TOPICS 1-3

PRIVATE CORPORATIONS UNDER

REVISED CORPORATION CODE

MODULE 2

INCORPORATION AND ORGANIZATION-SECS 10-21RCC

SEC 18 RCC
THEORY OF CORPORATE ENTITY

Certificate of incorporation- corporate or juridical existence begins from date of issuance of the
coi as stated therein. It is from that time that the corporation legally exists and therefore, can
exercise corporate powers either express, implied or incidental

SEC 175 RCC

- Registration and incorporation and other fees/

SEC 177 RCC

- Reportorial requirements-afs/gis/et al

SEC 25 RCC
- Report of Election of Directors, Trustees and Officers, Non-holding of Election and
Cessation from Office

SECS 162 RCC

- Willful Certification of Incomplete, Inaccurate, False, or Misleading Statements or

Reports; Penalties

SEC 161 RCC VIS A VIS SECS 45,73,92,128,177 RCC

- Violation of Duty to Maintain Records, to Allow their Inspection or Reproduction;

Penalties.

SEC 21 RCC
EFFECT OF NON-USE OF CORPORATE CHARTER/CONTINUOUS INOPERATION

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 NON-USE OF CORPORATE CHARTER FOR 5 YEARS

The RCC extends the allowable period for non-use of corporate charter from 2 years to 5 years
from the date of incorporation.  The certificate of incorporation shall be deemed revoked as of the
day following the end of the 5-year period.  (Sec. 21 RCC). 

CONTINUOUS INOPERATION FOR 5 YEARS

Meanwhile, a corporation which has commenced its business but subsequently becomes
inoperative for a period of at least 5 years may be deemed a delinquent corporation and shall have
a period of 2 years to resume operations.
Failure to resume operations within the period given by the SEC shall cause the revocation of its
certificate of incorporation (Sec. 21 RCC). 

SEC 13/14 RCC AND ALLIED SECTIONS

PREPARATION/DRAFTING/EXECUTION OF AOI

FORM/CONTENTS

Articles of Incorporation -official languages/duly signed and acknowledged or

authenticated/substantial compliance

SEC 13 LP RCC/SEC 180 RCC-ELECTRONIC FILING

SALIENT FEATURES/CONTENTS OF AOI

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1. CORPORATE NAME

-Sec 13 (a)-(j) RCC / Sec 14 FIRST RCC / Sec 17 RCC

MNEMONICS-NOT Dis P/C Law

 Not
 Distinguishable from any registered/reserved corporate name
 Not
 Protected by law
 Not
 Contrary to law, rules & regulations

Sec 159 RCC- Unauthorized use of corporate name

- Unauthorized Use of Corporate Name; Penalties. – The unauthorized use of a

corporate name shall be punished with a fine ranging from Ten thousand pesos
(P10,000.00) to Two hundred thousand pesos (P200,000.00).

2. PURPOSE/S-PRIMARY/SECONDARY
-SEC 13 (b) RCC/14 SECOND RCC

3. PLACE OF PRINCIPAL OFFICE

-SEC 13 (c) RCC/14 THIRD RCC
- which must be in the Philippines – sec 13 (b)

4. TERM
-SEC 13 (d) RCC/14 FOURTH RCC/SEC II RCC

The corporate term limit of 50 years has been removed such that a corporation
can now enjoy perpetual existence unless expressly limited by its AOI.

Such perpetual corporate term shall also apply to corporations incorporated prior
to the RCC, unless said corporations elect to retain a specific corporate term.

The new law also states that a corporation whose term has expired can apply with
the Securities and Exchange Commission (SEC) for the revival of its corporate
existence, with all the rights and privileges under its certificate of incorporation
and subject to all of its duties, debts and liabilities existing prior to its revival.
Upon the SEC’s approval, the corporation shall be deemed revived and a
certificate of revival of corporate existence shall be issued giving it perpetual
existence, unless its application for revival provides otherwise (Sec. 11 RCC).

PERPETUAL EXISTENCE-unlimited term or corporate life

-SEC 11 1ST PAR RCC

CORPORATION BY PRESCRIPTION-ROMAN CATHOLIC CHURCH

-SEC 11 2ND PAR RCC

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CORPORATE TERM FOR A SPECIFIED TERM
-SEC 11 3RD PAR RCC

EXTENSION/SHORTENING
-SEC 15/SEC 36 RCC

STEPS/RULES:

1.BOARD RES
-majority vote of bod/t to adopt the
extension/shortening

2. SH RES
- 2/3 ocs/ms- the adotion of the extension/shortening is
ratified by shs/ms-2/3 ocs/ms in a meeting specifically called for that purpose.

NOTICE OF MEETING :
PME- PERSONAL/MAIL/E-
NOTICE-

3. AMENDED AOI
-the corporation prepares a copy of the aoi, as amended, underscoring the
changes made- (sec 15 RCC)

4. NOTARIZED SECRETARY AND DIRECTORS CERTIFICATE-

- Corporate sec and majority of bod/t certify under oath thet the
amendments have been duly approved by the required vote of shs/ms

5. FILING/SUBMISSION OF ORIGINAL AND AMENDED AOI WITH

NOTARIZED SECRETARY AND BOD/T CERTIFICATE
-The corporation submits said docs to sec for approval

6. EFFECTIVITY

-Upon approval of sec/6 mos from date of filing

REVIVAL OF EXPIRED CORPORATE TERM

-SEC 11 4TH & 5TH PAR RCC

LIMITATION/S IN CASE OF EXTENSION OF CORPORATE TERM-APPRAISAL

RIGHT -sec 36 RCC

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 SHORTENING Dissolution by Shortening Corporate Term. – A voluntary dissolution
may be effected by amending the articles of incorporation to shorten the corporate term
pursuant to the provisions of this Code. A copy of the amended articles of incorporation
shall be submitted to the Commission in accordance with this Code. -SEC 136 RCC

5. IINCORPORAT4ORS

-SEC 13 (e) RCC/14 FIFTH RCC/10 RCC

NUMBER AND QUALIFICATIONS OF INCORPORATORS

The RCC removed the absolute requirement of having a minimum of 5

individuals in the formation of corporations (Sec. 10 RCC).

The law now allows the establishment of a One-Person Corporation (OPC)

composed of a single shareholder, who may be a natural person, a trust or an
estate. A shareholder may acquire all the stocks of an ordinary stock corporation
and apply for the conversion thereof into an OPC. In terms of liability, the single
shareholder claiming limited liability has the burden of affirmatively showing
that the corporation was adequately financed (Sec. 18, 115, 116, 130, 131
RCC).

MNEMONICS-No PAIRS
No
-NUMBER
GR-SEC 10-1-15 RCC
SEC 115-132 RCC-OPC
EXCEPTIONS
SEC 13 (f) RCC/91 RCC
-Non stock-may be more than 15/may not be more than
15

SEC 95 RCC
-CLOSE-1-20

SEC. 106 RCC

-EDUCATIONAL-5-15

SEC 107 RCC

-RELIGIOUS-1 OR MORE
P
-PERSONS-NATURAL OR JURIDICAL/SINGLY OR JOINTLY

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 A
-AGE-NATURAL PERSON-LEGAL AGE-18 AND ABOVE

I
-INCAPACITY-NATURAL PERSON-NOT SUFFERING FROM
INCAPACITY OR LEGAL IMPEDIMENT SUCH AS INSANITY,
INSOLVENCY, CIVIL INTERDICTION

R
-RESIDENCE-RESIDENCE ADDRESSES

S
-SHAREHOLDER/STOCKHOLDER-MUST OWN AT LEAST 1
STOCK/SHARE

6. DIRECTORS
-SEC 13 (f) RCC/SEC 14 SIXTH RCC/SECS 22-34 RCC

MORE DISCUSSIONS ON THE TOPIC-BOARD OF DIRECTORS/CORPORATE

OFFICERS

INCORPORATORS AS FIRST BOARD

-SEC 13(g) RCC

7. MINIMUM CAPITAL STOCK

Stock corporations are still not required to have a minimum capital stock, unless
specifically provided by special law.

STOCK
-ACS-SEC 13 (h) RCC-INITIAL CAPITAL/FUND/MONEY
-OCS-SEC 173 RCC-ISSUED CAPITAL STOCK
NON STOCK
-CAPITAL CONTRIBUTIONS/DONATIONS-SEC 13 (i) RCC

Notably, in the revised form of the Articles of Incorporation (AOI), it is no longer

required that the capitalization be in “lawful money of the Philippines” (Sec. 14 RCC).

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 8. SUCS
-SEC 13 (i) RCC/SEC 14 EIGHTH RCC

STOCK
-SUBSCRIBED-
NON STOCK
-NAMES, NATIONALITIIES AND RESIDENCE ADDRESSES OF
DONORS/CONTRIBUTORS AND AMOUNT GIVEN-SEC 13 (i) RCC

The RCC removed the requirement that 25% of the authorized capital stock be subscribed
and that 25% of the subscribed capital stock be paid for purposes of incorporation as
previously mandated under Section 13 of the Corporation Code, which was deleted in its
entirety (Sec. 12 RCC).

However, the 25%-25% requirement was retained for any increase in the authorized
capital stock (Sec. 27 RCC).

OTHER MATTERS
-SEC 13 (j) RCC

9. INTERIM TREASURER
-SEC 13 (h)/SEC 14 NINTH RCC

CERTIFICATION AS TO SEVENTH AND EIGHTH CLAUSES

-NO NEED OF TREASURERS AFFIDAVIT

10. CHANGE OF NAME

-SEC 13 (j) RCC/SEC 14 TENTH RCC/SEC 17 RCC

11. FILIPINO OWNERSHIP

-SEC 13 (j) RCC/SEC 14 ELEVENTH RCC/
-SEC 176
FILIPINO OWNERSHIP REQUIREMENT IN CERTAIN CORPORATIONS
100% FILIPINO OWNED-MASS MEDIA/SECURITY AGENCIES/RURAL
BANKS/RETAIL TRADE/RICE AND CORN INDUSTRY

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 75% FILIPINO OWNED-COTTAGE INDUSTRIES
70% FILIPINO OWNED-SAVINGS AND LOAN ASSOCIATIONS (VOTING
STOCKS)/BANKING INSTITUTIONS (VOTING STOCKS)/ADVERTISING
FIRMS/PAWNSHOPS
60% FILIPINO OWNED-PUBLIC UTILITIES/EDUCATIONAL
INSTITUTIONS (EXCEPT IF ESTABLISHED BY RELIGIOUS ORDERS OR
CHARITABLE ORG)/EXPLOITATION OF NATURAL
RESOURCES/COASTWISE SHIPPING/CIVIL AERONAUTICS/FINANCING
COMPANIES/ATOMIC ENERGY

12. ARBITRATION AGREEMENT

-SEC 13 2ND TO LP RCC/SEC 181 RCC

AMENDMENT OF AOI
-SEC 15 RCC
MNEMONICS-LAFE

L
-LEGITIMATE PURPOSE/S-SEC 15 1ST PAR RCC
A
-APPROVAL/ASSENT-SEC 15 1ST PAR RCC
BOD/T MEETING HELD
-BOARD RES-MAJORITY VOTE
SHS/MS MEETING HELD
-SHS/MS RES-2/3 OCS/MS
WITH NOTICE
– PERSONAL/MAIL/E NOTICE
NO SHS/MS MEETING HELD
-WRITTEN ASSENT-2/3 OCS/MS
F
-FORM-SEC 15 2ND PAR RCC

E
-EFFECTIVITY-SEC 15 3RD PAR RCC

GROUNDS FOR REJECTION/DISAPPROVAL OF AOI

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 -SEC 16 RCC
NOT COMPLIANT
MNEMONICS-COP FoR

C
-CERTIFICATION OF TREASURER ANENT SUCS AND/OR PUCS IS FALSE
O
-OWNERSHIP OF C/S-REQUIRED % NOT COMPLIED WITH
P
-PURPOSE-ILLEGAL, UNCONSTITUTIONAL, IMMORAL, CONTRARY TO
GOVT RULES AN REGULATIONS

Fo
-FORM-AS PRESCRIBED BY SEC
R
-RECOMMENDATION-NO FAVORABLE RECOMMENDATION FROM
APPROPRIATE GOVERNMENT AGENCIES

NSSLAS-????????
Non-Stock Savings and Loan Association.

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