Revised Corporation Code - Codal Flashcards
1
Q
Describe what a corporation is according to the Revised Corporation Code of the Philippines.
A
A corporation is an artificial being created by operation of law, having the right of succession and specific powers authorized by law.
2
Q
Define stock corporations and non-stock corporations according to the Revised Corporation Code of the Philippines.
A
Stock corporations have capital stock divided into shares and can distribute dividends to shareholders. Non-stock corporations do not have capital stock and do not distribute profits to members.
3
Q
How are corporations created by special laws or charters governed according to the Revised Corporation Code of the Philippines?
A
Corporations created by special laws or charters are primarily governed by the provisions of the special law or charter creating them, supplemented by the provisions of the Revised Corporation Code.
4
Q
Describe the difference between corporators and incorporators according to the Revised Corporation Code of the Philippines.
A
Corporators are individuals who compose a corporation, while incorporators are the stockholders or members mentioned in the articles of incorporation as the original founders of the corporation.
5
Q
Define the classification of shares in a corporation according to the Revised Corporation Code of the Philippines.
A
The classification of shares, their corresponding rights, privileges, restrictions, and par value must be indicated in the articles of incorporation. Each share is generally equal to every other share, unless specified otherwise.
6
Q
What voting rights do holders of non-voting shares have according to the Revised Corporation Code of the Philippines?
A
Holders of non-voting shares are entitled to vote on specific matters such as amending the articles of incorporation, adopting or amending bylaws, and major corporate decisions like property disposition.
7
Q
Describe the types of corporate acts that typically require shareholder approval according to the provided content.
A
Bonded indebtedness, increase or decrease of authorized capital stock, merger or consolidation, investment of corporate funds, and dissolution of the corporation.
8
Q
Define preferred shares of stock and their potential preferences in a corporation.
A
Preferred shares of stock may have preferences in dividend distribution, asset distribution during liquidation, or other specified preferences, typically issued with a stated par value.
9
Q
How are shares of capital stock without par values treated in terms of payment and liability according to the content?
A
Shares without par values are deemed fully paid and nonassessable, and the holder is not liable to the corporation or its creditors. They must be issued for a consideration of at least Five pesos per share.
10
Q
Do founders’ shares have special rights and privileges, and what limitations may apply to these shares?
A
Founders’ shares may have exclusive voting rights for a limited period not exceeding five years from the date of incorporation. Certain limitations apply to prevent violations of specific laws.
11
Q
Describe the purpose of redeemable shares in a corporation as mentioned in the content.
A
Redeemable shares may be issued by a corporation as specified in the articles of incorporation, allowing the corporation to repurchase these shares at a later date.
12
Q
Explain the process through which the terms and conditions of preferred shares of stock are established according to the content.
A
The board of directors, if authorized in the articles of incorporation, can set the terms and conditions of preferred shares of stock. These terms become effective upon filing a certificate with the Securities and Exchange Commission.
13
Q
Describe what treasury shares are in a corporation.
A
Treasury shares are shares of stock that were issued, fully paid for, and then reacquired by the issuing corporation through various means like purchase, redemption, or donation.
14
Q
Define incorporators in the context of forming a corporation.
A
Incorporators are individuals, partnerships, associations, or corporations who come together (up to 15 in number) to organize a corporation for lawful purposes.
15
Q
How many shares must each incorporator of a stock corporation own or subscribe to?
A
Each incorporator of a stock corporation must own or be a subscriber to at least one share of the capital stock.
16
Q
Describe the term of existence for a corporation unless stated otherwise in the articles of incorporation.
A
A corporation shall have perpetual existence unless its articles of incorporation specify a different term.
17
Q
Do corporations with certificates of incorporation issued before the current code came into effect have perpetual existence?
A
Yes, corporations with certificates issued before the current code came into effect and still in existence have perpetual existence unless changed by a majority vote of stockholders.
18
Q
How can a corporation extend or shorten its term of existence as per the articles of incorporation?
A
A corporation can extend or shorten its term of existence by amending the articles of incorporation, with no extension earlier than three years before the original or subsequent expiry date, unless justified by the Commission.
19
Q
Describe the process of filing articles of incorporation for corporations.
A
Corporations must file articles of incorporation with the Commission in any official language, containing specific details like the corporation’s name, purpose, location of principal office, term of existence, names of incorporators, directors/trustees, capital stock information, and other necessary matters.
20
Q
Define the role of intermediaries in the approval process by the Commission.
A
Intermediaries must be approved by the Commission unless accompanied by a favorable recommendation from the appropriate government agency.
21
Q
How many directors can a corporation have according to the content?
A
A corporation can have a maximum of fifteen directors, or more than fifteen trustees if it is a stock corporation.
22
Q
What is the exception to the requirement of minimum capital stock for stock corporations?
A
Stock corporations are not required to have minimum capital stock, except as otherwise specially provided by special law.
23
Q
Do non-stock corporations have to include a specific purpose in their articles of incorporation?
A
Non-stock corporations must include the amount of capital, names of contributors, and amounts contributed by each in their articles of incorporation.
24
Q
Describe the information that must be provided in the articles of incorporation for a stock corporation.
A
For a stock corporation, the articles of incorporation must include details about the authorized capital stock, number of shares, par value, names of subscribers, amounts subscribed and paid, and whether shares are with or without par value.
25
What is the required form for Articles of Incorporation for domestic corporations in the Philippines?
The articles of incorporation must comply substantially with a specific form.
26
Describe the process of filing the Articles of Incorporation with the Commission.
The Articles of Incorporation and applications for amendments can be filed as electronic documents in accordance with the Commission's rules.
27
Define the term 'perpetual existence' in the context of a corporation.
Perpetual existence means that the corporation does not have a predetermined end date and can continue its operations indefinitely.
28
How should the purpose or purposes of the corporation be indicated in the Articles of Incorporation?
If there is more than one purpose, the primary and secondary purposes should be clearly indicated.
29
Do the incorporators need to provide their names, nationalities, and residence addresses in the Articles of Incorporation?
Yes, the names, nationalities, and residence addresses of the incorporators must be included in the document.
30
Describe the required information about the directors or trustees of the corporation according to the content.
The names, nationalities, and residence addresses of the first directors or trustees of the corporation.
31
Define the authorized capital stock of the corporation as mentioned in the content.
The total value of shares that the corporation is allowed to issue.
32
How is the authorized capital stock of the corporation divided in terms of shares and par value based on the content?
It is divided into a specific number of shares with a designated par value per share, or all shares may be without par value.
33
Do you need to specify the number of shares subscribed and the amount paid by each subscriber according to the content?
Yes, the content requires detailing the number of shares subscribed and the corresponding amount paid by each subscriber.
34
Describe the structure of the capital stock of the corporation when some shares have a par value and some are without par value based on the content.
The capital stock consists of a total number of shares, with some having a par value specified and others being without a designated par value.
35
Describe the process for amending the articles of incorporation of a corporation.
Amendments to the articles of incorporation require a majority vote of the board of directors/trustees and at least two-thirds of the outstanding capital stock, or a majority of the trustees and at least two-thirds of the members for non-stock corporations.
36
Define the grounds on which the Commission may disapprove articles of incorporation or amendments.
Grounds for disapproval include non-compliance with legal requirements, unconstitutional, illegal, immoral purposes, false certification of capital stock, and failure to meet Filipino ownership percentage.
37
How are amendments to the articles of incorporation indicated and certified?
Amendments are indicated by underscoring changes made. A certified copy, under oath by the corporate secretary and majority of directors/trustees, is submitted to the Commission.
38
Do all amendments to the articles of incorporation require approval by the Commission?
Yes, amendments must be approved by the Commission or take effect from the date of filing if not acted upon within six months for reasons not attributable to the corporation.
39
Describe the role of the Commission in the approval process of articles of incorporation or amendments.
The Commission may disapprove if the submission does not comply with legal requirements, giving the entity time to modify objectionable portions.
40
What is the required percentage of Filipino ownership of the capital stock under existing laws or the Constitution?
The required percentage of Filipino ownership of the capital stock must be complied with as per existing laws or the Constitution.
41
Describe the process for selecting a corporation according to the content.
The name must be distinguishable from others, even if it contains certain common words or variations. The Commission can order a corporation to cease using a name if it conflicts with existing registrations or laws.
42
What actions can the Commission take if a corporation fails to comply with an order regarding its name?
The Commission can hold the corporation and its directors/officers in contempt, impose administrative, civil, or criminal liability, or revoke the corporation's registration.
43
Define the role of the Commission in the registration and incorporation of a corporation.
The Commission verifies the intended corporate name, reserves it if compliant, and issues the certificate of incorporation if all submitted documents meet legal requirements.
44
How does a private corporation's existence and legal personality begin according to the content?
A private corporation starts its corporate existence when the Commission issues the certificate of incorporation under its official seal, forming a body corporate as stated in the articles of incorporation.
45
Describe the steps involved in incorporating a corporation as outlined in the content.
Incorporators submit the intended name for verification, then provide articles of incorporation and bylaws to the Commission for approval. Upon compliance, the Commission issues the certificate of incorporation.
46
Explain the significance of having a distinguishable corporation name as per the content.
Having a distinguishable name is crucial to avoid conflicts with existing registrations or laws. The Commission can take actions if a name is found to be non-compliant.
47
Describe the liability of individuals who assume to act as a corporation without authority.
They shall be liable as general partners for all debts, liabilities, and damages incurred.
48
Define the consequences of non-use of a corporate charter and continuous inoperation.
The corporation's certificate of incorporation may be deemed revoked after five years of non-organization or five consecutive years of inoperation.
49
How can a delinquent corporation lift its delinquent status?
By resuming operations and complying with all requirements prescribed by the Commission.
50
Do directors and trustees have the same term length in a corporation?
No, directors are elected for a term of one year, while trustees are elected for a term not exceeding three years.
51
Describe the qualification of independent directors in corporations with public interest.
They must constitute at least twenty percent of the board and are required for corporations covered by specific laws.
52
Define the role of the Board of Directors or Trustees in a corporation.
They exercise corporate powers, conduct business, and control properties of the corporation.
53
Describe the role of an director in a corporation.
An independent director a person elected by to provide unbiased judgment and oversight in carrying out responsibilities as a director, free from any conflicts of interest.
54
Define the term 'quorum' in the context of corporate elections.
Quorum refers to the minimum number of shareholders or members required to be present, either physically or through authorized representatives, for a valid election.
55
How are voting rights exercised in corporations vested with public interest during elections?
In such corporations, shareholders or members can vote through remote communication or in absentia, even without a provision in the bylaws.
56
Describe the voting process for stockholders in stock corporations during elections.
Stockholders can vote the number of shares they own, as recorded in the stock books of the corporation at the time specified in the bylaws or at the time of the election if the bylaws are silent.
57
What factors may be considered by the Commission when determining the need for independent directors in certain corporations?
Factors such as minority ownership, type of financial products offered, public interest involved, and other relevant considerations may be taken into account by the Commission.
58
Describe the disqualifications for being a director, trustee, or officer of a corporation as outlined in Section 26.
Disqualifications include being convicted of certain offenses, found administratively liable for fraudulent acts, or facing disqualification by a foreign court for similar acts.
59
Define the process for removing a director or trustee from office according to Section 27.
Directors or trustees can be removed by a vote of stockholders holding at least two-thirds of outstanding capital stock, or in a non-stock corporation, by a vote of at least two-thirds of members entitled to vote.
60
How can a special meeting be called for the purpose of removing a director or trustee from office as per Section 27?
The secretary can call a special meeting on order of the president or upon a written demand of stockholders representing a majority of outstanding capital stock, or members entitled to vote.
61
Describe the notice requirements for proposing the removal of a director or trustee at a meeting according to Section 27.
Notice of the intention to propose such removal must be given to stockholders or members of the corporation through publication or written notice prescribed in the Code.
62
Define the authority of the Commission in ordering the removal of a director or trustee as per the content provided.
The Commission can order the removal of a director or trustee elected despite disqualification or facing disqualification, upon verified complaint and after due notice and hearing.
63
How can a director or trustee be removed without cause according to Section 27?
Directors or trustees can be removed without cause by a vote of stockholders holding at least two-thirds of outstanding capital stock, or in a non-stock corporation, by a vote of at least two-thirds of members entitled to vote.
64
Describe the process for filling vacancies in the board of directors or trustees.
Vacancies can be filled by a majority vote of remaining directors/trustees if constituting a quorum, or by stockholders/members in a meeting. Elections must be held promptly, and replacement directors serve the unexpired term of their predecessor.
65
How can a vacancy in the board be temporarily filled in case of emergency?
If a vacancy prevents a quorum and emergency action is needed, it can be temporarily filled by officers of the corporation with a unanimous vote of remaining directors/trustees. The temporary appointment is limited to emergency actions.
66
Define 'replacement director or trustee' in the context of filling vacancies.
A replacement director or trustee is an individual elected to fill a vacancy in the board and serves only for the unexpired term of the predecessor in office.
67
Describe the notification requirement in case of creating an emergency board to fill a vacancy.
The corporation must notify the Commission within three days of creating an emergency board, stating the reason for its creation.
68
What is the process for compensating directors or trustees in the absence of specific bylaws?
Directors or trustees shall not receive compensation unless approved by a majority of stockholders or members. Reasonable perdiems may be granted with approval.
69
How can the compensation for directors or trustees be approved and granted?
Compensation for directors or trustees can be approved and granted by stockholders representing a majority of outstanding capital stock or members at a regular or special meeting.
70
Describe the liability of directors, trustees, or officers in a corporation according to Section 30.
They are liable jointly and severally for damages resulting from willfully voting for unlawful acts, gross negligence, bad faith, or acquiring conflicting personal interests.
71
What are the conditions required for a contract between a corporation and its directors, trustees, or officers to be valid according to Section 31?
Presence of the director was not necessary for quorum, their vote was not needed for approval, the contract is fair and reasonable, and in public interest corporations, approved by a majority of independent directors.
72
Define the process for ratifying a contract with a director or trustee if certain conditions are absent according to Section 31.
It may be ratified by a vote of stockholders representing at least two-thirds of outstanding capital stock or members, with full disclosure of adverse interests and fairness of the contract.
73
How can a contract between corporations with interlocking directors be validated according to Section 32?
If the contract is fair, reasonable, and not fraudulent, it shall not be invalidated solely due to interlocking directorships.
74
Describe the consequences for a director, trustee, or officer attempting to acquire an interest adverse to the corporation according to Section 30.
They shall be liable as a trustee for the corporation and must account for the profits that would have accrued to the corporation.
75
Define the term 'voidable' in the context of contracts with directors, trustees, or officers according to Section 31.
It means that the contract is subject to being declared invalid at the option of the corporation if certain conditions are not met.
76
Describe the provision regarding disloyalty of a director acquiring a business opportunity that should belong to the corporation.
The director must account for and refund all profits obtained to the corporation unless ratified by a vote of stockholders owning at least two-thirds of the outstanding capital stock.
77
What can an executive committee do according to the bylaws?
An executive committee can act on specific matters within the board's competence as delegated by the bylaws or majority vote of the board, except for certain actions like shareholder approval, filling board vacancies, amending bylaws, or distributing cash dividends.
78
Define the powers of a corporation according to the Code.
The powers include the ability to sue and be sued, have perpetual existence, adopt a corporate seal, amend articles of incorporation, adopt and amend bylaws, issue stock, deal with property, enter into agreements, among others.
79
How can a board of directors create special committees?
The board can create special committees of temporary or permanent nature, determining their members, terms, composition, compensation, powers, and responsibilities.
80
Describe the corporate capacity to deal with real and personal property.
Corporations can purchase, receive, hold, convey, sell, lease, pledge, mortgage, and deal with real and personal property as necessary for lawful business, subject to legal limitations.
81
What is the power of a corporation regarding partnerships and commercial agreements?
Corporations have the power to enter into partnerships, joint ventures, mergers, consolidations, or other commercial agreements with natural and juridical persons.
82
Describe the power of a private corporation to extend or shorten its corporate term.
A private corporation can extend or shorten its term as stated in the articles of incorporation with approval from the majority of the board of directors or trustees, and ratification by at least two-thirds of the outstanding capital stock or members.
83
Define the power of a corporation to increase or decrease its capital stock or incur bonded indebtedness.
A corporation can only increase or decrease its capital stock or incur bonded indebtedness with approval from the majority of the board of directors and two-thirds of the outstanding capital stock at a stockholders' meeting.
84
How can a dissenting stockholder respond to the extension of a corporate term?
A dissenting stockholder may exercise the right of appraisal under the conditions provided in the Code.
85
Do foreign corporations have limitations on giving donations according to the content?
Yes, foreign corporations are prohibited from giving donations in aid of any political party or candidate or for purposes of partisan political activity.
86
Describe the process for approving an increase or decrease in a corporation's capital stock.
Approval requires a majority vote of the board of directors and two-thirds of the outstanding capital stock at a stockholders' meeting, with written notice sent to stockholders at their places of residence.
87
Define the purpose of establishing pension, retirement, and other plans by a corporation.
The purpose is to benefit the corporation's directors, trustees, officers, and employees.
88
Describe the process required for increasing or decreasing the capital stock of a corporation according to the content provided.
The process involves obtaining prior approval from the Commission and possibly the Philippine Competition Commission, submitting the application within six months of board and stockholder approval, and ensuring that at least 25% of the increase in capital stock has been subscribed and paid.
89
Define bonded indebtedness as outlined in the content.
Bonded indebtedness refers to the debt incurred, created, or increased by a corporation, subject to approval by the Commission and meeting specific requirements.
90
How can nonstock corporations incur, create, or increase bonded indebtedness according to the content?
Nonstock corporations can do so with approval from a majority of the board of trustees and at least two-thirds of the members in a meeting called for that purpose.
91
Do stockholders of a stock corporation have preemptive rights, and what are the exceptions to this right as per the content?
Stockholders have preemptive rights, except when denied by the articles of incorporation or amendment, or for shares issued in compliance with laws or with the approval of two-thirds of outstanding capital stock.
92
Describe the power of the Commission regarding the registration of bonds issued by a corporation.
The Commission has the authority to determine the sufficiency of the terms of bonds issued by a corporation.
93
What is the requirement for the sale or disposition of assets of a corporation according to the content?
The sale or disposition of assets is subject to the provisions of Republic Act No. 10667, also known as the 'Philipp,' unless specified otherwise.
94
Describe the voting requirements for authorizing the sale of a corporation's properties and assets.
At least two-thirds of outstanding capital stock or members must vote in favor, or a majority of trustees in non-stock corporations without voting members.
95
How is the determination made whether a sale involves all or substantially all of a corporation's properties and assets?
It is based on the corporation's net asset value as shown in its latest financial statements, rendering the corporation incapable of continuing business.
96
Define the process for providing notice of a proposed action to stockholders or members.
Written notice must be addressed to stockholders or members at their places of residence, deposited in the post office with postage prepaid, served personally, or sent electronically with consent.
97
What can the board of directors or trustees do after receiving authorization from stockholders or members for a sale of properties and assets?
They can, at their discretion, abandon the sale without further action or approval, subject to the rights of third parties under any related contract.
98
Describe the circumstances under which a corporation can sell, lease, or dispose of its property and assets without stockholder or member authorization.
If necessary in the usual course of business or if proceeds are appropriated for the conduct of remaining business.
99
How can a stock corporation acquire its own shares according to Section 40?
It can do so if it has unrestricted retained earnings to cover the shares, for legitimate corporate purposes like eliminating fractional shares or settling unpaid subscriptions.
100
Describe the process for approving investments in a corporation for purposes other than its primary purpose.
Approval by majority of the board of directors or trustees, ratified by at least two-thirds of stockholders or members, with notice and meeting requirements.
101
Define the power to declare dividends in a stock corporation.
Authority of the board of directors to declare dividends from unrestricted retained earnings, payable in cash, property, or stock.
102
How can cash dividends due on delinquent stock be applied in a stock corporation?
First applied to the unpaid balance on the subscription plus costs and expenses.
103
Do stockholders need to approve stock dividends in a stock corporation?
Yes, approval of stockholders representing at least two-thirds of the outstanding capital stock is required.
104
Describe the restrictions on surplus profits for stock corporations.
Prohibited from retaining surplus profits in excess of 100% of their paid-in capital stock, with exceptions for specific circumstances like corporate expansion projects or loan agreements.
105
Define the power to enter into a management contract in a corporation.
Authority to engage in a management contract with another corporation, subject to approval by the board of directors and majority of stockholders or members owning the outstanding capital stock.
106
Describe the process for adopting bylaws in a corporation according to the provided content.
Bylaws in a corporation require an affirmative vote from stockholders representing a majority of outstanding capital stock or members (for nonstock corporations). The bylaws must be signed by the voters, kept in the principal office, and filed with the Commission.
107
Define Ultra Vires Acts of Corporations based on the content.
Ultra Vires Acts refer to corporations exceeding their powers beyond what is granted by the Code or their articles of incorporation, except when necessary for exercising conferred powers.
108
How long can a management contract be entered into for a term according to the content?
A management contract cannot exceed a period longer than five (5) years for any term.
109
What is required for bylaws to be effective according to the content?
Bylaws are effective only upon the issuance of a certification by the Commission that they are in accordance with the Code.
110
Describe the contents that a private corporation may include in its bylaws as per the content provided.
A private corporation's bylaws may cover aspects like calling and conducting meetings, quorum requirements, voting procedures, attendance modes, and proxy regulations.
111
Do special laws govern the acceptance of bylaws for specific types of corporations according to the content?
Yes, special laws govern the acceptance of bylaws for entities like banks, insurance companies, and educational institutions, requiring a certificate from the appropriate government agency for filing.
112
Describe the qualifications, duties, and responsibilities of directors or trustees as outlined in the content.
The content outlines the qualifications, duties, and responsibilities of directors or trustees within a corporation.
113
Define the process for amending the bylaws as per the content.
The content explains that a majority of the board of directors or trustees, along with the owners of at least a majority of the outstanding capital stock, can amend or repeal the bylaws.
114
How can the power to amend or adopt new bylaws be delegated according to the content?
The content states that the owner of two-thirds of the outstanding capital stock or members in a nonstock corporation may delegate the power to amend or adopt new bylaws to the board of directors or trustees.
115
What is the significance of filing amended or new bylaws with the Commission as per the content?
The content mentions that the corporation must file any amended or new bylaws with the Commission, along with resolutions authorizing the delegation of such powers.
116
Describe the effectiveness of amended or new bylaws according to the content.
The content specifies that amended or new bylaws are only effective upon the issuance of certification by the Commission.
117
Do regular meetings of stockholders or members have a fixed date according to the content?
Regular meetings of stockholders or members are to be held annually on a date fixed in the bylaws or determined by the board of directors or trustees after April 15 of every year, as per the content.
118
Describe the information that should be presented to stockholders or members at a regular meeting by the board of directors or trustees.
The presentation should include minutes of the most recent meeting, members' list, assessment of the corporation's performance, financial report, dividend policy explanation, director profiles, attendance report, appraisals, compensation report, and director disclosures.
119
What should be included in the minutes of the most recent regular meeting presented to stockholders or members?
The minutes should describe voting procedures, questions asked by stockholders, matters discussed, voting results, attendees, and any other items required by the Commission.
120
Define the purpose of the financial report presented at the meeting.
The financial report includes financial statements, internal controls statement, external audit fees, and provides an overview of the corporation's financial performance.
121
How should director or trustee profiles be presented at the meeting?
The profiles should include qualifications, experience, length of service, training, board representation in other corporations, and other relevant details.
122
Describe the content of the director or trustee compensation report.
The report should outline the compensation details of directors in accordance with the Code and rules prescribed by the Commission.
123
What information should be disclosed by directors regarding self-dealings and related party transactions?
Directors should disclose any self-dealings and transactions with related parties as part of the meeting presentation.
124
Explain the importance of providing a detailed assessment of the corporation's performance at the meeting.
The assessment helps stockholders understand the company's strategic changes, business performance, and overall direction, promoting transparency and accountability.
125
Describe who can propose matters for inclusion in the agenda at regular meetings of stockholders or members.
A director, trustee, stockholder, or member may propose any other matter for inclusion in the agenda at regular meetings of stockholders or members.
126
Define special meetings of stockholders or members and the notice requirement for such meetings.
Special meetings of stockholders or members can be held at any time deemed necessary or as provided in the bylaws. At least one week written notice should be sent to all stockholders or members, unless a different period is provided in the bylaws, law, or regulation.
127
How can a stockholder or member propose the holding of a special meeting and items to be included in the agenda?
A stockholder or member may propose the holding of a special meeting and items to be included in the agenda.
128
Describe the conditions under which notice of a meeting may be waived for stockholders or members.
Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member. General waivers of notice in the articles of incorporation or the bylaws are not allowed.
129
Define the process for calling a meeting when no person is authorized or refuses to do so, according to the content.
The Commission may issue an order directing a petitioning stockholder or member to call a meeting of the corporation upon showing of good cause.
130
How long before the scheduled date of a meeting should the stock and transfer book or membership book be closed, according to the content?
The stock and transfer book or membership book should be closed at least twenty days for regular meetings and seven days for special meetings before the scheduled date of the meeting.
131
Describe the process for postponing stockholders' or members' regular meetings according to the content.
In case of postponement of stockholders' or members' regular meetings, written notice and the reason therefor should be sent to all stockholders or members of record at least two weeks prior to the date of the meeting.
132
Define the ways in which the right to vote of stockholders or members can be exercised according to the content.
The right to vote of stockholders or members can be exercised in person, through remote communication, or in absentia.
133
Describe the requirements that should accompany a notice of a meeting according to the content provided.
The notice of a meeting should include the agenda, a proxy submission deadline, procedures for remote participation, and election requirements for directors/trustees.
134
Define quorum in meetings for stock corporations as per the content.
In stock corporations, a quorum consists of stockholders representing a majority of the outstanding capital stock.
135
How often should regular meetings of the board of directors or trustees be held according to the content?
Regular meetings of the board of directors or trustees should be held monthly, unless the bylaws state otherwise.
136
Do directors or trustees have the option to participate in meetings through remote communication according to the content?
Yes, directors or trustees can participate and vote through remote communications like video conferencing or teleconferencing.
137
Describe the procedure for waiving the notice requirement for board meetings as outlined in the content.
A director or trustee may waive the notice requirement for board meetings either expressly or impliedly.
138
Define the quorum required for transacting corporate business by the board of directors or trustees as per the content.
A majority of the directors or trustees as stated in the articles of incorporation constitute a quorum for transacting corporate business.
139
Describe the voting rights of secured creditors and administrators in stock corporations.
Secured creditors and administrators in stock corporations have the right to attend and vote at meetings of stockholders, unless expressly given such right in writing by the stockholder-grantor.
140
Define quorum in the context of corporate meetings.
Quorum refers to the minimum number of members required to be present at a meeting to make the proceedings of that meeting valid.
141
How can stockholders or members participate in voting through remote communication or in absentia?
Stockholders or members can participate in voting through remote communication or in absentia if authorized in the bylaws or by a majority of the board of directors, with votes received before the tally of votes is completed.
142
Do treasury shares have voting rights in a corporation?
No, treasury shares do not have voting rights as long as they remain in the Treasury of the corporation.
143
Describe the requirements for proxies in corporate meetings.
Proxies must be in writing, signed and filed by the stockholder or member, in a form authorized in the bylaws, and received by the corporate secretary within a reasonable time before the scheduled meeting.
144
How are joint owners of stock required to vote in stock corporations?
The consent of all co-owners is necessary when voting shares of stock owned jointly by two or more persons, unless there is a written proxy signed by all co-owners authorizing one or some of them to vote the shares.
145
Describe the requirements for a voting trust agreement in a loan agreement context.
The voting trust must be in writing, notarized, specify terms, and be filed with the corporation and Commission.
146
Define voting trust certificates.
Certificates transferable like stock, issued by trustees to transferors in a voting trust agreement.
147
How can a stockholder examine a voting trust agreement filed with a corporation?
In the same manner as any other corporate book or record.
148
Do voting trust agreements expire automatically upon full loan payment?
Yes, they automatically expire upon full payment of the loan.
149
Describe the conditions under which a voting trust agreement can be renewed.
Unless expressly renewed, all rights granted in a voting trust agreement automatically expire at the end of the agreed period.
150
Define pre-incorporation subscription in the context of stocks and stockholders.
An irrevocable subscription of shares in a corporation yet to be formed for at least six months from the date of subscription.
151
How can voting trustees vote in a corporation unless the agreement provides otherwise?
By proxy or in any manner authorized under the bylaws.
152
Describe the types of considerations that can be given in exchange for shares of stock in a corporation.
Actual cash, property, labor, previously incurred indebtedness, transfers from retained earnings, outstanding shares exchange, shares of stock in another corporation, or other generally accepted forms of consideration.
153
How is the valuation of intangible property like patents or copyrights determined when given as consideration for shares of stock in a corporation?
The valuation is initially determined by the stockholders or the board of directors, subject to the approval of the Commission.
154
Define the process of issuing shares of stock in a corporation with no par value.
The issued price may be fixed in the articles of incorporation, by the board of directors, or by the stockholders representing a majority of the outstanding capital stock.
155
What is required for a transfer of shares of stock to be valid between parties in a corporation?
The transfer must be recorded in the corporation's books, showing the names of the parties, date of transfer, certificate numbers, and number of shares transferred.
156
Describe the process of transferring shares of stock in a corporation.
Shares are transferred by delivering the endorsed certificate or certificates, and the transfer must be recorded in the corporation's books.
157
How are securities or shares of stock issued in corporations that trade in trading markets and can demonstrate their capability to do so?
They may issue their securities or shares of stock in uncertificated or scripless form in accordance with the rules of the Commission.
158
Describe the process when there is no bidder at a public auction for delinquent stock.
The corporation may bid for the shares, and the total amount due shall be credited as fully paid in the corporation's books.
159
Define delinquent stock.
Stock for which the payment has not been made by the shareholder within the specified timeframe.
160
How can a corporation recover unpaid subscriptions according to the content?
The corporation can collect the amount due through court action, along with accrued interest, costs, and expenses.
161
Do delinquent stockholders have voting rights or rights at stockholder meetings?
No, delinquent stockholders cannot vote or have rights at stockholder meetings until the amount due is paid.
162
Describe the rights of holders of subscribed shares that are not fully paid and not delinquent.
They have all the rights of a stockholder.
163
How should a corporation proceed when issuing new stock certificates for lost, stolen, or destroyed certificates?
The registered owner or their legal representatives must file an affidavit detailing the circumstances, share details, and other necessary information for verification.
164
Describe the process a corporation follows when a certificate of stock is lost, stolen, or destroyed.
The corporation cancels the lost certificate, issues a new one, and may require a bond or security for a year.
165
Define the suspension of issuing a new certificate of stock in the context of a pending court action regarding ownership.
Issuing a new certificate is suspended until the court makes a final decision on ownership.
166
How can a corporation issue a new certificate of stock before the one-year period if a bond or security is filed by the registered owner?
If a bond or security is filed, the corporation may issue a new certificate before the one-year period.
167
Do shareholders have the right to contest the issuance of a new certificate of stock if the original is lost, stolen, or destroyed?
Shareholders have the right to contest unless a bond or security is filed.
168
Describe the requirements for corporate books and records as outlined in Title VIII.
Corporations must keep records of articles of incorporation, ownership structure, board members, business transactions, resolutions, and meeting minutes.
169
Define the information that should be included in the minutes of corporate meetings.
Minutes should detail meeting time, place, authorization, notice, agenda, attendees, actions taken, and any demands noted by directors, trustees, or shareholders.
170
Describe who can inspect corporate records according to the provided content.
Directors, trustees, stockholders, or members of the corporation can inspect corporate records in person or through a representative.
171
Define the confidentiality rules that the inspecting or reproducing party must abide by.
The inspecting or reproducing party must adhere to confidentiality rules under prevailing laws, such as those on trade secrets or processes.
172
How can a requesting party who is not a stockholder or member of record be restricted from inspecting corporate records?
If the requesting party is a competitor, director, officer, controlling stockholder, or represents the interests of a competitor, they have no right to inspect or demand reproduction of corporate records.
173
Do stockholders have consequences for abusing the rights granted to inspect corporate records?
Yes, stockholders who abuse these rights may be penalized under Section 158 of the Code.
174
Describe the liability of an officer or agent of the corporation who refuses to allow inspection or reproduction of records.
They may be liable to the director, trustee, stockholder, or member for damages and may be guilty of an offense punishable under Section 161 of the Code.
175
How can a person defending against an action for refusing inspection of corporate records justify their refusal?
It can be a defense if the person demanding to examine or copy excerpts from the records was not acting in good faith or for a legitimate purpose, or if they are a competitor, director, officer, controlling stockholder, or represent the interests of a competitor.
176
Describe the process for a stock corporation to transfer its own stocks according to the content.
A stock corporation can transfer its own stocks, subject to rules and regulations imposed on stock transfer agents, with the exception of a license fee.
177
Define the Right to Financial Statements as per the content.
The Right to Financial Statements requires a corporation to provide its stockholders or members with its most recent financial statement within ten days of receiving a written request.
178
How can a corporation's financial statements be certified if its total assets or liabilities are less than ₱600,000.00, based on the content?
The financial statements may be certified under oath by the treasurer and the president.
179
Do stock corporations transferring or trading stocks in secondary markets need to have an independent transfer agent, as per the content?
Yes, the Commission may require stock corporations involved in secondary market stock transfers to have an independent transfer agent.
180
Describe the requirements for a plan of merger or consolidation between two or more corporations according to the content.
The plan must include the names of the constituent corporations, terms of the merger/consolidation, changes in articles of incorporation, and any other necessary provisions.
181
Define the approval process needed for a plan of merger or consolidation among corporations based on the content.
The plan must be approved by a majority vote of the board of directors or trustees of each constituent corporation before being submitted for approval by the stockholders or members of each corporation.
182
Describe the process of giving notice of regular or special meetings under Section 49 of the Code.
The process involves stating the purpose of the meeting and including a copy or summary of the plan of merger or consolidation. A two-thirds vote of stockholders or members is required for plan approval.
183
What is necessary for the approval of a plan of merger or consolidation according to the Code?
An affirmative vote of stockholders representing at least two-thirds of the outstanding capital stock of each corporation in the case of stock corporations, or two-thirds of the members in the case of non-stock corporations.
184
How can an amendment to the plan of merger or consolidation be made according to the Code?
An amendment must be approved by a majority vote of the respective boards of directors or trustees of all constituent corporations and ratified by a two-thirds vote of stockholders or members of each constituent corporation.
185
Define Articles of Merger or Consolidation as per the Code.
These are documents executed by each constituent corporation after stockholder or member approval, setting forth details like the plan of merger, number of shares/members, voting results, assets and liabilities, accounting method, and other prescribed information.
186
Describe the effectivity process of a merger or consolidation according to the Code.
The signed and certified articles of merger or consolidation are submitted to the Commission for approval. Special corporations require favorable recommendation from the appropriate government agency before Commission approval.
187
What happens to the right of appraisal if the board of directors decides to abandon the plan of merger or consolidation?
The right of appraisal is extinguished if the board of directors decides to abandon the plan after stockholder approval.
188
Describe the process the Commission follows if it believes a proposed merger or consolidation goes against the law.
The Commission sets a hearing to allow the concerned corporations to present their case, providing written notice at least two weeks before the hearing.
189
Define the effects of a merger or consolidation according to Section 79 of the Code.
The constituent corporations become a single entity, with the surviving or consolidated corporation inheriting all rights, privileges, and assets.
190
How does the Code address the rights of creditors or liens in the event of a merger or consolidation?
The rights of creditors or liens on the property of constituent corporations are not impaired by the merger or consolidation.
191
Do stockholders have the right to demand payment of the fair value of their shares in certain situations? If so, provide examples.
Yes, stockholders can demand payment in cases like amendments to articles of incorporation, sale of corporate assets, mergers, or investments deviating from the corporation's primary purpose.
192
Describe when a stockholder can exercise the right of appraisal according to Section 80 of the Code.
A stockholder can exercise the right of appraisal when there are changes affecting their rights, corporate property disposition, mergers, or investments not aligned with the corporation's primary purpose.
193
How can a dissenting stockholder exercise the right of appraisal in a corporate action?
By voting against the proposed action and then choosing to exercise the right of appraisal.
194
Describe the process for a stockholder to demand payment of the fair value of their shares in a corporation.
The stockholder must make the demand within 30 days of the vote, and if not, it is considered a waiver of the appraisal right. Upon surrendering their stock certificate, the corporation must pay the fair value of the shares as of the day before the vote.
195
How is the fair value of shares determined if the stockholder and the corporation cannot agree within 60 days of the corporate action approval?
It is determined and appraised by three disinterested persons, one named by the stockholder, another by the corporation, and the third by the two chosen appraisers. The majority decision of the appraisers is final.
196
Define the effect of a stockholder's demand for payment of fair value on their rights in the corporation.
From the demand until the abandonment of the corporate action or purchase of shares by the corporation, all rights including voting and dividend rights are restored.
197
Describe when the right to payment of fair value ceases for a stockholder under this Title.
The right ceases if the demand is withdrawn with corporation consent, if the proposed action is abandoned or disapproved, or if the stockholder is not entitled to the appraisal right.
198
How are the costs of appraisal handled in the process of determining the fair value of shares?
The corporation bears the costs unless the fair value is close to an offered price, in which case the stockholder bears the costs. In a legal action to recover the fair value, all costs are assessed accordingly.
199
Explain the process for transferring shares back to the corporation after payment of the agreed or awarded price.
Upon payment, the stockholder must transfer the shares to the corporation immediately.
200
Describe the definition of a nonstock corporation according to the provided content.
A nonstock corporation is one where no part of its income is distributable as dividend to its members, trustees, or officers, and any profit obtained must be used for the furtherance of the corporation's purpose.
201
Define the purposes for which nonstock corporations may be formed or organized based on the content.
Nonstock corporations may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes.
202
How can the right to vote of members in a nonstock corporation be limited, broadened, or denied according to the content?
The right to vote of members can be limited, broadened, or denied as specified in the articles of incorporation or the bylaws.
203
Describe the nontransferability of membership in a nonstock corporation as per the content.
Membership in a nonstock corporation and all rights arising from it are personal and nontransferable unless the articles of incorporation or bylaws state otherwise.
204
Do the articles of incorporation or bylaws determine the termination of membership in a nonstock corporation?
Yes, the articles of incorporation or bylaws specify the manner and cause for the termination of membership in a nonstock corporation.
205
Explain the election and term of trustees in a nonstock corporation based on the provided content.
The number of trustees is fixed in the articles of incorporation or bylaws, with a term of not more than three years. Trustees elected to fill vacancies hold office for the unexpired period until successors are elected.
206
Describe the process of electing officers in a non-stock corporation.
Members may directly elect officers unless otherwise provided in the articles of incorporation or bylaws.
207
Define the rules of distribution of assets in a non-stock corporation during dissolution.
Assets are distributed by first paying off liabilities, then fulfilling conditions on assets, transferring assets for charitable purposes, following articles of incorporation or bylaws, and distributing to specified entities.
208
How can a plan of distribution of assets be adopted in a non-stock corporation during dissolution?
The board of trustees must adopt a resolution recommending a plan of distribution and submit it to a vote at a meeting of members with voting rights.
209
Describe the requirements for holding meetings in a non-stock corporation.
Meetings can be held at any place, even outside the corporation's principal office, as long as proper notice is sent to all members and the meeting place is within Philippine territory.
210
What is the timeframe for keeping a list of members and proxies before an election in a non-stock corporation?
The corporation must keep a list of members and their proxies of record twenty days prior to any scheduled election.
211
Define the purpose of distributing assets to charitable, religious, benevolent, or educational organizations during dissolution of a non-stock corporation.
Assets held for charitable purposes are transferred to similar organizations engaged in activities in the Philippines, as specified in a plan of distribution.
212
Describe the voting requirements for adopting a plan of distribution in a close corporation.
The plan of distribution in a close corporation must be adopted upon approval of at least two-thirds (2/3) of the members having voting rights present or represented by proxy at the meeting.
213
Define a close corporation according to the provided content.
A close corporation is one whose articles of incorporation specify that the issued stock is held by a limited number of individuals (not exceeding twenty), with restrictions on transfer and limitations on public offerings.
214
How can a corporation be incorporated as a close corporation?
Any corporation, except mining or oil companies, stock exchanges, banks, insurance companies, public utilities, educational institutions, and those declared to be vested with public interest, can be incorporated as a close corporation.
215
Do close corporations have specific provisions regarding the management of the business?
Yes, the articles of incorporation of a close corporation may provide that the business shall be managed by the stockholders instead of a board of directors.
216
Describe the purpose of the greater quorum or voting requirements in the meetings of stockholders or directors in a close corporation.
The greater quorum or voting requirements in close corporations aim to provide more stringent rules for decision-making processes compared to those outlined in the general corporate laws.
217
What types of corporations are excluded from being classified as close corporations?
Mining or oil companies, stock exchanges, banks, insurance companies, public utilities, educational institutions, and those declared to be vested with public interest are excluded from being classified as close corporations.
218
Describe the validity requirements for restrictions on right to transfer shares in a corporation.
Restrictions on right to transfer shares must be in the articles of incorporation, bylaws, and certificate of stock to be binding on purchasers in good faith.
219
Define the effects of issuance or transfer of stock in breach of qualifying conditions in a close corporation.
The effects include conclusive presumption of notice of ineligibility to be a stockholder or violation of restrictions, and the corporation's option to refuse registration of the transfer.
220
How are officers or employees typically elected or appointed in a corporation according to the articles of incorporation?
The articles of incorporation may specify that officers or employees are elected or appointed by stockholders instead of the board of directors.
221
Describe the consequences of issuing or transferring stock to an ineligible person in a close corporation.
The person is conclusively presumed to have notice of their ineligibility to be a stockholder.
222
Do all stockholders need to consent to a transfer of stock that violates certain restrictions in a close corporation?
No, if all stockholders consent to the transfer, the corporation may still register it.
223
Define the term 'transfer' as used in the context of stock transactions in a close corporation.
In this context, 'transfer' refers to the act of conveying ownership of stock from one party to another.
224
Describe the provision regarding voting rights in a written agreement among stockholders in a close corporation.
The provision allows stockholders to agree on how their shares will be voted or establish a procedure for voting.
225
Define fiduciary duties among stockholders actively engaged in the management of a close corporation.
Stockholders are held to strict fiduciary duties towards each other and the corporation.
226
How can an action taken by the directors of a close corporation without a board meeting be deemed valid?
It can be deemed valid if all directors sign a written consent, all stockholders have knowledge and do not object, or if directors are accustomed to informal actions with stockholders' acquiescence.
227
Describe the ratification process for an action within corporate powers taken at a meeting without proper call or notice.
An action is deemed ratified by a director who failed to attend unless they promptly file a written objection after knowing about it.
228
What is the preemptive right of stockholders in close corporations regarding stock issuance?
Stockholders have the preemptive right to new stock issuance unless the articles of incorporation state otherwise.
229
Define the process for amending the articles of incorporation in a close corporation.
Any amendment must comply with the provisions required by law and cannot reduce a quorum or voting requirement unless permitted.
230
Describe the process for resolving deadlocks in a close corporation according to the provided content.
The Commission can arbitrate disputes if directors or stockholders are divided, with the power to make various orders like altering provisions, appointing a provisional director, or even dissolving the corporation.
231
What powers does the Commission have in resolving deadlocks in a close corporation as per the content?
The Commission can cancel or alter provisions in the articles of incorporation, bylaws, or stockholders' agreement, appoint a provisional director, dissolve the corporation, or grant other necessary relief.
232
Define a provisional director in the context of a close corporation based on the content.
A provisional director is an impartial individual without ties to the corporation or its affiliates, appointed by the Commission to help resolve deadlocks, with rights and powers similar to a duly elected director.
233
How can a stockholder compel a close corporation to purchase their shares at fair value according to the content?
A stockholder can compel the corporation to buy their shares at fair value by having sufficient assets to cover debts and liabilities, exclusive of capital stock.
234
Describe the conditions under which a stockholder can petition for the dissolution of a close corporation based on the content.
A stockholder can petition for the dissolution of a close corporation by written request to the Commission, especially when faced with acts of dire circumstances.
235
What is the role of a provisional director in a close corporation deadlock situation according to the content?
A provisional director is appointed by the Commission to help resolve deadlocks, with powers similar to a duly elected director, until removed by the Commission or all stockholders.
236
Describe the composition of the Board of Trustees for educational institutions organized as non-stock corporations.
The Board of Trustees for such institutions must consist of at least five (5) but no more than fifteen (15) members, with the number of trustees being in multiples of five (5).
237
Define the term of office for trustees in incorporated schools, colleges, or other institutions of learning.
One-fifth (1/5) of the trustees' terms should expire every year, with trustees elected to fill vacancies holding office for the unexpired period or five (5) years if filling vacancies due to term expiration.
238
How is a quorum determined for the Board of Trustees of educational institutions organized as non-stock corporations?
A majority of the trustees must be present to constitute a quorum for the transaction of business.
239
Do the powers and authority of trustees in educational institutions organized as non-stock corporations vary?
Yes, the powers and authority of trustees are defined in the bylaws of the institution.
240
Describe the governance of religious corporations according to the provided content.
Religious corporations may be incorporated by one or more persons and can be classified into corporations sole and religious societies, governed by specific chapters and general provisions.
241
Define a Corporation Sole as outlined in the content.
A Corporation Sole is formed by the chief archbishop, bishop, priest, minister, rabbi, or presiding elder to manage the affairs, property, and temporalities of a religious denomination or church.
242
How can one become a Corporation Sole according to the content?
By filing articles of incorporation with the Commission, stating representation of the religious denomination, consistency with its rules, and being charged with the administration of its temporalities and affairs.
243
Describe the requirements for articles of incorporation to establish a Corporation Sole.
The articles must include the representation of the religious denomination, consistency with its rules, the responsibilities of the applicant, and the manner of filling vacancies in the office.
244
What is the requirement for the location of the principal office of a corporation sole in the Philippines?
The place must be within the territory of the Philippines.
245
Describe the process of submitting the Articles of Incorporation for a corporation sole.
The articles must be verified by affidavit or affirmation of the religious leader and accompanied by relevant documents, then filed with the Commission.
246
Define a corporation sole.
A legal entity consisting of a single officeholder who holds property and conducts business on behalf of a religious organization.
247
How can a corporation sole acquire and alienate property?
It can purchase, hold, sell, or mortgage real estate and personal property for church, charitable, benevolent, or educational purposes.
248
Do members of the religious denomination have a say in the sale or mortgage of property by a corporation sole?
Yes, they can oppose the application for leave to sell or mortgage property.
249
Describe the role of the chief archbishop, bishop, priest, minister, rabbi, or presiding elder in the process of selling or mortgaging property as a corporation sole.
They need to make a verified petition for leave to sell or mortgage property, which can be opposed by members of the religious denomination.
250
Describe the process of dissolution for a corporation sole as outlined in the content.
The dissolution process for a corporation sole involves submitting a verified declaration of dissolution to the Commission, including the corporation's name, reason for dissolution, authorization by the religious denomination, and names of persons supervising the winding up of affairs.
251
What happens to a corporation sole upon approval of its declaration of dissolution by the Commission?
Upon approval, the corporation sole ceases to carry on its operations except for the purpose of winding up its affairs.
252
Define the role of religious societies in the context of incorporation as per the content.
Religious societies can incorporate for the administration of their temporalities or management of affairs, properties, and estate by filing articles of incorporation with the Commission, subject to certain conditions.
253
How can a religious society incorporate for the administration of its affairs, properties, and estate according to the content?
A religious society can incorporate by obtaining written consent or an affirmative vote from at least two-thirds of its membership and filing verified articles of incorporation with the Commission.
254
Describe the requirements for incorporating a religious society as detailed in the content.
The requirements include verifying the religious nature of the organization, obtaining consent from the majority of members, ensuring no prohibition by competent authority or religious rules, expressing the desire to incorporate, specifying the principal office location, and listing the trustees.
255
What conditions must be met for a religious society to incorporate for the administration of its affairs, properties, and estate based on the content?
The society must have the approval of at least two-thirds of its members, ensure no prohibition by competent authority or religious rules, and desire to incorporate for the mentioned purposes.
256
Describe what a One Person Corporation is to Section 116.
A Person Corporation is a with a single stockholder, limited to natural persons, trusts, or estates.
257
Describe the role of the treasurer in a One Person Corporation according to the provided content.
The treasurer, who is also a single stockholder, must give a bond to the Commission and undertake to administer the corporation's funds, disburse and invest them as per the articles of incorporation, and renew the bond every two years.
258
What are the special functions of the corporate secretary in a One Person Corporation as outlined in the content?
Maintaining the minutes book, notifying nominees of the stockholder's death or incapacity, informing the Commission of the stockholder's death, and calling a meeting to advise legal heirs on matters like electing a new director.
259
Define the roles of a nominee and an alternate nominee in a One Person Corporation based on the provided content.
The nominee and alternate nominee are designated individuals who step in as directors and manage the corporation's affairs in case of the stockholder's death or incapacity, with specific authorities and limitations outlined in the articles of incorporation.
260
How can a single stockholder change their nominee or alternate nominee in a One Person Corporation according to the content?
By submitting the names of the new nominees and their written consent to the Commission at any time.
261
Describe the responsibilities of the corporate secretary in a One Person Corporation as per the content.
Maintaining records, notifying relevant parties of the stockholder's status, and facilitating the transition of management in case of the stockholder's death or incapacity.
262
What is the process for the alternate nominee to take over in a One Person Corporation if the nominee is unable to fulfill their duties?
The alternate nominee steps in to manage the corporation in case of the nominee's inability, incapacity, death, or refusal to act, under the same terms and conditions applicable to the nominee.
263
Describe the process for a One Person Corporation to take action on a matter without a meeting.
Prepare a written resolution signed and dated by the single stockholder, recorded in the minutes book of the One Person Corporation.
264
What are the reportorial requirements for a One Person Corporation as per Section 129?
Submission of annual audited financial statements, report on auditor's remarks, disclosure of self-dealings, and other reports as required by the Commission.
265
How can a sole shareholder claiming limited liability prove that the corporation was adequately financed?
By affirmatively showing that the corporation was adequately financed.
266
Define the liability of a single shareholder in a One Person Corporation.
The single shareholder is jointly and severally liable for debts if unable to prove separation of personal and corporate assets.
267
Describe the process of converting from an ordinary stock corporation to a One Person Corporation.
By acquiring all stocks of an ordinary stock corporation and applying for conversion, subject to Commission requirements.
268
Explain the legal responsibility of a One Person Corporation converted from an ordinary stock corporation.
It succeeds the previous corporation and is liable for its outstanding liabilities as of the conversion date.
269
Describe the process for voluntary dissolution of corporation when creditors are affected.
verified petition signed by majority of the board directors/trustees, setting forth claims, demands, and reasons for dissolution, must be filed with Commission.
270
What is for the dissolution of financial institutions like banks and insurance companies?
A favorable recommendation from the appropriate government agency must accompany the application for dissolution.
271
Define the role of the Commission in the dissolution process of corporations.
The Commission issues a certificate of dissolution, reviews petitions, and may appoint a receiver to handle assets and debts.
272
How are objections to a dissolution petition handled by the Commission?
The Commission fixes a deadline for objections, publishes the order, hears objections, and renders judgment if objections are insufficient.
273
Describe the voting requirements for the dissolution of a corporation.
Dissolution must be resolved upon by at least two-thirds of the outstanding capital stock or members at a meeting called for that purpose.
274
What documents must a corporation submit to the Commission for voluntary dissolution?
A certified copy of the resolution authorizing dissolution and a list of all creditors must be submitted.
