The Qualifications, Duties and Responsibilities of a Corporate Treasurer

Corporate Treasurer

The Corporate Treasurer under the Revised Corporation Code of the Philippines

The Corporate Treasurer, as defined under the Revised Corporation Code Republic Act No. 11232, otherwise known as The Revised Corporation Code of the Philippines (“Revised Corporation Code”), enacted as Republic Act No. 11232, is the law which governs corporations, their creation, operation, organization. As to everything else which a corporation can do in the Philippines, we always abide by the Revised Corporation Code. Corollary to this, the Revised Corporation Code identifies the duties, obligations, and liabilities of directors, trustees, as well as corporate officers.

In our previous article On Corporate Officers: Who Can Be Officers of a Corporation?, we identified the corporate officers enumerated by the Revised Corporation Code. These are the President, the Corporate Secretary or simply Secretary, the Treasurer or Corporate Treasurer, and the Compliance Officer. Of course, the Revised Corporation Code allows the designation of other corporate officers. These additional officers may be provided under the corporation’s By-Laws, such as the vice-president, cashier, auditor and general manager.

Additional requirements may govern specialized corporations, such as banks or financial institutions, insurance companies, and lending companies, which have, in addition to the Revised Corporation Code, other laws governing them.

The Title of Corporate Treasurer

The Corporate Treasurer’s title varies and may come in different designations. What is important is not the name, but rather, the appointment of the person, and the duties and responsibilities outlined in his or her appointment as Treasurer or Corporate Treasurer. Thus, a Corporate Treasurer can hold various titles but mean the same thing. Aside from the usual title of Treasurer or Corporate Treasurer, a person holding the functions of a corporate treasurer under the Corporation Code may be called Chief Financial Officer, Finance Head, Finance Manager, Head of Finance, Head of Treasurer, and many more appellations as can be conjured by context or convention.

Election of the Corporate Treasurer

The election of a Corporation Treasurer is done simultaneous to the election of the rest of the corporate officers. After the conduct of the annual stockholders meeting, it is customary that the election of directors be held. After the members of the board of directors have been elected and duly qualified, the election of the rest of the corporation’s officers, including the Corporate Treasurer, should be held also. The fact and results of the election should be communicated with the Securities and Exchange Commission (SEC) within thirty (30) days after the election of the officer. The notification is done through the submission of a General Information Sheet, which enumerates the list of the corporations duly elected Board of Directors and corporate officers, which includes, the names, nationalities, shareholdings, and residence addresses of the officers elected.

If for any reason the annual election of directors and officers is not held, a similar report should be submitted to the SEC, along with a new date when the election should be held, which should not be later than sixty (60) days from the original meeting date. The SEC is permitted by law to intervene in case no date has been designated or if no election is held during the rescheduled meeting, in which case, the SEC itself may order that an election take place.

If the Corporate Treasurer dies, resigns, or otherwise ceases to be the corporation’s Corporate Treasurer, the corporation is likewise mandated to report the same to the SEC. However, the prevent disruption of the corporation’s operations, the Board of Directors may meet, nominate and elect a Corporate Treasurer, after compliance with the formalities for holding and conducting board meetings in accordance with the Revised Corporation Code.

Qualifications and Duties of a Corporate Treasurer

The Revised Corporation Code requires that the Corporate Treasurer must be a resident of the Philippines. Unlike other officers of the Corporation, there is no citizenship requirement. The only requirement is one of residency. For purposes of the Revised Corporation Code, a resident of the Philippines is one who is a habitual resident of the Philippines, and has been residing therein for at least six (6) months. 

Also, Section 24 of the Revised Corporation Code prohibits the President of a Corporation from acting as a Treasurer at the same time. While there is no prohibition for the Corporate Secretary to act as Corporate Treasurer concurrently, as a matter of prudence and as a best practice, the two (2) positions should be held separately to ensure that checks and balances within the corporation is maintained.

In addition, Section 14, which discusses the form of the Articles of Incorporation, identifies one of the roles performed by the Corporate Treasurer, to wit:

“Ninth: That _____________________ has been elected by the subscribers as Treasurer of the Corporation to act as such until after the successor is duly elected and qualified in accordance with the bylaws, that as Treasurer, authority has been given to receive in the name and for the benefit of the corporation, all subscriptions, contributions or donations paid or given by the subscribers or members, who certifies the information set forth in the seventh and eighth clauses above, and that the paid-up portion of the subscription in cash and/or property for the benefit and credit of the corporation has been duly received.”

Thus, the roles specifically outlined in the Articles of Incorporation which a Corporate Treasurer must perform are: first, to receive in the name and for the benefit of the corporation, all subscriptions, contributions or donations paid or given by the subscribers or members; second, to certify the information set forth in the seventh and eighth clauses above, and third, that the paid-up portion of the subscription in cash and/or property for the benefit and credit of the corporation has been duly received.

 

Other Duties of the Corporate Treasurer under the Revised Corporate Code

Aside from Section 24 of the Revised Corporation Code, several other provisions of the law provide for other functions and duties to be performed by the Corporate Treasurer. As the person in charge of reviewing, assessing and protecting the Corporation’s financial well-being, the Corporate Treasurer’s duties include:

1. Receive all subscriptions, contributions or donations paid or given by the subscribers or members

2. Certify any certificate of increase of capital stock, showing that at least twenty-five percent (25%) of the increase of capital stock has been subscribed and that at least twenty-five percent (25%) of the amount subscribed has been paid in actual cash to the Corporation or that property, the valuation of which is equal to twenty-five percent (25%) of the subscription

3. Certify under oath Affidavit of decrease of capital stock

4. Certify under oath the financial statements if the total assets or total liabilities of the corporation is less than Six Hundred Thousand Philippine Pesos (P600,000.00), or such other amount as may be determined appropriate by the Department of Finance

5. Sign relevant documents such as Annual Income Tax Returns of the Corporation

6. Ensure proper management of budget and financial risks for the Corporation

7. Certifying compliance with local laws and government agencies related to treasury

About Nicolas and De Vega Law Offices

If you need assistance in registration with the Securities and Exchange Commission, or have issues in corporate law, commercial law, corporate or commercial litigation, or civil or other criminal law-related issues,  we can help you. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com.

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