAL OF CORPORATE EXISTENCE

NO APPLICATION FOR REVIVAL OF CERTIFICATE OF INCORPORATION OF BANKS AND OTHER

SPECIFIED FINANCIAL INSTITUTIONS SHALL BE APPROVED BY THE SEC UNLESS ACCOMPANIED BY
A FAVORABLE RECOMMENDATION OF THE APPROPRIATE GOVERNMENT AGENCY.

000

MINIMUM CAPITAL STOCK REQUIRED OF STOCK CORPORATIONS

STOCK CORPORATIONS SHALL NOT BE REQUIRED TO HAVE A MINIMUM CAPITAL STOCK, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED BY SPECIAL LAW

000

A DOCUMENT OR CHARTER THAT ESTABLISHES THE EXISTENCE OF A CORPORATION IN THE

PHILIPPINES.

ARTICLES OF INCORPORATION

000

VOTING REQUIREMENT FOR THE AMENDMENT OF ARTICLES OF INCORPORATION

THE ARTICLES OF INCORPORATION MAY BE AMENDED BY A MAJORITY VOTE OF THE BOARD OF

DIRECTORS OR TRUSTEES AND THE VOTE OR WRITTEN ASSET OF THE STOCKHOLDERS
REPRESENTING AT LEAST 2/3 OF THE OUTSTANDING CAPITAL STOCK (2/3 OF THE MEMBERS FOR
NONSTOCK CORPORATIONS), WITHOUT PREJUDICE TO THE APPRAISAL RIGHT OF DISSENTING
STOCKHOLDERS IN ACCORDANCE WITH THE PROVISIONS OF THIS CODE.

000

EFFECTIVITY OF AMENDMENTS TO THE ARTICLES OF INCORPORATION

THE AMENDMENTS SHALL TAKE EFFECT UPON THEIR APPROVAL BY THE SEC OR FROM THE DATE OF
FILING WITH THE SEC IF NOT ACTED UPON WITHIN 6 MONTHS FROM THE DATE OF FILING DOR A
CAUSE NOT ATTRIBUTABLE TO THE CORPORATION.

000

GROUNDS THAT INVALIDATES A CORPORATE NAME

1. IF IT IS NOT DISTINGUISHABLE FROM THAT ALREADY RESERVED OR REGISTERED FOR USE OF
ANOTHER CORPORATION; OR
2. IF SUCH NAME IS ALREADY PROTECTED BY LAW; OR
3. WHEN ITS USE IS CONTRARY TO EXISTING LAW, RULES AND REGULATIONS.

000

IS ONE THAT HAS COMPLETELY FULFILLED THE STATUTORY FORMALITIES IMPOSED BY THE CODE
IN ORDER TO BE GRANTED CORPORATE EXISTENCE.

DE JURE CORPORATION

000

IS ONE THAT HAS ACTED IN GOOD FAITH AND WOULD BE AN ORDINARY CORPORATION BUT FOR
FAILURE TO COMPLY WITH SOME TECHNICAL REQUIREMENTS. FURTHERMORE, THIS KIND OF
CORPORATION HAS ALL THE POWERS OF A DE JURE CORPORATION.

DE FACTO CORPORATION

000

RULE ON THE INQUIRY ON THE RIGHT OF A POSSIBLY DE FACTO CORPORATION TO EXIST

INQUIRY ON THE RIGHT OF A POSSIBLY DE FACTO CORPORATION SHALL BE MADE BY THE

SOLICITOR GENERAL IN A QUO WARRANTO PROCEEDING RATHER THAN BEING INQUIRED INTO
COLLATERALLY IN ANY PRIVATE SUIT TO WHICH SUCH CORPORATION MAY BE A PARTY.

000

ESSENTIAL ELEMENTS OF A DE FACTOR CORPORATION

1. EXISTENCE OF A VALID LAW UNDER WHICH A CORPORATION CAN BE ORGANIZED;

2. AN ATTEMPT IN GOOD FAITH TO INCORPORATE; AND
3. ACTUAL EXERCISE OF CORPORATE POWERS

000

IS A PRECLUSION, WHICH PREVENTS A MAN FROM DENYING A FACT, IN CONSEQUENCE OF HIS

OWN PREVIOUS ACT, ALLEGATIONS, OR DENIAL OF A CONTRARY TENOR.

ESTOPPEL

000

REFERS TO SOMEONE CONTRACTING AND DEALING WITH A BUSINESS AS IF IT WERE A

CORPORATION. IT LACKS THE REQUISITES OF A DE FACTO CORPORATION.

CORPORATION BY ESTOPPEL

000

LIABILITY OF PERSONS WHO ASSUME TO ACT AS A CORPORATION KNOWING IT TO BE WITHOUT

AUTHORITY TO DO SO

THESE PERSONS SHALL BE LIABLE AS GENERAL PARTNERS FOR ALL DEBTS, LIABILITIES AND
DAMAGES INCURRED OR ARISING AS A RESULT THEREOF.

000
RULE ON THE REQUIREMENT FROM A CORPORATION TO FORMALLY ORGANIZE AND COMMENCE
BUSINESS

IF A CORPORATION DOES NOT FORMALLY ORGANIZE AND COMMENCE ITS BUSINESS WITHIN 5
YEARS FROM THE DATE OF INCORPORATION ITS CERTIFICATE OF INCORPORATION SHALL BE
DEEMED REVOKED AS OF THE DAY FOLLOWING THE END OF THE FIVE-YEAR PERIOD.

000

RULE TO BE APPLIED IF A CORPORATION HAS COMMENCED ITS BUSINESS BUT SUBSEQUENTLY

BECOMES INOPERATIVE

IF A CORPORATION HAS COMMENCED BUSINESS BUT SUBSEQUENTLY BECOMES INOPERATIVE FOR A

PERIOD OF AT LEAST FIVE CONSECUTIVE YEARS, THE SEC MAY, AFTER DUE NOTICE AND
HEARING, PLACE THE CORPORATION UNDER DELINQUENT STATUS.

000

(1) PERIOD ALLOWED FOR DELINQUENT CORPORATIONS TO RESUME OPERATIONS AND COMPLY WITH
ALL THE REQUIREMENTS THAT THE SEC SHALL PRESCRIBE. (2) AND EFFECT IN CASE OF
FAILURE TO COMPLY WITH THE REQUIREMENTS AND RESUME OPERATIONS WITHIN THE PERIOD
GIVEN

1. 2 YEARS
2. REVOCATION OF THE CORPORATION'S CERTIFICATE OF INCORPORATION

000

IS COMPOSED OF REPRESENTATIVES OF THE CORPORATION ITSELF HAVING THE CAPABILITY TO

EXERCISE THE CORPORATE POWERS, CONDUCT ALL BUSINESS, AND CONTROL ALL PROPERTIES OF
THE CORPORATION.

BOARD OF DIRECTORS (STOCK) OR BOARD OF TRUSTEES (NONSTOCK)

000

TERM OF SERVICE OF (1) DIRECTORS AND (2) TRUSTEES

1. 1 YEAR
2. A TERM NOT EXCEEDING 3 YEARS

EACH DIRECTOR AND TRUSTEE SHALL HOLD OFFICE UNTIL THE SUCCESSOR IS ELECTED AND
QUALIFIED.

000

QUALIFICATIONS OF DIRECTORS

1. MUST BE A HOLDER OF AT LEAST 1 SHARE OF STOCKS REGISTERED IN THE CORPORATION'S

BOOKS;
2. MAJORITY OF THE DIRECTORS MUST BE RESIDENTS OF THE PHILIPPINES; AND
3. A DIRECTOR MUST NOT HAVE BEEN CONVICTED BY FINAL JUDGMENT OF AN OFFENSE
PUNISHABLE BY IMPRISONMENT EXCCEEDING 6 YEARS OR A VIOLATION OF THE PROVISIONS OF
THE CORPORATION CODE COMMITTED WITHIN 5 YEARS PRIOR TO THE DATE OF ELECTION OR
APPOINTMENT.

000
REQUIRED DIRECTORS WHO ARE CITIZENS OF THE PHILIPPINES AMONG BANKS AND BANKING
INSTITUTIONS

AT LEAST 2/3 OF THE MEMBERS OF THE BOARD OF DIRECTORS SHALL BE CITIZENS OF THE
PHILIPPINES.

000

REQUIRED DIRECTORS WHO ARE CITIZENS OF THE PHILIPPINES AMONG RURAL BANKS

EVERY MEMBER OF THE BOARD OF DIRECTORS SHALL BE CITIZENS OF THE PHILIPPINES.

000

REQUIRED DIRECTORS WHO ARE CITIZENS OF THE PHILIPPINES AMONG DOMESTIC AIR CARRIERS

THE DIRECTING HEAD AND 2/3 OR MORE OF THE BOARD OF DIRECTORS AND OTHER MANAGING
OFFICES SHALL BE CITIZENS OF THE PHILIPPINES

000

REQUIRED DIRECTORS WHO ARE CITIZENS OF THE PHILIPPINES AMONG REGISTERED INVESTMENT
COMPANIES

EVERY MEMBER OF THE BOARD OF DIRECTORS SHALL BE CITIZENS OF THE PHILIPPINES.

000

REQUIRED DIRECTORS WHO ARE CITIZENS OF THE PHILIPPINES AMONG PRIVATE DEVELOPMENT
BANKS

EVERY MEMBER OF THE BOARD OF DIRECTORS SHALL BE CITIZENS OF THE PHILIPPINES.

000

REQUIRED DIRECTORS WHO ARE CITIZENS OF THE PHILIPPINES AMONG FINANCING CORPORATIONS

AT LEAST 2/3 OF ALL MEMBERS OF THE BOARD OF DIRECTORS SHALL BE CITIZENS OF THE
PHILIPPINES

000

CORPORATIONS VESTED WITH PUBLIC INTEREST REQUIRED TO HAVE IN ITS BOARD AN

INDEPENDENT DIRECTOR CONSTITUTING AT LEAST 20% OF SUCH BOARD

1. CORPORATIONS WITH AN EXCHANGE OR ASSETS OF AT LEAST P50,000,000 AND HAVING 200

OR MORE HOLDERS OF SHARES, EACH HOLDING AT LEAST 100 SHARES OF CLASS OF ITS EQUITY
SHARES;
2. BANKS AND OTHER SPECIFIED FINANCIAL INSTITUTIONS; AND
3. OTHER CORPORATIONS ENGAGED IN BUSINESS VESTED WITH PUBLIC INTEREST SIMILAR TO
ABOVE.

000

IS A PERSON WHO, APART FROM SHAREHOLDINGS AND FEES RECEIVED FROM THE CORPORATION,
IS INDEPENDENT OF MANAGEMENT AND FREE FROM ANY BUSINESS OR OTHER RELATIONSHIP WHICH
COULD, OR COULD REASONABLY BE PERCEIVED TO MATERIALLY INTERFERE WITH THE EXERCISE
OF INDEPENDENT JUDGMENT IN CARRYING OUT THE RESPONSIBILITIES AS A DIRECTOR.
INDEPENDENT DIRECTOR

000

PRESENCE OF SHAREHOLDERS (OR MEMBERS) REQUIRED IN THE ELECTION OF DIRECTORS (OR

TRUSTEES)

STOCK CORPORATION - THERE MUST BE PRESENT, EITHER IN PERSON OR BY REPRESENTATIVE

AUTHORIZED TO ACT BY WRITTEN PROXY, THE OWNERSOF THE MAJORITY OF THE OUTSTANDING
CAPITAL STOCK.
NONSTOCK CORPORATION - MAJORITY OF THE MEMBERS ENTITLED TO VOTE.

000

RULES ON VOTING FOR THE ELECTION OF THE MEMBERS OF THE BOARD OF DIRECTORS THROUGH
REMOTE COMMUNICATION OR IN ABSENTIA

GR: VOTING IN ABSENTIA IS ONLY ALLOWED WHEN AUTHORIZED IN THE BY-LAWS OR BY A

MAJORITY OF THE BOARD OF DIRECTORS.
XPN: CORPORATORS OF CORPORATIONS VESTED WITH PUBLIC INTEREST MAY VOTE IN ABSENTIA
NOTWITHSTANDING THE ABSENCE OF A PROVISION IN THE BY-LAWS OF SUCH CORPORATIONS.

000

VIOLATION COMMITTED WHEN A, B AND C WERE ELECTED AS MEMBERS OF THE BOARD OF

TRUSTEES TO REPRESENT MANILA, PASAY AND MAKATI CITIES, RESPECTIVELY.

ELECTION OF TRUSTEES BY REGIONS IN A NONSTOCK CORPORATION

000

FORMULA FOR THE NUMBER OF VOTES THAT CAN BE CASTED BY A SHAREHOLDER

NUMBER OF SHARES OWNED EXCLUDING DELINQUENT SHARES * NUMBER OF DIRECTORS TO BE

ELECTED = TOTAL NUMBER OF VOTES THAT CAN BE CASTED BY SHAREHOLDER

POSSIBLE VOTING METHODS

1. STRAIGHT VOTING
2. CUMULATIVE VOTING FOR ONE CANDIDATE
3. CUMULATIVE VOTING BY DISTRIBUTION

000

RULE ON THE CASTING OF VOTES OF MEMBERS OF NON-STOCK CORPORATION IN THE ELECTION OF

TRUSTEES

STRAIGHT VOTING - UNLESS OTHERWISE PROVIDED IN THE ARTICLES OF INCORPORATION OR IN

THE BY-LAWS, MEMBERS OF NONSTOCK CORPORATIONS MAY CAST AS MANY VOTES AS THERE ARE
TRUSTEES TO BE ELECTED BUT MAY NOT CAST MORE THAN 1 VOTE FOR 1 CANDIDATE.

000

CORPORATE OFFICERS TO BE ELECTED BY DIRECTORS IMMEDIATELY AFTER THEIR ELECTION (4

ITEMS)

1. PRESIDENT
2. TREASURER
3. SECRETARY
4. OTHER OFFICERS PROVIDED FOR IN THE BY-LAWS
000

QUALIFICATION FOR BECOMING A CORPORATE PRESIDENT

HE MUST BE A DIRECTOR.

000

QUALIFICATION FOR BECOMING A CORPORATE TREASURER

HE MUST BE A RESIDENT OF THE PHILIPPINES REGARDLESS OF WHETHER HE IS A DIRECTOR OR

NOT.

000

QUALIFICATION FOR BECOMING A CORPORATE SECRETARY

HE MUST BE A RESIDENT AND CITIZEN OF THE PHILIPPINES REGARDLESS OF WHETHER HE IS A

DIRECTOR OR NOT.

000

RULE ON THE CONCURRENT HOLDING OF 2 OR MORE POSITIONS AS CORPORATE OFFICER BY THE

SAME PERSON

THE SAME PERSON MAY HOLD 2 OR MORE POSITIONS CONCURRENTLY, EXCEOT THAT NO ONE SHALL
ACT AS PRESIDENT AND SECRETARY OR AS PRESIDENT AND TREASURER AT THE SAME TIME,
UNLESS OTHERWISE ALLOWED IN THIS CODE.

000

REPORTORIAL REQUIREMENTS WITH REGARD TO DIRECTORS, TRUSTEES AND OFFICERS (3 ITEMS)

1. ELECTION OF DIRECTORS, TRUSTEES AND OFFICERS

2. NON-HOLDING OF ELECTION
3. CESSATION FROM OFFICE

000

REQUIREMENT TO REPORT INFORMATION REGARDING THE ELECTION OF DIRECTORS, TRUSTEES AND

OFFICERS TO THE SEC

WITHIN 30 DAYS AFTER THE ELECTION OF THE DIRECTORS, TRUSTEES AND OFFICER OF THE
CORPORATION, THE SECRETARY, OR ANY OTHER OFFICER OF THE CORPORATION, SHALL SUBMIT
TO THE SEC, THE NAMES, NATIONALITIES, SHAREHOLDINGS AND RESIDENCE ADDRESSES OF THE
DIRECTORS, TRUSTEES AND OFFICERS ELECTED.

000

REQUIREMENT TO REPORT THE NONHOLDING OF ELECTIONS OF DIRECTORS, TRUSTEES AND

OFFICERS TO THE SEC

THE NON-HOLDING OF ELECTIONS AND THE REASONS THEREFOR SHALL BE REPORTED TO THE SEC
WITHIN 30 DAYS FROM THE DATE OF THE SCHEDULED ELECTION. THE REPORT SHALL SPECIFY
NEW DATE FOR THE ELECTION, WHICH SHALL NOT BE LATER THAN 60 DAYS FROM THE SCHEDULED
DATE.

000
REQUIREMENT TO REPORT INFORMATION ABOUT THE CESSATION OF A DIRECTOR, TRUSTEE OR
OFFICER FROM OFFICE

SHOULD A DIRECTOR, TRUSTEE OR OFFICER DIE, RESIGN OR IN ANY MANNER CEASE TO HOLD
OFFICE, THE SECRETARY, OR THE DIRECTOR, TRUSTEE OR OFFICER OF THE CORPORATION,
SHALL, WITHIN 7 DAYS FROM THE KNOWLEDGE THEREOF, REPORT IN WRITING SUCH FACT TO THE
SEC.

SSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSS

POWERS OF CORPORATIONS ACCORDING TO SEC. 36 (FIRST 6 ITEMS)

1. TO SUE AND BE SUED IN ITS CORPORATE NAME;

2. TO HAVE PERPETUAL EXISTENCE UNLESS THE CERTIFICATE OF INCORPORATION PROVIDES
OTHERWISE;
3. TO ADOPT AND USE A CORPORATE SEAL;
4. TO AMEND ITS ARTICLES OF INCORPORATION;
5. TO ADOPT, AMEND OR REPEAL BYLAWS; AND
6. TO ISSUE OR SELL STOCKS AND ADMIT MEMBERS.

000

POWERS OF CORPORATIONS ACCORDING TO SEC. 36 (LAST 5 ITEMS)

7. TO PURCHASE, RECEIVE, ETC., DEAL WITH REAL AND PERSONAL PROPERTY.

8. TO ENTER INTO A PARTNERSHIP, JOINT VENTURE, MERGER, CONSOLIDATION, ETC.;
9. TO MAKE REASONABLE DONATIONS;
10. TO ESTABLISH PENSION, RETIREMENT, ETC.; AND
11. TO EXERCISE SUCH OTHER POWERS AS MAY BE ESSENTIAL OR NECESSARY TO CARRY OUT ITS
PURPOSE(S).

000

VOTING REQUIREMENT FOR THE LENGTHENING OR SHORTENING OF CORPORATE TERM

MAJORITY VOTE OF THE BOARD OF DIRECTORS OR TRUSTEES, AND RATIFIED AT A MEETING BY

THE STOCKHOLDERS OR MEMBERS REPRESENTING AT LEAST 2/3 OF THE OUTSTANDING CAPITAL
STOCK OR OF ITS MEMBERS.

000

VOTING REQUIREMENT FOR THE INCREASE OR DECREASE OF CAPITAL STOCK OR INCURRENCE,

CREATION OR INCREASE OF BONDED INDEBTEDNESS

MAJORITY VOTE OF THE BOARD OF DIRECTORS AND BY 2/3 OF THE OUTSTANDING CAPITAL STOCK
AT A STOCKHOLDERS' MEETING.

000

REQUIREMENT FOR MINIMUM SUBSCRIPTION AND PAID-IN CAPITAL WITH REGARD TO INCREASE IN
CAPITAL STOCK

AT LEAST 25% OF THE INCREASE IN CAPITAL STOCK MUST HAVE BEEN SUBSCRIBED AND THAT AT
LEAST 25% OF THE AMOUNT SUBSCRIBED HAS BEEN PAID IN CASH OR PROPERTY.

000
LIMITATION ON DECREASE IN CAPITAL STOCK

NO DECREASE IN CAPITAL STOCK SHALL BE APPROVED BY THE SEC IF ITS EFFECT SHALL
PREJUDICE THE RIGHTS OF CORPORATE CREDITORS.

000

IS A RIGHT BELONGING TO EXISTING SHAREHOLDERS OF A CORPORATION TO AVOID INVOLUNTARY

DILUTION OF THEIR OWNERSHIP STAKE BY GIVING THEM THE CHANCE TO BUY A PROPORTIONAL
INTEREST OF ANY FUTURE ISSUANCE OF COMMON STOCK.

PREEMPTIVE RIGHT

000

RULES ON GRANTING OF PREEMPTIVE RIGHT TO STOCKHOLDERS

ALL STOCKHOLDERS OF A STOCK CORPORATION SHALL ENJOY PREEMPTIVE RIGHT, UNLESS SUCH
RIGHT IS DENIED BY THE ARTICLES OF INCORPORATION OR AN AMENDMENT THERETO.

000

REMEDIES FOR WRONGFUL DENIAL OF PRE-EMPTIVE RIGHTS

THE AGGRIEVED STOCKHOLDERS MAY OBTAIN AN INJUNCTION AGAINST THE ISSUE OR A MANDAMUS
TO ALLOW HIM TO EXERCISE THE RIGHT OR THE COUR MAY EVEN ORDER THE CANCELLATION OF
THE SHARES, PROVIDED NO INNOCENT THIRD PARTIES ARE PREJUDICED.

000

VOTING REQUIREMENT FOR THE SALE OR OTHER DISPOSITION OF ASSETS (E.G., LEASE,
EXCHANGE, ETC.) IN STOCK CORPORATIONS.

GR: A MAJORITY VOTE OF THE BOARD OF DIRECTORS.

XPN: IF SUBSTANTIALLY ALL OF THE COPORATIONS ASSETS (INCLUDING GOODWILL) ARE TO BE
DISPOSED, VOTE OF THE STOCKHOLDERS REPRESENTING AT LEAST 2/3 OF THE OUTSTANDING
CAPITAL STOCK.

VOTING REQUIREMENT FOR THE SALE OR OTHER DISPOSITION OF ASSETS (E.G., LEASE,
EXCHANGE, ETC.) IN NONSTOCK CORPORATIONS.

GR: A MAJORITY VOTE OF THE BOARD OF TRUSTEES.

XPN: IF SUBSTANTIALLY ALL OF THE CORPORATIONS ASSETS (INCLUDING GOODWILL) ARE TO BE
DISPOSED, VOTE OF AT LEAST 2/3 OF THE MEMBERS IS REQUIRED.
XPN TO XPN: IN NONSTOCK CORPORATIONS WHERE THERE ARE NO MEMBERS WITH VOTING RIGHTS,
THE VOTE OF AT LEAST A MAJORITY OF THE TRUSTEES WILL BE SUFFICIENT.

000

DETERMINATION OF WHETHER OR NOT THE DISPOSTION INVOLVES ALL OR SUBSTANTIALL ALL OF

THE CORPORATION'S ASSETS

A SALE OR OTHER DISPOSITION SHALL BE DEEMED TO COVER SUBSTANTIALLY ALL THE

CORPORATE ASSETS IF THEREBY THE CORPORATION WOULD BE RENDERED INCAPABLE OF
CONTINUING BUSINESS OR ACCOMPLISHING THE PURPOSE FOR WHICH IT WAS INCORPORATED.

000
EXCEPTION TO THE RESTRICTION ON THE POWER OF ANY CORPORATION TO DISPOSE ANY OF ITS
ASSETS

A CORPORATION MAY DISPOSE ANY OF ITS ASSETS WITHOUT THE AUTHORIZATION BY THE
STOCKHOLDERS OR MEMBERS IF THE SAME IS NECESSARY IN THE REGULAR COURSE OF BUSINESS
IF THE CORPORATION OR IF THE PROCEEDS OF SALE OR OTHER DISPOSITION OF SUCH PROPERTY
AND ASSETS SHALL BE APPROPRIATED FOR THE CONDUCT OF ITS REMAINING BUSINESS.

000

REQUISITES TO BE COMPLIED WITH BEFORE A CORPORATION MAY BE ABLE TO ACQUIRE ITS OWN
SHARES (2 ITEMS)

1. THAT THE ACQUISITION MUST BE FOR LEGITIMATE CORPORATE PURPOSE OR PURPOSES; AND
2. THAT THE CORPORATION MUST HAVE UNRESTRICTED RETAINED EARNINGS IN ITS BOOKS TO
COVER THE SHARES TO BE PURCHASED OR ACQUIRED.

000

LEGITIMATE PURPOSES FOR ACQUIRING A CORPORATION'S OWN SHARES AS STATED IN SEC. 40

(3 ITEMS)

1. TO ELIMINATE FRACTIONAL SHARES ARISING OUT OF STOCK DIVIDENDS;

2. TO COLLECT OR COMPROMISE AN INDEBTEDNESS TO THE CORPORATION, ARISING OUT OF
UNPAID SUBSCRIPTION, IN A DELINQUENCY SALE, AND TO PURCHASE DELINQUENT SHARES SOLD
DURING SAID SALE; AND
3. TO PAY DISSENTING OR WITHDRAWING STOCKHOLDERS ENTITLED TO PAYMENT FOR THEIR
SHARES UNDER THE PROVISIONS OF THE CODE.

000

VOTING REQUIREMENT FOR THE INVESTMENT OF CORPORATE FUNDS IN ANOTHER CORPORATION OR

BUSINESS OR FOR ANY OTHER PURPOSE

APPROVAL BY A MAJORITY OF THE BOARD OF DIRECTORS OR TRUSTEES AND RATIFIED BY THE

STOCKHOLDERS REPRESENTING AT LEAST 2/3 OF THE OUTSTANDING CAPITAL STOCK OR AT LEAST
2/3 OF THE MEMBERS IN THE CASE OF NONSTOCK CORPORATIONS.

000

EXCEPTION TO THE VOTING REQUIREMENT FOR THE INVESTMENT OF CORPORATE FUNDS IN

ANOTHER CORPORATION OR BUSINESS OR FOR ANY OTHER PURPOSE

THE APPROVAL OF THE STOCKHOLDERS OR MEMBERS SHALL NOT BE NECESSARY IF THE

INVESTMENT BY THE CORPORATION IS REASONABLY NECESSARY TO ACCOMPLISH ITS PRIMARY
PURPOSE AS STATED IN THE ARTICLES OF INCORPORATION.

000

A CORPORATION MUST HAVE SUFFICIENT ________ BEFORE IT CAN DECLARE DIVIDENDS.

UNRESTRICTED RETAINED EARNINGS

RULE ON THE APPLICATION OF DIVIDENDS ON DELINQUENT STOCK

ANY CASH DIVIDEND DUE ON DELINQUENT STOCK SHALL FIRST BE APPLIED TO THE UNPAID
BALANCE ON THE SUBSCRIPTION PLUS COSTS AND EXPENSES.
VOTING REQUIREMENT FOR THE ISSUANCE OF STOCK DIVIDEND

APPROVAL OF STOCKHOLDERS REPRESENTING AT LEAST 2/3 OF THE OUTSTANDING CAPITAL STOCK

GENERAL RULE ON ACCUMULATION OF PROFITS BY STOCK CORPORATIONS SUBJECT TO EXEMPTIONS

GR: STOCK CORPORATIONS ARE PROHIBITED FROM RETAINING SURPLUS PROFITS IN EXCESS OF
100% OF THEIR PAID-IN CAPITAL STOCK.

EXEMPTIONS ON THE RULE THAT STOCK CORPORATIONS ARE PROHIBITED FROM RETAINING
SURPLUS PROFITS IN EXCESS OF 100% OF THEIR PAID-IN CAPITAL STOCK

XPN 1: EXCEPT WHEN JUSTIFIED BY DEFINITE CORPORATE EXPANSION PROJECTS OR PROGRAMS

APPROVED BY THE BOARD OF DIRECTORS; OR
XPN 2: WHEN THE CORPORATION IS PROHIBITED UNDER ANY LOAN AGREEMENT WITH FINANCIAL
INSTITUTIONS OR CREDITORS FROM DECLARING DIVIDENDS WITHOUT THEIR CONSEST, AND SUCH
CONSENT HAS NOT YET BEEN SECURED; OR
XPN 3: WHEN THERE IS NEED FOR SPECIAL RESERVE FOR PROBABLE CONTINGENCIES.

000

GENERAL RULE ON THE VOTING REQUIREMENT FOR A CORPORATION TO ENTER INTO A MANAGEMENT
CONTRACT (FOR BOTH MANAGING AND MANAGED CORPORATION)

STOCK CORPORATION - APPROVAL BY THE BOARD OF DIRECTORS AND BY STOCKHOLDERS OWNING

AT LEAST THE MAJORITY OF THE OUTSTANDING CAPITAL STOCK
NONSTOCK CORPORATION - APPROVAL BY AT LEAST A MAJORITY OF THE MEMBERS

000

EXCEPTIONS WHERE THERE IS A DIFFERENT VOTING REQUIREMENT FOR A CORPORATION TO ENTER

INTO A MANAGEMENT CONTRACT (2 ITEMS)

1. WHERE A STOCKHOLDER OR STOCKHOLDERS REPRESENTING THE SAME INTEREST OF BOTH THE

MANAGING AND THE MANAGED CORPORATIONS OWN OR CONTROL MORE THAN 1/3 OF THE TOTAL
OUTSTANDING CAPITAL STOCK ENTITLED TO VOTE OF THE MANAGING CORPORATION; OR
2. WHERE A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS OF THE MANAGING
CORPORATION ALSO CONSTITUTE A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS OF
THE MANAGED CORPORATION.
VOTING REQUIREMENT: AT LEAST 2/3 OF THE TOTAL OUTSTANDING CAPITAL STOCK (OR
MEMBERS) ENTITLED TO VOTE.

000

NO MANAGEMENT CONTRACT SHALL BE ENTERED INTO FOR A PERIOD LONGER THAN __________
FOR ANY 1 TERM.

5 YEARS

000

THE ACTS WITHIN A CORPORATION'S EXPRESS OR IMPLIED POWERS

INTRA VIRES ACTS

/000

THE ACTS (WHETHER LAWFUL OR UNLAWFUL) EBEYOND A CORPORATION'S EXPRESS OR IMPLIED

POWERS
ULTRA VIRES ACTS

000

EFFECTS OF ULTRA VIRES ACTS

1. IF THE CONTRACT IS FULLY EXECUTED ON BOTH SIDES, THE CONTRACT IS EFFECTIVE.

2. IF THE CONTRACT IS EXECUTORY ON BOTH SIDES, THE CONTRACT IS UNENFORCEABLE.
3. WHERE THE CONTRACT IS EXECUTORY ON ONE SIDE ONLY, AND HAS BEEN FULLY PERFORMED
ON THE OTHER, THE PARTY WHO HAS RECEIVED BENEFITS FROM THE PERFORMANCE IS ESTOPPED
TP SET UP THAT THE CONTRACT IS ULTRA VIRES.

000

ARE THE RELATIVELY PERMANENT AND CONTINUING RULES OF ACTION BY THE CORPORATION FOR
ITS GOVERNMENT AND THAT OF THE INDIVIDUALS COMPOSING IT AND THOSE HAVING THE
DIRECTION, MANAGEMENT AND CONTROL OF ITS AFFAIRS, IN WHOLE OR IN PART, IN THE
MANAGEMENT AND CONTROL OF ITS AFFAIRS AND ACTIVITES.

BYLAWS

000

VOTING REQUIREMENT FOR THEADOPTION OF BYLAWS

VOTE OF THE STOCKHOLDERS REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING

CAPITAL STOCK, OR OF AT LEAST A MAJORITY OF THE MEMBERS IN CASE OF NONSTOCK
CORPORATIONS.

000

EFFECTIVITY OF BYLAWS

UPON THE ISSUANCE BY THE SEC OF A CERTIFICATION THAT THE BYLAWS ARE IN ACCORDANCE
WITH THE CORPORATION CODE.

000

VOTING REQUIREMENT FOR AMENDMENTS TO BE MADE TO OR REPEAL BYLAWS

VOTE OF A MAJORITY OF THE BOARD OF DIRECTORS OR TRUSTEES, AND THE OWNERS OF AT

LEAST A MAJORITY OF THE OUTSTANDING CAPITAL STOCK, OR AT LEAST A MAJORITY OF THE
MEMBERS OF A NONSTOCK CORPORATION.

000

VOTING REQUIREMENT FOR THE DELEGATION OF THE POWER TO AMEND OR REPEAL THE BYLAWS OR
ADOPT NEW BYLAWS

VOTE OF THE OWNERS OF AT LEAST 2/3 OF THE OUTSTANDING CAPITAL STOCK OR 2/3 OF THE
MEMBERS IN A NONSTOCK CORPORATION.

000

VOTING REQUIREMENT FOR THE REVOCATION OF THE DELEGATION OF THE POWER TO AMEND OR
REPEAL THE BYLAWS OR ADOPT NEW BYLAWS TO THE BOARD OF DIRECTORS OR TRUSTEES

VOTE OF STOCKHOLDERS OWNING OR REPRESENTING A MAJORITY OF THE OUTSTANDING CAPITAL

STOCK OR MAJORITY OF THE MEMBERS.

000

KINDS OF MEETINGS OF DIRECTORS, TRUSTEES, STOCKHOLDERS OR MEMBERS (2 ITEMS)

1. REGULAR
2. SPECIAL

000

DATE OF REGULAR MEETINGS OF STOCKHOLDERS OR MEMBERS

GR: MEETINGS SHALL BE HELD ANNUALLY ON A DATE FIXED IN THE BYLAWS.

XPN: IF NO DATE IS FIXED, MEETINGS SHALL BE HELD ON ANY DATE AFTER APRIL 15 OF
EVERY YEAR AS DETERMINED BY THE BOARD OF DIRECTORS OR TRUSTEES.

000

WRITTEN NOTICE OF REGULAR MEETINGS SHALL BE SENT TO ALL STOCKHOLDERS OR MEMBERS OF

RECORD AT LEAST __________ PRIOR TO THE MEETING, UNLESS A DIFFERENT PERIOD IS
REQUIRED IN THE BYLAWS, LAW OR REGULATION.

21 DAYS

000

WAYS THE RIGHT OF A STOCKHOLDER OR MEMBER TO VOTE MAY BE EXERCISED (3 ITEMS)

1. IN PERSON
2. THROUGH A PROXY
3. THROUGH REMOTE COMMUNICATION (IN ABSENTIA) WHEN SO AUTHORIZED IN THE BYLAWS

000

PLACE OF MEETINGS OF STOCKHOLDERS OR MEMBERS (REGULAR OR SPECIAL)

GR: MEETINGS SHALL BE HELD IN THE PRINCIPAL OFFICE OF THE CORPORATION SET FORTH IN
THE ARTICLES OF INCORPORATION.
XPN: IF NOT PRACTICABLE, IN THE CITY OR MUNICIPALITY WHERE THE PRINCIPAL OFFICE OF
THE CORPORATION IS LOCATED.

000

SIGNIFIES THE NUMBER OF PERSONS BELONGING TO A CORPORATION REQUIRED TO TRANSACT

BUSINESS

QUORUM

000

NUMBER OF STOCKHOLDERS OR MEMBERS CONSTITUTING A QUORUM (ALSO APPLICABLE TO

DIRECTORS OR TRUSTEES)

GR: IT SHALL CONSIST OF THE STOCKHOLDERS REPRESENTING A MAJORITY OF THE OUTSTANDING

CAPITAL STOCK OR A MAJORITY OF THE MEMBERS IN CASE OF NONSTOCK CORPORATIONS.
XPN: THE CORPORATION CODE OR THE BYLAWS MAY FIX FOR A DIFFERENT NUMBER TO
CONSTITUTE A QUORUM (QUALIFIED MAJORITY).
000

REGULAR MEETINGS OF THE BOARD OF DIRECTORS OR TRUSTEES SHALL BE HELD _________,

UNLESS THE BYLAWS PROVIDE OTHERWISE.

MONTHLY

000

SPECIAL MEETINGS OF THE BOARD OF DIRECTORS OR TRUSTEES MAY BE HELD AT ANY TIME UPON
THE CALL OF THE __________ OR AS PROVIDED IN THE BYLAWS.

PRESIDENT

000

PLACE OF MEETINGS OF DIRECTORS OR TRUSTEES

ANYWHERE IN OR OUTSIDE OF THE PHILIPPINES, UNLESS THE BYLAWS PROVIDE OTHERWISE.

000

NOTICE OF REGULAR OR SPECIAL MEETINGS STATING THE DATE, TIME AND PLACE OF THE
MEETING MUST BE SENT TO EVERY DIRECTOR OR TRUSTEE AT LEAST __________ PRIOR TO THE
SCHEDULED MEETING, UNLESS A LONGER TIME IS PROVIDED IN THE BYLAWS.

2 DAYS

000

WHO SHALL PRESIDE AT MEETINGS

THE CHAIRMAN OR, IN HIS ABSENCE, THE PRESIDENT SHALL PRESIDE AT ALL MEETINGS OF THE
DIRECTORS OR TRUSTEES AS WELL AS OF THE STOCKHOLDERS OR MEMBERS, UNLESS THE BYLAWS
PROVIDE OTHERWISE.