What is the default voting right of a member in a nonstock corporation? The right of members of any class to vote may be limited, broadened, or denied, provided this is explicitly specified in the articles of incorporation or the bylaws (SEC. 88, Revised Corporation Code of the Philippines). However, unless such voting rights are […]
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What must occur before the SEC exercises its power to arbitrate a deadlock in a close corporation? The SEC’s power to arbitrate a deadlock can be invoked only if the directors or stockholders are so divided on the management of the corporation’s business and affairs that the votes required for a corporate action cannot be
What is the general rule regarding the transferability of membership and rights in a nonstock corporation? The general rule established by the Code is that membership in a nonstock corporation, along with all rights arising therefrom, are personal and non-transferable (SEC. 89, Revised Corporation Code of the Philippines). This rule distinguishes nonstock membership from share
What are the four remedial orders the SEC may issue when arbitrating a close corporation deadlock? When arbitrating a deadlock, the SEC has broad authority to make appropriate orders to resolve the dispute (SEC. 103, Revised Corporation Code of the Philippines). The SEC may order the cancellation or alteration of any provision contained in the
What is the effect of the termination of membership in a nonstock corporation? Termination of membership in a nonstock corporation is carried out in the manner and for the causes provided in the articles of incorporation or the bylaws (SEC. 90, Revised Corporation Code of the Philippines). Upon termination, the membership shall extinguish all rights
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What are the requirements concerning the number and term of office for trustees in nonstock corporations? The number of trustees in a nonstock corporation shall be fixed in the articles of incorporation or bylaws, and this number may or may not be more than fifteen (15) (SEC. 91, Revised Corporation Code of the Philippines). Trustees
What restrictions apply to the place of meetings for members of a nonstock corporation? While the bylaws may authorize members of a nonstock corporation to hold their regular or special meetings at any place, even outside the principal office of the corporation, a specific geographic restriction remains (SEC. 92, Revised Corporation Code of the Philippines).
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What are the initial two steps required for the distribution of assets during the dissolution of a nonstock corporation? The distribution process begins by mandating that all liabilities and obligations of the corporation shall be paid, satisfied, and discharged, or adequate provision shall be made for these obligations (SEC. 93, Revised Corporation Code of the
How are assets received for specific purposes (charitable, religious) but not subject to return distributed upon nonstock dissolution? Assets received and held by the corporation subject to limitations permitting their use only for charitable, religious, benevolent, educational, or similar purposes, but not held upon a condition requiring return, must be transferred to specific similar organizations
What three provisions must the articles of incorporation of a close corporation contain regarding its stock? A close corporation is defined as one whose articles of incorporation provide three specific restrictions regarding its issued stock (SEC. 95, Revised Corporation Code of the Philippines). First, all the corporation’s issued stock of all classes, exclusive of treasury
