Batas Pambansa Bilang 68THE CORPORATION CODE OF THEPHILIPPINESBe
it enacted by the Batasang Pambansa insession assembled:TITLE
IGENERAL PROVISIONSDEFINITIONSAND CLASSIFICATIONSSectin !"Title of
the Code. This Code shallbe known as "The Corporation Code of
thePhilippines." (n)Sectin #" Corporation defned. A corporationis
an artifcial being created by operation of law,haing the right of
s!ccession and the
powers,attrib!tesandpropertiese"presslya!thori#edby law or incident
to its e"istence. ($)Sectin $"Classes of corporations.Corporations
for%ed or organi#ed !nder
thisCode%aybestockornon&stockcorporations.Corporationswhichhaecapital
stockdiidedinto sharesand are a!thori#ed todistrib!te tothe holders
of s!ch shares diidends orallot%ents of the s!rpl!s profts on the
basis ofthe shares held are stock corporations. All
othercorporations are non&stock corporations. ('a)Sectin
%"Corporations created by speciallaws or charters. Corporations
created byspecial laws or charters shall be goernedpri%arily by the
proisions of the special law orcharter creatingthe%or
applicabletothe%,s!pple%entedbytheproisionsof thisCode,insofar as
they are applicable. (n)Sectin &"Corporators and
incorporators,stockholdersandmembers.Corporatorsarethose
whoco%poseacorporation,whetherasstockholders or as %e%bers.
(ncorporators arethosestockholders or %e%bers %entionedinthe
articles of incorporation as originallyfor%ing and co%posing the
corporation andwho are signatories thereof.Corporators
inastockcorporationarecalledstockholdersorshareholders.
Corporatorsinanon&stock corporation are called %e%bers.
()a)Sectin 6"Classifcation of shares. Thesharesof stockof
stockcorporations%aybediided into classes or series of shares, or
both,anyof whichclassesor seriesof shares%ayhaes!chrights,
priilegesor restrictions as%aybestatedinthearticles of
incorporation*Proided, That noshare%aybedepriedofoting rights
e"cept those classifed and iss!edas"preferred" or "redee%able"
shares, !nlessotherwise proided in this Code* Proided,f!rther, That
thereshall alwaysbeaclassorseries of shares
whichhaeco%pleteotingrights. Any or all of theshares or series
ofshares%ayhaeapar al!eor haenoparal!e as %ay be proided for in the
articles ofincorporation* Proided, howeer, That banks,tr!st
co%panies, ins!ranceco%panies, p!blic!tilities, and b!ilding and
loan associations shallnot be per%itted to iss!e no&par al!e
shares ofstock.Preferred shares of stock iss!ed by anycorporation
%ay be gien preference in thedistrib!tion of the assets of the
corporationincaseof li+!idationandinthedistrib!tionofdiidends, or
s!ch other preferences as %ay bestated in the articles of
incorporation which arenot iolatie of the proisions of this
Code*Proided, That preferred shares of stock %ay beiss!ed only with
a stated par al!e. The boardof directors, where a!thori#ed in the
articles ofincorporation, %ay f" the ter%s and conditionsof
preferred shares of stock or any seriesthereof* Proided, That s!ch
ter%s andconditions shall be e,ectie !pon the fling of acertifcate
thereof with the -ec!rities and."change Co%%ission.-hares of
capital stock iss!ed witho!t par al!eshall be dee%ed f!lly paid and
non&assessableand the holder of s!ch shares shall not be
liableto the corporation or to its creditors in respectthereto*
Proided/ That shares witho!t par al!e%ay not be iss!ed for a
consideration less thanthe al!e of fe (P0.11) pesos per
share*Proided, f!rther, That the entire considerationreceied by the
corporation for its no&par al!eshares shall be treated as
capital and shall notbe aailable for distrib!tion as diidends.A
corporation %ay, f!rther%ore, classify itssharesforthep!rposeof
ins!ringco%pliancewith constit!tional or legal re+!ire%ents.."cept
as otherwise proided in the articles
ofincorporationandstatedinthecertifcateofstock, each share shall be
e+!al in all respectsto eery other
share.2herethearticlesofincorporation proidefornon&oting shares
in the cases allowed by thisCode, the holders of s!ch shares
shallneertheless be entitled to ote on the following%atters*3.
A%end%ent of the articles ofincorporation/$. Adoption and a%end%ent
of by&laws/'. -ale, lease, e"change, %ortgage, pledgeor other
disposition of all or s!bstantiallyall of the corporate property/).
(nc!rring, creating or increasing bondedindebtedness/0. (ncrease or
decrease of capital stock/4. 5erger or consolidation of
thecorporationwithanothercorporationorother corporations/6.
(nest%ent of corporate f!nds in anothercorporation or b!siness in
accordancewith this Code/ and7. 8issol!tion of the
corporation.."cept as proided in the i%%ediatelypreceding
paragraph, the ote necessary toapproe a partic!lar corporate act as
proidedinthisCodeshall bedee%edtoreferonlytostocks with oting
rights. (0a)Sectin '"Founders shares. 9o!nders:shares classifed as
s!ch in the articles
ofincorporation%aybegiencertainrightsandpriilegesnoten;oyedbytheownersof
otherstocks, proided that where the e"cl!sie rightto ote andbe oted
for in the election ofdirectors isgranted, it %!st befor
ali%itedperiodnottoe"ceedfe(0)yearss!b;ecttotheapproal of
the-ec!rities and."changeCo%%ission. The fe&year period
shallco%%ence fro% the date of the aforesaidapproal by the
-ec!rities and ."changeCo%%ission. (n)Sectin 8"!edeemable shares.
cers to beelectedshall perfor%thed!ties en;oinedonthe% by law and
the by&laws of the corporation.Anlessthearticlesof
incorporationortheby&laws proide for a greater %a;ority, a
%a;ority ofthe n!%ber of directors or tr!stees as f"ed
inthearticlesof incorporationshall constit!tea+!or!% for the
transaction of corporateb!siness, and eery decision of at least
a%a;ority of the directors or tr!stees present at a%eetingat
whichthereisa+!or!%shall bealid as a corporate act, e"cept for the
electionof o>cers whichshall re+!ire theote of a%a;ority of all
the %e%bers of the board.8irectors or tr!stees cannot attend or ote
bypro"y at board %eetings. (''a)Sectin#6"!eport of election of
directors,trusteesando/cers.2ithin thirty ('1)daysafter the
election of the directors, tr!stees ando>cers of the
corporation, the secretary, or anyother o>cer of the
corporation, shall s!b%it tothe-ec!ritiesand."changeCo%%ission,
thena%es, nationalities and residences of thedirectors, tr!stees,
and o>cers elected. -ho!lda director, tr!stee or o>cer die,
resign or in any%anner cease to hold o>ce, his heirs in case
ofhis death, the secretary, or any other o>cer ofthe
corporation, or the director, tr!stee oro>cer hi%self, shall
i%%ediatelyreport s!chfact to the -ec!rities and
."changeCo%%ission. (n)Sectin #'"+is#ualifcation of
directors,trusteesoro/cers.Dopersonconictedbyfnal ;!dg%ent of an
o,ense p!nishable byi%prison%ent for a period e"ceeding si"
(4)years, or aiolationof this Codeco%%ittedwithinfe(0) years prior
tothedateof hiselection or appoint%ent, shall +!alify as adirector,
tr!steeor o>cer of anycorporation.(n)Sectin #8" !emo)al of
directors or trustees. Any director or tr!stee of a corporation %ay
bere%oed fro% o>ce by a ote of thestockholders holding or
representing at leasttwo&thirds ($?') of the o!tstanding
capital stock,or if the corporation be a non&stock
corporation,byaoteof at least two&thirds ($?') of
the%e%bersentitledto ote* Proided, Thats!chre%oal shall take place
either at a reg!lar%eeting of the corporation or at a
special%eetingcalledfor thep!rpose, andineithercase, after
preio!snoticetostockholdersor%e%bers of the corporation of the
intention topropose s!ch re%oal at the %eeting. A special%eetingof
thestockholdersor%e%bersof acorporation for the p!rpose of re%oal
ofdirectors ortr!stees, or any of the%,%!st becalled by the
secretary on order of the presidentoronthewrittende%andof
thestockholdersrepresentingor holdingat least a%a;orityofthe
o!tstanding capital stock, or, if it be a non&stock
corporation,on the written de%and of a%a;ority of the %e%bers
entitled to ote.-ho!ldthesecretaryfail or ref!setocall thespecial
%eeting!pons!chde%andor fail orref!se to gie the notice, or if
there is nosecretary, the call for the %eeting %ay beaddressed
directly to the stockholders or%e%bers by any stockholder or %e%ber
of thecorporationsigningthede%and. Doticeoftheti%e and placeofs!ch
%eeting,as wellas ofthe intention to propose s!ch re%oal, %!st
begien by p!blication or by written noticeprescribed in this Code.
cers is oidable, at the option ofs!ch corporation, !nless all the
followingconditions are present*3. That thepresenceof s!chdirector
ortr!steeintheboard%eetinginwhichthe contract was approed was
notnecessary to constit!te a +!or!%fors!ch %eeting/$. That the ote
of s!ch director or tr!steewasnot necessaryfor theapproal ofthe
contract/'. That the contract is fair and reasonable!nder the
circ!%stances/ and). Thatincaseof ano>cer, thecontracthas
beenpreio!slya!thori#edbytheboard of directors.2here any of the
frst two conditions set forth inthe preceding paragraph is absent,
in the caseof acontract withadirector or tr!stee, s!chcontract %ay
beratifedby the oteof thestockholders representing at least
two&thirds($?')of theo!tstandingcapital stockorof atleast
two&thirds ($?') of the %e%bers in a%eeting called for the
p!rpose* Proided, Thatf!ll disclos!reof theaderseinterest of
thedirectorsortr!steesinoledis%adeats!ch%eeting* Proided, howeer,
Thatthecontractis fair and reasonable !nder the
circ!%stances.(n)Sectin$$"Contracts between corporationswith
interlocking directors. ."cept in cases offra!d, and proided the
contract is fair andreasonable !nder the circ!%stances, a
contractbetween two or %ore corporations hainginterlocking
directors shall not be inalidated onthat gro!nd alone* Proided,
That if the interestof the interlocking director in one corporation
iss!bstantial and his interest in the
othercorporationorcorporationsis%erelyno%inal,he shall be s!b;ect
to the proisions of thepreceding section insofar as the
lattercorporation or corporations are concerned.-tockholdings
e"ceeding twenty ($1=) percentof the o!tstanding capital stock
shall beconsidered s!bstantial for p!rposes ofinterlocking
directors. (n)Sectin $%"+isloyalty of a director. 2here adirector,
by irt!e of his o>ce, ac+!ires forhi%self a b!siness opport!nity
which sho!ldbelong to the corporation, thereby obtainingprofts to
the pre;!dice of s!ch corporation, he%!st acco!nt to the latter for
all s!ch profts byref!ndingthesa%e, !nlesshis act has beenratifed
by a ote of the stockholders owning orrepresenting at least
two&thirds ($?') of theo!tstanding capital stock. This proision
shall beapplicable, notwithstanding the fact that thedirector
risked his own f!nds in the ent!re.
(n)Sectin$&",*ecuti)ecommittee. Theby&laws of a corporation
%ay create an e"ec!tieco%%ittee, co%posedof not less
thanthree%e%bers of the board, to be appointed by theboard.
-aidco%%ittee %ay act, by %a;orityote of all its %e%bers, on s!ch
specifc%atters within the co%petence of the board, as%ay
bedelegated to it in the by&laws or on a%a;ority ote of the
board, e"cept with respectto* (3) approal of any action for
whichshareholders: approal is also re+!ired/ ($) thefling of
acancies in the board/ (') thea%end%ent or repeal of by&laws or
the adoptionof new by&laws/ ()) the a%end%ent or repeal ofany
resol!tion of the board which by its
e"presster%sisnotsoa%endableorrepealable/ and(0) a distrib!tion of
cash diidends to theshareholders.TITLE IVPO-ERS OF
CORPORATIONSSectin $6"Corporate powers and capacity..ery
corporation incorporated !nder this Codehas the power and
capacity*3. To s!e and be s!ed in its corporatena%e/$. Cf
s!ccession by its corporate na%e forthe period of ti%e stated in
the articlesof incorporation and the certifcate ofincorporation/'.
To adopt and !se a corporate seal/). To a%end its articles of
incorporation inaccordancewiththeproisions of thisCode/0. Toadopt
by&laws, not contrarytolaw,%orals, or p!blic policy, and to
a%end orrepeal the sa%e in accordance with thisCode/4. (n case of
stock corporations, to iss!e orsell stocks to s!bscribers and to
sellstocks to s!bscribers and to sell treas!rystocks in accordance
with the proisionsofthisCode/ andtoad%it%e%berstothe corporation if
it be a non&stockcorporation/6. To p!rchase, receie, take or
grant, hold,coney, sell, lease, pledge, %ortgageandotherwisedeal
withs!chreal andpersonal property, incl!ding sec!ritiesand bonds of
other corporations, as thetransaction of the lawf!l b!siness of
thecorporation %ay reasonably andnecessarily re+!ire, s!b;ect to
theli%itations prescribed by lawand theConstit!tion/7. To enter
into %erger or consolidationwithother corporations as proidedinthis
Code/@. To %ake reasonable donations, incl!dingthose for the p!blic
welfare or forhospital, charitable, c!lt!ral, scientifc,ciic, or
si%ilar p!rposes* Proided, Thatno corporation, do%estic or foreign,
shallgie donations in aid of any politicalparty or candidate or for
p!rposes ofpartisan political actiity/31. To establish pension,
retire%ent, andother plans for the beneft of itsdirectors,
tr!stees, o>cers ande%ployees/ and33. To e"ercise s!ch other
powers as %ay beessential or necessarytocarryo!t itsp!rpose or
p!rposes as stated in thearticles of incorporation. (3'a)Sectin
$'"Power to e*tend or shortencorporateterm.
Apriatecorporation%aye"tend or shortenits ter%as stated in
thearticles of incorporationwhenapproedbya%a;ority ote of the board
of directors ortr!stees and ratifed at a %eeting by thestockholders
representing at least two&thirds($?') ofthe o!tstandingcapital
stockorbyatleast two&thirds ($?') of the %e%bers in case
ofnon&stock corporations. 2ritten notice of
theproposedactionandof theti%eandplaceofthe %eeting shall be
addressed to eachstockholder or %e%ber at his place of residenceas
shown on the books of the corporation
anddepositedtotheaddresseeinthepost o>cewith postage prepaid, or
sered personally*Proided, That in case of e"tension of
corporateter%, any dissenting stockholder%ay e"ercisehis appraisal
right !nder the conditions proidedin this code. (n)Sectin$8"Power
to increase or decreasecapitalstock2 incur, create or increase
bondedindebtedness. Do corporation shall increase ordecreaseits
capital stockor inc!r, createorincrease any bonded indebtedness
!nlessapproedbya%a;orityoteof theboardofdirectorsand,
atastockholder:s%eetingd!lycalledfor thep!rpose,
two&thirds($?') of theo!tstanding capital stock shall faor
theincreaseordi%in!tionof thecapital stock, orthe inc!rring,
creating or increasing of anybonded indebtedness. 2ritten notice of
theproposedincreaseordi%in!tionof thecapitalstock or of the
inc!rring, creating, or increasingof anybondedindebtednessandof
theti%eand place of the stockholder:s %eeting at whichthe proposed
increase or di%in!tion of thecapital stockor theinc!rringor
increasingofanybondedindebtednessistobeconsidered,%!stbeaddressedtoeachstockholderathisplace
of residence as shown on the books of thecorporationanddeposited to
the addresseeinthe post o>ce with postage prepaid, or
seredpersonally.Acertifcateind!plicate%!stbesignedbya%a;ority of
the directors of the corporation andco!ntersigned by the chair%an
and thesecretary of the stockholders: %eeting, settingforth*(3)
That the re+!ire%ents of this sectionhae been co%plied with/($) The
a%o!nt of the increase ordi%in!tion of the capital stock/(') (f
anincreaseof thecapital stock, thea%o!nt of capital stockor n!%ber
ofsharesof no&par stockthereof act!allys!bscribed, the na%es,
nationalities andresidences of thepersons s!bscribing,the a%o!nt of
capital stock or n!%ber ofno&par stock s!bscribed by each,
andthe a%o!nt paid by each on hiss!bscriptionincashor
property,orthea%o!nt of capital stockor n!%ber ofsharesof
no&parstockallottedtoeachstock&holder if s!chincreaseisfor
thep!rpose of %aking e,ectie stockdiidend therefor a!thori#ed/())
Any bonded indebtedness to be inc!rred,created or increased/(0) The
act!al indebtedness of thecorporation on the day of the %eeting/(4)
The a%o!nt of stock represented at the%eeting/ and(6) The ote
a!thori#ing the increase ordi%in!tionof thecapital stock, or
theinc!rring, creatingorincreasingof anybonded indebtedness.Any
increase or decrease in the capital stock orthe inc!rring, creating
or increasing of anybonded indebtedness shall re+!ire priorapproal
of the -ec!rities and ."changeCo%%ission.Cne of the d!plicate
certifcates shall be kept onfle in the o>ce of the corporation
and the othershall be fled with the -ec!rities and
."changeCo%%ission and attached to the original articlesof
incorporation. 9ro% and after approal by
the-ec!ritiesand."changeCo%%issionandtheiss!ance by the Co%%ission
of its certifcate offling, the capital stock shall stand increased
ordecreased and the inc!rring, creating orincreasing of any bonded
indebtednessa!thori#ed, as the certifcate of fling %aydeclare*
Proided, That the -ec!rities and."change Co%%ission shall not
accept for flingany certifcate of increase of capital stock!nless
acco%panied by the sworn state%ent ofthe treas!rer of the
corporation lawf!lly holdingo>ce at the ti%e of the fling of the
certifcate,showing that at least twenty&fe ($0=) percentof s!ch
increased capital stock has beens!bscribed and that at least
twenty&fe ($0=)percent of the a%o!nt s!bscribed has been
paideither in act!al cash to the corporation or
thattherehasbeentransferredtothecorporationproperty the al!ation of
which is e+!al totwenty&fe($0=) percent of
thes!bscription*Proided, f!rther, That no decrease of thecapital
stock shall be approed by theCo%%ission if its e,ect shall
pre;!dice therights of corporate creditors.Don&stock
corporations %ay inc!r or createbonded indebtedness, or increase
the sa%e,withtheapproal by a%a;ority oteof theboard of tr!stees and
of at least two&thirds ($?')of the %e%bers in a %eeting d!ly
called for thep!rpose.Gonds iss!ed by a corporation shall
beregistered with the -ec!rities and ."changeCo%%ission, which
shall haethea!thoritytodeter%ine the s!>ciency of the ter%s
thereof.(36a)Sectin $(" Power to deny pre.empti)e right. All
stockholders of a stock corporation shallen;oy pre&e%ptie right
to s!bscribe to alliss!esor
dispositionofsharesofanyclass,inproportion to their respectie
shareholdings,!nlesss!chright isdeniedbythearticlesofincorporation
or an a%end%ent thereto*Proided, That s!ch pre&e%ptie right
shall note"tendtoshares tobeiss!edinco%pliancewith laws re+!iring
stock o,erings or %ini%!%stock ownership by thep!blic/or toshares
tobe iss!ed in good faith with the approal of thestockholders
representing two&thirds ($?') of theo!tstanding capital stock,
in e"change forpropertyneededfor corporatep!rposesor inpay%ent of a
preio!sly contracted debt.Sectin %*" 3ale or other disposition of
assets.-!b;ect to the proisions of e"isting laws onillegal
co%binations and %onopolies, acorporation %ay, by a %a;ority ote of
its boardof directorsor tr!stees, sell, lease, e"change,%ortgage,
pledge or otherwise dispose of all ors!bstantially all of its
property and assets,incl!ding its goodwill, !pon s!ch ter%s
andconditions and for s!ch consideration, which%ay be %oney,
stocks, bonds or otherinstr!%ents for the pay%ent of %oney or
otherproperty or consideration, as its board ofdirectors or
tr!stees %ay dee% e"pedient,when a!thori#ed by the ote of the
stockholdersrepresenting at least two&thirds ($?') of
theo!tstandingcapital stock, or incaseof non&stock corporation,
by the ote of at least to two&thirds ($?') of the %e%bers, in a
stockholder:sor %e%ber:s %eeting d!ly called for thep!rpose.
2ritten notice of the proposed actionand of the ti%e and place of
the %eeting shallbe addressed to each stockholder or %e%ber athis
place of residence as shown on the books ofthe corporation and
deposited to the addresseein the post o>ce with postage prepaid,
orsered personally* Proided, That any dissentingstockholder %ay
e"ercise his appraisal right!nder the conditions proided in this
Code.A sale or other disposition shall be dee%ed tocoer
s!bstantiallyall thecorporatepropertyand assets if thereby the
corporation wo!ld berenderedincapableof contin!ingtheb!sinessor
acco%plishing the p!rpose for which it wasincorporated.After s!ch
a!thori#ation or approal by thestockholders or %e%bers, the board
of directorsor tr!stees %ay, neertheless, in its discretion,abandon
s!ch sale, lease, e"change, %ortgage,pledge or other disposition of
property andassets, s!b;ect to the rights of third parties!nder any
contract relating thereto, witho!tf!rther action or approal by the
stockholders or%e%bers.Dothing in this section is intended to
restrict thepower of any corporation, witho!t thea!thori#ation by
the stockholders or %e%bers,tosell, lease, e"change, %ortgage,
pledgeorotherwisedisposeof anyof its propertyandassets if the sa%e
is necessary in the !s!al andreg!lar co!rse of b!siness of said
corporation orif the proceeds of the sale or other disposition
ofs!chpropertyandassetsbeappropriatedforthe cond!ct of its
re%aining
b!siness.(nnon&stockcorporationswherethereareno%e%bers with
oting rights, the ote of at leasta %a;ority of the tr!stees in
o>ce will bes!>cient a!thori#ationfor thecorporationtoenter
intoanytransactiona!thori#edbythissection.Sectin %!"Power to
ac#uire own shares. Astock corporation shall hae the power
top!rchase or ac+!ire its own shares for alegiti%ate corporate
p!rpose or p!rposes,incl!ding b!t not li%ited to the following
cases*Proided, That the corporation has !nrestrictedretained
earnings in its books to coer theshares to be p!rchased or
ac+!ired*3. To eli%inate fractional shares arising o!tof stock
diidends/$. To collect or co%pro%ise anindebtedness to the
corporation, arisingo!t of !npaid s!bscription, in adelin+!ency
sale, and to p!rchasedelin+!ent shares sold d!ring said sale/and'.
To pay dissenting or withdrawingstockholders entitled to pay%ent
fortheir shares !nder the proisions of thisCode. (a)Sectin %#"
Power to in)est corporate funds inanother corporation or business
or for any otherpurpose. -!b;ect to the proisions of thisCode, a
priate corporation %ay inest its f!ndsin any other corporation or
b!siness or for anyp!rpose other than the pri%ary p!rpose
forwhichit was organi#edwhenapproedbya%a;orityof theboardof
directorsor tr!steesand ratifed by the stockholders representing
atleast two&thirds ($?') of the o!tstanding capitalstock, or
byat least twothirds ($?') of the%e%bers in the case of
non&stock corporations,at astockholder:sor
%e%ber:s%eetingd!lycalledfor thep!rpose. 2rittennoticeof
theproposed inest%ent and the ti%e and place ofthe %eeting shall be
addressed to eachstockholder or %e%ber at his place of residenceas
shown on the books of the corporation
anddepositedtotheaddresseeinthepost o>cewith postage prepaid, or
sered personally*Proided, That any dissenting stockholder
shallhaeappraisal rightasproidedinthisCode*Proided,howeer,
Thatwhere the
inest%entbythecorporationisreasonablynecessarytoacco%plish its
pri%ary p!rpose as stated in thearticles of incorporation, the
approal of thestockholders or %e%bers shall not benecessary. (36
3?$a)Sectin %$"Power to declare di)idends.& Theboardof
directorsof astockcorporation%aydeclare diidends o!t of the
!nrestrictedretained earnings which shall be payable incash, in
property, or in stock to all stockholderson the basis of
o!tstanding stock held by the%*Proided, That any cash diidends d!e
ondelin+!ent stockshall frst
beappliedtothe!npaidbalanceonthes!bscriptionpl!scostsande"penses,
whilestockdiidends shall
bewithheldfro%thedelin+!entstockholder!ntilhis!npaids!bscriptionisf!llypaid*
Proided,f!rther, That no stock diidend shall be iss!edwitho!t the
approal of stockholdersrepresentingnot lessthantwo&thirds ($?')
oftheo!tstandingcapital stockat areg!lar orspecial %eeting d!ly
called for the p!rpose.(34a)-tock corporations are prohibited fro%
retainings!rpl!s profts in e"cess of one h!ndred (311=)percent of
their paid&in capital stock, e"cept*
(3)when;!stifedbydefnitecorporatee"pansionpro;ects or progra%s
approed by the board ofdirectors/ or ($) when the corporation
isprohibited !nder any loan agree%ent with anyfnancial instit!tion
or creditor, whether local orforeign, fro% declaring diidends
witho!t its?hisconsent, ands!chconsent has not yet beensec!red/ or
(') whenit
canbeclearlyshownthats!chretentionisnecessary!nderspecialcirc!%stances
obtaining in the corporation,s!ch as when there is need for special
reserefor probable contingencies. (n)Sectin %%"Power to enter into
managementcontract. Do corporation shall concl!de a%anage%ent
contract with another corporation!nless s!ch contract shall hae
been approedbytheboardof directorsandbystockholdersowning at least
the %a;ority of the o!tstandingcapital stock, orbyatleast
a%a;orityof the%e%bers in the case of a non&stock
corporation,of both the %anaging and the %anagedcorporation, at
a%eetingd!lycalledfor thep!rpose* Proided, That (3) where a
stockholderor stockholders representing the sa%e interestof both
the %anaging and the %anagedcorporations own or control %ore than
one&third(3?') of the total o!tstanding capital stockentitled
to ote of the %anaging corporation/ or($) wherea%a;orityof
the%e%bers of theboard of directors of the %anaging corporationalso
constit!te a %a;ority of the %e%bers of theboard of directors of
the %anaged corporation,then the %anage%ent contract %!st beapproed
bythestockholders of the
%anagedcorporationowningatleasttwo&thirds($?')ofthetotal
o!tstandingcapital stockentitledtoote, or by at least
two&thirds ($?') of the%e%bers in the case of a non&stock
corporation.Do %anage%ent contract shall be entered intofor a
period longer than fe years for any oneter%.The proisions of the
ne"t preceding paragraphshall apply to any contract whereby
acorporation!ndertakesto%anageor operateall or s!bstantially all of
the b!siness of anothercorporation, whether
s!chcontractsarecalledserice contracts, operating agree%ents
orotherwise* Proided, howeer, That s!ch sericecontracts or
operating agree%ents which relateto the e"ploration, deelop%ent,
e"ploitation or!tili#ation of nat!ral reso!rces %ay be enteredinto
for s!ch periods as %ay be proided by thepertinent laws or
reg!lations. (n)Sectin %&"Altra ires acts of corporations. Do
corporation !nder this Code shall possess ore"ercise any corporate
powers e"cept thoseconferred by this Code or by its articles
ofincorporation and e"cept s!ch as are necessaryorincidental
tothee"erciseof thepowerssoconferred. (n)TITLE VB. LA-SSectin
%6"%doption of by.laws. .erycorporation for%ed !nder this Code
%!st,withinone(3) %onthafter receipt of o>cialnotice of the
iss!ance of its certifcate
ofincorporationbythe-ec!ritiesand."changeCo%%ission, adopt a codeof
by&laws for itsgoern%ent not inconsistent with this Code.
9orthe adoption of by&laws by the corporation thea>r%atie
ote of the stockholdersrepresenting at least a %a;ority of
theo!tstanding capital stock, or of at least a%a;orityof
the%e%bersincaseof non&stockcorporations, shall benecessary.
Theby&lawsshall be signed by the stockholders or %e%bersoting
for the%and shall be kept in theprincipal o>ce of the
corporation, s!b;ect to theinspection of the stockholders or
%e%bersd!ring o>ce ho!rs. A copy thereof,
d!lycertifedtobya%a;orityof thedirectors ortr!stees co!ntersigned
by the secretary of thecorporation, shall
befledwiththe-ec!ritiesand ."change Co%%ission which shall
beattached to the original articles of
incorporation.Dotwithstanding the proisions of the
precedingparagraph, by&laws%aybeadoptedandfledprior
toincorporation/ ins!chcase, s!chby&lawsshall
beapproedandsignedbyall theincorporators
ands!b%ittedtothe-ec!ritiesand."changeCo%%ission, together
withthearticles of incorporation.(n all cases, by&laws shall be
e,ectie only !pontheiss!ancebythe-ec!rities and."changeCo%%issionof
acertifcationthattheby&lawsare not inconsistent with this
Code.The -ec!rities and ."change Co%%ission shallnot accept for
fling the by&laws or anya%end%ent thereto of any bank,
bankinginstit!tion, b!ildingandloanassociation, tr!stco%pany,
ins!rance co%pany, p!blic !tility,ed!cational instit!tion or other
specialcorporationsgoernedbyspecial laws, !nlessacco%panied by a
certifcate of the appropriategoern%ent agency to the e,ect that
s!ch by&laws or a%end%ents are inaccordance withlaw.
($1a)Sectin %'"Contents ofby.laws. -!b;ect totheproisions of
theConstit!tion, this Code,other special laws, and the articles
ofincorporation, a priate corporation %ayproide in its by&laws
for*3. Theti%e, placeand%anner of callingand cond!cting reg!lar or
special%eetings of the directors or tr!stees/$. The ti%e and %anner
of calling andcond!ctingreg!lar or special %eetingsof the
stockholders or %e%bers/'. The re+!ired +!or!%in %eetings
ofstockholders or %e%bers and the%anner of oting therein/). The
for% for pro"ies of stockholders and%e%bers and the %anner of
otingthe%/0. The +!alifcations, d!ties andco%pensation of directors
or tr!stees,o>cers and e%ployees/4. The ti%e for holding the
ann!al electionof directors of tr!stees and the %ode or%anner of
giing notice thereof/6. The%annerof electionorappoint%entand the
ter% of o>ce of all o>cers otherthan directors or tr!stees/7.
The penalties for iolation of the by&laws/@. (nthecaseof stock
corporations, the%anner of iss!ing stock certifcates/ and31. -!ch
other %atters as %ay be necessaryfor the proper or conenient
transactionof its corporate b!siness and
a,airs.($3a)Sectin%8"%mendments to by.laws. Theboardof directors or
tr!stees, bya%a;orityote thereof, and the owners of at least
a%a;ority of the o!tstanding capital stock, or atleast a %a;ority
of the %e%bers of a non&stockcorporation, at a reg!lar or
special %eeting d!lycalledfor thep!rpose, %aya%endor repealany
by&laws or adopt new by&laws. The ownersof two&thirds
($?') of theo!tstandingcapitalstockortwo&thirds($?') of
the%e%bersinanon&stock corporation %ay delegate to theboard of
directors or tr!stees the power toa%end or repeal any by&laws
or adopt new by&laws* Proided, That any power delegated to
theboard of directors or tr!stees to a%end orrepealany by&laws
or adopt new by&laws shallbe considered as reoked
wheneerstockholders owning or representing a %a;orityof the
o!tstanding capital stock or a %a;ority ofthe %e%bers in
non&stock corporations, shall soote at a reg!lar or special
%eeting.2heneer any a%end%ent or new by&laws areadopted, s!ch
a%end%ent or new by&laws shallbe attached to the original
by&laws in the o>ceof thecorporation, andacopythereof,
d!lycertifed !nder oath by the corporate secretaryand a %a;ority of
the directors or tr!stees, shallbe fled with the -ec!rities and
."changeCo%%issionthesa%etobeattachedtotheoriginal articles of
incorporation and original by&laws.The a%ended or
newby&laws shall only
bee,ectie!pontheiss!ancebythe-ec!ritiesand ."change Co%%ission of a
certifcation thatthesa%earenotinconsistentwiththisCode.($$a and
$'a)TITLE VI/EETINGSSectin %("4indsof meetings.5eetingsofdirectors,
tr!stees, stockholders, or %e%bers%ay be reg!lar or special.
(n)Sectin&*"!egular andspecial meetingsofstockholders or
members. & cer.($), $4)Sectin&!"Place and time of meetings
ofstockholders of members. -tockholder:s or%e%ber:s %eetings,
whether reg!lar or special,shallbeheld in the city or %!nicipality
wherethe principal o>ce of the corporation is located,andif
practicable inthe principal o>ceofthecorporation* Proided,
That5etro5anilashall,for p!rposes of this section, be considered a
cityor %!nicipality.Dotice of %eetings shall be in writing, and
theti%e and place thereof stated therein.All proceedings had and
any b!sinesstransactedat any %eetingofthestockholdersor %e%bers, if
within the powers or a!thority ofthe corporation, shall be alid een
if the%eeting be i%properly held or called, proidedall the
stockholders or %e%bers of thecorporation are present or d!ly
represented atthe %eeting. ($) and $0)Sectin "5uorumin meetings.
Anlessotherwise proided for in this Code or in the by&laws, a
+!or!% shall consist of the stockholdersrepresenting a %a;ority of
the o!tstandingcapital stockora%a;orityof the%e%bersinthe case of
non&stock corporations. (n)Sectin&$"!egular andspecial
meetingsofdirectors or trustees. cers,no action %ay be bro!ght
against anycorporationwhichshall haeiss!edcertifcateof stock in
lie! of those lost, stolen or destroyedp!rs!ant to the proced!re
aboe&described.(r%atie ote of stockholders representing atleast
two&thirds ($?') of the o!tstanding capitalstock of each
corporationinthecase of
stockcorporationsoratleasttwo&thirds($?') of the%e%bers in the
case of non&stock corporationsshall be necessary for the
approal of s!ch plan.Any dissenting stockholder in stock
corporations%ay e"ercisehisappraisal right in accordancewith the
Code* Proided, That if after theapproal by the stockholders of s!ch
plan, theboard of directors decides to abandon the plan,the
appraisal right shall be e"ting!ished.Any a%end%ent to the plan of
%erger orconsolidation %ay be %ade, proided s!cha%end%ent is
approed by %a;ority ote of therespectie boards of directors or
tr!stees of allthe constit!ent corporations and ratifed by
thea>r%atie ote of stockholders representing atleast
two&thirds ($?') of the o!tstanding capitalstock or of
two&thirds ($?') of the %e%bers ofeach of the constit!ent
corporations. -!ch plan,together with any a%end%ent, shall
beconsidered as the agree%ent of %erger orconsolidation. (n)Sectin
'8" Articles of %erger or consolidation. After the approal by the
stockholders or%e%bers as re+!ired by the preceding
section,articles of %erger or articles of consolidationshall
bee"ec!tedbyeachof theconstit!entcorporations, to
besignedbythepresidentorice&president and certifed by the
secretary orassistantsecretaryof eachcorporationsettingforth*3.
Theplanof the%erger or theplanofconsolidation/$. As to stock
corporations, the n!%ber ofshares o!tstanding, or in the case
ofnon&stock corporations, the n!%ber of%e%bers/ and'.
Astoeachcorporation, then!%ber ofshares or %e%bers oting for
andagainst s!ch plan, respectiely. (n)Sectin '(".,ectiity of %erger
orconsolidation. Thearticles of %erger or ofconsolidation, signed
and certifed as hereinaboe re+!ired, shall be s!b%itted to
the-ec!rities and ."change Co%%ission in+!adr!plicate for its
approal* Proided, That inthe case of %erger or consolidation of
banks orbanking instit!tions, b!ilding and loanassociations, tr!st
co%panies, ins!ranceco%panies, p!blic !tilities,
ed!cationalinstit!tions and other special corporationsgoerned by
special laws, the faorablereco%%endation of the appropriate
goern%entagency shall frst be obtained. (f theCo%%ission is
satisfed that the %erger orconsolidationof
thecorporationsconcernedisnot inconsistent with the proisions of
this Codeand e"isting laws, it shall iss!e a certifcate of%erger or
of consolidation, at whichti%ethe%erger or consolidation shall be
e,ectie.(f, !pon inestigation, the -ec!rities and."change
Co%%ission has reason to belieethat theproposed%erger or
consolidationiscontrary to or inconsistent with the proisions
ofthis Code or e"isting laws, it shall set a hearingto gie the
corporations concerned theopport!nitytobeheard. 2rittennoticeof
thedate, ti%e and place of hearing shall be gien toeachconstit!ent
corporationat least two($)weeks before said hearing. The
Co%%issionshall thereafter proceed as proided in thisCode.
(n)Sectin 8*" .,ects of %erger or consolidation.The%erger or
consolidationshall haethefollowing e,ects*3. The constit!ent
corporations shallbeco%easinglecorporationwhich, incaseof %erger,
shall bethes!riingcorporation designated in the plan of%erger/ and,
incaseof consolidation,shall be the consolidated
corporationdesignated in the plan of consolidation/$. The separate
e"istence of theconstit!ent corporations shall cease,e"cept that of
the s!riing or theconsolidated corporation/'. The s!riing or the
consolidatedcorporationshall possessall therights,priileges,
i%%!nities andpowers andshall be s!b;ect to all the d!ties
andliabilities of a corporation organi#ed!nder this Code/). The
s!riing or the consolidatedcorporation shall there!pon
andthereafter possess all the
rights,priileges,i%%!nitiesandfranchises ofeach of the constit!ent
corporations/ andall property, real or personal, and allreceiables
d!e on whateer acco!nt,incl!ding s!bscriptions to shares andother
choses in action, and all and eeryother interest of, or belonging
to, or d!eto each constit!ent corporation, shall bedee%ed
transferred to and ested ins!ch s!riing or consolidatedcorporation
witho!t f!rther act or deed/and0. The s!riing or
consolidatedcorporation shall be responsible andliable for all the
liabilities and obligationsof each of the constit!ent corporations
inthe sa%e %anner as if s!ch s!riing orconsolidated corporation had
itselfinc!rred s!ch liabilities or obligations/and any pending
clai%, action orproceeding bro!ght by or against any ofs!ch
constit!ent corporations %ay beprosec!ted by or against the s!riing
orconsolidatedcorporation. Therights ofcreditorsor
liens!ponthepropertyofany of s!ch constit!ent corporationsshall not
be i%paired by s!ch %erger orconsolidation. (n)TITLE 1APPRAISAL
RIGHTSectin 8!"(nstances of appraisal right. Anystockholder of a
corporation shall hae the rightto dissent and de%and pay%ent of the
fairal!e of his shares in the following instances*3. (n case any
a%end%ent to the articles ofincorporation has the e,ect of
changingor restricting the rights of anystockholder or class of
shares, or ofa!thori#ingpreferences inany respects!periortothoseof
o!tstandingsharesof any class, or of e"tending orshortening the
ter% of corporatee"istence/$. (n case of sale, lease,
e"change,transfer, %ortgage, pledge or otherdispositionof all or
s!bstantiallyall ofthe corporate property and assets asproided in
the Code/ and'. (n case of %erger or consolidation. (n)Sectin
8#"7owright is e*ercised. Theappraisal right %ay be e"ercised by
anystockholder whoshall haeotedagainst theproposed corporate
action, by %aking a
writtende%andonthecorporationwithinthirty('1)days after the date on
which the ote was takenfor pay%ent of thefair al!eof his
shares*Proided, That fail!re to %ake the de%andwithin s!ch period
shall be dee%ed a waier oftheappraisal right. (f
theproposedcorporateaction is i%ple%ented or a,ected,
thecorporation shall pay to s!ch stockholder, !pons!rrender of the
certifcate or certifcates ofstock representing his shares, the fair
al!ethereof as of the day prior to the date on whichthe ote was
taken, e"cl!ding any appreciationor depreciation in anticipation of
s!ch corporateaction.(f withinaperiodof si"ty(41) daysfro%thedate
the corporate action was approed by thestockholders,
thewithdrawingstockholderandthe corporation cannot agree on the
fair al!eof the shares, it shall be deter%ined
andappraisedbythree(') disinterestedpersons,one of who% shall be
na%ed by thestockholder, another by the corporation, andthe third
by the two th!s chosen. The fndings ofthe %a;ority of the
appraisers shall be fnal, andtheir awardshall
bepaidbythecorporationwithin thirty ('1) days after s!ch award
is%ade* Proided, That no pay%ent shall be%ade to any dissenting
stockholder !nless thecorporationhas!nrestrictedretainedearningsin
its books to coer s!ch pay%ent* andProided, f!rther, That
!ponpay%ent bythecorporation of the agreed or awarded price,
thestockholder shall forthwith transfer his shares tothe
corporation. (n)Sectin 8$",-ect of demand and terminationof right.
9ro% the ti%e of de%and for pay%entof the fair al!e of a
stockholder:s shares !ntileither the abandon%ent of the corporate
actioninoled or the p!rchase of the said shares bythe corporation,
all rights accr!ing to s!chshares, incl!ding oting and diidend
rights,shall be s!spended in accordance with theproisions of this
Code, e"cept the right of s!chstockholder to receie pay%ent of the
fair al!ethereof* Proided, That if the dissentingstockholder is not
paid the al!e of his shareswithin '1 days after the award, his
oting anddiidendrightsshall i%%ediatelyberestored.(n)Sectin 8%"6hen
right to payment ceases.Do de%and for pay%ent !nder this Title %ay
bewithdrawn !nless the corporation consentsthereto. (f, howeer,
s!ch de%and for pay%entis withdrawn with the consent of
thecorporation, or if the proposed corporate actionis abandoned or
rescinded by the corporation ordisapproed by the -ec!rities and
."changeCo%%ission where s!ch approal is necessary,orif
the-ec!ritiesand."changeCo%%issiondeter%ines that s!ch stockholder
is not entitledtotheappraisal right, thentheright of
saidstockholder to be paid the fair al!e of hisshares shall cease,
his stat!s as a stockholdershall there!ponberestored, andall
diidenddistrib!tionswhichwo!ldhaeaccr!edonhisshares shall be paid
to hi%. (n)Sectin8&"6hobearscostsof
appraisal.Thecostsande"pensesof appraisal shall beborne by the
corporation, !nless the fair al!eascertained by the appraisers is
appro"i%atelythesa%eas
thepricewhichthecorporation%ayhaeo,eredtopaythestockholder, inwhich
case they shall be borne by the latter. (nthe case of an action to
recoer s!ch fair al!e,all costs and e"penses shall be
assessedagainst thecorporation, !nless theref!sal ofthe stockholder
to receie pay%ent was!n;!stifed. (n)Sectin 86""otation on
certifcates2 rights oftransferee. 2ithin ten (31) days
afterde%anding pay%ent for his shares, a dissentingstockholder
shall s!b%it the certifcates of
stockrepresentinghissharestothecorporationfornotation thereon that
s!ch shares are dissentingshares. Iis fail!re to do so shall, at
the option ofthe corporation, ter%inate his rights !nder thisTitle.
(f sharesrepresentedbythecertifcatesbearing s!chnotation are
transferred,andthecertifcatesconse+!entlycancelled, therightsof
thetransferor as adissentingstockholder!nder thisTitleshall
ceaseandthetransfereeshall hae all the rights of a reg!lar
stockholder/and all diidend distrib!tions which wo!ld
haeaccr!edons!chshares shall bepaidtothetransferee. (n)TITLE
1INON2STOC0 CORPORATIONSSectin8'"8efnition. 9orthep!rposesofthis
Code, a non&stock corporation is one whereno part of its inco%e
is distrib!table asdiidends to its %e%bers, tr!stees, or
o>cers,s!b;ect to the proisions of this Code ondissol!tion*
Proided, That anyproft whichanon&stock corporation %ay obtain
as an incidenttoitsoperationsshall, wheneernecessaryorproper, be
!sed for the f!rtherance of thep!rpose or p!rposes
forwhichthecorporationwas organi#ed, s!b;ect to the proisions of
thisTitle.The proisions goerning stock corporation,when pertinent,
shall be applicable to non&stockcorporations, e"cept as %ay be
coered byspecifc proisions of this Title. (n)Sectin 88" P!rposes.
Don&stock corporations%ay be for%ed or organi#ed for
charitable,religio!s, ed!cational, professional,
c!lt!ral,fraternal, literary, scientifc, social, ciic serice,or
si%ilar p!rposes, like trade, ind!stry,agric!lt!ral and like
cha%bers, or anyco%bination thereof, s!b;ect to the
specialproisions of this Title goerning partic!larclasses of
non&stock corporations. (n)CHAPTER
I/E/BERSSectin8("!ightto)ote.Therightof the%e%bers of any class or
classes to ote %ay beli%ited, broadened or denied to the
e"tentspecifed in the articles of incorporation or theby&laws.
Anless so li%ited, broadened or denied,each %e%ber, regardless of
class, shall beentitled to one ote.Anless otherwise proided in the
articles ofincorporationor theby&laws, a%e%ber %ayote by pro"y
in accordance with the proisionsof this Code. (n)Koting by %ail or
other si%ilar %eans by%e%bers of non&stock corporations %ay
bea!thori#ed by the by&laws of non&stockcorporations
withtheapproal of, and!nders!chconditionswhich%aybeprescribedby,the
-ec!rities and ."change Co%%ission.Sectin (*"
Don&transferability of %e%bership. 5e%bership in a
non&stock corporation and allrightsarisingtherefro%arepersonal
andnon&transferable, !nless the articles of incorporationor the
by&laws otherwise proide. (n)Sectin (!"Ter%ination of
%e%bership. 5e%bership shall be ter%inated in the
%annerandfortheca!sesproidedinthearticlesofincorporation or the
by&laws. Ter%ination of%e%bership shall hae the e,ect
ofe"ting!ishing all rights of a %e%ber in thecorporation or in its
property, !nless otherwiseproided in the articles of incorporation
or theby&laws. (n)CHAPTER IITR,STEES AND
OFFICESSectin(#",lectionandtermof trustees.Anless otherwise proided
in the articles ofincorporation or the by&laws, the board
oftr!steesof non&stockcorporations, which%aybe %ore than ffteen
(30) in n!%ber as %ay bef"ed in their articles of incorporation or
by&laws,shall, as soon as organi#ed, so classifythe%seles that
the ter% of o>ce of one&third(3?') of their n!%ber shall
e"pireeeryyear/and s!bse+!ent elections of tr!stees
co%prisingone&third (3?') of the board of tr!stees shall beheld
ann!ally and tr!stees so elected shall haeater%of three(') years.
Tr!steesthereafterelectedtofll acancies
occ!rringbeforethee"piration of a partic!lar ter% shall hold
o>ceonly for the !ne"pired period.Do person shall be elected as
tr!stee !nless heis a %e%ber of the corporation.Anless otherwise
proided in the articles ofincorporation or the by&laws,
o>cers of a non&stock corporation %ay be directly elected by
the%e%bers. (n)Sectin ($"Placeofmeetings.Theby&laws%ay proide
that the %e%bers of a non&stockcorporation%ayholdtheir reg!lar
or special%eetingsatanyplaceeeno!tsidetheplacewhere the principal
o>ce of the corporation islocated* Proided, That proper notice
is sent toall %e%bers indicating the date, ti%e and placeof the
%eeting* and Proided, f!rther, That theplace of %eeting shall be
within the Philippines.(n)CHAPTER IIIDISTRIB,TION OF ASSETS
INNON2STOC0 CORPORATIONSSectin(%"!ules of distribution.
(ncasedissol!tion of a non&stock corporation inaccordance with
the proisions of this Code, itsassets shall be applied and
distrib!ted asfollows*3. All liabilities and obligations of
thecorporationshall bepaid, satisfedanddischarged, or
ade+!ateproisionshallbe %ade therefore/$.
Assetsheldbythecorporation!ponacondition re+!iring ret!rn, transfer
orconeyance, and which condition occ!rsby reason of the
dissol!tion, shall beret!rned, transferred or coneyed inaccordance
with s!ch re+!ire%ents/'. Assets receied and held by thecorporation
s!b;ect to
li%itationsper%ittingtheir!seonlyforcharitable,religio!s,
beneolent, ed!cational orsi%ilar p!rposes, b!t not
held!ponacondition re+!iring ret!rn, transfer orconeyance by reason
of the dissol!tion,shall be transferred or coneyed to oneor %ore
corporations, societies ororgani#ations engaged in actiities in
thePhilippines s!bstantially si%ilar to thoseof
thedissolingcorporationaccordingto a plan of distrib!tion
adoptedp!rs!ant to this Chapter/). Assets other than those
%entioned intheprecedingparagraphs, if any, shallbe distrib!ted in
accordance with theproisions of the articles of incorporationor
theby&laws, tothee"tent that thearticlesof
incorporationortheby&laws,deter%ine the distrib!tie rights
of%e%bers, or any class or classes of%e%bers, or proide for
distrib!tion/ and0. (n any other case, assets %ay bedistrib!ted to
s!ch persons, societies,organi#ations or corporations, whether
ornot organi#ed for proft, as %ay bespecifed in a plan of
distrib!tionadopted p!rs!ant to this Chapter. (n)Sectin (&"Plan
of distribution of assets. Aplan proiding for the distrib!tion of
assets, notinconsistent with the proisions of this Title,%ay be
adopted by a non&stock corporation inthe process of dissol!tion
in the following%anner*Theboardof tr!steesshall,
by%a;orityote,adopt a resol!tion reco%%ending a plan ofdistrib!tion
and directing the s!b%issionthereof to a ote at a reg!lar or
special %eetingof %e%bers haing oting rights. 2ritten noticesetting
forth the proposed plan of distrib!tion ora s!%%ary thereof and the
date, ti%e andplaceof s!ch%eetingshall begientoeach%e%ber entitled
to ote, within the ti%e and inthe %anner proided in this Code for
the giingof notice of %eetings to %e%bers. -!ch plan
ofdistrib!tionshall beadopted!ponapproal ofat least two&thirds
($?') of the %e%bers haingoting rights present or represented by
pro"y ats!ch %eeting. (n)TITLE 1IICLOSE CORPORATIONSSectin (6"
+efnition and applicability of Title.& A close corporation,
within the %eaning of thisCode, is one whose articles of
incorporationproide that* (3) All thecorporation:s iss!edstock of
all classes, e"cl!sie of treas!ry shares,shall beheldof recordby
not %orethanaspecifed n!%ber of persons, not e"ceedingtwenty ($1)/
($) all the iss!ed stock of allclasses shall be s!b;ect to one or
%ore specifedrestrictionsontransferper%ittedbythisTitle/and(')
Thecorporationshall not list inanystock e"change or %ake any p!blic
o,ering ofanyof itsstockof anyclass. Dotwithstandingthe foregoing,
a corporation shall not bedee%ed a close corporation when at least
two&thirds ($?') of its oting stock or oting rights isowned or
controlled by another corporationwhich is not a close corporation
within the%eaning of this Code.Any corporation %ay be incorporated
as a closecorporation, e"cept %ining or oil
co%panies,stocke"changes, banks, ins!ranceco%panies,p!blic
!tilities, ed!cational instit!tions andcorporations declared tobe
ested withp!blicinterest in accordance with the proisions of
thisCode.The proisions of this Title shall pri%arily goernclose
corporations* Proided, That theproisions of other Titles of this
Code shall applys!ppletorily e"cept insofar as this Titleotherwise
proides.Sectin('"%rticles of incorporation. Thearticlesof
incorporationof aclosecorporation%ay proide*3. 9or aclassifcationof
shares or rightsand the +!alifcations for owning orholding the sa%e
and restrictions ontheir transfers as %ay be stated therein,s!b;ect
to the proisions of the followingsection/$. 9ora classifcation of
directors into oneor %ore classes, each of who% %ay beoted for and
elected solely by apartic!lar class of stock/ and'. 9or a greater
+!or!% or otingre+!ire%ents in %eetings ofstockholders or directors
than thoseproided in this Code.The articles of incorporation of a
closecorporation%ayproidethat theb!sinessofthe corporation shall be
%anaged by thestockholders of the corporation rather than by aboard
of directors. -o long as this proisioncontin!es in e,ect*3. Do
%eeting of stockholders need becalled to elect directors/$. Anless
the conte"t clearly re+!iresotherwise, the stockholders of
thecorporation shall be dee%ed to bedirectors for the p!rpose of
applying theproisions of this Code/ and'. The stockholders of the
corporation shallbe s!b;ect to all liabilities of directors.The
articles of incorporation %ay likewiseproidethat all o>cersor
e%ployeesor thatspecifed o>cers or e%ployees shall be electedor
appointed by the stockholders, instead of bythe board of
directors.Sectin (8"0alidity of restrictions on transferof shares.
cers/ (')directing or prohibiting any act of thecorporation or its
board of directors,stockholders, o>cers, or other persons party
totheaction/ ())re+!iringthep!rchaseattheirfair al!e of shares of
any stockholder, either bythe corporation regardless of the
aailability of!nrestrictedretainedearningsinitsbooks, orby the
other stockholders/ (0) appointing aproisional director/ (4)
dissoling thecorporation/ or (6) granting s!ch other relief asthe
circ!%stances %ay warrant.A proisional director shall be an
i%partialperson who is neither a stockholder nor acreditor of the
corporation or of any s!bsidiaryor a>liate of the corporation,
and whose f!rther+!alifcations, if any, %ay be deter%ined by
theCo%%ission. A proisional director is not areceierof
thecorporationand doesnothaethe title and powers of a c!stodian or
receier. Aproisional director shall hae all the rights andpowers of
a d!ly elected director of thecorporation, incl!ding the right to
notice of andto ote at %eetings of directors, !ntil s!ch ti%eas he
shall be re%oed by order of theCo%%ission or by all the
stockholders. Iisco%pensation shall be deter%ined byagree%ent
betweenhi%andthecorporations!b;ect toapproal of theCo%%ission,
which%ayf" his co%pensationintheabsenceofagree%ent or in the eent
of disagree%entbetween the proisional director and
thecorporation.Sectin !*&"6ithdrawal of stockholder
ordissolution of corporation. (n addition andwitho!t pre;!dice to
other rights and re%ediesaailable to a stockholder !nder this
Title, anystockholder of a close corporation %ay, for anyreason,
co%pel the said corporation to p!rchasehis shares at their fair
al!e, which shall not belessthantheir par or iss!edal!e,
whenthecorporation has s!>cient assets in its books tocoer its
debts and liabilities e"cl!sie of capitalstock* Proided, That any
stockholder of a closecorporation %ay, by written petition to
the-ec!rities and."changeCo%%ission, co%pelthedissol!tionof
s!chcorporationwheneerany of acts of the directors, o>cers or
those incontrol of the corporation is illegal, orfra!d!lent, or
dishonest, or oppressie or!nfairly pre;!dicial to thecorporationor
anystockholder, orwheneercorporateassetsarebeing %isapplied or
wasted.TITLE 1IIISPECIAL CORPORATIONSCHAPTERI 2 ED,CATIONAL
CORPORATIONSSectin !*6"&ncorporation. .d!cationalcorporations
shall be goerned by special lawsand by the general proisions of
this Code. (n)Sectin !*'"Pre.re#uisites to
incorporation.."cept!ponfaorablereco%%endationof the5inistry of
.d!cation and C!lt!re, the -ec!ritiesand."changeCo%%issionshall
notacceptorapproethearticles of incorporationandby&laws of any
ed!cational instit!tion. (347a)Sectin !*8"Boardof
trustees.Tr!steesofed!cationalinstit!tionsorgani#edas
non&stockcorporations shall not be less than fe (0) nor%ore
than ffteen (30)* Proided, howeer, Thatthe n!%ber of tr!stees shall
be in %!ltiples offe (0).Anless otherwise proided in the articles
ofincorporation on the by&laws, the board oftr!stees of
incorporatedschools, colleges, orotherinstit!tionsof learningshall,
assoonasorgani#ed, so classify the%seles that the ter%of o>ce of
one&ffth (3?0) of their n!%ber shalle"pire eery year. Tr!stees
thereafter elected tofll acancies, occ!rring before the e"piration
ofa partic!lar ter%, shallhold o>ce only for the!ne"pired
period. Tr!stees elected thereafter tofll acancies ca!sed by
e"piration of ter% shallhold o>ce for fe (0) years. A %a;ority
of thetr!stees shall constit!te a +!or!% for thetransaction of
b!siness. The powers anda!thority of tr!stees shall be defned in
the by&laws.9or instit!tions organi#ed as stock
corporations,the n!%ber and ter%of directors shall begoerned by the
proisions on stockcorporations. (34@a)CHAPTER IIRELIGIO,S
CORPORATIONSSectin !*("Classes of religious corporations. dait of
thepresiding elder, secretary, or clerk or other%e%ber of
s!chreligio!s societyor religio!sorder, or diocese, synod, or
district organi#ationof thereligio!sdeno%ination, sect or
ch!rch,setting forth the following*3. That the religio!s society or
religio!sorder, or diocese, synod, or districtorgani#ation is a
religio!s organi#ation ofa religio!s deno%ination, sect or
ch!rch/$. That at least two&thirds ($?') of its%e%bership hae
gien their writtenconsent or hae oted to incorporate, ata d!ly
conened %eeting of the body/'. That theincorporationof
thereligio!ssociety or religio!s order, or diocese,synod, or
district organi#ation desiring toincorporate is not forbidden
byco%petent a!thority or by theconstit!tion, r!les, reg!lations
ordiscipline of the religio!sdeno%ination,sect, or ch!rch of which
it for%s a part/). That the religio!s society or religio!sorder, or
diocese, synod, or districtorgani#ation desires to incorporate
forthe ad%inistration of its a,airs,properties and estate/0.
Theplacewheretheprincipal o>ceofthe corporation is to be
established andlocated, which place %!st be within thePhilippines/
and4. The na%es, nationalities, and residencesof
thetr!steeselectedbythereligio!ssociety or religio!s order, or the
diocese,synod, or district organi#ationtoserefor the frst year or
s!ch other period as%aybeprescribedbythelawsof thereligio!s society
or religio!s order, or ofthe diocese, synod, or
districtorgani#ation, the board of tr!stees to benot less than fe
(0) nor %ore thanffteen (30). (341a)TITLE 1IVDISSOL,TIONSectin
!!'"5ethods of dissol!tion. Acorporation for%ed or organi#ed !nder
theproisions of this Code %ay be dissoledol!ntarily or
inol!ntarily. (n)Sectin!!8"Kol!ntarydissol!tionwherenocreditors are
a,ected. (f dissol!tion of acorporation does not pre;!dice the
rights of anycreditor haing a clai% against it, thedissol!tion %ay
be e,ected by %a;ority ote oftheboardof directors or tr!stees,
andbyaresol!tion d!ly adopted by the a>r%atie oteof
thestockholdersowningat leasttwo&thirds($?')of
theo!tstandingcapital stockorof atleast two&thirds ($?') of the
%e%bers of a%eeting to be held !pon call of the directors
ortr!stees after p!blication of the notice of ti%e,placeandob;ect
of the%eetingfor three(')consec!tie weeks in a newspaper p!blished
inthe place where the principal o>ce of
saidcorporationislocated/ andif nonewspaperisp!blished in s!ch
place, then in a newspaper ofgeneral circ!lation in the
Philippines, aftersending s!ch notice to each stockholder or%e%ber
either by registered %ail or bypersonal deliery at least thirty
('1) days priorto said %eeting. A copy of the resol!tiona!thori#ing
the dissol!tion shall be certifed bya %a;ority of the board of
directors or tr!steesand co!ntersigned by the secretary of
thecorporation. The -ec!rities and ."changeCo%%ission shall
there!pon iss!e thecertifcate of dissol!tion. (4$a)Sectin
!!("Kol!ntary dissol!tion wherecreditorsarea,ected.
2herethedissol!tionof a corporation %ay pre;!dice the rights of
anycreditor, the petition for dissol!tion shall befled with the
-ec!rities and ."changeCo%%ission.The petition shallbe signedby
a%a;ority of its board of directors or tr!stees orother o>cers
haingthe %anage%ent of itsa,airs, erifed by its president or
secretary oroneof itsdirectorsor tr!stees, andshall setforthall
clai%s andde%ands against it, andthat
itsdissol!tionwasresoled!ponbythea>r%atie ote of the
stockholdersrepresenting at least two&thirds ($?') of
theo!tstandingcapital stockor byat least two&thirds ($?') of
the %e%bers at a %eeting of itsstockholders or %e%bers called for
thatp!rpose.(f the petition is s!>cient in for% ands!bstance,
theCo%%issionshall, byanorderrecitingthe p!rpose ofthe petition,f"
a dateonorbeforewhichob;ectionsthereto%aybefled by any person,
which date shall not be lessthan thirty('1) days nor%ore than
si"ty(41)daysaftertheentryof theorder. Gefores!chdate, a copy of
the order shall be p!blished atleast once a week for three (')
consec!tieweeks in a newspaper of general circ!lationp!blished in
the %!nicipality or city where theprincipal o>ce of the
corporation is sit!ated, orif there be no s!ch newspaper, then in
anewspaper of general circ!lation in thePhilippines, and a si%ilar
copy shallbe postedfor three(') consec!tie weeks inthree (')p!blic
places in s!ch %!nicipality or city.Apon fe (0) day:s notice, gien
after the dateon which the right to fle ob;ections as f"ed inthe
order has e"pired, the Co%%ission shallproceed to hear the petition
and try any iss!e%adebytheob;ections fled/ andif nos!chob;ection is
s!>cient, and the %aterialallegations of the petition are tr!e,
it shallrender ;!dg%ent dissoling the corporation anddirecting s!ch
disposition of its assets as ;!sticere+!ires, and %ay appoint a
receier to collects!ch assets and pay the debts of thecorporation.
(cial lang!age of thePhilippines, if necessary.
Theapplicationshallbe !nder oath and, !nless already stated in
itsarticles of incorporation, shall specifcally setforth the
following*3. The date and ter% of incorporation/$. The address,
incl!ding the streetn!%ber, of the principal o>ce of
thecorporationinthe co!ntry or stateofincorporation/'.
Thena%eandaddress of its residentagent a!thori#ed to accept
s!%%onsand process in all legal proceedings and,pending the
establish%ent of a localo>ce, all notices a,ecting
thecorporation/). TheplaceinthePhilippineswherethecorporation
intends to operate/0. Thespecifcp!rposeorp!rposeswhichthe
corporation intends to p!rs!e in thetransaction of its b!siness in
thePhilippines*Proided,Thatsaid p!rposeor p!rposes are those
specifcally statedinthecertifcateof a!thorityiss!edbythe
appropriate goern%ent agency/4. The na%es and addresses of the
presentdirectors and o>cers of the corporation/6. A state%ent of
its a!thori#ed capitalstock and the aggregate n!%ber ofshares which
the corporation hasa!thoritytoiss!e,
ite%i#edbyclasses,paral!eofshares,shares witho!tparal!e, and
series, if any/7. Astate%ent of its o!tstandingcapitalstock and the
aggregate n!%ber ofshares which the corporation has iss!ed,ite%i#ed
by classes, par al!e of shares,shareswitho!tparal!e, andseries,
ifany/@. A state%ent of the a%o!nt act!ally paidin/ and31.
-!chadditional infor%ationas%aybenecessary or appropriate in order
toenable the -ec!rities and ."changeCo%%issionto
deter%inewhethers!chcorporation is entitled to a license totransact
b!siness in the Philippines, andto deter%ine and assess the
feespayable.Attached to the application for license shall be ad!ly
e"ec!ted certifcate !nder oath by thea!thori#ed o>cial or
o>cials of the ;!risdictionof its incorporation, attesting to
the fact that thelawsof theco!ntryor stateof
theapplicantallow9ilipinociti#ens andcorporations
todob!sinesstherein, andthat theapplicant
isane"istingcorporationingoodstanding. (f s!chcertifcate is in a
foreign lang!age, a translationthereof in.nglish!nder
oathofthetranslatorshall be attached thereto.The application for a
license to transactb!siness in the Philippines shall likewise
beacco%panied by a state%ent !nder oath of thepresident or any
other person a!thori#ed by thecorporation,
showingtothesatisfactionof the-ec!rities and ."change Co%%ission
and othergoern%ental agencyinthepropercasesthattheapplicantissolent
andinso!nd fnancialcondition, and setting forth the assets
andliabilities of the corporation as of the date note"ceeding one
(3) year i%%ediately prior to thefling of the application.9oreign
banking, fnancial and ins!rancecorporations shall, in addition to
the aboere+!ire%ents, co%ply with the proisions ofe"isting laws
applicable to the%. (n the case ofall other foreign corporations,
no application forlicensetotransact b!sinessinthePhilippinesshall
be accepted by the -ec!rities and."change Co%%ission witho!t
preio!sa!thority fro% the appropriate goern%entagency, wheneer
re+!ired by law. (47a)Sectin!#6"&ssuanceof alicense. (f
the-ec!rities and ."change Co%%ission is satisfedthat the applicant
has co%pliedwithall there+!ire%ents of this Code and other
speciallaws, r!les and reg!lations, the Co%%issionshall iss!e a
license to the applicant to transactb!sinessinthePhilippinesfor
thep!rposeorp!rposes specifed in s!ch license. Aponiss!ance of the
license, s!ch foreign corporation%ay co%%ence to transact b!siness
in thePhilippines and contin!e to do so for as long
asitretainsitsa!thoritytoactasacorporation!nder thelawsof
theco!ntryor stateof itsincorporation, !nless s!ch license is
sooners!rrendered, reoked, s!spended or ann!lled inaccordance with
this Code or other special laws.2ithin si"ty (41) days after the
iss!ance of thelicensetotransactb!sinessinthePhilippines,the
license, e"cept foreign banking or ins!rancecorporation, shall
deposit with the -ec!ritiesand."changeCo%%issionfor thebeneft
ofpresentandf!t!recreditorsofthelicenseeinthe Philippines,
sec!rities satisfactory to the-ec!rities and ."change
Co%%ission,consisting of bonds or other eidence ofindebtedness of
the Loern%ent of thePhilippines, its political s!bdiisions
andinstr!%entalities, or of goern%ent&owned
orcontrolledcorporationsandentities, sharesofstock in "registered
enterprises" as this ter% isdefned in cial or o>cials of the
co!ntry or state !nderthe laws of which %erger or consolidation
wase,ected* Proided, howeer, That if theabsorbed corporation is the
foreign corporationdoing b!siness in the Philippines, the latter
shallat the sa%e ti%e fle a petition for withdrawal ofits license
in accordance with this Title. (n)Sectin !$$" +oing business
without a license. Do foreign corporation transacting b!siness
inthe Philippines witho!t a license, or itss!ccessors or assigns,
shall be per%itted to%aintain or interene in any action, s!it
orproceeding in any co!rt or ad%inistratieagency of the
Philippines/ b!t s!ch corporation%ay be s!ed or proceeded against
beforePhilippine co!rts or ad%inistratietrib!nals onany alid ca!se
of action recogni#ed !nderPhilippine laws. (4@a)Sectin
!$%"!e)ocation of license. 2itho!tpre;!dice to other gro!nds
proided by speciallaws, the licenseof a
foreigncorporationtotransact b!siness in the Philippines %ay
bereoked or s!spended by the -ec!rities and."change Co%%ission !pon
any of the followinggro!nds*3. 9ail!re to fle its ann!al report or
pay anyfees as re+!ired by this Code/$. 9ail!re to appoint and
%aintain aresident agent in the Philippines asre+!ired by this
Title/'. 9ail!re, after change of its resident agentor of his
address, to s!b%it to the-ec!ritiesand."changeCo%%issionastate%ent
of s!ch change as re+!ired bythis Title/). 9ail!retos!b%it
tothe-ec!ritiesand."changeCo%%issionana!thenticatedcopy of any
a%end%ent to its articles ofincorporation or by&laws or of
anyarticles of %erger or consolidation withinthe ti%e prescribed by
this Title/0. A %isrepresentation of any %aterial%atter in any
application, report,a>dait or other doc!%ent s!b%itted bys!ch
corporation p!rs!ant to this Title/4. 9ail!re to pay any and all
ta"es, i%posts,assess%ents or penalties, if any, lawf!llyd!e to the
Philippine Loern%ent or anyof its agencies or political
s!bdiisions/6. Transactingb!siness inthe Philippineso!tsideof
thep!rposeor p!rposesforwhich s!ch corporation is a!thori#ed!nder
its license/7. Transacting b!siness in the Philippines asagent of
or actingfor andinbehalf ofany foreign corporation or entity not
d!lylicensed to do b!siness in thePhilippines/ or@. Any other
gro!nd as wo!ld render it !nfttotransact
b!sinessinthePhilippines.(n)Sectin !$&"&ssuance of
certifcate ofre)ocation.
Aponthereocationofanys!chlicensetotransactb!sinessinthePhilippines,the-ec!ritiesand."changeCo%%issionshalliss!e
a corresponding certifcate of reocation,f!rnishing a copy thereof
to the appropriategoern%ent agency in the proper cases.The
-ec!rities and ."change Co%%ission shallalso%ail tothecorporationat
its registeredo>ce in the Philippines a notice of s!chreocation
acco%panied by a copy of thecertifcate of reocation. (n)Sectin
!$6"6ithdrawal of foreigncorporations. -!b;ect to e"isting laws
andreg!lations, aforeigncorporationlicensedtotransact b!siness in
the Philippines %ay beallowed to withdrawfro%the Philippines
byflingapetitionfor withdrawal of license. Docertifcate of
withdrawal shall be iss!ed by the-ec!rities and ."change Co%%ission
!nless allthe following re+!ire%ents are %et/3. All clai%s which
hae accr!ed in thePhilippines hae been paid,co%pro%ised or
settled/$. All ta"es, i%posts, assess%ents, andpenalties, if any,
lawf!lly d!e to thePhilippine Loern%ent or any of itsagencies or
political s!bdiisions haebeen paid/ and'. The petition for
withdrawal of license hasbeen p!blished once a week for three
(')consec!tie weeks in a newspaper ofgeneral circ!lation in the
Philippines.TITLE 1VI/ISCELLANEO,S PROVISIONSSectin !$'"8utstanding
capital stockdefned. The ter% "o!tstanding capital stock",as !sed
in this Code, %eans the total shares ofstock iss!ed !nder binding
s!bscriptionagree%ents to s!bscribers or stockholders,whether or
not f!llyor partiallypaid, e"cepttreas!ry shares. (n)Sectin !$8"
+esignation of go)erning boards.Theproisionsof specifcproisionsof
thisCode to the contrary notwithstanding, non&stockor special
corporations %ay, thro!gh theirarticles of incorporation or their
by&laws,designate their goerning boards by any na%eother than
as board of tr!stees. (n)Sectin!$("&ncorporationandother
fees.The -ec!rities and ."change Co%%ission ishereby a!thori#ed to
collect and receie fees asa!thori#edbylawor
byr!lesandreg!lationspro%!lgated by the Co%%ission.9:wphi9
(n)Sectin !%*"3tock ownership in certaincorporations. P!rs!ant to
the d!ties specifedby Article J(K of the Constit!tion, the
Dational.cono%ic and 8eelop%ent A!thority shall,fro%ti%eto ti%e,
%akea deter%inationofwhether the corporate ehicle has been !sed
byanycorporationor byb!sinessor ind!strytofr!strate the proisions
thereof or of applicablelaws, and shall s!b%it to the
GatasangPa%bansa, wheneer dee%ed necessary, areport of its fndings,
incl!dingreco%%endations for their preention
orcorrection.5a"i%!%li%its%aybeset bytheGatasangPa%bansa for
stockholdings in corporationsdeclared by it to be ested with a
p!blic interestp!rs!ant to the proisions of this section,belonging
to indiid!als or gro!ps of indiid!alsrelated to each other by
consang!inity ora>nity or by close b!siness interests, orwheneer
it is necessarytoachieenationalob;ecties, preent illegal %onopolies
orco%binations in restraint or trade, or toi%ple%entnational
econo%icpolicies declaredin laws, r!les and reg!lations designed
topro%ote the general welfare and fosterecono%ic
deelop%ent.(nreco%%endingto theGatasangPa%bansacorporations,
b!sinesses or ind!stries to bedeclaredestedwithap!blicinterest
andinfor%!latingproposals for li%itations onstockownership, the
Dational .cono%ic and8eelop%entA!thorityshall considerthetypeand
nat!re of the ind!stry, the si#e of theenterprise, the econo%ies of
scale, thegeographic location, the e"tent of 9ilipinoownership,
thelabor intensityof theactiity,thee"port potential, aswell as
other factorswhich are ger%ane to the reali#ation andpro%otion of
b!siness and ind!stry.Sectin !%!"%nnual reportor corporations..ery
corporation, do%estic or foreign, lawf!llydoing b!siness in the
Philippines shall s!b%it tothe -ec!rities and ."change Co%%ission
anann!al report of its operations, together with
afnancialstate%entofits assets and liabilities,certifed by any
independent certifed p!blicacco!ntant inappropriatecases,
coeringthepreceding fscal year and s!ch otherre+!ire%ents as
the-ec!rities and."changeCo%%ission%ayre+!ire. -!chreportshall
bes!b%itted within s!ch period as %ay beprescribed by the
-ec!rities and ."changeCo%%ission. (n)Sectin !%#"Confdential nature
ofe*amination results. All interrogatoriespropo!nded by the
-ec!rities and ."changeCo%%ission and the answers thereto, as well
astheres!lts of anye"a%ination%adebytheCo%%ission or by any other
o>cial a!thori#edby law to %ake an e"a%ination of theoperations,
books and records of anycorporation, shall bekept
strictlyconfdential,e"cept insofar as the law %ay re+!ire the
sa%eto be %ade p!blic or where s!chinterrogatories, answers or
res!lts arenecessarytobepresentedaseidencebeforeany co!rt.
(n)Sectin !%$"!ule.making power of the3ecurities and ,*change
Commission. The-ec!rities and ."change Co%%ission shall haethe
power and a!thority to i%ple%ent theproisions of this Code, and to
pro%!lgate r!lesand reg!lations reasonably necessary to enableit to
perfor% its d!ties here!nder, partic!larly inthe preention of fra!d
and ab!ses on the partof the controlling stockholders,
%e%bers,directors, tr!stees or o>cers. (n)Sectin !%%"0iolations
of the Code.Kiolations of any of the proisions of this Codeor its
a%end%ents not otherwise specifcallypenali#ed therein shall be
p!nished by a fne ofnotlessthanonetho!sand(P3,111.11)pesosb!t not
%orethantentho!sand(P31,111.11)pesos or by i%prison%ent for not
less thanthirty ('1) days b!t not %ore than fe (0)years, or both,
in the discretion of the co!rt. (fthe iolation is co%%itted by a
corporation, thesa%e %ay, after notice and hearing, bedissoled in
appropriate proceedings before the-ec!rities and ."change
Co%%ission* Proided,That s!ch dissol!tion shall not precl!de
theinstit!tion of appropriate action against thedirector, tr!steeor
o>cer of thecorporationresponsible for said iolation* Proided,
f!rther,That nothing in this section shall be constr!edtorepeal
theotherca!sesfor dissol!tion of acorporation proided in this Code.
(3@1 3?$ a)Sectin !%&" %mendment or repeal. Do rightor re%edy
in faor of or against anycorporation, its stockholders,
%e%bers,directors,tr!stees, oro>cers, noranyliabilityinc!rred by
any s!ch corporation, stockholders,%e%bers, directors, tr!stees,
oro>cers, shallbe re%oed or i%paired either by thes!bse+!ent
dissol!tion of said corporation or byanys!bse+!ent a%end%ent or
repeal of thisCode or of any part thereof.
(n)Sectin!%6"!epealingclause. ."cept ase"pressly proided by this
Code, all laws orparts thereof inconsistent with any proision
ofthis Code shall be dee%ed repealed. (n)Sectin !%'"3eparability of
pro)isions.-ho!ldanyproisionof thisCodeoranypartthereof be declared
inalid or !nconstit!tional,the other proisions, so far as they
areseparable, shall re%ain in force. (n)Sectin !%8"%pplicability to
e*istingcorporations. All corporations lawf!lly
e"istinganddoingb!siness inthePhilippines onthedate of the
e,ectiity of this Code andheretofore a!thori#ed, licensed or
registered bythe -ec!rities and ."change Co%%ission, shallbe dee%ed
to hae been a!thori#ed, licensed orregistered!nder theproisions of
this Code,s!b;ect to the ter%s and conditions of itslicense, and
shall be goerned by the proisionshereof* Proided, That if any s!ch
corporation isa,ected by the new re+!ire%ents of this
Code,saidcorporationshall, !nlessotherwisehereinproided,
begienaperiodof
not%orethantwo($)yearsfro%thee,ectiityofthisCodewithin which to
co%ply with the sa%e. (n)Sectin !%(" ,-ecti)ity. This Code shall
takee,ect i%%ediately !pon its approal.