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CORPORATE POWERS AND AUTHORITY -Act done in excess of corporate officers authority (cannot bind
-Corp has no power except those expressly, impliedly or corp)
incidental to its existence
-Exercise its power thru Board of Directors or duly authorized Ratification of Ultra Vires Act
officer -Corp is estopped from questioning the legality of such act

Express powers Consequence of Ultra-vires act

1. Adopt and use corp seal -Suspend/ revoke
2. Amend articles of incorporation -Derivative suit filed by stockholder
3. Amend/ adopt by-laws
- within 1 mn from receipt of incorporation or before By-laws
incorporation -Not contrary to law, public policy, morals
4. Deny pre-emptive rights -Not inconsistent with AOI
5. Issue/ sell stocks -Reasonable
6. Increase/ Decrease of capital stock
-Approval by majority vote of board, 2/3 vote ratification of Failure to file by-laws
stockholder, prior written notice to each stockholder, -Suspension/ revocation of franchise after notice and hearing
certificate must be signed by majority of stockholders, filed and -Does not result in automatic dissolution
approval of SEC
-Increase of capital stock must not prejudice the right of By-laws are internal rules and does not bind 3rd person whom
creditors does not have any knowledge
7. Enter into merger or consolidation
8. Extend/ shorten corporate term Modes of Amending By-Laws
-majority vote of board, ratification by 2/3 votes of A. Majority vote of Directors and majority vote of outstanding
stockholders, made during the lifetime of corp capital stock
-Dissenting stockholder may exercise appraisal right B. BoD alone when delegated by 2/3 votes of outstanding
-Submit and approval of SEC capital stock (may be revoked)
9. Succession
-Corp exist despite of death, civil interdiction, incapacity Stockholders meeting; req
10. Sue and be sued 1. Held on date fixed by by-laws
- Principal office of business indicated in AOI 2. Prior notice (In writing but waivable express/ implied)
11. Make reasonable donation- not be aid for politics 3. Proper place- where principal office is. Except nonstock corp
which may be anywhere in Ph
Implied Powers 4. Quorum
-Articles expressly provide that the purpose was to engage in
transportation by water, such corp cannot engage in land Director/Trustees Meeting;Req
transportation- entirely different business 1. Held monthly, anywhere in Ph unless by-law provides
otherwise
Ff are express powers that requires stockholders ratification 2. Notice sent at least 1 day prior(waivable) - if not complied
1. Borrow Funds- requires SPA with, meeting is illegal and will not bind the corporation but
2. Extend/ shorten corporate term presence in the meeting waives the want of notice
3. Enter into management contracts 3. Teleconferencing and vidoeconferencing is allowed
4. Enter into joint venture 4. Proxy not allowed
5. Increase/ decrease capital stock -also needs approval of SEC
6. Incur, create or increase bonded indebtedness Board of Directors
7. Invest corporate funds for non-primary purpose -Exercise powers granted by law, conduct business, controls
8. Sell, dispose, mortgage, encumber all substantial asset and hold property of corp
-Corp property is not property of stockholders, may not be sold -Board is separate and distinct from corporate entity
without express authority from BoD -Fiduciary character
-Sale by BoD requires ratification of 2/3 votes otherwise void -Must as a body to bind the corporation
9. Sell land and other properties -May delegate its authority
10. Sue and be sued- lodged with BoD -Power to appoint/terminate corporate officers
11. Hire Employees and appoint agents
12. Provide gratuity pay It is the BoD and not the President that exercise corporate
13. Make reasonable donations powers

Ultra Vires Doctrine Action of BoD during meeting which was illegal for lack of
-Committed outside beyond the power of corporation notice may be ratified either expressly by the action of the directors

in subsequent legal meeting or impliedly by the corp subsequent
course of conduct
Theory of Stockholders delegated power
-BoD is a creation of stockholders and direct affairs of the corp
-Right to vote for the Directors
Executive Committee
-Board has the power to constitute it even if not provided in
AOI and by-laws
Business Judgment Rule
-Questions of policy or management are left solely to the
honest decision of BoD, courts have no authority to review
them, whether it will cause losses or decrease corporations
profit
-No court can in resolving issues between squabbling
stockholders, order the corporation to undertake certain
corporate acts
However, directors shall be liable if mismanagement resulting
to losses be proven resulting from BF
DOCTRINES TO PROTECT CORPORATE CONTRACTS
A. Doctrine of Ratification
-BoD to ratify have full and complete knowledge of all material
facts connected withe the transaction. Ratification can never
be made by same person who wrongfully assume power
Admission by counsel on behalf of the corporation of thev
latters culpability for personal loans obtained by its corporate
officers cannot be given legal effect when the admission was
without any enabling act or attendant ratification of corporate act
B. Doctrine of Apparent Authority
-Corporation knowingly permits one of its officers to act within
the scope of apparent authority, it holds him out to the pubic
power to do acts and corp is estopped from denying such
authority
Note: Corporation should first prove by clear evidence that its
corporate officer is not in fact authorizes on its behalf before the
burden of evidence shifts to the other party to prove
QUALIFICATIONS OF DIRECTORS/TRUSTEES
-Director must own atleast 1 share of stock
-Director cannot be represented by proxy
Election of Directors/Trustee
-Board elected annually
-Submit formal report to SEC on the changes in directors and
officers. Only those directors/ officers appearing in such report
are deemed legally constituted to bind the corporation
Election Contest
-Quo Warranto Proceeding
-Original and exclusively jurisdiction of RTC acting as Special
Commercial Court and not SEC
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Removal of Director/ Trustee
-Only by stockholders on stockholders meeting called by
atleast 2/3 outstanding capital stocks
Hold-Over Principle
-Directors to fill vacancy occuring in the Board until
qualification of their successors
-Hold-over is not part of the term of office of a member of BoD
Remaining members of Board cannot elect another director to
fill vacancy caused by the resignation of a hold-over director,
vacancy can only be filled up by the stockholders
Quorum
A. Stock Corp- based on number of outstanding voting stock
B. Nonstock- actual living members with voting rights
Abstentation
-Presumed to be counted as affirmative
Minutes of Meeting
-Signature of corporate secretary gives probative value and
credibility
Resolution
-Formal action by corporate BoD authorizing a particular act,
transaction
Minutes
-Brief statement that transpired at a meeting
Compensation of Directors
-GR: Gratuitous Service. Not entitled for compensation when
they perform in their usual and ordinary duties.
EX: Can receive renumeration for acting as executive officers
like Chairman, Pres, Corp Secretary
Corporate Officers
1. President- shall be a director
2. Secretary
- custodian of corporate records. Duty and obligation to
register a valid transfer stock in the books
-Secretary Certificate is regular on its face and can be relied
upon by 3rd person
-A pledgor prior to foreclosure and sale does not acquire
ownership rigts over the pledged shares and cannot compel
the corp secretary to record his alleged ownership of such
shares on the basis of merely contract of pledge
3. Treasurer
-Whose negligence in signing a confirmation letter for
rediscounting of crossed checks knowing fully well that checks
were strictly endorsed for deposit only can be personally liable
VP does not require to be a stockholder. But when By-laws
provide that VP and Secretary must have the same qualification as
those of the president, appointment of whom not members to such
position would be unlawful

Corporate polices need not be in writing
Acts of corporate officers within the scope of their authority
are binding on the corporation. If exceeded their authority, does not
bind the corporation
President of the corporation which becomes liable for the
accident caused by its truck driver cannot be held solidarill liable for
the judgment obligation arising from quas-delict since being the
president
President is a corp officer, issues of dismissal of him is
intra-corporate dispute
One who is included in the by-laws is a corporate officer and
not mere employee
A mere manager not named in the by-laws is not an officer of
the corporation
FIDUCIARY DUTY OF DIRECTORS AND OFFICERS; 3 fold duty
1. Obedience
-Director shall act in a manner and within formalities
prescribed by its charter or general law
2. Loyalty
-Directors shall not use their position to further their personal
interest
3. Diligence
-Director shall be personally liable to reimburse corporation
(accounting) for the amnts of dividends wrongfully declared
and paid to stockholder
Shall not acquire personal or pecuniary interest in conflict with
their duty as such directors/ trustees
Liabilities of director, trustees, officer
-GR: not liable for corporate debts. Being separate and distinct
-Mere ownership by an officer of majority of the equity of the
corporation do not warrant piercing the veil to make such
officer personally liable for debts
Ex: to make director personally liable for debts of corporation; Req
1. Complaint allege director/officer assented to unlawful acts
of corp/ gross negligence or bf of directors or officers (severally
liable)
2. Clearly and convincingly prove such unlawful acts,
negligence or bf
BF does not arise for failure of the corporation to pay its
obligation.
Officer-stockholder who signs in behalf of the corporation to a
fraudulent contract cannot claim the benefit of separate juridical
entity
Officers of a corporation may become liable for its loans when
they breached their duty of diligence
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Corporate officers are not personally liable for money claims of
discharged employees unless they acted with evident malice and bf
in terminating their employment (solidary liable)
Rule: Corporation obtain funds for capital expenditures by: Shares
of stocks or bonds
SHARE OF STOCKS
-Personal property of stockholder, owners have right to
transfer
-Registration of shares in stockholders name, issuance of stock
certificate, right to receive dividends, registration in the book
Capital Stock (Paid up Capital)
-Not all funds/ assets received by corporation can be
considered paid-ip capital; such must form part of Authorized
Capital Stock- been subscribed and actually paid up
-Excludes treasury shares
Subscribed Capital
-Agreed to take and pay. Can be more than par value of the
shares
Classifications of Shares
1. Common Shares
-Represent the residual ownership interest of corporation
-Issued without extraordinary rights and privileges, entitles
shareholders pro rata division
-Cannot be deprive of right to vote
2. Preferred Shares
-Entitles shareholder some priority on dividends and asset
distribution
-Still entitles to voting rights in the absence of denial in AOI h
3. Redeemable Shares
-Certificate of stock recognize redemption but the option is
vested with the corporation.
-”Optional”
-Repurchase of stock by issuing corp in exchange for money,
property
4. Founders Shares
-When articles of incorporation expressly provides a class of
share to have exclusive right to vote and voted for into BoD
5. Treasury Shares
-Stocks issued and fully paid for and re-acquired by corporation
either by purchase, donation, forfeiture, do not have the status
of being outstanding shares, and not entitled to be voted upon
6. Re-classification and exchange shares
-Reclassification of shares does not always bring any
substantial alteration in subscribers proportional interest
-Exchange- Shifting of the balance of stock
Conversion of preferred shares through amendment of AOI is
legitimate exercise of corporate powers

Reduction of Capital stock cannot be employed to avoid
corporations’s obligation
Assignment of Subscription Agreement
-Form of novation by substitute of a new debtor which requires
the consent of the creditor
When properties were assigned pursuant to pre-incorporation
subscription agreement, but the corporation fails to issue the coverd
shares, return of such properties to the subscriber is a direct
consequence of rescission and does not amnt to corporate
distribution of assets prior to dissolution
Consideration for Subscription
1. Cash
2. Property
3. Services
4. Shares
5. Retained Earnings
Sec43: Prohibits the issuance of any stock dividend without the
approval of stockholders, representing not less than 2/3
Trust Fund Doctrine re: Unpaid subscription
-Subscription to the capital of corporation constitute a fund to
which creditors have a right to satisfy their claims
-Board resolution releasing the stockholders from payment of
balance of their subscription is ineffectual
A stockholder who is employed with the company, cannot
offset his unpaid subscription agsnt his claims for wages, where
there has been no call for the payment of such subscription
Certificate of Stock
-Not the stock itself merely e vidence of ownership of shares of
stock. Convenient instrument for the transfer of title
-No certificate shall be issued until full amnt has been paid
-Not a negotiable instrument but merely quasi negotiable bcus
maybe transferred thru delivery coupled with endorsement
-Endorsement of Certificate of stock is mandatory requirement
for effective transfer of certificate of stock
-Could not be considered issued in contemplation of the law
unless signed by P/VP and countersigned by Secretary
Street Certificate
-Stock certificate endorsed in blank by owner
Stock and Transfer Book
-Not a public record
-Entries can only be done by Corp secretary, other entries not
made by him shall not be given effect
Absence of deed of sale evidencing sale of shares of stock does
not necessarily show irregularity since sec63 does not require any
deed for the validity of the transfer of shares
Registering lis pendens is inapplicable to shares of stocks which
are personal
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Situs of shares of stock is the domicile of corporation
Req for Issuance of Certificate of Stock
1. Signed by president/vp and countersigned by secretary
2. Sealed by corp seal
3. Full amnt of subscription be paid
-Issuance of Stock certificate is not a condition sine-quanon to
consider a subscriber as a stockholder
Req: for issuance of new certificate of stocks in lieu of those lost,
stolen or destroyed
1. Reg owner file with corp an affidavit setting forth the
circumstances
2. Submit evidence
3. Publication of notice
-If there is contest- issuance of new cert of stock shall be
suspended until final decision of court
GR:Holders of subscribed shared not fully paid are entitled to all
rights of a stockholder
EX: Delinquent stockholder/ Stockholder exercise his appraisal
right
Nonregistration od certificate of stock to corp books
-Will not affect the validity in so far between contracting
parties but not effective to the corporation bcus the corp looks
thru its books for the purposes of determining who are the
stockholders
Necessity of registration of transfers stock
1. Avoid fraudulent transfer
2. Afford corp to object/ refuse registration
3. Enable corp to know who are stockholders
4. Exercise his rights as stockholder
5. Protect creditor
3 Ways to become stockholder
1. Contract of subscription- take and pay stocks of a corp. Not
required to be in writing. Fraud does not apply. Conditional
subscription is valid
2. Purchase of shares of existing stockholder
3. Purchase of treasury shares from corp
Valid transfer stocks
1. Delivery- not essential if sought to be held as stockholder is
officer of a corporation
2. Certificate must be endorse by owner/ atty-in fact
3. Recorder in books to be valid agnst 3rd parties
Only absolute conveyance of ownership of the title to a share
need be entered and note dupon the books of the corporation.
Chattel mortgage is not a complete and absolute alienation, its entry
and notation upon the books is not necessary requisite and
mandamus will not lie
A clause contained in the by-laws of a corporation which
provides that the owner of a share of stock cannot sell it to another

person except to the corporation is ultra vires. Violative of property
rights of shareholders
Unauthorized Issuance of certificate of stock
-Either by fraud/ mistake
-GR: no legal title and no right of remedy agnst the corporation
-Ex: If corporation issues a new certificate of stock to a bona
fide purchaser, corp is estopped to deny its validity, can
compel the corporation to recognize his title
Watered stock
-issued by corp as fully paid up shares when in fact whole amnt
of value is not paid
-Directors and officers are solidarily liable with stockholders
concerned and its creditors for the difference between fmv at
the time of issuance and par value
Ways which watered stocks may be issued
1. Monetary is less that its par value
2. Property valued in excess of its fmv
3. Gratuitously
4. In the guise of stock dividends, no surplus profit
Effect of watered stocks
A. As to corp- state may institute quo warranto
B. Corporation and subscriber- subscription is void, pay full
value
C. Consenting stockholder- estopped from raising any
objection
D. Dissenting stockholder- they may compel the payment
solidarily agnst the responsible and consenting directors
E. Creditors- Enforce payment
When unpaid subscription= interest shall be paid
1. On the date fixed in the contract of subscription
2. Specified by BoD
Remedies of the corporation to enforce payment of unpaid
subscription
1. Delinquency sale by board action
2. Collection case in court
-Failure/ refusal of corp to enforce/ collect payment of unpaid
subscription will not prevent creditors or receiver of corp to
institute a court action to collect unpaid portion
Grounds for questioning delinquency sale
1. Irregularity in notice of sale
2. “ in sale
Conditions before an action to recover delinquent stocks
irregularly sold may be allowed
1. Party seeking pay first to the party holding the stock sum
same as sold
2. File a complaint within 6 mns from date of sale
Call
-Condition precedent before the right of action to institute a
recovery suit accrues
-Demand is required before debtor may incure delay
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-Unpaid subscription is not due and payable until call us made
by corporation for payment
Call is not necessary in the ff
1. Contract of subscription provides for date of payment
2. Corp become insolvent
GR: Valid and binding subscription of stock cannot be canceled so
as to release the subscriber from liability
Ex: Consent of all stockholders are given
Ex to ex: Bona fide compromise, set-off of debt due from corp,
release supported by consideration
Stockholder is personally liable for the financial obligation of a
corporation to the extent of his unpaid subscription
Delinquent stock is not entitled to
1. Voted
2. Represented at stockholder smeeting
3. Any of the rights of stockholders
-Except it is entitled to dividends
Rule: holders of not fully paid of subscribed shares but not
delinquent shall have all the rights of stockholders
Ex: not entitled to be issued a certificate of stock
Rights of stockholders
1. Appraisal rights
2. Exercise preemptive rights
3. Issued certificate of stocks
4. Inspect books
5. Have corporation dissolve
6. Receive dividends
7. Right of first refusal
8. Right to file derivative suit
9. Transfer shares of stocks
10. Participate in distribution of assets of corp upon
dissolution
Obligations and liabilities of Stockholder
1. Answer the water in stocks
2. Answer to creditors for unpaid subscription
3. Liable as general partners if ostensible corp
4. Liable for corp torts if participated
5. Pay interest on unpaid subscription
Corporate books
-Subject to inspection(to protect his right as stockholder) at
reasonable hrs on business days- must act in gf
Inspection of books in personal but may be delegated
One requesting must not be guilty of using it improperly the
info and must act in gf
GR:Any officers who refuses to allow inspection shall be liable for
damages
EX: Defense of 1) Improperly use of information 2) not acting in GF

Remedies of stockholder who is denied inspection
1. Crim complain
2. Damages
3. Mandamus
Merger
-Absorbing one or more existing corp by another, the other is
dissolved (A+B=A)
Consolidation
-Uniting existing corp to form a new corp (A+B=C)
Effect of Merger/ Consolidation
-One of the corporation survives and continue the business,
while the other is dissolved and all their rights and properties
and liabilities are acquired by surviving corporation
-Surviving corporation has the right to institute collection suit
on accounts of the constituent corporation
3 Types of corporate acquisition and transfer
1. Assets only
- Transferee not liable for liabilities of the transferor except
agreed upon expressly or impliedly
2. Transfer of business enterprise
-Transferee continues the business enterprise of transferor.
Transferee shall be liable for the liabilities of transferor arising
from business enterprise
3. Equity Transfer
-Transferee is not liable for debts and liabilities of the
transferor except transferee expressly/ impliedly agreed to
assume debts
-Where change of ownership is done in BF or used to defeat
rights of labor, successor-employer is deemed to have
absorbed the employees and held liable for transgression (if GF
then no legal duty to absorb)
In merger/ consolidation there is no liquidation of assets of
dissolved corporation and the surviving/ consolidated corporation
assume ipso jure the liabilities of dissolve corp.
Consent of creditors of corporation is not needed in M/C
No law requiring that the purchaser should absorb the
employees of the selling company.
Unless expressly assumed, employment contracts and CBAs are
not enforceable agnst transferee of an enterprise, labor contracts
being contracts in personam and binding only between parties
Req:Merger and Consolidation
1. BoD/T of each corp shall approve a plan of m/c
2. Approval of plan by stockholder by 2/3 votes of each corp
3. Prior 2 weeks notice of meeting with a copy of summary
plan
4. Execution of articles of m/c by each corp
5. Submission to SEC
6. Issuance of certificate of m/c by SEC
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Amendment of plan of M/C
-Must be approved by majority vote of the respective BoD/T of
all corp
Merger/ comsolidation does not become effective upon mere
agreement, only upon issuance of certificate of merger by SEC
Appraisal Right
-Method of paying a shareholder for taking his property
-Where a stockholder can avoid the conversion of his property
to another property not of his own choosing
-To protect property rights of dissenting stockholder from
action of majority stockholder which alter the nature of their
investment
Instances when a stockholder have the right to exercise appraisal
right
1. Amendment of AOI effect of
a) Authorizing preferences
b) Changing/ restricting rights of stockholder
c) Extending/ shortening corporate existence
2. Sale, lease, exchange, transfer, mortgage or pledge of all or
substantial all corporate property
3. Merger/ consolidation
Req: For exercise of Appraisal Right
1. Stockholder voted agnst the propose corporate action
2. Written demand for payment within 30 days after vote was
taken(failure to do so, waiver)
3. Surrender of certificate of stock for notation in corporate
books and payment of said share base on fmv of the day prior
to the date of vote
4. Upon payment of share, deisenting stockholder shall
transfer his share to the corporation
If stockholder is not immediately paid the value of his share
within 30 days, his voting and dividend right shall immediately
restored
No demand for payment may be withdrawn unless the
corporation consented
Right to payment cease when:
1. Corporate action is abandoned/rescinded
2. “ disapproved by SEC
3. Stockholder withdraw his demand for payment with corps
consent
4. SEC determines that stockholder is not entitled to appraisal
right
5. Stockholder fails to submit certificate of stock within 10
days from demand of payment
6. Shares are transferred and canceled
GR: Cost and expenses of appraisal shall be borne by corporation
EX: fair value ascertained by appraiser is the same as price the corp
is offering to stockholder

GR: In action to recover the fair value of stocks, all cost and
expenses shall be assessed agnst the corporation
EX: Refusal of stockholder to receive payment is unjustified
Dissenting stockholder is not prohibited from selling,
transferring or assigning his shares
A director who exercise his appraisal right remained to be a
director until his share no longer registered in his name
Stockholder whose subscription not fully pais is still entitled to
exercise his appraisal right
DISSOLUTION
-Extinguishment of corporate franchise and termination of
existence
-Can no longer pursue business except winding up its affairs
3 modes of dissolution
1. Expiration of term
2. Voluntary dissolution
3. Revocation of franchise
Stockholder/ member of corporation can institute dissolution
proceeding agnst own corporation
SEC has concurrent jurisdiction to suspend, revoke, after
proper notice and hearing the franchise/ certificate of registration of
corporation
Effect of dissolution
1. Terminates corp franchise and prevents further exercise of
secondary franchise if any
2. Terminates power to enter into contract
3. Contracts for personal service are terminated
4. Debts due to corp are not extinguished
5. GR: Lease to a corporation, rights and obligation therein is
not extinguished by dissolution. Stockholders succeed to rights
and liabilities in unexpired leasehold
EX: Lease terms also terminates it when corp ceases
Liquidation and winding up
-Collection of corporate assets
-Payments of debts, settlement if obligation
-Distribution of corporate assets in accordance to
stockholders proportionate share
-Dissolved corporation continues as a body corporate for 3 yrs
from time of dissolution for purposes of prosecuting and
defending suit, convey and distribute assets
Assets distributable to creditor/ stockholder who is unknown
or cannot be found shall be escheated to city/ municipality where
assets is located
GR: No corp shall distribute any of its assets except upo dissolution
and after payment of debts
EX: Decrease of capital stock or otherwise allowed by Code
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Counsel who prosecuted and defended the interest of the
corporation and who appeared in behalf of the corporation may be
considered as a trustee
Claim established agnst the corporation may be prosecuted
agsnt the liquidator even after 3 yrs from dissolution
Upon dissolution of the corporation, its assets are held for the
benefit of its stockholder after payment of debts
GR: BoD of a dissolved corporation is not permitted to undertake
any activity outside the usual liquidation of the corporation
EX: Stockholders of a dissolved corp may convey their respective
shareholdings towards the creation of new corporation to continue
the business of the old
Incorporation test is applied in determining whether
corporation is domestic or foreign. Except: In times of war, Control
test applies
If corporation is incorporated in another state, it is a foreign
corporation, while if it is registered in Ph laws, deemed as Filipino
domestic corporation irrespective of the nationality of the
stockholders
GR: Corporation can have no legal existence outside the
boundaries of the sovereign by which it is created
EX: Principle of comity
Derivative Suit
-Action brought by minority stockholders in the name of
corporation to redress wrongs committed agnst the
corporation for which the directors refuse to sue
-This is agnst the abuse of majority stockholders
Family corporation is not exempt from complying the
requirements to file derivative suit
Req: of Derivative Suit
1. Must be a shareholder during the time the act/ transaction
complained (number of shares is immaterial)
2. Exhausted intra-corporate remedies
3. Cause of action actually devolves on the corporation and
not to the particular stockholder bringing the suit
4. Not a nuisance suit
5. Appraisal right is not available
ONE-MAN CORPORATION (OPC)
-Corporation with a single stockholder
-Separate and distinct legal personality still applies
-Limited liability
-Only natural person, estate and trust may form opc
-Not required to have a minimum capital stock
-Not required to file by-law bcus these are rules and
regulations that govern intracorporate relations. Since there is
only 1 stockholder, no need
-Shall distinguish itself as ‘OPC’
 8
Corporate officers of OPC
1. President- sole director Liabilities of ordinary stock converted to OPC- OPC acquires it
2. Corporate Secretary- citizen and resident of Ph
3. Treasure- must be resident of Ph FRIA
4. Other officers -Allows corp to apply for rehabilitation even before its uffers
-Within 15 days from issuance of certificate of incorporation, losses in order to recover financially
appoint such officers
Stay order
Nominee and Alternate Nominee -Stop collection and let corporation recover first
-Designated by single stockholder in the event of his death,
incapacity, to take place as director and manager Submit a rehabilitation Plan
-There must be written consent of nominee and a.n attached -Containing when to pay and who to pay first
to AOI
-Contain the name, residence, address and contact details of Dividends from retained earnings can be declared to
nominee and a.n stated in AOI stockholders and cannot to the creditors
-Their consent maybe withdrawn in writing at anytime prior to
stockholder death/ incapacity Corp already dissolved cannot anymore issue Board resolution

How long nominee/a.n act

A. Temporary incapacity
-Until stockholder regain his capacity

B. Death/ Permanent Incapacity

-Until the heirs of stockholder, designate one of them or
agreed that the estate shall be the stockholder

Delinquent Status of OPC

-If failed to submit with SEC reportial requirement for 3
instances whether consecutively or intermittent within the
period of 5 yrs

Nominee can be change by stockholder by submitting to SEC.

No need to amend AOI

Natural person who is license to exercise a profession may not

organize OPC except otherwise provided by special laws
(Architecture and Environmental Planning Act)

AOI shall substantially contain name of corporation, nationality,

residence of nominee and alternate nominee

In OPC, single stockholder cannot appoint itself as corporate

secretary bcus of the sensitivity of the matters handled by secretary
but he can be a treasurer provided that the corporation gives a
bond- renewed every 2 yrs

OPC no need for meeting. Sufficient to prepare a written

resolution, recorded in the books except meeting with officers if
wanted to

Limited liability of OPC but if cannot prove that OPC is

independent of the stockholder personal property, stockholder shall
be jointly and severally liable for debts-piercing the veil of corporate
fiction

Ordinary corporation can be converted to OPC when

stockholder acquires all the stock. Apply to SEC conversion. If SEC
approved, commissioner shall issue a certificate of filing amended
AOI to reflect conversion