Article 23p. 23

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

4.

To

amend

its

articles

of

incorporation

in

accordance with the provisions of this Code;

5. To adopt bylaws, not contrary to law, morals, or

public policy, and to amend or repeal the same in

accordance with this Code;

6. In case of stock corporations, to issue or sell stocks

to subscribers and to sell treasury stocks in accordance

with the provisions of this Code; and to admit members

to the corporation if it be a non-stock corporation;

7. To purchase, receive, take or grant, hold, convey,

sell, lease, pledge, mortgage and otherwise deal with

such real and personal property, including securities and

bonds of other corporations, as the transaction of the

lawful business of the corporation may reasonably and

necessarily require, subject to the limitations prescribed

by law and the Constitution;

8. To adopt any plan of merger or consolidation as

provided in this Code;

9. To make reasonable donations, including those for

the public welfare or for hospital, charitable, cultural,

scientific, civic, or similar purposes: Provided , that no

corporation, domestic or foreign, shall give donations in

aid of any political party or candidate or for purposes of

partisan political activity;

10. To establish pension, retirement, and other plans

for the benefit of its directors, trustees, officers and

employees; and

11. To exercise such other powers as may be essential

or necessary to carry out its purpose or purposes as

stated in its articles of incorporation. (13a)

SECTION 37. Power to Extend or Shorten Corporate

Term . — A private corporation may extend or shorten its

term as stated in the articles of incorporation when

approved by a majority vote of the board of directors or

trustees and ratified at a meeting by the stockholders

representing at least two-thirds (2/3) of the outstanding

capital

stock

or

by

at

least

two-thirds (2/3) of the

members in case of non-stock corporations. Written

notice of the proposed action and of the time and place

of the meeting shall be addressed to each stockholder or

member at his place of residence as shown on the books

of the corporation and deposited to the addressee in the

post office with postage prepaid or served personally:

Provided , That in case of extension of corporate term, any

dissenting stockholder may exercise his appraisal right

under the conditions provided in this Code. (n)

SECTION 38. Power to Increase or Decrease Capital

Stock ; Incur , Create or Increase Bonded Indebtedness .

— No corporation shall increase or decrease its capital

stock

or

incur,

create

or

increase

any

bonded

indebtedness unless approved by a majority vote of the

board of directors and, at a stockholder's meeting duly

called for the purpose, two-thirds (2/3) of the outstanding

capital stock shall favor the increase or diminution of the

capital stock, or the incurring, creating or increasing of

any bonded indebtedness. Written notice of the proposed

increase or diminution of the capital stock or of the

incurring,

creating,

or

increasing

of

any

bonded

indebtedness

and

of

the

time

and

place

of

the

stockholder's meeting at which the proposed increase or

diminution

of

the

capital stock or the incurring or

increasing

of

any

bonded

indebtedness

is

to

be

considered, must be addressed to each stockholder at his

place

of

residence

as

shown

on

the books of the

corporation and deposited to the addressee in the post

office with postage prepaid, or served personally.

A

certificate

in

duplicate

must be signed by a

majority

of

the

directors

of

the

corporation

and

countersigned by the chairman and secretary of the

stockholders' meeting, setting forth:

(1) That the requirements of this section have been

complied with;

(2) The amount of the increase or diminution of the

capital stock;

(3) If an increase of the capital stock, the amount of

capital stock or number of shares of no-par stock thereof

actually

subscribed,

the

names,

nationalities

and

residences of the persons subscribing, the amount of

capital

stock

or

number

of

shares

of no-par stock

subscribed by each, and the amount paid by each on his

subscription in cash or property, or the amount of capital

stock or number of shares of no-par stock allotted to each

stockholder if such increase is for the purpose of making

effective stock dividend therefor authorized;

(4) Any bonded indebtedness to be incurred, created,

or increased;

(5) The actual indebtedness of the corporation on the

day of the meeting;

(6) The amount of stock represented at the meeting;

and

(7) The vote authorizing the increase or diminution of

the capital stock, or the incurring, creating or increasing

of any bonded indebtedness.

Any increase or decrease in the capital stock or the

incurring,

creating

or

increasing

of

any

bonded

indebtedness shall require prior approval of the Securities

and Exchange Commission.

One of the duplicate certificates shall be kept on file

in the office of the corporation and the other shall be filed

with

the

Securities

and

Exchange

Commission

and

attached to the original articles of incorporation. From

and

after

approval

by

the Securities and Exchange

Commission and the issuance by the Commission of its

certificate of filing, the capital stock shall stand increased

or decreased and the incurring, creating or increasing of

any bonded indebtedness authorized, as the certificate of

filing may declare: Provided , That the Securities and

Exchange Commission shall not accept for filing any

certificate

of

increase

of

capital

stock

unless

accompanied by the sworn statement of the treasurer of

the corporation lawfully holding office at the time of the

filing of the certificate, showing that at least twenty-five

(25%) percent of such increased capital stock has been

subscribed and that at least twenty-five (25%) percent of

the amount subscribed has been paid either in actual

cash to the corporation or that there has been transferred

to the corporation property the valuation of which is

equal to twenty-five (25%) percent of the subscription:

Provided , further , That no decrease of the capital stock

shall be approved by the Commission, if its effect shall

prejudice the rights of corporate creditors.

Non-stock corporations may incur or create bonded

indebtedness, or increase the same, with the approval by

a majority vote of the board of trustees and of at least

two-thirds (2/3) of the members in a meeting duly called

for the purpose.

Bonds issued by a corporation shall be registered

with the Securities and Exchange Commission which

shall have the authority to determine the sufficiency of

the terms thereof. (17a)

SECTION 39. Power to Deny Pre-emptive Right . — All

stockholders

of

a

stock

corporation

shall

enjoy

pre-emptive right to subscribe to all issues or disposition

of shares of any class, in proportion to their respective

shareholdings, unless such right is denied by the articles

of incorporation or an amendment thereto: Provided ,

That such pre-emptive right shall not extend to shares to

be

issued

in

compliance

with

laws

requiring

stock

offerings or minimum stock ownership by the public; or

to shares to be issued in good faith with the approval of

the stockholders representing two-thirds (2/3) of the

outstanding

capital

stock,

in

exchange

for property

needed

for corporate purposes or in payment of a

previously contracted debt.

SECTION 40. Sale or Other Disposition of Assets . —

Subject to the provisions of existing laws on illegal

combinations and monopolies, a corporation may, by a

majority vote of its board of directors or trustees, sell,

lease, exchange, mortgage, pledge or otherwise dispose

© Compiled by RGL

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