What is the fundamental definition of a nonstock corporation regarding its income?
For the purposes of this Code, a nonstock corporation is fundamentally defined as one where no part of its income is distributable as dividends to its members, trustees, or officers (SEC. 86, Revised Corporation Code of the Philippines). This principle remains true even if the nonstock corporation obtains profits incidental to its operations. Any such incidental profit must, whenever necessary or proper, be strictly used for the furtherance of the purpose or purposes for which the corporation was originally organized. The rules governing stock corporations are only applicable to nonstock corporations when they are pertinent and not superseded by the specific provisions governing nonstock entities.
31 October 2025
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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/.
