Law on Corp - NonStock Corporation Flashcards
(41 cards)
One where no part of its income is distributable to its members, trustees, or officers.
Non-Stock Corporations
What are the purposes of Non-Stock Corporations?
Allowable purposes
- Formed for;
> Charitable
> Religious
> Educational
> Professional
> Cultural
> Fraternal
> Literary
> Scientific
> Social
> Civic Service
> Similar purposes like trade, industry, agricultural and like chambers, or any combination thereof
What are the powers to Make Profits and Engage in Business?
A. Non-Profit character of NSC
B. Incidental Profits obtained from operations
C. Profits obtained from investment of accumulated funds
D. Prohibitions against distribution of dividends
A NSC cannot engage in business with the object of making profits
True or False?
True
What is the general rule on Incidental Profits obtained from operations?
Not empowered to engage in business with the object of making income or profits directly or indirectly
What is the exception in the general rule on Incidental Profits obtained from operations?
It is not prohibited to make income or profits as an incident to its operation
> any profit derived by it from any authorized activity cannot be distributed as dividends to its members
will only be used for furtherance of the purposes for which the corporation was organized
NSC may not lawfully engage in any business activity for profit as it would run counter to its very nature as a non-profit entity unless it is necessary to carry out the purpose for which it was organized. However, it may invest its accumulated funds for profit purposes.
True or False?
True
No part of NSC’s income is distributable as dividends to its members
True or False?
True
No pecuniary benefits shall inure in favor of the members although they may avail of, or derive other forms of, assistance from the corp
True or False?
True
Under Right to Vote in Non-Stock Corporations
The right to vote of members of any class or classes may be limited, broadened, or, even denied in the articles of incorporation or the by-laws. Unless so limited, broadened, or denied, each member, regardless of class, shall be entitled to one vote
True or False?
True
Under Right to Vote in Non-Stock Corporations
Unless otherwise provided by the articles of incorporation or the by-laws, a member may vote by proxy in accordance with the provisions of the RCCP
True or False?
True
Under Right to Vote in Non-Stock Corporations
Each member shall be entitled only to one vote per candidate in the election of trustees unless cumulative voting is authorized in the articles of incorporation or the by-laws.
He may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate.
True or False?
True
Under Right to Vote in Non-Stock Corporations
Each member shall be entitled only to one vote per candidate in the election of trustees unless cumulative voting is authorized in the articles of incorporation or the by-laws.
The by-laws may likewise authorize voting through remote communication and/or in absentia
True or False?
True
Under Membership in a NSC
In terms of nature of membership rights
In the absence of restrictions, it may act arbitrarily, and exclude any person as it may see fit and the courts have no power to interfere.
True or False?
True
Under Membership in a NSC
In terms of Manner or Mode of Acquisition of Membership
Membership in a non-stock corporation cannot be acquired except in the particular manner or mode of acquiring the same, as provided for in its valid by-laws. The manner of admitting new members to a non-stock corporation is governed by the by-laws and may not, therefore, be uniform in all corporations. Once adopted, such mode of admitting new members must be observed until a new procedure is adopted by the corporation through an amendment of the by-laws.
True or False?
True
Under Membership in a NSC
In terms of Qualifications for Membership
It is a matter of general knowledge that corporations may validly prescribe certain qualifications necessary for membership and the mode of procedure in which membership can be acquired.
True or False?
True
Under Membership in a NSC
In terms of Power of Courts
Courts are without power to strip a member of a non-stock, non-profit corporation of his membership therein without cause; otherwise, that would be an unwarranted and undue interference with the well-established right of a corporation to determine its membership.
True or False?
True
Under Membership in a NSC
In terms of Non-Transferability of Membership
Membership in a non-stock corporation and all rights arising therefrom personal and non-transferable, unless the articles of incorporation or the by- laws otherwise provide
True or False?
True
Under Membership in a NSC
In terms of Non-Transferability of Membership
General rule is that membership in a non-stock corporation has personal elements accompanied by social and other ties
True or False?
True
In terms of Non-Transferability of Membership
Exception to the general rule is where the articles of incorporation or by-laws so provide, it cannot be transferred to any other person who wishes to be a member
True or False?
True
Under Membership in a NSC
In terms of Payment of Dues and Other Assessments
A non-stock corporation is authorized by law to accept members and may collect reasonable membership dues and other assessments for purposes of accomplishing the purposes or objectives for which the corporation was organized
True or False?
True
Under Membership in a NSC
In terms of Payment of Dues and Other Assessments
The board of trustees of the corporation may not increase the membership fee resolution, without first properly amending the by-laws of the corporation.
True or False?
True
Under Membership in a NSC
In terms of Payment of Dues and Other Assessments
The trustees do not have the power to make such step in their capacity alone as members of the board of trustees, as it needs an amendment of the by-laws of the corporation, if the matter is expressly treated therein.
True or False?
True
Under Termination of Membership
Membership shall be terminated only in the manner and for the causes provided in the articles of incorporation or by the by-laws.
Termination of membership shall have the effect of extinguishing all rights of a member in the corporation or in its property, unless otherwise provided in the articles of incorporation or the by-laws.
True or False?
True
