How is a vacancy in the board of directors filled, excluding removal or expiration of term? A vacancy occurring in the board of directors or trustees due to reasons other than removal or expiration of term may be filled by a vote of at least a majority of the remaining directors or trustees, provided they […]
What are the functions and how is an emergency board to fill a vacancy constituted? An emergency board may be temporarily formed when a vacancy prevents the remaining directors from constituting a quorum, and critically, emergency action is required to prevent grave, substantial, and irreparable loss or damage to the corporation (SEC. 28, Revised Corporation
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What is the limit on the total yearly compensation for directors or trustees? In the absence of a provision in the bylaws fixing their compensation, directors or trustees shall not receive any compensation in their capacity as such, except for reasonable per diems (SEC. 29, Revised Corporation Code of the Philippines). However, stockholders representing a
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Under what conditions are directors, trustees, or officers liable jointly and severally for damages? Directors or trustees are held jointly and severally liable for all resulting damages if they willfully and knowingly vote for or assent to patently unlawful acts of the corporation (SEC. 30, Revised Corporation Code of the Philippines). Liability also arises if
What happens if a director or officer acquires an interest adverse to the corporation in a confidential matter? A director, trustee, or officer is strictly prohibited from attempting to acquire, or actually acquiring, any interest adverse to the corporation in respect of any matter that was reposed in them in confidence (SEC. 30, Revised Corporation
How are treasury shares defined, and how may they be subsequently disposed of? Treasury shares are defined as shares of stock that have been previously issued and fully paid for, but which the issuing corporation subsequently reacquires (SEC. 9, Revised Corporation Code of the Philippines). This reacquisition can occur through various lawful means, such as
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What are the requirements for natural persons organizing a corporation regarding their number and qualifications? A corporation may be organized by any person, partnership, association, or corporation, provided the total number of incorporators is not more than fifteen (15) (SEC. 10, Revised Corporation Code of the Philippines). If the incorporators are natural persons, they must
What is the term of existence for corporations formed prior to the effectivity of this Code? Corporations with certificates of incorporation issued prior to the Revised Corporation Code’s effectivity, and which continue to exist, are granted perpetual existence by default (SEC. 11, Revised Corporation Code of the Philippines). These existing corporations are given a choice,
Under what conditions may a corporation whose term has expired apply for revival? A corporation whose specific term has expired may apply for the revival of its corporate existence, subject to fulfilling existing duties, debts, and liabilities prior to revival (SEC. 11, Revised Corporation Code of the Philippines). Upon the SEC’s approval, the corporation is
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What is the requirement regarding minimum capital stock for stock corporations? Stock corporations are generally not required to have a minimum capital stock (SEC. 12, Revised Corporation Code of the Philippines). This provision liberalizes the capital requirements for most industries, making incorporation more accessible. However, this general rule has an explicit exception: a minimum capital
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