BP 68 - Corporation - Code - of - The - Philippines
BP 68 - Corporation - Code - of - The - Philippines
BP 68 - Corporation - Code - of - The - Philippines
TITLE I
General Provisions
Definitions and Classifications
SECTION 1. Title of the Code. — This Code shall be known as "The Corporation
Code of the Philippines." (n)
SECTION 2. Corporation Defined. — A corporation is an arti cial being created
by operation of law, having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its existence. (2)
SECTION 3. Classes of Corporations. — Corporations formed or organized
under this Code may be stock or non-stock corporations. Corporations which have
capital stock divided into shares and are authorized to distribute to the holders of such
shares dividends or allotments of the surplus pro ts on the basis of the shares held are
stock corporations. All other private corporations are non-stock corporations. (3a)
SECTION 4. Corporations Created by Special Laws or Charters. —
Corporations created by special laws or charters shall be governed primarily by the
provisions of the special law or charter creating them or applicable to them,
supplemented by the provisions of this Code, insofar as they are applicable. (n)
SECTION 5. Corporators and Incorporators, Stockholders and Members. —
Corporators are those who compose a corporation, whether as stockholders or as
members. Incorporators are those stockholders or members mentioned in the articles
of incorporation as originally forming and composing the corporation and who are
signatories thereof. cdtai
__________________________
(Name of Corporation)
The undersigned incorporators, all of legal age and a majority of whom are
residents of the Philippines, have this day voluntarily agreed to form a (stock) (non-
stock) corporation under the laws of the Republic of the Philippines;
SECOND: That the purpose or purposes for which such corporation is incorporated
are: (If there is more than one purpose, indicate primary and secondary purposes);
FOURTH: That the term for which the said corporation is to exist is ___________
years from and after the date of issuance of the certificate of incorporation;
FIFTH: That the names, nationalities and residences of the incorporators of the
corporation are as follows:
SIXTH: That the number of directors or trustees of the corporation shall be _______;
and the names, nationalities and residences of the rst directors or trustees of the
corporation are as follows:
That the capital stock of the corporation is ______________ shares without par value.
(In case some shares have par value and some are without par value): That the
capital stock of said corporation consists of _____________ shares of which
______________ shares are of the par value of _________________ (P____________)
pesos each, and of which _____________ shares are without par value.
EIGHTH: That at least twenty- ve (25%) percent of the authorized capital stock
above stated has been subscribed as follows:
NINTH: That the above-named subscribers have paid at least twenty- ve (25%)
percent of the total subscription as follows:
(Modify Nos. 8 and 9 if shares are with no par value. In case the corporation is non-
stock, Nos. 7, 8 and 9 of the above articles may be modi ed accordingly, and it is
su cient if the articles state the amount of capital or money contributed or
donated by speci ed persons, stating the names, nationalities and residences of
the contributors or donors and the respective amount given by each.)
"No transfer of stock or interest which will reduce the ownership of Filipino citizens
to less than the required percentage of the capital stock as provided by existing
laws shall be allowed or permitted to be recorded in the proper books of the
corporation and this restriction shall be indicated in all the stock certi cates issued
by the corporation."
_______________________ _______________________
_______________________ _______________________
___________________________
_______________________ _______________________
(Notarial Acknowledgment)
TREASURER'S AFFIDAVIT
REPUBLIC OF THE PHILIPPINES)
CITY/MUNICIPALITY OF ) S.S.
PROVINCE OF )
____________________
(Signature of Treasurer)
SUBSCRIBED AND SWORN to before me, a Notary Public, for and in the
City/Municipality of ________________, Province of __________________, this _______
day of ___________, 19___; by _____________ with Res. Cert. No. ___________ issued at
____________________ on ____________, 19____.
NOTARY PUBLIC
My commission expires on
_________, 19____
Doc. No. _________;
Page No. _________;
Book No. ________;
Series of 19____ (7a)
The original and amended articles together shall contain all provisions required by
law to be set out in the articles of incorporation. Such articles, as amended, shall be
indicated by underscoring the change or changes made, and a copy thereof duly certi ed
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under oath by the corporate secretary and a majority of the directors or trustees stating
the fact that said amendment or amendments have been duly approved by the required
vote of the stockholders or members, shall be submitted to the Securities and Exchange
Commission.
The amendments shall take effect upon its approval by the Securities and
Exchange Commission or from the date of ling with the said Commission if not acted
upon within six (6) months from the date of ling for a cause not attributable to the
corporation.
SECTION 17. Grounds When Articles of Incorporation or Amendment May Be
Rejected or Disapproved. — The Securities and Exchange Commission may reject the
articles of incorporation or disapprove any amendment thereto if the same is not in
compliance with the requirements of this Code: Provided, That the Commission shall
give the incorporators a reasonable time within which to correct or modify the
objectionable portions of the articles or amendment. The following are grounds for such
rejection or disapproval:
1. That the articles of incorporation or any amendment thereto is not
substantially in accordance with the form prescribed herein;
2. That the purpose or purposes of the corporation are patently
unconstitutional, illegal, immoral, or contrary to government rules and
regulations;
3. That the Treasurer's A davit concerning the amount of capital stock
subscribed and/or paid is false;
4. That the required percentage of ownership of the capital stock to be
owned by citizens of the Philippines has not been complied with as
required by existing laws or the Constitution.
No articles of incorporation or amendment to articles of incorporation of banks,
banking and quasi-banking institutions, building and loan associations, trust companies
and other nancial intermediaries, insurance companies, public utilities, educational
institutions, and other corporations governed by special laws shall be accepted or
approved by the Commission unless accompanied by a favorable recommendation of
the appropriate government agency to the effect that such articles or amendment is in
accordance with law. (n)
SECTION 18. Corporate Name. — No corporate name may be allowed by the
Securities and Exchange Commission if the proposed name is identical or deceptively or
confusingly similar to that of any existing corporation or to any other name already
protected by law or is patently deceptive, confusing or contrary to existing laws. When a
change in the corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name. (n)
SECTION 19. Commencement of Corporate Existence. — A private corporation
formed or organized under this Code commences to have corporate existence and
juridical personality and is deemed incorporated from the date the Securities and
Exchange Commission issues a certi cate of incorporation under its o cial seal; and
thereupon the incorporators, stockholders/members and their successors shall
constitute a body politic and corporate under the name stated in the articles of
incorporation for the period of time mentioned therein, unless said period is extended or
the corporation is sooner dissolved in accordance with law. (n)
SECTION 20. De facto Corporations. — The due incorporation of any
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corporation claiming in good faith to be a corporation under this Code, and its right to
exercise corporate powers, shall not be inquired into collaterally in any private suit to
which such corporation may be a party. Such inquiry may be made by the Solicitor
General in a quo warranto proceeding. (n)
SECTION 21. Corporation by Estoppel. — All persons who assume to act as a
corporation knowing it to be without authority to do so shall be liable as general partners
for all debts, liabilities and damages incurred or arising as a result thereof: Provided,
however, That when any such ostensible corporation is sued on any transaction entered
by it as a corporation or on any tort committed by it as such, it shall not be allowed to
use as a defense its lack of corporate personality.
On who assumes an obligation to an ostensible corporation as such, cannot resist
performance thereof on the ground that there was in fact no corporation. (n)
SECTION 22. Effects of Non-use of Corporate Charter and Continuous
Inoperation of a Corporation. — If a corporation does not formally organize and
commence the transaction of its business or the construction of its works within two (2)
years from date of its incorporation, its corporate powers cease and the corporation
shall be deemed dissolved. However, if a corporation has commenced the transaction of
its business but subsequently becomes continuously inoperative for a period of at least
ve (5) years, the same shall be a ground for the suspension or revocation of its
corporate franchise or certificate of incorporation. (19a)
This provision shall not apply if the failure to organize, commence the transaction
of its business or the construction of its works, or to continuously operate is due to
causes beyond the control of the corporation as may be determined by the Securities
and Exchange Commission.
TITLE III
Board of Directors/Trustees/Officers
SECTION 23. The Board of Directors or Trustees. — Unless otherwise provided
in this Code, the corporate powers of all corporations formed under this Code shall be
exercised, all business conducted and all property of such corporations controlled and
held by the board of directors or trustees to be elected from among the holders of
stocks, or where there is no stock, from among the members of the corporation, who
shall hold office for one (1) year until their successors are elected and qualified. (28a)
Every director must own at least one (1) share of the capital stock of the
corporation of which he is a director, which share shall stand in his name on the books of
the corporation. Any director who ceases to be the owner of at least one (1) share of the
capital stock of the corporation of which he is a director shall thereby cease to be a
director. Trustees of non-stock corporations must be members thereof. A majority of
the directors or trustees of all corporations organized under this Code must be
residents of the Philippines. (30a)
SECTION 24. Election of Directors or Trustees . — At all elections of directors
or trustees, there must be present, either in person or by representative authorized to act
by written proxy, the owners of a majority of the outstanding capital stock, or if there be
no capital stock, a majority of the members entitled to vote. The election must be by
ballot if requested by any voting stockholder or member. In stock corporations, every
stockholder entitled to vote shall have the right to vote in person or by proxy the number
of shares of stock standing, at the time xed in the by-laws, in his own name on the
stock books of the corporation, or where the by-laws are silent, at the time of the
election; and said stockholder may vote such number of shares for as many persons as
there are directors to be elected or he may cumulate said shares and give one candidate
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as many votes as the number of directors to be elected multiplied by the number of his
shares shall equal, or he may distribute them on the same principle among as many
candidates as he shall see t: Provided, That the total number of votes cast by him shall
not exceed the number of shares owned by him as shown in the books of the
corporation multiplied by the whole number of directors to be elected: Provided,
however, That no delinquent stock shall be voted. Unless otherwise provided in the
articles of incorporation or in the by-laws, members of corporations which have no
capital stock may cast as many votes as there are trustees to be elected but may not
cast more than one vote for one candidate. Candidates receiving the highest number of
votes shall be declared elected. Any meeting of the stockholders or members called for
an election may adjourn from day to day or from time to time but not sine die or
indefinitely if, for any reason, no election is held, or if there are not present or represented
by proxy, at the meeting, the owners of a majority of the outstanding capital stock, or if
there be no capital stock, a majority of the member entitled to vote. (31a)
SECTION 25. Corporate O cers , Quorum. — Immediately after their election,
the directors of a corporation must formally organize by the election of a president, who
shall be a director, a treasurer who may or may not be a director, a secretary who shall
be a resident and citizen of the Philippines, and such other o cers as may be provided
for in the by-laws. Any two (2) or more positions may be held concurrently by the same
person, except that no one shall act as president and secretary or as president and
treasurer at the same time.
The directors or trustees and o cers to be elected shall perform the duties
enjoined on them by law and the by-laws of the corporation. Unless the articles of
incorporation or the by-laws provide for a greater majority, a majority of the number of
directors or trustees as xed in the articles of incorporation shall constitute a quorum
for the transaction of corporate business, and every decision of at least a majority of the
directors or trustees present at a meeting at which there is a quorum shall be valid as a
corporate act, except for the election of o cers which shall require the vote of a
majority of all the members of the board.
Directors or trustees cannot attend or vote by proxy at board meetings. (33a)
SECTION 26. Report of Election of Directors, Trustees and O cers . — Within
thirty (30) days after the election of the directors, trustees and o cers of the
corporation, the secretary, or any other o cer of the corporation, shall submit to the
Securities and Exchange Commission, the names, nationalities and residences of the
directors, trustees and o cers elected. Should a director, trustee or o cer die, resign or
in any manner cease to hold o ce, his heirs in case of his death, the secretary, or any
other o cer of the corporation, or the director, trustee or o cer himself, shall
immediately report such fact to the Securities and Exchange Commission. (n) asia dc
10. To establish pension, retirement, and other plans for the bene t 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 rati ed 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
o ce 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)
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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 o ce with
postage prepaid, or served personally.
A certi cate 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 stock-holder 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 certi cates shall be kept on le in the o ce of the
corporation and the other shall be led 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
certi cate of ling, 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 ling any certi cate of increase of capital stock unless accompanied
by the sworn statement of the treasurer of the corporation lawfully holding o ce at the
time of the ling of the certi cate, showing that at least twenty- ve (25%) percent of
such increased capital stock has been subscribed and that at least twenty- ve (25%)
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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- ve (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 su ciency 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 of all or substantially all of its property and assets,
including its goodwill, upon such terms and conditions and for such consideration, which
may be money, stocks, bonds or other instruments for the payment of money or other
property or consideration, as its board of directors or trustees may deem expedient,
when authorized by the vote of the stockholders representing at least two-thirds (2/3) of
the outstanding capital stock; or in case of non-stock corporation, by the vote of at least
two-thirds (2/3) of the members, in a stockholders' or members' meeting duly called for
the purpose. 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
o ce with postage prepaid, or served personally: Provided, That any dissenting
stockholder may exercise his appraisal right under the conditions provided in this Code.
A sale or other disposition shall be deemed to cover substantially all the corporate
property and assets if thereby the corporation would be rendered incapable of
continuing the business or accomplishing the purpose for which it was incorporated.
After such authorization or approval by the stockholders or members, the board
of directors or trustees may, nevertheless, in its discretion, abandon such sale, lease,
exchange, mortgage, pledge or other disposition of property and assets, subject to the
rights of third parties under any contract relating thereto, without further action or
approval by the stockholders or members.
Nothing in this section is intended to restrict the power of any corporation,
without the authorization by the stockholders or members, to sell, lease, exchange,
mortgage, pledge or otherwise dispose of any of its property and assets if the same is
necessary in the usual and regular course of business of said corporation or if the
proceeds of the sale or other disposition of such property and assets be appropriated
for the conduct of its remaining business.
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In non-stock corporations, where there are no members with voting rights, the
vote of at least a majority of the trustees in o ce will be su cient authorization for the
corporation to enter into any transaction authorized by this section. (28-1/2a)
SECTION 41. Power to Acquire Own Shares. — A stock corporation shall have
the power to purchase or acquire its own shares for a legitimate corporate purpose or
purposes including but not limited to the following cases: Provided, That the corporation
has unrestricted retained earnings in its books to cover the shares to be purchased or
acquired:
1. To eliminate fractional shares arising out of stock dividends;
2. To collect or compromise an indebtedness to the corporation, arising
out of unpaid subscription, in a delinquency sale, and to purchase
delinquent shares sold during said sale; and
3. To pay dissenting or withdrawing stockholders entitled to payment for
their shares under the provisions of this Code. (n)
SECTION 42. Power to Invest Corporate Funds in Another Corporation or
Business or for Any Other Purpose. — Subject to the provisions of this Code, a private
corporation may invest its funds in any other corporation or business or for any purpose
other than the primary purpose for which it was organized when approved by a majority
of the board of directors or trustees and rati ed 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 the case of non-stock corporations, at a stockholders' or members'
meeting duly called for the purpose. Written notice of the proposed investment and 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 o ce with postage prepaid, or served personally: Provided, That
any dissenting stockholder shall have appraisal right as provided in this Code: Provided,
however, That where the investment by the corporation is reasonably necessary to
accomplish its primary purpose as stated in the articles of incorporation, the approval of
the stockholders or members shall not be necessary. (17-1/2a)
SECTION 43. Power to Declare Dividends. — The board of directors of a stock
corporation may declare dividends out of the unrestricted retained earnings which shall
be payable in cash, in property, or in stock to all stockholders on the basis of
outstanding stock held by them: Provided, That any cash dividends due on delinquent
stock shall rst be applied to the unpaid balance on the subscription plus costs and
expenses, while stock dividends shall be withheld from the delinquent stockholder until
his unpaid subscription is fully paid: Provided, further, That no stock dividend shall be
issued without the approval of stockholders representing not less than two-thirds (2/3)
of the outstanding capital stock at a regular or special meeting duly called for the
purpose. (16a) cd i
Stock corporations are prohibited from retaining surplus pro ts in excess of one
hundred (100%) percent of their paid-in capital stock, except: (1) when justi ed by
de nite corporate expansion projects or programs approved by the Board of Directors;
or (2) when the corporation is prohibited under any loan agreement with any nancial
institution or creditor, whether local or foreign, from declaring dividends without its/his
consent, and such consent has not yet been secured; or (3) when it can be clearly shown
that such retention is necessary under special circumstances obtaining in the
corporation, such as when there is a need for special reserve for probable contingencies.
(n)
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SECTION 44. Power to Enter into Management Contract. — No corporation
shall conclude a management contract with another corporation unless such contract
shall have been approved by the Board of Directors and by stockholders owning at least
the majority of the outstanding capital stock, or by at least a majority of the members in
the case of a non-stock corporation, of both the managing and the managed
corporation, at a meeting duly called for the purpose: Provided, That (a) where a
stockholder or stockholders representing the same interest of both the managing and
the managed corporations own and control more than one-third (1/3) of the total
outstanding capital stock entitled to vote of the managing corporation; or (b) where a
majority of the members of the Board of Directors of the managing corporation also
constitute a majority of the members of the Board of Directors of the managed
corporation, then the management contract must be approved by the stockholders of
the managed corporation owning at least two-thirds (2/3) of the total outstanding
capital stock entitled to vote, or by at least two-thirds (2/3) of the members in case of a
non-stock corporation. No management contract shall be entered into for a period
longer than five years for any one term.
The provisions of the next preceding paragraph shall apply to any contract
whereby a corporation undertakes to manage or operate all or substantially all of the
business of another corporation whether such contracts are called service contracts,
operating agreements or otherwise: Provided, however, that such service contracts or
operating agreements which relate to the exploration, development, exploitation or
utilization of natural resources may be entered into for such periods as may be provided
by the pertinent laws or regulations. (n)
SECTION 45. Ultravires Acts of Corporations. — No corporation under this
Code shall possess or exercise any corporate powers except those conferred by this
Code or by its articles of incorporation and except such as are necessary or incidental to
the exercise of the powers so conferred. (n)
TITLE V
By-Laws
SECTION 46. Adoption of By-Laws. — Every corporation formed under this
Code must, within one (1) month after receipt of o cial notice of the issuance of its
certi cate of incorporation by the Securities and Exchange Commission, adopt a code of
by-laws for its government not inconsistent with this Code. For the adoption of by-laws
by the corporation, the a rmative vote of the stockholders representing at least a
majority of the outstanding capital stock, or of at least a majority of the members, in the
case of non-stock corporations, shall be necessary. The by-laws shall be signed by the
stockholders or members voting for them and shall be kept in the principal o ce of the
corporation, subject to the inspection of the stockholders or members during o ce
hours; and a copy thereof, duly certi ed to by a majority of the directors or trustees and
countersigned by the secretary of the corporation, shall be led with the Securities and
Exchange Commission which shall be attached to the original articles of incorporation.
Notwithstanding the provisions of the preceding paragraph, by-laws may be
adopted and led prior to incorporation; in such case, such by-laws shall be approved
and signed by all the incorporators and submitted to the Securities and Exchange
Commission, together with the articles of incorporation.
In all cases, by-laws shall be effective only upon the issuance by the Securities and
Exchange Commission of a certi cation that the by-laws are not inconsistent with this
Code.
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The Securities and Exchange Commission shall not accept for ling the by-laws or
any amendment thereto of any bank, banking institution, building and loan association,
trust company, insurance company, public utility, educational institution or other special
corporations governed by special laws, unless accompanied by a certi cate of the
appropriate government agency to the effect that such by-laws or amendments are in
accordance with law. (20a)
SECTION 47. Contents of By-Laws. — Subject to the provisions of the
Constitution, this Code, other special laws, and the articles of incorporation, 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
meetings of the stockholders or members;
3. The required quorum in meetings of stockholders or members and the
manner of voting therein;
4. The form for proxies of stockholders and members and the manner of
voting them;
5. The quali cations, 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 or manner of giving notice thereof;
7. The manner of election or appointment and the term of o ce of all
officers other than directors or trustees;
8. The penalties for violation of the by-laws;
9. In the case of stock corporations, the manner of issuing stock
certificates; and
10. Such other matters as may be necessary for the proper or convenient
transaction of its corporate business and affairs. (21a)
SECTION 48. Amendments to By-Laws. — The board of directors or trustees,
by a majority vote thereof, and the owners of at least a majority of the outstanding
capital stock, or at least a majority of the members of a non-stock corporation, at a
regular or special meeting duly called for the purpose, may amend or repeal any by-laws
or adopt new by-laws. The owners of two-thirds (2/3) of the outstanding capital stock or
two-thirds (2/3) of the members in a non-stock corporation may delegate to the board
of directors or trustees the power to amend or repeal any by-laws or adopt new by-laws:
Provided, That any power delegated to the board of directors or trustees to amend or
repeal any by-laws or adopt new by-laws shall be considered as revoked whenever
stockholders owning or representing a majority of the outstanding capital stock or a
majority of the members in non-stock corporations, shall so vote at a regular or special
meeting.
Whenever any amendment or new by-laws is adopted, such amendment or new by-
laws shall be attached to the original by-laws in the o ce of the corporation, and a copy
thereof, duly certi ed under oath by the corporate secretary and a majority of the
directors or trustees, shall be led with the Securities and Exchange Commission, the
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same to be attached to the original articles of incorporation and original by-laws.
The amended or new by-laws shall only be effective upon the issuance by the
Securities and Exchange Commission of a certi cation that the same are not
inconsistent with this Code. (22a and 23a)
TITLE VI
Meetings
SECTION 49. Kinds of Meetings. — Meetings of directors, trustees,
stockholders, or members may be regular or special. (n)
SECTION 50. Regular and Special Meetings of Stockholders or Members. —
Regular meetings of stockholders or members shall be held annually on a date xed in
the by-laws, or if not so xed, on any date in April of every year as determined by the
board of directors or trustees: Provided, That written notice of regular meetings shall be
sent to all stockholders or members of record at least two (2) weeks prior to the
meeting, unless a different period is required by the by-laws.
Special meetings of stockholders or members shall be held at any time deemed
necessary or as provided in the by-laws: Provided, however, That at least one (1) week
written notice shall be sent to all stockholders or members, unless otherwise provided in
the by-laws.
Notice of any meeting may be waived, expressly or impliedly, by any stockholder
or member.
Whenever, for any cause, there is no person authorized to call a meeting, the
Securities and Exchange Commission, upon petition of a stockholder or member, and on
the showing of good cause therefor, may issue an order to the petitioning stockholder or
member directing him to call a meeting of the corporation by giving proper notice
required by this Code or by the by-laws. The petitioning stockholder or member shall
preside thereat until at least a majority of the stockholders or members present have
chosen one of their number as presiding officer. (24, 26)
SECTION 51. Place and Time of Meetings of Stockholders or Members. —
Stockholders' or members' meetings, whether regular or special, shall be held in the city
or municipality where the principal o ce of the corporation is located, and if practicable
in the principal o ce of the corporation: Provided, That Metro Manila shall, for the
purposes of this section, be considered a city or municipality.
Notice of meetings shall be in writing, and the time and place thereof stated
therein.
All proceedings had and any business transacted at any meeting of the
stockholders or members, if within the powers or authority of the corporation, shall be
valid even if the meeting be improperly held or called, provided all the stockholders or
members of the corporation are present or duly represented at the meeting. (24 and 25)
SECTION 52. Quorum in Meetings. — Unless otherwise provided for in this
Code or in the by-laws, a quorum shall consist of the stockholders representing a
majority of the outstanding capital stock or a majority of the members in case of non-
stock corporations. (n) cdasia
Payment of any unpaid subscription or any percentage thereof, together with the
interest accrued, if any, shall be made on the date speci ed in the contract of
subscription or on the date stated in the call made by the board. Failure to pay on such
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date shall render the entire balance due and payable and shall make the stockholder
liable for interest at the legal rate on such balance, unless a different rate of interest is
provided in the by-laws, computed from such date until full payment. If within thirty (30)
days from the said date no payment is made, all stocks covered by said subscription
shall thereupon become delinquent and shall be subject to sale as hereinafter provided,
unless the board of directors orders otherwise. (38)
SECTION 68. Delinquency Sale. — The board of directors may, by resolution,
order the sale of delinquent stock and shall speci cally state the amount due on each
subscription plus all accrued interest, and the date, time and place of the sale which shall
not be less than thirty (30) days nor more than sixty (60) days from the date the stocks
become delinquent.
Notice of said sale, with a copy of the resolution, shall be sent to every delinquent
stockholder either personally or by registered mail. The same shall furthermore be
published once a week for two (2) consecutive weeks in a newspaper of general
circulation in the province or city where the principal office of the corporation is located.
Unless the delinquent stockholder pays to the corporation, on or before the date
speci ed for the sale of the delinquent stock, the balance due on his subscription, plus
accrued interest, costs of advertisement and expenses of sale, or unless the board of
directors otherwise orders, said delinquent stock shall be sold at public auction to such
bidder who shall offer to pay the full amount of the balance on the subscription together
with accrued interest, costs of advertisement and expenses of sale, for the smallest
number of shares or fraction of a share. The stock so purchased shall be transferred to
such purchaser in the books of the corporation and a certi cate for such stock shall be
issued in his favor. The remaining shares, if any, shall be credited in favor of the
delinquent stockholder who shall likewise be entitled to the issuance of a certi cate of
stock covering such shares.
Should there be no bidder at the public auction who offers to pay the full amount
of the balance on the subscription together with accrued interest, costs of
advertisement and expenses of sale, for the smallest number of shares or fraction of a
share, the corporation may, subject to the provisions of this Code, bid for the same, and
the total amount due shall be credited as paid in full in the books of the corporation. Title
to all the shares of stock covered by the subscription shall be vested in the corporation
as treasury shares and may be disposed of by said corporation in accordance with the
provisions of this Code. (39a-46a)
SECTION 69. When Sale May Be Questioned. — No action to recover
delinquent stock sold can be sustained upon the ground of irregularity or defect in the
notice of sale, or in the sale itself of the delinquent stock, unless the party seeking to
maintain such action rst pays or tenders to the party holding the stock the sum for
which the same was sold, with interest from the date of sale at the legal rate; and no
such action shall be maintained unless it is commenced by the ling of a complaint
within six (6) months from the date of sale. (47a)
SECTION 70. Court Action to Recover Unpaid Subscription. — Nothing in this
Code shall prevent the corporation from collecting by action in a court of proper
jurisdiction the amount due on any unpaid subscription, with accrued interest, costs and
expenses. (49a)
SECTION 71. Effect of Delinquency. — No delinquent stock shall be voted for
or be entitled to vote or to representation at any stockholders' meeting, nor shall the
holder thereof be entitled to any of the rights of a stockholder except the right to
dividends in accordance with the provisions of this Code, until and unless he pays the
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amount due on his subscription with accrued interest, and the costs and expenses of
advertisement, if any. (50a)
SECTION 72. Rights of Unpaid Shares. — Holders of subscribed shares not
fully paid which are not delinquent shall have all the rights of a stockholder. (n)
SECTION 73. Lost or Destroyed Certi cates . — The following procedure shall
be followed for the issuance by a corporation of new certi cate(s) of stock in lieu of
those which have been lost, stolen or destroyed:
1. The registered owner of certi cate(s) of stock in a corporation or his
legal representative shall le with the corporation an a davit in
triplicate setting forth, if possible, the circumstances as to how the
certi cate(s) were lost, stolen or destroyed, the number of shares
represented by each certi cate, the serial number(s) of the
certi cate(s) and the name of the corporation which issued the same.
He shall also submit such other information and evidence which he
may deem necessary;
2. After verifying the a davit and other information and evidence with the
books of the corporation, said corporation shall publish a notice in a
newspaper of general circulation published in the place where the
corporation has its principal o ce, once a week for three (3)
consecutive weeks at the expense of the registered owner of the
certi cate(s) of stock which have been lost, stolen or destroyed. The
notice shall state the name of said corporation, the name of the
registered owner and the serial number(s) of said certi cate(s), and
the number of shares represented by such certi cate(s), and that after
the expiration of one (1) year from the date of the last publication, if no
contest has been presented to said corporation regarding said
certi cate(s) of stock, the right to make such contest shall be barred
and said corporation shall cancel in its books the certi cate(s) of
stock which has been lost, stolen or destroyed and issue in lieu thereof
new certi cate(s) of stock, unless the registered owner les a bond or
other security in lieu thereof as may be required, running for a period of
one (1) year for a sum and in such form and with such sureties as may
be satisfactory to the board of directors, in which case a new
certi cate may be issued even before the expiration of the one (1) year
period provided herein: Provided, That if a contest has been presented
to said corporation or if an action is pending in court regarding the
ownership of said certi cate(s) of stock which have been lost, stolen
or destroyed, the issuance of the new certi cate(s) of stock in lieu
thereof shall be suspended until the nal decision by the court
regarding the ownership of said certificate(s) of stock which have been
lost, stolen or destroyed.
Except in case of fraud, bad faith, or negligence on the part of the corporation and
its o cers, no action may be brought against any corporation which shall have issued
certi cate(s) of stock in lieu of those lost, stolen or destroyed pursuant to the procedure
above-described. (R.A. 201a)
TITLE VIII
Corporate Books and Records
SECTION 74. Books to be Kept; Stock Transfer Agent . — Every corporation
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shall, at its principal o ce, keep and carefully preserve a record of all business
transactions, and minutes of all meetings of stockholders or members, or of the board
of directors or trustees, in which shall be set forth in detail the time and place of holding
the meeting, how authorized, the notice given, whether the meeting was regular or
special, if special its object, those present and absent, and every act done or ordered
done at the meeting. Upon the demand of any director, trustee, stockholder or member,
the time when any director, trustee, stockholder or member entered or left the meeting
must be noted in the minutes; and on a similar demand, the yeas and nays must be taken
on any motion or proposition, and a record thereof carefully made. The protest of any
director, trustee, stockholder or member on any action or proposed action must be
recorded in full on his demand.
The records of all business transactions of the corporation and the minutes of any
meetings shall be open to the inspection of any director, trustee, stockholder or member
of the corporation at reasonable hours on business days and he may demand, in writing,
for a copy of excerpts from said records or minutes, at his expense.
Any o cer or agent of the corporation who shall refuse to allow any director,
trustee, stockholder or member of the corporation to examine and copy excerpts from
its records or minutes, in accordance with the provisions of this Code, shall be liable to
such director, trustee, stockholder or member for damages, and in addition, shall be
guilty of an offense which shall be punishable under Section 144 of this Code: Provided,
That if such refusal is pursuant to a resolution or order of the Board of Directors or
Trustees, the liability under this section for such action shall be imposed upon the
directors or trustees who voted for such refusal: and Provided, further, That it shall be a
defense to any action under this section that the person demanding to examine and copy
excerpts from the corporation's records and minutes has improperly used any
information secured through any prior examination of the records or minutes of such
corporation or of any other corporation, or was not acting in good faith or for a
legitimate purpose in making his demand.
Stock corporations must also keep a book to be known as the "stock and transfer
book", in which must be kept a record of all stocks in the names of the stockholders
alphabetically arranged; the installments paid and unpaid on all stock for which
subscription has been made, and the date of payment of any installment; a statement of
every alienation, sale or transfer of stock made, the date thereof, and by and to whom
made; and such other entries as the by-laws may prescribe. The stock and transfer book
shall be kept in the principal o ce of the corporation or in the o ce of its stock transfer
agent and shall be open for inspection of any director or stockholder of the corporation
at reasonable hours on business days.
No stock transfer agent or one engaged principally in the business of registering
transfers of stocks in behalf of a stock corporation shall be allowed to operate in the
Philippines unless he secures a license from the Securities and Exchange Commission
and pays a fee as may be xed by the Commission, which shall be renewed annually:
Provided, That a stock corporation is not precluded from performing or making transfer
of its own stocks, in which case all the rules and regulations imposed on stock transfer
agents, except the payment of a license fee herein provided, shall be applicable. (51a and
32a; P.B. No. 268.) acd
SECTION 75. Right to Financial Statements. — Within ten (10) days from
receipt of a written request of any stockholder or member, the corporation shall furnish
to him its most recent nancial statement, which shall include a balance sheet as of the
end of the last taxable year and a pro t or loss statement for said taxable year, showing
in reasonable detail its assets and liabilities and the result of its operations.
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At the regular meeting of stockholders or members, the board of directors or
trustees shall present to such stockholders or members a nancial report of the
operations of the corporation for the preceding year, which shall include nancial
statements, duly signed and certified by an independent certified public accountant.
However, if the paid-up capital of the corporation is less than P50,000.00, the
nancial statements may be certi ed under oath by the treasurer or any responsible
officer of the corporation. (n)
TITLE IX
Merger and Consolidation
SECTION 76. Plan of Merger or Consolidation. — Two or more corporations
may merge into a single corporation which shall be one of the constituent corporations
or may consolidate into a new single corporation which shall be the consolidated
corporation.
The board of directors or trustees of each corporation, party to the merger or
consolidation, shall approve a plan of merger or consolidation setting forth the
following:
1. The names of the corporations proposing to merge or consolidate,
hereinafter referred to as the constituent corporations;
2. The terms of the merger or consolidation and the mode of carrying the
same into effect;
3. A statement of the changes, if any, in the articles of incorporation of
the surviving corporation in case of merger; and, with respect to the
consolidated corporation in case of consolidation, all the statements
required to be set forth in the articles of incorporation for corporations
organized under this Code; and
4. Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or desirable. (n)
SECTION 77. Stockholders' or Members' Approval. — Upon approval by
majority vote of each of the board of directors or trustees of the constituent
corporations of the plan of merger or consolidation, the same shall be submitted for
approval by the stockholders or members of each of such corporations at separate
corporate meetings duly called for the purpose. Notice of such meetings shall be given
to all stockholders or members of the respective corporations, at least two (2) weeks
prior to the date of the meeting, either personally or by registered mail. Said notice shall
state the purpose of the meeting and shall include a copy or a summary of the plan of
merger or consolidation, as the case may be. The a rmative vote of stockholders
representing at least two-thirds (2/3) of the outstanding capital stock of each
corporation in case of stock corporations or at least two-thirds (2/3) of the members in
case of non-stock corporations, shall be necessary for the approval of such plan. Any
dissenting stockholder in stock corporations may exercise his appraisal right in
accordance with this Code: Provided, That if after the approval by the stockholders of
such plan, the board of directors should decide to abandon the plan, the appraisal right
shall be extinguished.
Any amendment to the plan of merger or consolidation may be made, provided
such amendment is approved by majority vote of the respective boards of directors or
trustees of all the constituent corporations and rati ed by the a rmative vote of
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stockholders representing at least two-thirds (2/3) of the outstanding capital stock or
of two-thirds (2/3) of the members of each of the constituent corporations. Such plan,
together with any amendment, shall be considered as the agreement of merger or
consolidation. (n)
SECTION 78. Articles of Merger or Consolidation. — After the approval by the
stockholders or members as required by the preceding section, articles of merger or
articles of consolidation shall be executed by each of the constituent corporations, to be
signed by the president or vice-president and certi ed by the secretary or assistant
secretary of each corporation setting forth:
1.The plan of the merger or the plan of consolidation;
2.As to stock corporations, the number of shares outstanding, or in case of
non-stock corporations, the number of members; and
3.As to each corporation, the number of shares or members voting for and
against such plan, respectively. (n)
SECTION 79. Securities and Exchange Commission's Approval and Effectivity
of Merger or Consolidation. — The articles of merger or of consolidation, signed and
certi ed as hereinabove required, shall be submitted to the Securities and Exchange
Commission in quadruplicate for its approval: Provided, That in the case of merger or
consolidation of banks or banking institutions, building and loan associations, trust
companies, insurance companies, public utilities, educational institutions and other
special corporations governed by special laws, the favorable recommendation of the
appropriate government agency shall rst be obtained. Where the Commission is
satis ed that the merger or consolidation of the corporations concerned is not
inconsistent with the provisions of this Code and existing laws, it shall issue a certi cate
of merger or of consolidation, as the case may be, at which time the merger or
consolidation shall be effective.
If, upon investigation, the Securities and Exchange Commission has reason to
believe that the proposed merger or consolidation is contrary to or inconsistent with the
provisions of this Code or existing laws, it shall set a hearing to give the corporations
concerned the opportunity to be heard. Written notice of the date, time and place of said
hearing shall be given to each constituent corporation at least two (2) weeks before said
hearing. The Commission shall thereafter proceed as provided in this Code. (n)
SECTION 80. Effects of Merger or Consolidation. — The merger or
consolidation, as provided in the preceding sections shall have the following effects:
1. The constituent corporations shall become a single corporation which,
in case of merger, shall be the surviving corporation designated in the
plan of merger; and, in case of consolidation, shall be the consolidated
corporation designated in the plan of consolidation;
2. The separate existence of the constituent corporations shall cease,
except that of the surviving or the consolidated corporation;
3. The surviving or the consolidated corporation shall possess all the
rights, privileges, immunities and powers and shall be subject to all the
duties and liabilities of a corporation organized under this Code;
4. The surviving or the consolidated corporation shall thereupon and
thereafter possess all the rights, privileges, immunities and franchises
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of each of the constituent corporations; and all property, real or
personal, and all receivables due on whatever account, including
subscriptions to shares and other choses in action, and all and every
other interest of, or belonging to, or due to each constituent
corporation, shall be taken and deemed to be transferred to and vested
in such surviving or consolidated corporation without further act or
deed; and
5. The surviving or consolidated corporation shall be responsible and
liable for all the liabilities and obligations of each of the constituent
corporations in the same manner as if such surviving or consolidated
corporation had itself incurred such liabilities or obligations; and any
claim, action or proceeding pending by or against any of such
constituent corporations may be prosecuted by or against the
surviving or consolidated corporation, as the case may be. Neither the
rights of creditors nor any lien upon the property of any of such
constituent corporations shall be impaired by such merger or
consolidation. (n)
TITLE X
Appraisal Right
SECTION 81. Instances of Appraisal Right. — Any stockholder of a corporation
shall have the right to dissent and demand payment of the fair value of his shares in the
following instances:
1. In case any amendment to the articles of incorporation has the effect
of changing or restricting the rights of any stockholders or class of
shares, or of authorizing preferences in any respect superior to those
of outstanding shares of any class, or of extending or shortening the
term of corporate existence;
2. In case of sale, lease, exchange, transfer, mortgage, pledge or other
disposition of all or substantially all of the corporate property and
assets as provided in the Code; and
3. In case of merger or consolidation. (n)
SECTION 82. How Right is Exercised. — The appraisal right may be exercised
by any stockholder who shall have voted against the proposed corporate action, by
making a written demand on the corporation within thirty (30) days after the date on
which the vote was taken for payment of the fair value of his shares: Provided, That
failure to make the demand within such period shall be deemed a waiver of the appraisal
right. If the proposed corporate action is implemented or affected, the corporation shall
pay to such stockholder, upon surrender of the certi cate(s) of stock representing his
shares, the fair value thereof as of the day prior to the date on which the vote was taken,
excluding any appreciation or depreciation in anticipation of such corporate action.
If within a period of sixty (60) days from the date the corporate action was
approved by the stockholders, the withdrawing stockholder and the corporation cannot
agree on the fair value of the shares, it shall be determined and appraised by three (3)
disinterested persons, one of whom shall be named by the stockholder, another by the
corporation and the third by the two thus chosen. The ndings of the majority of the
appraisers shall be nal, and their award shall be paid by the corporation within thirty
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(30) days after such award is made: Provided, That no payment shall be made to any
dissenting stockholder unless the corporation has unrestricted retained earnings in its
books to cover such payment: and Provided, further, That upon payment by the
corporation of the agreed or awarded price, the stockholder shall forthwith transfer his
shares to the corporation. (n)
SECTION 83. Effect of Demand and Termination of Right . — From the time of
demand for payment of the fair value of a stockholder's shares until either the
abandonment of the corporate action involved or the purchase of the said shares by the
corporation, all rights accruing to such shares, including voting and dividend rights shall
be suspended in accordance with the provisions of this Code, except the right of such
stockholder to receive payment of the fair value thereof: Provided, That if the dissenting
stockholder is not paid the value of his shares within 30 days after the award, his voting
and dividend rights shall immediately be restored. (n) cd i
Whenever such service of summons or other process shall be made upon the
Securities and Exchange Commission, it must, within ten (10) days thereafter, transmit
by mail a copy of such summons or other legal process to the corporation at its home or
principal o ce. The sending of such copy by the Commission shall be a necessary part
of and shall complete such service. All expenses incurred by the Commission for such
service shall be paid in advance by the party at whose instance the service is made.
In case of a change of address of the resident agent, it shall be his or its duty to
immediately notify in writing the Securities and Exchange Commission of the new
address. (72a; and n)
SECTION 129. Law Applicable. — Any foreign corporation lawfully doing
business in the Philippines shall be bound by all laws, rules and regulations applicable to
domestic corporations of the same class, save and except such only as provide for the
creation, formation, organization or dissolution of corporations or such as x the
relations, liabilities, responsibilities, or duties of stockholders, members, or o cers of
corporations to each other or to the corporation. (73a)
SECTION 130. Amendments to Articles of Incorporation or By-laws of Foreign
Corporations. — Whenever the articles of incorporation or the by-laws of a foreign
corporation authorized to transact business in the Philippines are amended, such foreign
corporation shall, within sixty (60) days after such amendment becomes effective, le
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with the Securities and Exchange Commission, and in the proper cases with the
appropriate government agency, a duly authenticated copy of the articles of
incorporation or by-laws, as amended, indicating clearly in capital letters or by
underscoring the change or changes made, duly certi ed by the authorized o cial or
o cials of the country or state of incorporation. The ling thereof shall not of itself
enlarge or alter the purpose or purposes for which such corporation is authorized to
transact business in the Philippines. (n)
SECTION 131. Amended License. — A foreign corporation authorized to
transact business in the Philippines shall obtain an amended license in the event it
changes its corporate name, or desires to pursue in the Philippines other or additional
purposes, by submitting an application therefor to the Securities and Exchange
Commission, favorably endorsed by the appropriate government agency in the proper
cases. (n)
SECTION 132. Merger or Consolidation Involving a Foreign Corporation
Licensed in the Philippines. — One or more foreign corporations authorized to transact
business in the Philippines may merge or consolidate with any domestic corporation or
corporations if such is permitted under Philippine laws and by the law of its
incorporation: Provided, That the requirements on merger or consolidation as provided
in this Code are followed.
Whenever a foreign corporation authorized to transact business in the Philippines
shall be a party to a merger or consolidation in its home country or state as permitted by
the law of its incorporation, such foreign corporation shall, within sixty (60) days after
such merger or consolidation becomes effective, le with the Securities and Exchange
Commission, and in proper cases with the appropriate government agency, a copy of the
articles of merger or consolidation duly authenticated by the proper o cial or o cials
of the country or state under the laws of which such merger or consolidation was
effected: Provided, however, That if the absorbed corporation is the foreign corporation
doing business in the Philippines, the latter shall at the same time le a petition for
withdrawal of its license in accordance with this Title. (n)
SECTION 133. Doing Business Without License. — No foreign corporation
transacting business in the Philippines without a license, or its successors or assigns,
shall be permitted to maintain or intervene in any action, suit or proceeding in any court
or administrative agency of the Philippines; but such corporation may be sued or
proceeded against before Philippine courts or administrative tribunals on any valid
cause of action recognized under Philippine laws. (69a)
SECTION 134. Revocation of License. — Without prejudice to other grounds
provided by special laws, the license of a foreign corporation to transact business in the
Philippines may be revoked or suspended by the Securities and Exchange Commission
upon any of the following grounds:
1. Failure to file its annual report or pay any fees as required by this Code;
2. Failure to appoint and maintain a resident agent in the Philippines as
required by this Title;
3. Failure, after change of its resident agent or of his address, to submit
to the Securities and Exchange Commission a statement of such
change as required by this Title;
4. Failure to submit to the Securities and Exchange Commission an
authenticated copy of any amendment to its articles of incorporation
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or by-laws or of any articles of merger or consolidation within the time
prescribed by this Title;
5. A misrepresentation of any material matter in any application, report,
a davit or other document submitted by such corporation pursuant to
this Title;
6. Failure to pay any and all taxes, imposts, assessments or penalties, if
any, lawfully due to the Philippine Government or any of its agencies or
political subdivisions;
7. Transacting business in the Philippines outside of the purpose or
purposes for which such corporation is authorized under its license;
8. Transacting business in the Philippines as agent of or acting for and in
behalf of any foreign corporation or entity not duly licensed to do
business in the Philippines; or
9. Any other ground as would render it un t to transact business in the
Philippines. (n)
SECTION 135. Issuance of Certi cate of Revocation . — Upon the revocation of
any such license to transact business in the Philippines, the Securities and Exchange
Commission shall issue a corresponding certi cate of revocation, furnishing a copy
thereof to the appropriate government agency in the proper cases.
The Securities and Exchange Commission shall also mail to the corporation at its
registered office in the Philippines a notice of such revocation accompanied by a copy of
the certificate of revocation. (n)
SECTION 136. Withdrawal of Foreign Corporations. — Subject to existing laws
and regulations, a foreign corporation licensed to transact business in the Philippines
may be allowed to withdraw from the Philippines by ling a petition for withdrawal of
license. No certi cate of withdrawal shall be issued by the Securities and Exchange
Commission unless all the following requirements are met:
1. All claims which have accrued in the Philippines have been paid,
compromised or settled;
2. All taxes, imposts, assessments, and penalties, if any, lawfully due to
the Philippine Government or any of its agencies or political
subdivisions have been paid; and
3. The petition for withdrawal of license has been published once a week
for three (3) consecutive weeks in a newspaper of general circulation in
the Philippines.
TITLE XVI
Miscellaneous Provisions
SECTION 137. Outstanding Capital Stock De ned . — The term "outstanding
capital stock", as used in this Code, means the total shares of stock issued to
subscribers or stockholders, whether or not fully or partially paid (as long as there is a
binding subscription agreement), except treasury shares. (n)
SECTION 138. Designation of Governing Boards. — The provisions of speci c
provisions of this Code to the contrary notwithstanding, non-stock or special
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corporations may, through their articles of incorporation or their by-laws, designate their
governing boards by any name other than as board of trustees. (n)
SECTION 139. Incorporation and Other Fees. — The Securities and Exchange
Commission is hereby authorized to collect and receive fees as authorized by law or by
rules and regulations promulgated by the Commission. (n)
SECTION 140. Stock Ownership in Certain Corporations. — Pursuant to the
duties speci ed by Article XIV of the Constitution, the National Economic and
Development Authority shall, from time to time, make a determination of whether the
corporate vehicle has been used by any corporation or by business or industry to
frustrate the provisions thereof or of applicable laws, and shall submit to the Batasang
Pambansa, whenever deemed necessary, a report of its ndings, including
recommendations for their prevention or correction.
Maximum limits may be set by the Batasang Pambansa for stockholdings in
corporations declared by it to be vested with a public interest pursuant to the provisions
of this section, belonging to individuals or groups of individuals related to each other by
consanguinity or a nity or by close business interests, or whenever it is necessary to
achieve national objectives, prevent illegal monopolies or combinations in restraint of
trade, or to implement national economic policies declared in laws, rules and regulations
designed to promote the general welfare and foster economic development.
In recommending to the Batasang Pambansa corporations, businesses or
industries to be declared vested with a public interest and in formulating proposals for
limitations on stock ownership, the National Economic and Development Authority shall
consider the type and nature of the industry, the size of the enterprise, the economies of
scale, the geographic location, the extent of Filipino ownership, the labor intensity of the
activity, the export potential, as well as other factors which are germane to the
realization and promotion of business and industry.
SECTION 141. Annual Report of Corporations. — Every corporation, domestic
or foreign, lawfully doing business in the Philippines, shall submit to the Securities and
Exchange Commission an annual report of its operations, together with a nancial
statement of its assets and liabilities, certi ed by any independent certi ed public
accountant in appropriate cases, covering the preceding scal year and such other
requirements as the Securities and Exchange Commission may require. Such report shall
be submitted within such period as may be prescribed by the Securities and Exchange
Commission. (n) cd i