CORPORATION

 LAW  REVIEWER  (2013-­‐2014)            ATTY.  JOSE  MARIA  G.  HOFILEÑA    

 
agency   or   society.   In   other   words,   the   incorporators   must   be   the  manner  of  voting  therein;  
given   the   chance   to   explain   their   neglect   or   omission   and    
remedy  the  same.”  Loyola   Grand   Villas   Homeowners   v.   CA,   276   4.  The  form  for  proxies  of  stockholders  and  members  and  the  manner  
SCRA  681  (1997).   of  voting  them;  
• A   corporation   which   has   failed   to   file   its   by-­‐laws   within   the    
prescribed   period   does   not   ipso   facto   lose   its   powers   as   such,   5.  The  qualifications,  duties  and  compensation  of  directors  or  trustees,  
and   may   be   considered   a   de   facto   corporation   whose   right   to   officers  and  employees;  
exercise  corporate  powers  may  not  be  inquired  into  collaterally    
in   any   private   suit   to   which   such   corporations   may   be   a   party.   6.   The   time   for   holding   the   annual   election   of   directors   of   trustees   and  
[?]  Sawadjaan  v.  Court  of  Appeals,  459  SCRA  516  (2005).   the  mode  or  manner  of  giving  notice  thereof;  
o There  is  a  matter  of  compliance  with  the  requirements    
so  there  is  a  corporation,  but  it  is  simply  defective.   7.   The   manner   of   election   or   appointment   and   the   term   of   office   of   all  
  officers  other  than  directors  or  trustees;  
III.  Contents  (Section  47)    
  8.  The  penalties  for  violation  of  the  by-­‐laws;  
A.  Matters  Usually  Found  in  the  By-­‐Laws    
  9.   In   the   case   of   stock   corporations,   the   manner   of   issuing   stock  
Section  47.  Contents  of  by-­‐laws.   certificates;  and  
Subject   to   the   provisions   of   the   Constitution,   this   Code,   other   special    
laws,   and   the   articles   of   incorporation,   a   private   corporation   may   10.   Such   other   matters   as   may   be   necessary   for   the   proper   or  
provide  in  its  by-­‐laws  for:   convenient  transaction  of  its  corporate  business  and  affairs.  (21a)  
   
1.   The   time,   place   and   manner   of   calling   and   conducting   regular   or    
special  meetings  of  the  directors  or  trustees;   B.  Other  Matters  that  May  Be  Included  in  By-­‐Laws  
  • The  by-­‐laws  relate  to  the  internal  affairs  of  the  corporation.  
2.   The   time   and   manner   of   calling   and   conducting   regular   or   special   o It   may   contain   the   duties   and   responsibilities   of   the  
meetings  of  the  stockholders  or  members;   people  comprising  the  corporation.  
   
3.  The  required  quorum  in  meetings  of  stockholders  or  members  and   Other   matters   which   under   the   Corporation   Code   may   be   provided   for  

 
NOTES  BY  RACHELLE  ANNE  GUTIERREZ  (UPDATED  APRIL  3,  2014)  
CORPORATION  LAW  REVIEWER  (2013-­‐2014)            ATTY.  JOSE  MARIA  G.  HOFILEÑA    
 
in  the  by-­‐laws  are  as  follows:    
  (i)  Providing  for  interest  on  unpaid  subscriptions;9  
(a)   Designation   of   time   when   voting   rights   may   be   exercised   by    
stockholders  of  record;1   (j)  Entries  to  be  made  in  the  stock  and  transfer  book;10  and  
   
(b)  Providing  for  additional  officers  for  the  corporation;2   (k)   Providing   for   meetings   of   the   members   in   a   non-­‐stock  
  corporation  outside  of  the  principal  office  of  the  corporation.11  
(c)  Provisions  for  the  compensation  of  the  directors;3    
  C.  Matters  That  May  Be  Found  in  Articles  of  Incorporation  and  By-­‐Laws  
(d)  Creation  of  an  executive  committee;4    
  • How   do   you   determine   what   goes   into   the   articles   of  
(e)   Date   of   the   annual   meeting   or   provisions   of   special   incorporation  vis-­‐à-­‐vis  the  by-­‐laws?  
5
meetings  of  the  stockholders  or  members  of  the  corporation;   o Those   expressly   stated   in   the   Corporation   Code   must   be  
  placed  in  either  document  accordingly.  
(f)   Quorum   on   meetings   of   stockholders   or   members   of   the   o However,   with   regard   to   information   that   is   not   in   the  
corporation;6   articles  of  incorporation,  then  it  is  left  to  the  discretion  
  of   the   directors/incorporators   where   to   place   the  
(g)   Providing   for   the   presiding   officer   at   meetings   of   the   information.   Provided,   that   what   is   in   the   articles   of  
directors   or   trustees,   as   well   as   of   the   stockholders   or   incorporation  cannot  be  contained  in  the  by-­‐laws(?)  
members;7    
  In  addition,  the  Corporation  Code  expressly  allows  certain  matters  to  
(h)  Procedure  for  issuance  of  certificates  of  shares  of  stock;8   be   provided   for   either   in   the   articles   of   incorporation   or   the   by-­‐laws   of  
the  corporation,  thus:  
                                                                                                               
1
 Section  24,  Corporation  Code.    
2
 Section  25.  ibid.   (a)  Providing  for  cumulative  voting  in  non-­‐stock  corporations;12  
3
 Section  30.  ibid.  
4
 Section  35.  ibid.                                                                                                                  
5 9
 Sections  50  and  53.  ibid.    Section  66.  ibid.  
6 10
 Section  52.  ibid.    Section  74.  ibid.  
7 11
 Section  54.  ibid.    Section  93.  ibid.  
8 12
 Section  63.  ibid.    Section  24.  ibid.  
 
NOTES  BY  RACHELLE  ANNE  GUTIERREZ  (UPDATED  APRIL  3,  2014)  
CORPORATION  LAW  REVIEWER  (2013-­‐2014)            ATTY.  JOSE  MARIA  G.  HOFILEÑA    
 
  as   in   the   certificate   of   stock;   otherwise,   the   restriction   shall   not   be  
(b)   Providing   for   a   higher   quorum   requirement   for   a   valid   binding  on  any  purchaser  thereof  in  good  faith.8  
board  meeting;1    
  D.  Matters  That  Cannot  Be  Provided  for  in  By-­‐Laws  
(c)  Limiting,  broadening  or  denial  of  the  right  to  vote,  including    
2
voting  by  proxy,  for  members  in  non-­‐stock  corporations;   On  the  other  hand,  under  the  provisions  of  the  Corporation  Code,  the  
  following  matters  must  be  provided  for  in  the  articles  of  incorporation,  
(d)  Transferability  of  membership  in  a  non-­‐stock  corporations;3       and  consequently  cannot  be  governed  by  the  corporation's  by-­‐laws:  
   
(e)  Termination  of  membership  in  non-­‐stock  corporations;4   (a)   Classification   of   shares   of   stock   and   preferences   granted   to  
  preferred  shares;9  
(f)   Manner   of   election   and   term   of   office   of   trustees   and    
5
officers  in  non-­‐stock  corporations;   (b)  Provisions  on  founder's  shares;10  
   
(g)  Manner  of  distribution  of  assets  in  non-­‐stock  corporations   (c)  Providing  for  redeemable  shares;11  
upon  dissolution;6  and    
  (d)  Provisions  on  the  purposes  of  the  corporation;12  
(h)  Providing  for  staggered  board  in  educational  institutions;7    
  (e)  Providing  for  the  corporate  term  of  existence;13  
In   a   close   corporation,   restrictions   on   the   right   to   transfer   shares   must    
appear   both   in   the   articles   of   incorporation   and   in   the   by-­‐laws,   as   well   (f)  Capitalization  of  stock  corporations;14  
 
(g)  Corporate  name;1  and  
                                                                                                                                                                                                                               
1 8
 Section  25.  ibid.    Section  98.  ibid.  
2 9
 Section  89.  ibid.    Section  6,  Corporation  Code.  
3 10
 Section  90.  ibid.    Section  7,  ibid.  
4 11
 Section  91.  ibid.    Section  8,  ibid.  
5 12
 Section  92.  ibid.    Sections  14,  15,  36(11)  and  45,  ibid.  
6 13
 Section  94.  ibid.    Sections  11,  14  and  37,  ibid.  
7 14
 Section  108.  ibid.    Sections  13  and  14,  ibid..  
 
NOTES  BY  RACHELLE  ANNE  GUTIERREZ  (UPDATED  APRIL  3,  2014)