What agreement provision relating to corporate affairs is permitted among stockholders of a close corporation that would normally be restricted?
A written agreement among some or all of the stockholders in a close corporation is explicitly permitted to relate to the conduct of the business and affairs of the corporation (SEC. 99, Revised Corporation Code of the Philippines). This agreement shall not be invalidated on the ground that its effect is to restrict or interfere with the discretion or powers of the board of directors. This allowance is unique to close corporations, permitting direct owner management. However, this privilege comes with a significant liability: such an agreement shall impose on the stockholders who are parties thereto the liabilities for managerial acts imposed on directors by this Code.
02 November 2025
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