Corporate Officers; Qurom

Who are the Corporate officers and the definition of quorum in a corporation?

 

SEC. 25 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the Corporate officers; quorum with details as follows:

 

SEC. 25. Corporate officers; 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 officers 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 officers to be elected shall perform the duties enjoined on them by law and by 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 fixed 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 officers 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.

Election Of Directors Or Trustees

SEC. 24 of Batas Pambansa Blg. 68  "The Corporation Code of the Philippines" refers to the Election of directors or trustees with details as follows:

 

SEC. 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 fixed 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 as number of shares for as many persons as there are directors to be elected or he may cumulate said shares and give one candidate as many votes as the number of his shares shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit: Provided, That the total number of votes cast 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 that 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 form 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 members entitled to vote.

The Board Of Directors Or Trustees

Who are the board of directors or trustees in a corporation?

SEC. 23 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" would be the reference with regards to the board of directors or trustees as follows:

SEC. 23. The board of directors or trustees.  Unless otherwise provided in this Code, the corporate powers of all corporation 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 and until their successors are elected and qualified.

Every director must own at least one (1) share of the capital stock of the corporation of which he is a director, which shall stand in his name on the books of the corporation. Any directors who ceases to be 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.

Effects Of Non-use Of Corporate Charter And Continuous Inoperation Of A Corporation

What are the effects of non-use of corporate charter and continuous inoperation of a corporation?

SEC. 22 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" would be the reference of the effects of non-use of corporate corporate charter and continuous inoperation of a corporation as follows:

SEC. 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 the 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 five (5) years, the same shall be a ground for the suspension or revocation of its corporate franchise or certificate of incorporation.

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.

Corporation By Estoppel

Corporation by estoppel is stated in SEC. 21 of Bilang Pambansa "The Corporation Code of the Philippines" with details as follows:

 

SEC. 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 onstensible 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.

 

One who assumes an obligation to an onstensible corporation as such, cannot resist performance thereof on the ground that there was in fact no corporation.

De Facto Corporations

SEC. 20 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to De facto corporations as follows:

SEC. 20. De facto corporations.  The due incorporation of any 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 quo warranto proceeding.

List Of Accredited Tax Practitioners and Effects of Accreditation

Section 6 of Revenue Regulations No. 14 - 2010 refers to the Effects of Accreditation as follows:

Section 6. Effects of Accreditation. Only those Tax Agents/ Practitioners, Partners or Officers of general Professional Partnerships, or Officers or Directors of Corporate entities engaged in tax practice who have been issued certificate of Accreditation or ID card shall be allowed to represent a taxpayer or transact business with the Bureau of Internal Revenue in representation of taxpayer for the purposed(s) defined in these regulations. The Commissioner or his authorized representative shall only consider as valid document/attachments to tax returns, information returns or other statements or reports required by the Code or Regulations, the financial statements prepared, signed and certified by duly accredited tax practitioners. The BIR can refuse to transact official business with tax practitioners who are not accredited before it and shall required that certain official statements such as returns, financial statements, reports, protests, requests for ruling, official correspondence and other statements, paper or documents filed on behalf of a taxpayer be signed or certified to by accredited persons which shall bear the following information below the signature of the latter.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Lists/RNAB-Report2015July%2031.pdf of the List of Accredited Tax Practitioners as of July 2015.

The Commencement Of Corporate Existence

With regards to the commencement of corporate existence, SEC 19 of Bilang Pambansa 68 "The Corporation Code of the Philippines" would be the reference with details as follows:

SEC. 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 Exchanged Commission issues a certificate of incorporation under its official 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 wit law.

Corporate Name

Under SEC. 18 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the Corporate name with details as follows:

SEC. 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 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.

Grounds When Articles Of Incorporation Or Amendment May Be Rejected Or Disapproved

Grounds when the articles of incorporation or amendment may be rejected or disapproved is stated in SEC. 17 of RA No. 68 "The Corporation Code of the Philippines" with details as follows:

SEC. 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 ground 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 Affidavit concerning the amount of capital stock subscribed and/or paid is false;

4. That the 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, 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)