MEETINGS

Section 48 - Kinds of meetings Page 2

Section 49 - Regular and special meetings of stock holders or members Page 3 - 4
Section 50 - Place and time if meetings of stockholders or members Page 5
Section 51 - Quorum meeting Page 5
Section 52 - Regular and special meetings of directors or trustees;quorum Page 6
Section 53 - who shall preside at meetings Page 6
Section 54 - Right to vote of secured creditors and administrators Page 7
Section 55 - Voting in case of joint ownership of stock Page 7
Section 56 - Voting right for treasury shares Page 7
Section 57 - Manner of voting Page 7
Section 58 - Voting trust Page 8

SHARES AND SHAREHOLDERS

Section 59 Subscription contract Page 8
Section 60 Pre-incorporation subscription Page 9
Section 61 Consideration for Stocks Page 10
section 62 Certificate of Stock and Transfer of Shares Page 11
Section 63 Issuance of Stock Certificates Page 11
Section 64 Liability of Directors for Watered Stocks Page 12
Section 65 Interest on Unpaid Subscription Page 13
Section 66 Payment of Balance of Subscription Page 13
Section 67 Delinquency Sale Page 14
Section 71 Rights of Unpaid Share, Non-Delinquent Page 15
Section 72 Lost Or Destroyed Certificates Page 15
Section 70 Effect of Delinquency Page 15
 MEETINGS
(REVISED CORPORATION CODE)

Meetings- it implice concurrence or face to face of at least of a two person. Pero

ngayon hindi na kailangan face to face kasi meron ng video conferencing or virtual
meeting.

Section 48 - Kinds of meetings

Regular - Is a meeting that is scheduled there is pre-determined date or dates known in
advance or the occurrence and frequency of which is known to the board/trustees or to
the shareholders/members.
(section 48. refers to meeting of the board of directors)
It is stated of the articles of incorporation or the corporate by-laws. Advance to a
member.
Example: Every isang corporation scheduling meeting every 15th of April
every year. minsan yung corporation merong regular meeting sa mga stock
holder nila every 3 quarters.
Sketch/Special - walang scheduled date sa meetinghowever due to circumstances or
reason special meeting is called.
Example: may emergency na requires ng approval ng shareholders,mag sscheduled
yung board of directors or board of trustees’ ng special meeting. Kahit na walang
specific date para sa special meeting, yung dahilan is must be stated in the articles of
corporate by laws.
Section 49. Regular and special meetings of stock holders or members.
(sec.49 refers to meeting of shareholders or members)

Regular meeting shall be held either on:

A. the date fixed by laws; and
B. on any date after April 15, provided written notice shall be given to all
shareholders or members at least 21 days or prior to meeting.
Take note: under letter
B. any meeting that will be conducted after April 15
meron laging 21 days’ notice sa mga shareholders or members.
Bakit? Para mabigyan pa sila ng opportunity para makapag ready .
It is to prevent a raill roading of the decisions of the corp.
Rail roading is ang pwedi lang maka attend ay yung mga kakampi lang ng
mga BoD. para ma protektahan ang interest ng mga board of directors
under require yung mga BOD na yung mga shareholders ay bibigyan ng
saktong oras if it is not in the by laws a 3 weeks notice .
Cancellation or postponement will be send to a shareholders for atleast 2
weeks prior to the date of the meeting unlesstheres a different date fixed by
the by laws.
Example: Pwedi ba yung notice nay un ay mas maikli kunware ang
nakalagay sa by laws ay 1-week notice lang before the date of cancellation
of the meeting or kailangan 5 days lang magbigay ang corporation ng
notice of postponement don sa kanilang schedule date of the meeting .
It is a law so the by laws must follow the sec. 49 pwedi siyang mas mahaba
doon sa 2 weeks period .pero hindi dapat iikli sa 2 weeks kasi yug rules ng
corporation should follow the law . ,mas mataas ang RCC sa corporate by
laws.
Special meetings - it can be held at anytime deemed necessary or as
provided in the by-laws.
The written notice of meeting must be given to the shareholders for atleast
1 week. Unless the by-laws provide a longer notice lalo na kun emergency
Verbal notice kung may meeting yung mga BOD hindi siya valid notice.

The requirement of the law must be written. it can be send through email for the notice.
Example: ABC corp. nakalagay sa kanyang art.of incorporation yung notice of meeting
hindi na record ipadala sa alahat ng members, will that be legal?
The answer is NO, because the general waiver of lock of notice shall be void. the
requirement of the notice of meeting should be sent by the ABC corp to all
shareholders.di pwedi sabihin ni shareholder na hindi siya makaka attend. Ang
iniiwasan ng bata is yung corporation maging tamad sa pagbibigay ng notice.
The stock and transfer book/book of membership shall be closed before the scheduled
date of meeting unless different period is provided by by-laws and rules
a. 20 days for regular meeting it cannot be opened
b. 7 days for special meeting. Will be closed
The stock transfer book shall be closed hindi siya pweding galawin ng corporate
secretary.
The corporate secretary is the person who has the position of the stock and transfer
book hindi pweding I alter.

The right to vote during the meeting may be exercised:

a. in person
b. proxy
c. or when authorized by-laws through remote communication.
Section 50 - Place and time if meetings of stockholders or members.
Whether regular or special meeting it shall be held in:
a. principal office of the corporation;
example: san miguel corp .sa ortigas pa yung office nila. kung subrang daming
shareholder nila it might not possible

b. if not practicable in the principal office it shall be held at city of the municipality
where the principal office is located

Notice shall be sent through the means of communication provided in the by-laws which
also mention the time, place and purpose of meeting.
The meeting will be valid if all shareholder is represented the validity can’t be
questioned.

Section 51 - Quorum meeting

Quorum means the required number of the corporation is not for the conduct of the
meeting. The question of the quorum can be depending on its definition under corporate
by laws.
Under RCC the quorum is defined as where the shareholders represent of majority of
outstanding capital stock in case of a nonstock corp.
Pag quorum any business that was conducted in that meeting be considered as valid.
however, if the corporate bylaws provide for a higher number kunyari for the conduct
there must be 60% shareholders representing capital stock should be present.? yes, it
can be valid.
Section 52 - Regular and special meetings of directors or trustees; quorum
To constitute a quorum a majority of the directors or trustees as stated in the articles of
incorporation shall constitute a quorum to transact business.
Any business or any agenda that was decided during meeting will be valid because
there is quorum.
Example: pano kung anim lang ang umattend sa15 na BOD sa meeting nag approve
sila ng sweldo ng empleyado? the answer is NO because there is no Quorum.

Regular when it is conducted every month unless the bylaws provide, Special may
called anytime upon call by the president.
Note that the notice must be given to every trustee or director at least 2 days of the
meeting.
The meetings of directors may be held whether outside or within the phils. Director who
has potential in any interest in any related party transactions that is up for approval of
BOD.
Example: director si juan sa ayala corporation,however ayala corporation will be
procuring the services of the company of Juan,juan also ows janitorial corp ,ayala is
planning to hire that janitorial services ,for the approval of BOD andoon din si juan
during the meeting,wherein yung agenda ng meeting is for the approval of the
procurement of ayala corp in the janitorial services owned by juan .
Under sec.52 juan, should refused himself from voting hindi siya pweding bumuto..

Section 53 - who shall preside at meetings

Unless otherwise provided by the by-law, the chairman shall preside the meetings of the
board, in his/her absence or incapacity the president may preside.
Kung wala si chairman si president ang mag preside ng meeting. If the president is also
the chairman kung walang naka lagay sa by laws the vice chairman will preside.
Section 54 - Right to vote of secured creditors and administrators
Example: yung mga shares mo may 1000 naman ako na shares sa ABC corporation
nangailangan ako ng pera tapos para makakuha ng instant cash sinangla ko sa
Bangko.i am still allowed to vote during the meetings of abc corp kung sinangla kuna
yung shares ko sa bangko .
The answer could be yes, i can still attend the meeting and vote for the shares,however
kung yung loan ko sa bangko. I allowed the bangko to attend in my behalf instead of
me,

Section 55. Voting in case of joint ownership of stock

If two or more persons jointly own shares in a corporation, there is a need to secure the
consent of all owners. unless a written proxy is executed by all, authorizing one person
to vote in behalf of the shares co-owned by them.
Example: yung 1000 shares nag asawa ako kaming dalawa may joint account kami
tapos yung pera naming doon pinangbibili naming ng shares.
So sino ang may ari ng shares? it cannot be determined kung tag ilan
shares na sila it will be considered as joint ownership. Sino ang authorize umattend or
who will vote during the election of BOD in behalf of those shares .silang mag asawa
can authorized each other kung sino ang mag boboto sa mga shares namin. Or we can
appoint a third party like lawyer

Section 56 - Voting right for treasury shares.

Treasury shares have no voting rights, unless re issued. This is to prevent incumbent
directors or officers from using them in their own ends. Will be suspended until they are
re-issued.
Section 57 - Manner of voting
If proxy voting is allowed, the corporation must receive the vote before the tally of the
votes finished. During the voting of the corporation kung yung proxy or if you authorized
another person to vote on your behalf the shares that you own ,the proxy must be
submitted before the corporate secretary bago ma tally lahat ng boto.
Requirements of proxy are those documents authorizing another person to vote in your
behalf. Meron limit, yung proxy hindi lang siya sa pang specific meeting pwedi siyang
mag expand for a specific period the only limit is di siya pwedi mag exceed for the
period of 5 years.
Proxy voting is also called a delegated voting.to create a voting bloc.
Section 58 - Voting trust
It is an agreement between group of shareholders of corporation whereby a certain
circumstance It is provided control over the shareholders by the said shareholders.
Example: a group of shareholders can authorize another person to used that shares in
an election or voting. Kunwari ako shareholder ng ayala corporation meron share ang
nanay at kapatid ko. now we can execute a voting trust agreement in my behalf
authorizing me that in a certain situation, iboboto ko yung mga shares nila for that
matter.in that voting trust agreement I will always vote against any distribution of stock
dividend that would be valid yun ang tinatawag na voting trust.
Now, it must be noted that a voting trust only endows voting and other rights pertaining
to the shares subject of the agreement. voting trust should not exceed for a period of 5
years at any time. no voting trust agreement shall be entered to circumvent completion
laws and nationality requirements

Section 59. Subscription contract

Subscription contract is a subscription of the stock of the corporate whereby the
subscriber agrees to take a certain number of shares of the capital stock of a
corporation, paying for the same, or expressly or impliedly promising to pay for the
same.
Sir: Subscription contract - It is where in the shareholder intends to buy the shares of a
corporation.
States: In a subscription contract it states the number of shares and the authorized
stocks to be issued by the corporation, yung kanyang capital stock at kung paano niya
babayaran yun, whether impliedly or expressly.
Essence: the essence of the subscription contract is that it is an agreement to take the
unissued shares of the corporation.
Question: Pwede bang magkaroon ng subscription contract even though the
shareholder is yet unpaid to the number of shares he intends to buy in the corporation?
YES!
For example, I signed a subscription contract to the AYALA corporation, binigyan na
ako ng subscription contract, pero that doesn’t mean na automatically bayad na ako
nung shares na binili ko. It is nearly a promise to subscribe on the shares to be issued
by the corporation
Includes there: Number of shares to be issued by the corporation, on how to pay it, what
is the date in the payment and the promise to pay.
Section 60. Pre-incorporation subscription.
It is an agreement by the subscriber to which he/she subscribe to a certain number of
the proposed capital stock of a corporation still undergoing incorporation. It shall be
irrevocable for a period of six months.
Bago pa ma incorporates ang corporation, bago pa maapproved nang SEC yung
incorporation ng isang kompanya, a subscriber or a person can already subscribe to the
number of shares of a corporation.
VALID: This pre-incorporation subscription shall be valid for a period of six months.
Question: What will happen if a corporation did not push through? O di natuloy? It can
be revoked! (revoke means to take back or withdraw; annul, cancel, or reverse; rescind
or repeal in tagalog bawiin)

Instances when pre-incorporation subscription may be revoked

a. All other subscribers agree to the revocation;
b. The incorporation of the proposed corporation does not push through; and (Or
kung yung registration sa SEC did not push through)

c. The revocation is before the articles of incorporation is filed with the SEC. The
revocation is MADE before the filing of articles with the SEC,

GENERAL RULE: As a general rule kahit hindi magtayo or naka incorporate ang
isang corporation, subscription is allowed and it is valid for the period of six
months.
Section 61. Consideration for Stocks
Sir: The payment for the shares of stocks is not only money or cash,
it can be property, labor or services, or if ang corporation ay may utang sa corporation
din it can issue a shares which is pambabayad niya doon sa pinagkakautangan niyang
corporation, it can also be a surplus profit in case of stock dividends, ( when you issue a
stock dividend that surplus profit will be transferred into the capital of the corporation, so
the retained earnings now will be transferred to capital and operation will issue a stock
dividend)
Money is not the only consideration on acquiring shares of a corporation. A share may
be acquired in exchange for the following:
a. Cash
b. Property
c. Labor or services
d. Debt or equity
e. Retained earnings
f. Outstanding shares
g. Shares of stock of another corporation
Example bibili ako nang shares sa ibang company, pwede kong ipang bili yung
hawak kong shares doon sa bibilhin kong bagong shares.
h. Other generally accepted form of consideration
Example: Promissory note, is a kind of an asset, a promise to pay debt.

Take note: If consideration is other than cash, the value of the property or services shall
be determined by the shareholders or the board subject to SEC approval. The property
or service should not be less than the value of the share.
Example: You are a lawyer, and ABC corp wants your legal services. However, ABC
corporation has no cash, ABC corporation then issue 1000 shares sa halagang 1000
per share which is 1,000,000. Your contribution then is services as a lawyer to ABC
corporation in return of that the corporation will issue share, then you will be a
shareholder of the corp. then who will determine or sinong magdedecide kung ilang
share iissue sayo at bakit halagang 1 000 000. It is the shareholder and the board of
directors however it will be subsequently submitted before the SEC for its approval, kasi
pwedeng gawing fraud un, kahit di naman talga 1Million ung halaga ng services mo,
what if 200k lang talaga halaga ng services mo for the representation in court for the
abc corporation. pero ang binigay na value ng board at shareholder is 1Million so the
purpose of this is to protect the interest of the corporation, yung trust fund doctrine
which states that the assets of the corporation shall always be for the benefit of the
corporation and its creditors. (creditors meaning a person or company to whom money
is owed.)
Section 62. Certificate of stock and transfer of shares
Sir: A stock certificate is a document evidence issued by the corporation in favor of
the shareholder, stating that the shareholder is owning a share in the corporation.
A stock certificate is a written acknowledgement by the corporation of the interest of
the shareholder in the corporate property. To be a valid issuance , it must comply
with the following:
a. Signed by the president and counter-signed by the corporate secretary;
b. Sealed with the seal of the corporation
c. In accordance with by-laws

Sir: It is only valid if it is registered or recorded in the stock and transfer book. And
only the corporate secretary is allowed to record the stock certificate. What if
chairman yung nagrecord sa book? INVALID. Any record made under than this
corporate secretary is void and without effect.
The stock and transfer book is the book of the corporation stating who are the
shareholder of the corporation, how much do they own in the corporation.
No transfer shall be valid, unless it is recorded in the books of corporation.
Furthermore, only the corporate secretary is authorized to record the same in the
books.

Section 63. Issuance of stock certificates

The corporate secretary is prohibited from issuing stock certificate unless the
subscription is not fully paid.
Hanggat hindi ka bayad completely, hindi maiissue ang iyong stock certificate. You
can subscribe without paying but corporation will not issue you a stock certificate.
Section 64 Liability of Directors for watered stocks.
Sir: Concept of watered stock it is the issuance of the stock for less than its value.
Example ang halaga ng isang share is 1k at gusto mo isang lawyer maghandle nang
isang kaso ng corp however the corp has no money to pay for lawyer, board of
director give him 1k shares w/ par value of 1k per share, lawyer is now shareholder.
But the services of the lawyers is determined the real value of services of the lawyer
is only 250k. there’s is a liability of the director for issuing a watered stock, because
the issued shares for less than the consideration that the corporation received. In
that case the director or officer is liable in that act of issuing a watered stock.
A watered stock is that which is issued as fully paid up, when in fact the whole
amount of the par value thereof has not been paid in. if any amount less than the
whole face value of the stock has not be paid, and the stock has been issued as
fully paid, then the stock is watered to the extent of the deficit.
The director or officer shall be liable, based on the following acts:
a. Consents to the issuance of stock for a consideration less than its par or
issued value;
b. Consents to the issuance of stocks for a consideration other than cash,
valued in excess of its fair value
Alam niyang lagpas yung totoong value nang isang services ng lawyer
compared sa share na inissue ng corp
c. Having knowledge of the insufficient consideration and does write an
objection with the corporate secretary. The director or officer shall be liable to
corporation and creditors, solidarity with the shareholder concerned for the
difference between the value received by the corporation and the issued or
par value.
The director did not object or filed a written objection before the corporate
secretary, kahit na alam niya yung insufficient consideration, in that case he
is liable to the difference of the real value of the services of that lawyer minus
the shares that is issued. Example 1M issued – 250k real value = 750k then
the directors and officers who approved and did not file objection that
issuance of share will be liable in 750k pesos solidarily (paghahati hatian nila)
at ibibigay nila un sa corporation. This is to protect the corporation’s asset.
Section 65 Interest on unpaid subscription
The law allows the imposition of interest on the unpaid subscription. The
interest is not stated in the subscription contract, it shall follow the prevailing
legal rate which is 6%.
The law allows the corporation to impose interest kapag nakalagay sa
subscription contract na hindi nakapagbayad on time new subscriber o yung
taong gustong bumili ng share within 1 month from the signing of the
subscription contract then it will earn an interest of 12% it is allowed however
if there is no provision or hindi nakalagay sa subscription contract kung
magkano ang interest for late payments then it will be prevailing legal rate
which is 6%.

Section 66 payment of balance of subscription

The unpaid subscription shall be due as specified in the contract or on the
date call made by the board. in case, the shareholder failed to pay upon
demand the interval and shall be due and demandable. If no payment was
made within 30 days from the demand, the shares subscribed shall become
delinquent subject of sale.
If the payment of the balance of the subscription is a specified on contract for
there was a call. Call means meron ng demand board of directors. that
shareholder who failed to pay from the date of the call of the board of
directors or on the dates specified on the subscription contract th the shares
now is shall be considered as delinquent and they can be sold by the
corporation.
An unpaid subscription and its due date is stated in subscription contract the
promise to buy 100 shares worth 1000 per share on september 1,
demandable on september 30. but on september 30 you did not paid and
there's already a call from board of directors, after 30 days or on october 30
they are now considered as delinquent and they can be a subject on sale in a
public auction.
Section 67 delinquency sale
The board of directors shall order the sale by resolution, of the shares which
are delinquent. The resolution shall state the amount due on each
subscription + interest, date, time and place sale which shall not be less than
30 days nor more than 60 days from the date the stock became delinquent.
The delinquent shareholder shall be sent a notice, whether, personally,
registered mail, or any other means allowed by the by-laws. in addition, the
notice of sale shall be published in a newspaper of the general circulation in
the province or city where the principal office of the corporation is situated.

Example: The share has been delinquent on october 30 maaaring ibenta

iyong ng corporation a board resolution by the board of directors for not less
than 30 days from the date they become delinquent not exceeding 60 days
maaaring ibenta ng corporation the event incorporation on november 29
december 29 2020. the delinquent shareholder shall be notified a
papadalhan siya ng notice either personally or registered mail or any other
means allowed why the corporate bylaws pwede email lang yan pwede
facebook messenger. furthermore, the notice shall be published on the
newspaper on general circulation in the province or city where in the principal
office of the corporation is situated.
Publish once a week for three consecutive weeks
Unless the delinquent shareholder pace to the corporation, on or before the
scheduled date of sale, the delinquent shares shall be sold at public auction.
The bidder with the offer to pay the full amount of balance of subscription
together with accrued interest, cause of advertisement and expense of sale
for the smallest number of shares shall be chosen.
If there is a remaining share it shall be credited in favor of the delinquent
shareholders.

In the absence of bidder, the corporation is allowed to be the delinquent

shares.

Delinquent Shareholder 50 000 unpaid subscription + 20 000 advertisement

and other expense.

Pedro bid and bought it 200 000.

70 000 will go to Corporation

130 000 goes to delinquent Shareholder
If there is no bigger in the auction the corporation can be for the for the
delinquent share.
Section 72 Lost Or Destroyed Certificates.
The shareholder must file an affidavit before the corporation, detailing the
loss, destruction of the certificate.
At the expense of the shareholder, a publication in a newspaper of general
circulation for a period of once a week for three consecutive weeks, is stating
the fact of loss or destruction of the certificate.
After publication a one-year week period after the last date of publication,
before a new stock certificate may be issued, provided no one contest the
same the one year waiting period may be dispensed with if a security is
provided by the applicant.
In case, there is a party contesting the application it shall be resolved by the
court and the issuance of the stock certificates shall be held abeyance until
final judgment.
The corporation allows to issue stock certificate even if 1 year is not finish
when there is a strict security that was provided the applicant or shareholder.

Example of strict security is a 300 million house and lot.

The corporation is prohibited to issue stock certificate if merong issue sa
shareholder na nakawala, merong other shareholder na against na nagsasabi
na sa kanya yung nawalang stock certificate. It should be resolved muna by
the court before issuance of the stock certificate meron ng final judgement on
court.
No person shall be allowed to sue the corporation if there was an issuance of
stock unless it is by the reason of a fraud for negligence, hindi mo pwedeng
kasuhan ang corporation

Section 70 – effect of delinquency

The holder of delinquent shares is prevented from voting, or be voted, or to be

representation in a meeting, except the right to dividends. Until full payment of
the subscription plus interests, costs and expenses, the rights of the shareholder
shall not be restored nor be exercised.

Cannot exercise right unless fully paid. The right to attend meeting, the right to
vote.

Section 71 – rights of unpaid share, non-delinquent.

They may be exercise certain rights of shareholders. Unpaid pero di pa

lumalagpas sa specific contract deadline or wala pang call ng bod. Shareholders
of that share can still exercise the right of the share