What are the general voting requirements for a corporation to enter into a management contract with another corporation?
A corporation cannot conclude a management contract with another corporation unless the contract is approved by the board of directors and by stockholders owning at least the majority of the outstanding capital stock of both the managing and the managed corporation (SEC. 43, Revised Corporation Code of the Philippines). This approval must take place at a meeting duly called for the purpose in both corporations. This dual majority requirement ensures that the contract, which transfers significant operational control, is acceptable to the majority owners of both parties involved. However, specific scenarios involving common control trigger a stricter two-thirds vote requirement for the managed corporation.
02 November 2025
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