What condition allows the proceedings of an improperly held or called meeting to remain valid? All proceedings and business transacted at a meeting of the stockholders or members, if within the corporation’s powers, shall be deemed valid even if the meeting was improperly held or called (SEC. 50, Revised Corporation Code of the Philippines). This […]
What percentage of stock or membership constitutes a quorum for stockholders’ meetings? Unless otherwise provided in the Code or in the bylaws, a quorum for stockholders’ meetings consists of the stockholders representing a majority of the outstanding capital stock (SEC. 51, Revised Corporation Code of the Philippines). For nonstock corporations, the quorum consists of a
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What majority vote is required for the board of directors to transact corporate business, and what is the exception? To transact corporate business, a quorum must first be established, which generally consists of a majority of the directors or trustees as stated in the articles of incorporation (SEC. 52, Revised Corporation Code of the Philippines).
May directors or trustees attend and vote at board meetings via proxy or remote communication? Directors or trustees cannot attend or vote by proxy at board meetings, as their personal deliberation and judgment are deemed essential to the board’s function (SEC. 52, Revised Corporation Code of the Philippines). However, directors or trustees who are unable
Who has the right to vote shares in a stock corporation when the shares are subject to a security interest? In cases where a stockholder grants a security interest in their shares (like a pledge or chattel mortgage), the stockholder-grantor shall retain the right to attend and vote at meetings of stockholders (SEC. 54, Revised
What is the rule for voting shares of stock owned jointly by two or more persons? When shares are owned jointly by two or more persons, the consent of all co-owners shall be necessary for voting those shares (SEC. 55, Revised Corporation Code of the Philippines). This joint consent is required unless the co-owners execute
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What are the requirements for proxies and their maximum period of validity? Proxies must be in writing, signed and filed by the stockholder or member, and submitted in any form authorized in the bylaws (SEC. 57, Revised Corporation Code of the Philippines). They must be received by the corporate secretary within a reasonable time before
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What is the general term limit for a voting trust agreement, and what is the exception? A voting trust agreement may be created by one or more stockholders to confer upon a trustee the right to vote and other rights pertaining to the shares for a period not exceeding five (5) years at any time
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What specific unlawful purposes are prohibited for entering into a voting trust agreement? No voting trust agreement shall be entered into for the purposes of circumventing the laws against anti-competitive agreements, abuse of dominant position, or anti-competitive mergers and acquisitions (SEC. 58, Revised Corporation Code of the Philippines). Furthermore, voting trusts are prohibited if their
What is a mandatory provision the bylaws must include regarding independent directors? Among the matters a private corporation may provide in its bylaws, there is a mandatory guideline concerning independent directors (SEC. 46, Revised Corporation Code of the Philippines). The bylaws must specify the maximum number of other board representations that an independent director or
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