What is a Corporation? A juridical person created by operation of law and registered with the Securities and Exchange Commission.
What is a stock corporation? A corporation with authorized capital stock dividend into shares of stock either with or without par value. A stock corporation is engaged in income generating activities and is authorized to declare dividends.
What is a non-stock corporation? A corporation with no authorized capital stock. It is organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social civil service, or similar purposes, like trade, industry, agricultural and like chambers, or any combinations thereof.
When is a corporation deemed to have a juridical personality? A corporation is deemed imbued with juridical personality from the time the Certificate of Incorporation is issued by the Securities and Exchange Commission.
What are the contents of the AI? The contents of the AI are the following: a)The name of the corporation b)The specific purpose or purposes for which the corporation is being incorporated c)The place where the principal office of the corporation is to be located, which must be within the Philippines d)The term of which the corporation is to exist e)The names, nationalities and residences of the incorporators f)The number of directors or trustees, which shall not be less than five (5) nor more than fifteen (15) g)The names, nationalities and residences of persons who shall act as directors or trustees until the first regular directors or trustees are duly elected and qualified h)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 share 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. i)If it be a non-stock corporation, the amount of its capital, the names, nationalities of the contributors and the amount contributed by each j)The name of the treasurer-in-trust k)Transfer clause l)Such other matters as are not inconsistent with law and which the incorporators may deem necessary and convenient
How many Directors/trustees may a corporation have? For a stock corporation, the number of directors must be at least five (5) but not more than fifteen (15). For a non-stock corporation, the number of trustees must be at least five (5) and could be more than fifteen. For religious societies, the number of trustees must be at least five (5) but not more than fifteen (15). For non-stock educational corporation, the number of trustees must be at least five (5) but not more than fifteen (15) and the number of trustees must be in multiples of five (5). And, for a corporation sole, the trustee is only one (1).
What are the requirements on directors/trustees? The basic requirements on directors or trustees are the following:
a) Natural person and is of legal age b) Compliant with the required number required under the Corporation Code. c) Majority of the directors are residents of the Philippines. d) Holder of at least one share or a member in case of non-stock corporations. e) Not convicted by final judgement of an offense punishable by imprisonment for a period exceeding six years, or a violation of the Code committed within five (5) years prior to the date of his election or appointment.
The Board may provide for additional qualifications of a director such as, but not limited to, the following:
a. Educational attainment b. Adequate competency and understanding of business c. Age requirement d. Integrity/probity e. Assiduousness
What is the difference between directors and trustees? For stock corporations, the appropriate term is "director". For non-stock corporations the appropriate term is "trustees". In a non-stock corporations however, the trustees may be called by other than trustees (i.e. directors) provided that the term used is identified as such in the Articles of Incorporation referring to trustees.
Are there business activities that no foreign ownership is allowed? Yes. These business activities are fully reserved to Filipino citizens as follow: a)Mass Media b)Practice of professions c)Retail trade enterprises with paid-up capital of less than US$2,500,000 d)Private Security Agencies e)Small scale mining f)Utilization of marine resources in archipelagic waters, territorial sea, and exclusive economic zone as well as small-scale utilization of natural resources in rivers, lakes, bays and lagoons g)Ownership, operation and management of cockpits h)Manufacture of firecrackers and other pyrotechnic devices.
Are practices of professions allowed in corporate form? The general rule is NO. However, there are practices of professions allowed now in corporate form as follow a) Practice of architecture b) Practice of interior design c) Practice of real estate services d) Practice of customs brokerage
Is there a minimum amount of paid-up capital stock? Yes. Under the Corporation Code, at least 25% of the amount subscribed must be paid-up and in no case be less than Five Thousand (P5,000.00) Pesos. The foregoing amount however shall not apply, if there is a law, rule or regulation of other regulatory agencies requiring a higher minimum paid-up capital.
What are the requirements for treasurer? Treasurer must be Filipino citizen in corporations with fully or partly nationalized business activities in view of the provisions of the Anti-Dummy Law. However, in non-nationalized business activities, the foreigner is allowed as treasurer.
What are the contents of By-laws? A private corporation may provide in its by-laws for: (1)The time, place and manner of calling and conducting regular or special meetings of the directors or trustees; (2)The time and manner of calling and conducting regular or special meeting of the stockholders or members; (3)The required quorum in meeting of stockholders or member and the manner of voting therein; (4)The form for proxies of stockholders and members and the manner of voting them; (5)The qualifications, duties and compensation of directors or trustees, officers and employees; (6)The time for holding the annual election of directors or trustees and the mode of manner of giving notice thereof (7)The manner of election or appointment and the term of office of all officers other than directors or trustees; (8)The penalties for violation of the by-laws; (9)In the case of stock corporation, the manner of issuing stock certificates; and (10)Such other matters as may be necessary for the proper or convenient transactions of its corporate business and affairs.
What is the requirement on annual meeting? The annual meeting date should be a specific date (i.e. January 28).
What is the requirement on the fiscal year? The fiscal year could be calendar year or a twelve-month period.
If the BL is filed after incorporation, what are the requirements? Three copies of By-laws signed by stockholders representing majority of the outstanding capital stock or majority of the members in case of non-stock corporation and the adoption was certified by majority of the board and the corporate secretary that the by-laws was adopted by the votes required under the Corporation Code.
Can BL be filled simultaneous with the Articles of Incorporation? Yes. The By-laws must be signed by all of the incorporators. What is the current status of the PIID Bylaws as submitted to SEC? For purposes of requirement compliance, PIID submitted a “PROFORMA ByLaws” with the intention to submit a new ByLaws for adoption after the issuance of the Certificate of Registration. A PROFORMA is a pre-prepared document which contains the basic rights and rules that is needed for a corporation to operate and which is available from the SEC office or through a downloadable form from the sec.gov.ph website. It is the duty of the corporation to submit a constitution and bylaws which will guide the management of the corporation, provide direction to the corporate body, used as basis in settling disputes and as well as cater to the evolving needs of the new entity.
What are the Salient points of the new PIID ByLaws? a. An expanded and clear definition of terms; b. Membership Classification; duties, rights and privileges; and process of qualification; c. Organization of a Chapter; process of creation; duties, rights and privileges; d. A change in fiscal year; e. Disciplinary Proceedings; f. Board of Trustee; Composition; Election Procedure; powers and process in case of vacancies; g. Board Officers Qualifications; Duties and Function; h. Consultative Body; Composition; Function; i. Committees