ACT No. 1459
AN ACT PROVIDING FOR THE
FORMATION AND ORGANIZATION OF CORPORATIONS, DEFINING THEIR POWERS, FIXING THE
DUTIES OF DIRECTORS AND OTHER OFFICERS THEREOF, DECLARING THE RIGHTS AND
LIABILITIES OF SHAREHOLDERS AND MEMBERS, PRESCRIBING THE CONDITIONS UNDER WHICH
SUCH CORPORATIONS MAY TRANSACT BUSINESS, AND REPEALING CERTAIN ARTICLES OF THE
CODE OF COMMERCE AND ALL LAWS OR PARTS OF LAWS IN CONFLICT OR INCONSISTENT WITH
THIS ACT
CHAPTER I
GENERAL PROVISIONS AS TO
CORPORATIONS
Section
1
The short title of this Act shall be "The Corporation Law"
Section
2
A corporation is an artificial being
created by operation of law, having the right of succession and the powers,
attributes, and properties expressly authorized by law or incident to its
existence.
Section
3
Corporations may be public or private
Public corporations are those formed or
organized for the government of a portion of the state.
Private corporations are those formed for
some private purpose, benefit, aim, or end, as distinguished from public
corporations, which have for their purpose the general good and welfare.
Private corporations are divided into stock
corporations and non-stock corporations. Corporations which have a capital
stock divided into shares and are authorized to distribute to the holders of
such shares dividends or allotments of the surplus profits on the basis of the
shares held are stock corporations. All other private corporations are non-stock
corporations.
Section
4
Corporators of a corporation are those who
compose the corporation, whether stockholders or members or both.
Incorporations are those members or stockholders or both mentioned in the
articles of incorporation as originally forming and composing the corporation.
Section
5
The owners of shares in a corporation which
has capital stock are called stockholders or shareholders. Corporators of a
corporation which has no capital stock and corporators of a corporation who do
not own capital stock are members.
Section
6
Five or more persons, not exceeding
fifteen, a majority of whom are residents of the Philippine Islands, may form a
private corporation for any lawful purpose by filing with the Division of
Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau articles
of incorporation duly executed and acknowledged before a notary public, setting
forth:
(1) The name of the
corporation;
(2) The purpose for which
the corporation is formed;
(3) The place where the
principal office of the corporation is to be established or located, which
place must be within the Philippine Islands;
(4) The term for which it is
to exist, not exceeding fifty years, except as hereinafter provided;
(5) The names and residences
of the incorporators;
(6) Unless otherwise
provided by this Act, the number of directors of the corporation, not less than
five nor more than eleven. The directors named in the articles of incorporation
shall be the directors until their successors are elected and qualified as
provided by the by-laws: PROVIDED, HOWEVER, That at any time during the
existence of the corporation the number of directors may be increased to any
number not exceeding fifteen or diminished to any number not less than five in
the case of a non-stock corporation by the formal assent of a majority of the
members at a regular or special meeting of the membership, and in the case of a
stock corporation the number of directors may be increased to any number not
exceeding eleven or diminished to any number not less than five by the formal
assent of the stockholders of the corporation at a regular or special meeting
of stockholders representing or holding a majority of the stock: AND PROVIDED
FURTHER, That a certificate setting out such increase or diminution in the
number of directors of any corporation shall be duly signed and sworn to by the
president, managing agent, secretary or clerk, or treasurer of such corporation
and forthwith filed in the Division of Archives, Patents, Copyrights, and
Trade-Marks of the Executive Bureau;
(7) If it be a stock
corporation, the amount of its capital stock, in Philippine currency, and the
number of shares into which it is divided;
(8) If it be a stock
corporation, the amount of capital stock actually subscribed, the names and
residences of the persons subscribing, the amount subscribed by each, and the
sum paid by each on his subscription.
In
addition to the foregoing facts, articles of incorporation of railroad,
tramway, wagon road, and telegraph and telephone companies must state:
(1) The starting point and
terminus of the railroad, tramway, wagon road, or telegraph or telephone line,
its estimated length, the provinces through which it will pass, and all of its
intermediate branches and connections;
(2) In the case of railroads
or tramways, the gauge of the road, the motive power to be used and the means
of applying it, and the materials to be used in the construction;
(3) In the case of wagon
roads, the width of the road, the method of construction, and the construction
material to be used;
(4) In the case of telegraph
or telephone lines, the construction material, appliances, method of
construction, and system to be used.
Section
7
Articles of incorporation of stock
corporations, unless otherwise provided, shall be sufficient if they comply
substantially with the following form:
ARTICLES OF INCORPORATION OF THE
_________________________________
(Here insert full name of corporation.)
KNOW ALL MEN BY THESE PRESENTS:
That we, a majority of whom are residents
of the Philippine Islands, have this day voluntarily associated ourselves
together for the purpose of forming a corporation under the laws of the
Philippine Islands.
AND WE HEREBY CERTIFY
FIRST
That the name of said corporation shall be
the ________________________________________
(Here insert full name of corporation.)
SECOND
That the purposes for which such
corporation is formed are ________________________________________
(Here insert in full the purposes of the
corporation.)
________________________________________
________________________________________
THIRD
That the place where the principal office
of the corporation is to be established or located is
___________________________________________________________________________
(Here insert place where principal office
is to be established or located.)
FOURTH
That the term for which said corporation is
to exist is fifty (50) years from and after the date of incorporation.
FIFTH
That the names and residences of the
incorporators of said corporation are as follows:
NAME.
WHOSE RESIDENCE IS AT -
________________________ ________________________
________________________ ________________________
________________________ ________________________
SIXTH
That the number of directors of said
corporation shall be
___________________________________________________________
(Here insert number of directors, not less
than five nor more than fifteen.)
and that the names and residences of the
directors of the corporation who are to serve until their successors are
elected and qualified as provided by the by-laws are as follow, to wit:
NAME
WHOSE RESIDENCE IS AT
________________________ ________________________
________________________ ________________________
________________________ ________________________
SEVENTH
That the capital stock of said corporation
is _______________________________ pesos
(Here insert amount of capital stock.)
and said capital stock is divided into ________________________________
(Here insert the number of shares.)
shares of the par value each of
________________________________ pesos.
(Here insert par value of each share.)
EIGHT
That the amount of said capital stock which
has been actually subscribed is ___________________________________ pesos,
(Here insert full amount of capital
subscribed.)
and the following persons have subscribed
for the number of shares and amount of capital stock set out after their
respective names:
Number of Amount of capital
Name Residence Shares Stock
subscribed
_________ ______________ _________ ____________________
_________ ______________ _________ ____________________
_________ ______________ _________ ____________________
Total ___ ______________ _________ ____________________
NINTH
That the following persons have paid on the
shares of capital stock for which they have subscribed the amounts set out
after their respective names:
Amount of capital
Name Residence Stock
subscribed
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
_______________ _____________________ ____________________
Total _________ _____________________ ____________________
TENTH
That
___________________________________________
(Here insert name of treasurer elected by
subscribers.)
has been elected by the subscribers as
treasurer of the corporation to act as such until his successor is duly elected
and qualified in accordance with the by-laws, and that as such treasurer he has
been authorized to receive for the corporation and to receipt in its name for
all subscriptions paid in by said subscribers.
ELEVENTH
(If the corporation be a railroad, tramway,
wagon road, telegraph, or telephone corporation, here insert estimated length
of railroad, tramway, wagon road, telegraph or telephone line, provinces
through which such line will pass, and all of its intermediate branches and
connections.)
________________________________________________________________________
TWELFTH
(If the corporation be a railroad or
tramway corporation, here insert gauge of road, motive power to be used, means
of applying such power, and materials to be used in the construction.)
___________________________________________________________________________
THIRTEENTH
(If the corporation be a wagon-road
corporation, here insert width of the road, method of construction, and the
construction material to be used.)
_________________________________
_________________________________
_________________________________
FOURTEENTH
(If the corporation be a telegraph or
telephone corporation, here insert construction material, appliances, method of
construction, and system to be used.)
______________________________________________________________
IN WITNESS WHEREOF, We have hereunto set
our hands and seals this _______ day of _______________, A.D. 19____
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
SIGNED AND SEALED IN THE ___________________ (SEAL.)
PRESENCE OF ___________________
(SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
___________________ (SEAL.)
CITY OR MUNICIPALITY OF
___________________)
PROVINCE OF __________________________)
S.S.
Philippine Islands.
On this _________ day of
__________________, in the year A.D. one thousand nine hundred and
______________________, before me, ______________ a notary public in and for
the _________________________, personally appeared
___________________________________ ___________________________
(Here insert names of incorporations.)
___________________________________________________
known to me to be the persons whose names
are subscribed and who executed the within instrument, and each of them
acknowledged to me that he freely and voluntarily executed the same.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed my official seal the day and year last above written.
___________________________
Notary Public.
CITY OR MUNICIPALITY OF
_______________________)
PROVINCE OF
_______________________________) S.S.
Philippine Islands.
________________________________________
(Here insert name of treasurer elected by
subscribers.)
being duly sworn, deposes and says that on
the _________ day of ________________, A.D. 190_____, he was duly elected by
the subscribers named in the foregoing articles of incorporation as treasurer
of the corporation to act as such until his successor has been duly elected and
qualified in accordance with the by-laws of the corporation, and that as such
treasurer he has been authorized by the subscribers to receive for the
corporation all subscriptions paid in by subscribers for the capital stock;
that _____________________ pesos has been actually subscribed and that
_____________________ pesos has been actually paid to him for the benefit and
to the credit of the corporation, and that at least twenty per centum of the
entire capital stock has been subscribed and at least twenty-five per centum of
the subscription has been actually paid to him for the benefit and to the
credit of the corporation.
Subscribed and sworn to before me this
___________ day of _______________, A.D. 190____
_________________________
Section
8
The Chief of the Division of Archives,
Patents, Copyrights, and Trade-Marks of the Executive Bureau shall be entitled
to collect and receive for the filing of articles of incorporation filed in
accordance with the provisions of this Act a fee of twenty-five pesos.
Section
9
The Chief of the said Division of Archives,
Patents, Copyrights, and Trade-Marks shall not file the articles of
incorporation of any stock corporation unless accompanied by a sworn statement
of a treasurer elected by the subscribers showing that at least twenty per
centum of the entire capital stock has been subscribed, and that at least
twenty-five per centum of the subscription has been paid for the benefit and to
the credit of the corporation.
Section
10
A copy of any articles of incorporation
filed with the said Division of Archives, Patents, Copyrights, and Trade-Marks
in pursuance of this Act and duly certified by the chief of the said division
shall be received in the courts and all other places as prima facie evidence of
the facts therein stated.
Section
11
The Chief of the Division of Archives,
Patents, Copyrights, and Trade-Marks of the Executive Bureau, on the filing of
the articles of incorporation provided by this Act to be filed, shall issue to
the incorporators a certificate, under the seal of his office, setting forth
that such articles of incorporation have been duly filed in his office in accordance
with law; and thereupon the persons signing the articles of incorporation and
their associates and successors shall constitute a body politic and corporate,
under the name stated in the certificate, for the term specified in the
articles of incorporation, not exceeding fifty years, unless sooner legally
dissolved or unless otherwise provided in this Act.
Section
12
No corporation shall occupy or use any
private property without the consent of the owners or prior condemnation
proceedings and paying or tendering just compensation therefor, and no
corporation shall occupy or use any public lands, places, roads, highways,
streets, avenues, lanes, alleys, sidewalks, bridges, or any other public
property whatever without first securing a franchise for such use or occupancy
from the Government of the Philippine Islands: PROVIDED, HOWEVER, That street
railways, tramways, electric light, power, or telephone corporations may, in
the manner prescribed in Act Numbered Six hundred and sixty-seven, secure a franchise
to occupy or use any public lands, places, roads, highways, streets, avenues,
lanes, alleys, sidewalks, bridges, or any other public property necessary for
the transaction of its business: AND PROVIDED FURTHER, That street railway,
tramway, telephone, telegraph, electric power or light corporations for the
purpose of doing business in the city of Manila, and railroad corporations for
the purpose of doing business in the Philippine Islands, may form and organize
as corporations under this Act.
Section
13
Every corporation has the power:
(1) Of succession by its
corporate name for the period of time limited in the articles of incorporation
and not exceeding the time prescribed by law;
(2) To sue and be sued in
any court;
(3) To transact the business
for which it was lawfully organized, and to exercise such powers and to perform
such acts as may be reasonably necessary to accomplish the purpose for which
the corporation was formed;
(4) To make and use a common
seal and to alter the same at pleasure;
(5) To purchase, hold,
convey, sell, lease, let, mortgage, encumber, and otherwise deal with such real
and personal property as the purpose for which the corporation was formed may
permit, and the transaction of the lawful business of the corporation may
reasonably and necessarily require, unless otherwise prescribed in this Act:
PROVIDED, That no corporation shall be authorized to conduct the business of
buying and selling real estate or be permitted to hold or own real estate
except such as may be reasonably necessary to enable it to carry out the
purposes for which it is created, and every corporation authorized to engage in
agriculture shall be restricted to the ownership and control of not to exceed
one thousand and twenty-four hectares of land; and it shall be unlawful for any
member of a corporation engaged in agriculture or mining and for any
corporation organized for any purpose except irrigation to be in anywise
interested in any other corporation engaged in agriculture or in mining.
Corporations, however, may loan funds upon real-estate security and purchase
real estate when necessary for the collection of loans, but they shall dispose
of real estate so obtained within five years after receiving the title;
(6) To appoint and dismiss
such subordinate officers or agents as the business or welfare of the
corporation may demand, and to allow such subordinate officers and agents
suitable compensation;
(7) To make by-laws, not
inconsistent with any existing laws, for the fixing or changing of the number
of its officers and directors within the limits prescribed by law, and for the
transferring of its stock, the administration of its corporate affairs, the
management of its business, and the care, control, and disposition of its
property;
(8) To admit members to the
corporation; if it be a stock corporation, to issue stock to stockholders and
to sell stock or shares of stockholders for the payment of any indebtedness of
the stockholders to the corporation;
(9) To enter into any
obligation or contract essential to the proper administration of its corporate
affairs or necessary for the proper transaction of the business or
accomplishment of the purpose for which the corporation was organized.
Section
14
No corporation created under this Act shall
possess or exercise any corporate powers except those conferred by this Act and
except such as are necessary to the exercise of the powers so conferred.
Section
15
No corporation doing business in the
Philippine Islands or receiving any grant, franchise, or concession from the Government
of the Philippine Islands shall use, employ or contract for the labor of
persons claimed or alleged to be held in involuntarily servitude, and any
corporation violating the provisions of this section shall forfeit all
charters, grants, franchises, and concessions for doing business in said
Islands, and in addition shall be deemed guilty of an offense and shall be
punished by a fine of twenty thousand pesos.
Section
16
No corporation organized under this Act
shall create or issue bills, notes, or other evidence of debt for circulation
as money, and no corporation shall issue stock or bonds except in exchange for
actual cash paid to the corporation or for property actually received by it at
a fair valuation equal to the par value of the stock or bonds so issued. No
corporation shall make or declare any stock or bond dividend or any dividend
whatever except from the surplus profits arising from its business, or divide
or distribute its capital stock or property than actual profits among its members
or stockholders until after the payment of its debts and the termination of its
existence by limitation or lawful dissolution: PROVIDED, HOWEVER, That banking,
savings and loan, and trust corporations may receive deposits and issue
certificates of deposits, checks, drafts, and bills of exchange and the like in
the transaction of the ordinary business of banking, savings and loan, and
trust corporations.
Section
17
No corporation shall increase or diminish
its capital stock, or incur, create, or increase any bonded indebtedness
unless, at a stockholders' meeting regularly called for the purpose, two-thirds
of the entire corporate capital stock subscribed shall favor the increase or
diminution of the capital stock, or a majority of the subscribed capital stock
shall favor the incurring, creating, or increasing of any bonded indebtedness.
Written or printed notice of the proposed increase or diminution of the capital
stock or of the incurring, creating, or increasing of any bonded indebtedness
and of the time and place of the stockholders' meeting at which the proposed
increase or diminution of the capital stock or the incurring, creating, or
increasing of any bonded indebtedness is to be considered must be addressed to
each stockholder at his place of residence as shown by the books of the
corporation and registered and deposited so addressed in the post-office with
postage prepaid.
A certificate in duplicate must be signed
by a majority of the directors of the corporation and countersigned by the
chairman and secretary of the stockholders' meeting showing compliance with the
requirements of this section, the amount of the increase or diminution of the
capital stock, or the bonded indebtedness to be incurred, created, or
increased, the actual indebtedness of the corporation on the day of the
meeting, the amount of stock represented at the meeting, and the vote
authorizing the increase or diminution of the capital stock or the incurring,
creating, or increasing of any bonded indebtedness. One of the duplicate
certificates shall be kept on file in the office of the corporation and the
other shall be filed in the office of the Chief of the Division of Archives,
Patents, Copyrights, and Trade-Marks of the Executive Bureau and attached by
him to the original articles of incorporation. From and after the filing of the
duplicate certificate with the chief of the said division the capital stock
shall stand increased or diminished and the incurring, creating, or increasing
of any bonded indebtedness authorized as the certificate may declare.
The Chief of the said Division of Archives,
Patents, Copyrights, and Trade-Marks shall be entitled to collect the sum of
twenty pesos for filing said duplicate certificate.
Section
18
Any corporation may amend its articles of incorporation
by a majority vote of its board of directors or trustees and the vote or
written assent of two-thirds of is members, if it be a non-stock corporation,
or, if it be a stock corporation, by the vote or written assent of the
stockholders representing at least two-thirds of the subscribed capital stock
of the corporation. A copy of the articles of incorporation as amended, duly
certified to be correct by the president and the secretary of the corporation
and a majority of the board of directors or trustees, shall be filed in the
office of the Chief of the Division of Archives, Patents, Copyrights, and
Trade-Marks of the Executive Bureau and attached to the original articles of
incorporation, and, from the time of filing such copy of the amended articles
of incorporation, the corporation shall have the same powers and it and the
members or stockholders thereof shall thereafter be subject to the same
liabilities as if such amendment had been embraced in the original articles of
incorporation: PROVIDED, HOWEVER, That the life of said corporation shall not
be extended by said amendment beyond the time fixed in the original articles:
AND PROVIDED, That the original articles and amended articles together shall
contain all provisions required by law to be set out in the articles of
incorporation: AND PROVIDED FURTHER, That nothing in this section shall be
construed to authorize any corporation to increase or diminish its capital
stock or so as to affect any rights or actions which accrued to others between
the time of filing the original articles of incorporation and the filing of the
amended articles.
Section
19
If a corporation does not formally organize
and commence the transaction of its business or the construction of its works
within two years from date of its incorporation, its corporate powers cease.
The due incorporation of any corporation claiming in good faith to be a
corporation under this Act and its right to exercise corporate powers shall not
be inquired into collaterally in any private suit to which the corporation may
be a party, but such inquiry may be had at the suit of the Insular Government
on information of the Attorney-General.
Section
20
Every corporation formed under this Act
must, within one month after the filing of articles of incorporation with the
Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive
Bureau, adopt a code of by-laws for its government not inconsistent with this
Act or any Act of Congress having force and effect in the Philippine Islands.
For the adoption of any by-law or by-laws by the corporation the affirmative
vote of the stockholders representing a majority of all of the subscribed
capital stock, whether paid or unpaid, or of a majority of the members if there
be no capital stock is necessary. The by-laws shall be signed by the
stockholders or members voting for them and shall be kept in the principal
office of the corporation, subject to the inspection of the stockholders or
members during office hours, and a copy thereof, duly certified to by a
majority of the directors and countersigned by the secretary of the
corporation, shall be filed with the Chief of the said Division of Archives,
Patents, Copyrights, and Trade-Marks, who shall attach the same to the original
articles of incorporation and collect and receive a fee of two pesos for the
filing thereof.
Section
21
A corporation may, unless otherwise
prescribed by this Act, provide in its by-laws for the time, place, and manner
of calling and conducting regular or special meetings of its directors, and the
time and manner of calling and conducting regular or special meetings of
stockholders or members; the number of stockholders or members necessary to
constitute a quorum for the transaction of business at meetings of stockholders
or members; the conditions upon which members of non-stock corporations shall
be entitled to vote; the mode of securing proxies of stockholders or members
and voting them; the qualifications, duties, and compensation of directors,
officers and the mode and manner of giving notice thereof; the manner of
election and the term of office of all officers other than directors and those
elected by the directors or trustees; the penalties for violation of by-laws,
not exceeding in any case the sum of two hundred pesos; in the case of stock
corporations, the manner of issuing stock certificates or shares of stock; and
such other matters not otherwise provided for by this Act as may be necessary
for the proper or convenient transaction of the business of the corporation.
Section
22
The owners of a majority of the subscribed
capital stock, or a majority of the members if there be no capital stock, may,
at a regular or special meeting duly called for the purpose, amend or repeal
any by-law of adopt new by-laws. The owners of two-thirds of the subscribed
capital stock, or two-thirds of the members if there be no capital stock, may
delegate to the board of directors the power to amend or repeal any by-law or
to adopt new by-laws: PROVIDED, HOWEVER, That any power delegated to the board
of directors to amend or repeal any by-law or to adopt new by-laws shall be
considered as revoked whenever a majority of the stockholders or of the members
of the corporation shall so vote at a regular or special meeting.
Section
23
Whenever any amendment or new by-law is
adopted such amendment or by-law shall be attached to the original by-laws in
the office of the corporation and a copy thereof, duly certified to by a
majority of the directors and countersigned by the secretary or clerk of the
corporation, shall be filed with the Chief of the Division of Archives,
Patents, Copyrights, and Trade-Marks of the Executive Bureau, who shall attach
the same to the original articles of incorporation and original by-laws on file
in his office and collect and receive the sum of two pesos for the service.
Section
24
The meetings of the members or stockholders
of a corporation shall be held at the place where the principal office of the
corporation is established or located and where practicable in the principal
office of the corporation. Director's meetings may be held at the place fixed
in the by-laws.
Section
25
The proceedings had and the business
transacted at any meeting of the stockholders or members of a corporation, if
within the powers of the corporation, shall be valid even if the meeting be
improperly held or called: PROVIDED, That the stockholders or members of the
corporation are present at the meeting. At any such meeting the stockholders or
members of the corporation may elect officers and fill vacancies then existing,
and may transact such other business of the corporation as might lawfully be
transacted at a regular meeting thereof.
Section
26
Whenever, from any cause, there is no
person authorized to call a meeting, or when the officer authorized to do so
refuses, fails, or neglects to call a meeting, any judge of a Court of First
Instance, on the showing of good cause therefor, may issue an order to any
stockholder or member of a corporation, directing him to call a meeting of the
corporation by giving the proper notice required by this Act or the by-laws;
and if there be no person legally authorized to preside at such meeting, the
judge of the Court of First Instance may direct the person calling the meeting
to preside at the same until a majority of the members or stockholders
representing a majority of the stock present and permitted by law to be voted
have chosen one of their number to act as presiding officer for the purposes of
the meeting.
Section
27
Executors, administrators, guardians, or
other persons in a position of trust and legally authorized may vote as
stockholders upon stock held in their representative capacity.
Section
28
Unless otherwise provided in this Act, the
corporate powers of all corporations formed under this Act shall be exercised,
all business of such corporations conducted, and all property of such
corporations controlled and held by a board of not less than five nor more than
eleven directors to be elected from among the holders of stock, or, where there
is no stock, from the members of the corporation.
Section
29
At the meeting for the adoption of the original
by-laws, or at such subsequent meeting as may be then determined, directors
shall be elected to hold their offices for one year and until their successors
are elected and qualified. Thereafter the directors of the corporation shall be
elected annually by the stockholders if it be a stock corporation or by the
members if it be a non-stock corporation, and if no provision is made in the
by-laws for the time of election the same shall be held on the first Tuesday
after the first Monday in January. Unless otherwise provided in the by-laws,
two weeks' notice of the election of directors must be given by publication in
some newspaper of general circulation devoted to the publication of general
news at the place where the principal office of the corporation is established
or located, and by written notice deposited in the post-office, postage
prepaid, addressed to each stockholder, or, if there be no stockholders, then
to each member, at his last known place of residence. If there be no newspaper
published at the place where the principal office of the corporation is
established or located, a notice of the election of directors shall be posted
for a period of three weeks immediately preceding the election in at least
three public places, in the place where the principal office of the corporation
is established or located.
Section
30
Every director must own in his own right at
least one share of the capital stock of the stock corporation of which he is a
director, which stock shall stand in his name on the books of the corporation.
Any director who ceases to be the owner of at least one share of the capital
stock of a stock corporation of which he is a director shall thereby cease to
be a director. Directors of all other corporations must be members thereof and
at least two of the directors of all corporations organized under this Act must
be residents of the Philippine Islands.
Section
31
At all elections of directors there must be
present, either in person or by representative authorized to act by written proxy,
the owners of the majority of the subscribed capital entitled to vote, or, if
there be no capital stock, then a majority of the members entitled to vote. The
elections must be by ballot, and every stockholder entitled to vote shall have
the right to vote in person or by proxy the number of shares of stock standing
at the time fixed in the by-laws in his own name on the stock books of the
corporation, and said stockholders may vote such number of shares for as many
persons as there are directors or he may cumulate said shares and give one
candidate as many votes as the number of directors to be elected multiplied by
the number of his shares shall equal, or he may distribute them on the same
principle among as many candidates as he shall see fit: PROVIDED, That the
whole number of votes cast by him shall not exceed the number of shares owned
by him as shown by the books of the corporation multiplied by the whole number
of directors to be elected: AND PROVIDED, That no stock declared delinquent by
the board of directors for unpaid subscriptions shall be voted. Members of
corporations which have no capital stock may cast as many votes for one
director as there are directors to be elected, or may distribute the same among
any or all of the candidates. Directors receiving the highest number of votes
shall be declared elected. Any meeting of the stockholders or members called
for an election may adjourn from day to day or from time to time if for any
reason no election is had or if there are not present or represented by proxy
at the meeting the owners of a majority of the subscribed capital stock
entitled to vote or if there be no capital stock a majority of the members
entitled to vote.
Section
32
If for any cause no meeting is held on the
day fixed and appointed by law or by the by-laws of the corporation for holding
the election of directors, a meeting may be called for that purpose either by
the directors or as provided in section twenty-six; and the meeting held in
pursuance of such call the election may be had with the same effect as if it
had taken place on the day fixed by law or by the by-laws of the corporation.
Section
33
Immediately after election the directors of
a corporation must organize by the election of a president, who must be one of
their number, a secretary or clerk who shall be a resident of the Philippine
Islands and a citizen of the Philippine Islands or of the United States, and
such other officers as may be provided for in the by-laws. The directors and
officers so elected shall perform the duties enjoined on them by law and by the
by-laws of the corporation. A majority of the directors shall constitute a
quorum for the transaction of corporate business, and every decision of
majority of the quorum duly assembled as a board shall be valid as a corporate
act.
Section
34
Directors of a corporation may be removed
from office by a vote of two-thirds of the members entitled to vote, or, if the
corporation be a stock corporation, by a vote of the stockholders holding or
representing two-thirds of the subscribed capital stock entitled to vote:
PROVIDED HOWEVER, That such removal shall take place either at a regular
meeting of the corporation or at a special meeting called for the purpose, and
in either case, after previous notice to stockholders or members of the
intention to propose such removal at the meeting. A special meeting of the
stockholders or members of a corporation for the purpose of removal of
directors, or any of them, must be called by the secretary or clerk on order of
the president or on the written demand of a majority of the members entitled to
vote, or, if it be a stock corporation, on the written demand of the
stockholders representing or holding at least one-half of the shares entitled
to be voted. Should the secretary or clerk fail or refuse to give the notice,
or if there is no secretary or clerk, the call for the meeting may be addressed
directly to the members or stockholders by any member or stockholder of the
corporation signing the demand. Notice of the time and place of any such
meeting, as well as of the intention to propose such removal, must be given by
publication or by written notice as prescribed by section twenty-nine. In case
of removal on the vote of the stockholders or the members, as the case may be,
the vacancy so created may be filled by election at the same meeting without
further notice, or at any general meeting or at any special meeting called for
the purpose, after giving notice as prescribed by section twenty-nine.
Section
35
The capital of stock corporations shall be
divided into shares for which certificates signed by the president or the
vice-president, countersigned by the secretary or clerk and sealed with the
seal of the corporation, shall be issued in accordance with the by-laws. Shares
of stock so issued are personal property and may be transferred by delivery of
the certificate indorsed by the owner or his attorney in fact or other person
legally authorized to make the transfer. No transfer, however, shall be valid,
except as between the parties, until the transfer is entered and noted upon the
books of the corporation as to show the names of the parties to the
transaction, the date of the transfer, the number of the certificate, and the
number of shares transferred.
No share of stock against which the
corporation holds any unpaid claim shall be transferable on the books of the
corporation.
Section
36
Subscribers for stock shall pay to the
corporation quarterly on all unpaid subscriptions interest, from the date of
subscription, at the rate of six per centum per annum unless otherwise provided
in the by-laws. No certificate of stock shall be issued to a subscriber as
fully paid until the full par value thereof has been paid by him to the
corporation. Subscribed shares not fully paid up may be voted provided no
subscription call or interest due on subscription is unpaid and delinquent.
Section
37
The board of directors or trustees of any
stock corporation formed, organized, or existing under this Act may at any time
declare due and payable to the corporation unpaid subscriptions to the capital
stock and may collect the same with interest accrued thereon or such percentage
of said unpaid subscriptions as it may deem necessary.
Section
38
The order of the board of directors payable
any unpaid subscriptions to the capital stock shall state what percentage of
the unpaid subscription is due and payable, when, where, and to whom payable,
the date of delinquency, which must be subsequent to the full term of
publication of the notice of call for unpaid subscriptions and not less than
thirty days nor more than sixty days from the date of the order of the board
calling for the payment of unpaid subscriptions, and the date on which the
delinquent stock will be sold which must not be less than fifteen days nor more
than sixty days from the date the stock becomes delinquent.
Notice of the order declaring unpaid
subscriptions to the capital stock due and payable shall be given by the
secretary or clerk of the corporation substantially in the following form:
_________________________________
(Here insert name of corporation in full
and location of principal office.)
Notice is hereby given that a meeting of
the board of directors held on the _____________________ unpaid subscriptions
to the capital stock of the corporation (or
(Here insert date)
the percentage thereof declared due) were
declared due and payable ___________________________________(Here insert when,
to whom, and where.)
_______________________ All stock upon
which the subscription, with interest accrued, has not been paid on
_______________________
(Here insert date fixed for delinquency.)
will be delinquent and advertised for sale
at public auction, and unless payment of the subscriptions, with interest and
costs accrued, is made before sale of the stock, same will be sold on the
_______________________________ to pay the amount of the subscription (Here insert date fixed for sale.)
and accrued interest, together with the
costs of advertising and expenses of sale.
___________________________________
(Here insert signature of secretary or
clerk,
____________________________________
with location of office.)
Section
39
If the whole or any part of the
subscription on unpaid capital stock with interest accrued is unpaid on the
date of delinquency, such unpaid stock becomes subject to sale, and the
secretary or clerk, unless otherwise ordered by the board of directors, must
give notice of delinquency and sale substantially in the following form:
_________________________________
(Here insert name of corporation in full
and location of principal office.)
NOTICE
The following-described stock is delinquent
for nonpayment of the unpaid subscription thereon, with interest accrued, due
and payable on the _________________________,
(Here insert date.)
in the amounts set opposite the names of
the respective shareholders, as follows:
________________________________________
(Here insert names, number of each
certificates unpaid, number of shares, amount due on unpaid subscription, date
from which interest is accrued.)
________________________________________
Now, therefore, in accordance with law, so
may shares of said stock belonging to the several owners as may be necessary
will be sold at ________________________________________
(Here insert principal office of the
corporation.)
on the __________________ at
__________________ of said day, to pay the amount of
(Here insert date.) (Here insert hour.)
the unpaid subscription thereon, together
with interest, costs of advertising, and expenses of sale.
____________________________________
(Here insert signature of secretary or
clerk,
____________________________________
and location of office.)
Section
40
Notice of call for unpaid subscriptions
must be either personally served upon each stockholder or deposited in the
post-office, postage prepaid, addressed to him at his place of residence, if
known, and, if not known, addressed to the place where the principal office of
the corporation is situated. The notice must also be published once a week for
four successive weeks in some newspaper of general news published at the place
where the principal office of the corporation is established or located, and
posted in some prominent place at the works of the corporation if any such
there be. If there be no newspaper published at the place where the principal
office of the corporation is established or located, then such notice may be
published in any newspaper of general circulation devoted to the publication of
general news in the Islands.
Section
41
Notices of delinquency and sale of stock
for unpaid subscription must be published in the newspapers specified in the
section immediately preceding, and, when published in a daily newspaper, must
be published in ten successive issues of said newspaper previous to the day of
sale, and, when published in a weekly newspaper, must be published two weeks
previous to the sale and the first publication must be fifteen days prior to
the day of sale.
Section
42
From and after the publication of the
notices of delinquency and sale of stock for unpaid subscriptions the
corporation acquires jurisdiction to sell and convey all of the stock described
in the notices of sale, but the corporation must sell no more of the stock
mentioned in the notices than is necessary to pay the amount of the
subscription due, with interest accrued, and the expenses of advertising and
the costs of sale.
Section
43
On the day and at the place and hour of
sale specified in the notices of delinquency and sale of stock for unpaid
subscriptions the secretary or clerk shall, unless otherwise ordered by the
board of directors, sell or cause to be sold at public auction, to the highest
bidder, for cash, so many shares of the stock described in the notice as may be
necessary to pay the amount due on the subscription, with interest accrued,
expenses of advertising, and costs of sale.
Section
44
The person offering such sale to pay the
unpaid subscription, with interest accrued, together with expenses of advertising
and costs of sale, for the smallest number of shares or fraction of a share,
shall be the highest bidder, and the stock purchased must be transferred to him
on the stock books of the corporation on payment of the amount due on the
unpaid subscription, together with the expenses of advertising and costs of
sale.
If, at the sale of the stock for unpaid
subscription, no bidder offers to pay the amount due with expenses of
advertising and costs of sale, the same may be bid by the corporation, through
the secretary or clerk or president or any shareholder thereof, and the amount
of subscription due, together with the expenses of advertising and costs of
sale, shall be credited as paid in full on the books of the corporation and
entry of the transfer of the stock to the corporation made.
Section
45
The legal title to all stock purchased by
the corporation at sales of stock for unpaid subscriptions is vested in the
corporation, and the stock so purchased may be disposed of by the stockholders
in accordance with law and the by-laws of the corporation by a majority vote of
all the remaining shares.
Section
46
The dates fixed in any call for unpaid
subscription or in any notice of delinquency and sale of stock for unpaid
subscription, published according to the provisions of this article, may be
extended from time to time, for a period of not more than thirty days, by order
of the board of directors entered upon the records of the corporation, but no
order extending the time for the performance of any act specified in such
notice is effectual unless the notice of such extension or postponement is
appended to the notice to which the order relates, and is thereafter published
with the notice.
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