Article 18p. 18

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

Where

the

articles

of

incorporation

provide

for

non-voting shares in the cases allowed by this Code, the

holders of such shares shall nevertheless be entitled to

vote on the following matters:

1. Amendment of the articles of incorporation;

2. Adoption and amendment of bylaws;

3. Sale, lease, exchange, mortgage, pledge or other

disposition of all or substantially all of the corporate

property;

4.

Incurring,

creating

or

increasing

bonded

indebtedness;

5. Increase or decrease of capital stock;

6. Merger or consolidation of the corporation with

another corporation or other corporations;

7.

Investment

of

corporate

funds

in

another

corporation or business in accordance with this Code; and

8. Dissolution of the corporation.

Except as provided in the immediately preceding

paragraph, the vote necessary to approve a particular

corporate act as provided in this Code shall be deemed to

refer only to stocks with voting rights. (5a)

SECTION 7. Founders ' Shares . — Founders' shares

classified as such in the articles of incorporation may be

given certain rights and privileges not enjoyed by the

owners of other stocks, provided that where the exclusive

right to vote and be voted for in the election of directors is

granted, it must be for a limited period not to exceed five

(5) years subject to the approval of the Securities and

Exchange Commission. The five (5) year period shall

commence from the date of the aforesaid approval by the

Securities and Exchange Commission.

SECTION 8. Redeemable Shares . — Redeemable

shares may be issued by the corporation when expressly

so provided in the articles of incorporation. They may be

purchased or taken up by the corporation upon the

expiration of a fixed period, regardless of the existence of

unrestricted

retained

earnings

in

the

books

of

the

corporation, and upon such other terms and conditions

as may be stated in the articles of incorporation, which

terms

and

conditions

must

also

be

stated

in

the

certificate of stock representing said shares. (n)

SECTION 9. Treasury Shares . — Treasury shares are

shares of stock which have been issued and fully paid for,

but subsequently reacquired by the issuing corporation

by purchase, redemption, donation or through some

other lawful means. Such shares may again be disposed

of for a reasonable price fixed by the board of directors.

(n)

TITLE II Incorporation and Organization of Private

Corporations

SECTION

10.

Number

and

Qualifications

of

Incorporators . — Any number of natural persons not less

than five (5) but not more than fifteen (15), all of legal age

and a majority of whom are residents of the Philippines,

may form a private corporation for any lawful purpose or

purposes. Each of the incorporators of a stock corporation

must own or be a subscriber to at least one (1) share of

the capital stock of the corporation. (6a)

SECTION 11. Corporate Term . — A corporation shall

exist for a period not exceeding fifty (50) years from the

date of incorporation unless sooner dissolved or unless

said period is extended. The corporate term, as originally

stated in the articles of incorporation, may be extended

for periods not exceeding fifty (50) years in any single

instance

by

an

amendment

of

the

articles

of

incorporation, in accordance with this Code: Provided ,

That no extension can be made earlier than five (5) years

prior to the original or subsequent expiry date(s) unless

there are justifiable reasons for an earlier extension as

may be determined by the Securities and Exchange

Commission. (6)

SECTION 12. Minimum Capital Stock Required of

Stock Corporations . — Stock corporations incorporated

under this Code shall not be required to have any

minimum authorized capital stock except as otherwise

specifically provided for by special law, and subject to the

provisions of the following section.

SECTION

13.

Amount

of

Capital

Stock

to

be

Subscribed and Paid for Purposes of Incorporation . —

At least twenty-five (25%) percent of the authorized

capital stock as stated in the articles of incorporation

must be subscribed at the time of incorporation, and at

least twenty-five (25%) percent of the total subscription

must be paid upon subscription, the balance to be

payable on a date or dates fixed in the contract of

subscription without need of call, or in the absence of a

fixed date or dates, upon call for payment by the board of

directors: Provided , however , That in no case shall the

paid-up capital be less than five thousand (P5,000.00)

pesos. (n)

SECTION 14. Contents of Articles of Incorporation . —

All corporations organized under this Code shall file with

the

Securities and Exchange Commission articles of

incorporation in any of the official languages, duly signed

and acknowledged by all of the incorporators, containing

substantially the following matters, except as otherwise

prescribed by this Code or by special law:

1. The name of the corporation;

2. The specific purpose or purposes for which the

corporation is being incorporated. Where a corporation

has

more

than

one

stated

purpose, the articles of

incorporation shall state which is the primary purpose

and which is/are the secondary purpose or purposes:

Provided , That a non-stock corporation may not include a

purpose which would change or contradict its nature as

such;

3.

The

place

where

the

principal

office

of

the

corporation is to be located, which must be within the

Philippines;

4. The term for which the corporation is to exist;

5. The names, nationalities and residences of the

incorporators;

6. The number of directors or trustees, which shall not

be less than five (5) nor more than fifteen (15);

7. The names, nationalities and residences of the

persons who shall act as directors or trustees until the

first regular directors or trustees are duly elected and

qualified in accordance with this Code;

8. If it be a stock corporation, the amount of its

authorized

capital

stock

in

lawful

money

of

the

Philippines, the number of shares into which it is divided,

and in case the shares are par value shares, the par value

of each, the names, nationalities and residences of the

original subscribers, and the amount subscribed and paid

by each on his subscription, and if some or all of the

shares are without par value, such fact must be stated;

9. If it be a non-stock corporation, the amount of its

capital, the names, nationalities and residences of the

contributors and the amount contributed by each; and

10. Such other matters as are not inconsistent with

law and which the incorporators may deem necessary

and convenient.

The Securities and Exchange Commission shall not

accept

the

articles

of

incorporation

of

any

stock

corporation unless accompanied by a sworn statement of

the Treasurer elected by the subscribers showing that at

least twenty-five (25%) percent of the authorized capital

stock of the corporation has been subscribed, and at least

twenty-five (25%) percent of the total subscription has

been fully paid to him in actual cash and/or in property

the fair valuation of which is equal to at least twenty-five

(25%) percent of the said subscription, such paid-up

© Compiled by RGL

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