Philippine Legal Advice

What are the term lengths and qualification requirements for directors and trustees?

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What are the term lengths and qualification requirements for directors and trustees? Directors in a stock corporation are elected for a fixed term of one (1) year and must be holders of stocks registered in the corporation’s books (SEC. 22, Revised Corporation Code of the Philippines). Trustees in a nonstock corporation are elected for a […]

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What is the role and required percentage of independent directors in corporations vested with public interest?

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What is the role and required percentage of independent directors in corporations vested with public interest? Corporations deemed vested with public interest must have independent directors constituting at least twenty percent (20%) of their board (SEC. 22, Revised Corporation Code of the Philippines). An independent director is defined as a person who is free from

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What percentage of stock or membership is required to constitute a quorum for the election of directors or trustees?

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What percentage of stock or membership is required to constitute a quorum for the election of directors or trustees? For the election of directors or trustees, there must be present, either in person or through a written proxy, the owners of a majority of the outstanding capital stock (SEC. 23, Revised Corporation Code of the

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Describe the cumulative voting rights available to stockholders in stock corporations.

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Describe the cumulative voting rights available to stockholders in stock corporations. In stock corporations, stockholders entitled to vote possess the right to vote the number of shares standing in their own names in the stock books at the time of the election (SEC. 23, Revised Corporation Code of the Philippines). They have three options for

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Who are the mandatory officers required for a corporation, and what restrictions apply to holding multiple offices?

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Who are the mandatory officers required for a corporation, and what restrictions apply to holding multiple offices? Immediately after their election, the directors must formally organize and elect a president, who is required to be a director (SEC. 24, Revised Corporation Code of the Philippines). They must also elect a treasurer, who must be a

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What is the distinction between a corporator and an incorporator?

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What is the distinction between a corporator and an incorporator? Corporators are generally defined as all individuals who compose a corporation, whether they hold shares in a stock corporation or are merely members in a nonstock corporation (SEC. 5, Revised Corporation Code of the Philippines). Incorporators, however, are a specific subset of corporators. They are

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What fundamental right must always be retained by at least one class of shares?

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What fundamental right must always be retained by at least one class of shares? While certain shares, such as preferred or redeemable shares, may be deprived of voting rights, the Code mandates that there shall always be a class or series of shares with complete voting rights (SEC. 6, Revised Corporation Code of the Philippines).

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On which fundamental corporate matters must nonvoting shares be entitled to vote?

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On which fundamental corporate matters must nonvoting shares be entitled to vote? Holders of nonvoting shares are granted the statutory right to vote on several fundamental corporate matters crucial to their economic interests (SEC. 6, Revised Corporation Code of the Philippines). These include the amendment of the articles of incorporation and the adoption or amendment

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Which specific financial corporations are prohibited from issuing no-par value shares?

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Which specific financial corporations are prohibited from issuing no-par value shares? The issuance of no-par value shares is strictly prohibited for several types of financial and public interest corporations (SEC. 6, Revised Corporation Code of the Philippines). Specifically, banks, trust, insurance, and preneed companies, along with public utilities and building and loan associations, cannot issue

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What is the minimum consideration and accounting treatment for no-par value shares?

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What is the minimum consideration and accounting treatment for no-par value shares? No-par value shares must be issued for a consideration of at least Five pesos (P5.00) per share (SEC. 6, Revised Corporation Code of the Philippines). This minimum consideration serves as a statutory floor for their issuance price. Crucially, the entire consideration received by

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