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
What are the four types of entities that are prohibited from being incorporated as a close corporation. Although any corporation may generally be incorporated as a close corporation, several specific types of entities are explicitly excluded (SEC. 95, Revised Corporation Code of the Philippines). These prohibitions apply to mining or oil companies and stock exchanges.
Where must restrictions on the transfer of shares in a close corporation appear to be binding on a purchaser in good faith? Restrictions on the right to transfer shares in a close corporation must appear in three mandatory locations to be binding on any purchaser in good faith (SEC. 97, Revised Corporation Code of the
What financial condition must be met before a certificate of stock can be issued to a subscriber? No certificate of stock shall be issued to a subscriber until the full amount of the subscription has been paid (SEC. 63, Revised Corporation Code of the Philippines). In addition to the principal subscription amount, any interest and
