The Corporation Code
3. Remedial rights
a. To inspect corporate books (CC, Sec. 74);
b. To recover stock unlawfully sold for
delinquent payment of subscription (CC,
Sec. 69);
c. To be furnished with most recent financial
statements or reports of the corporation’s authority of the agent (De Leon, supra).
operation (CC, Sec. 74, 75);
d. To bring suits (derivative suit, individual
suit, and representative suit); and
e. To demand payment in the exercise of
appraisal right (CC, Secs. 41, 81).
DOCTRINE OF EQUALITY OF SHARES
Where the articles of incorporation do not provide
for any distinction of the shares of stock, all shares
issued by the corporation are presumed to be equal
and enjoy the same rights and privileges and are
also subject to the same liabilities (CC, Sec. 6).
PARTICIPATION IN MANAGEMENT
Under the CC, stockholders or members periodically
elect the board of directors or trustees, who are
charged with the management of the corporation.
The board, in turn, periodically elects officers to
carry out management functions on a day-to-day
basis. As owners, though, the stockholders or
members have residual powers over fundamental
and major corporate changes.
While stockholders and members (in some
instances) are entitled to receive profits, the
management and direction of the corporation are
lodged with their representatives and agents -- the
board of directors or trustees. In other words, acts
of management pertain to the board; and those of
ownership, to the stockholders or members. In the
latter case, the board cannot act alone, but must
seek approval of the stockholders or members (Tan
v. Sycip, G.R. No. 153468, August 17, 2006).
PROXY
Stockholders and members may vote in person or
by proxy in all meetings of stockholders or members
(Sec. 58, CC).
However the right of members to vote by proxy may
be denied under the articles of incorporation or by-
laws of a non-stock corporation (Sec. 89. CC.)
The term “proxy” designates the formal written time. By-laws may provide for a shorter
authority given by the owner or holder of the stock,
who has a right to vote it, or by a member, as
principal, to another person, as agent, to exercise
the voting rights of the former.
UNIVERSITY OF SANTO TOMAS
2019 GOLDEN NOTES
It is also used to apply to the holder of the authority
or person authorized by an absent stockholder or
member to vote for him at a stockholders’ or
members’ meeting.
It also refers to the instrument which evidences the
NOTE: A proxy is a special form of agency. A proxy
holder is an agent and as such a fiduciary (De Leon,
supra).
Since a proxy acts for another, he may act as such
although he himself is disqualified to vote his
shares. A proxy-stockholder disqualified to vote
because his stock has been declared delinquent may
vote the stocks of his principal which is not
delinquent.
Purposes of proxies
The purposes and use of proxies are as follows:
1. Assures the presence of a quorum in meetings
of stockholders of large corporations;
2. Enables those who do not wish to attend a
stockholders’/ members’ meeting to protect
their interest by exercising their right to vote
through a representative; and
3. One of the devices in securing voting control or
management control in the corporation (Ibid.).
Who may be a proxy
Any person whom the stockholder or member sees
fit to represent him.
NOTE: By-laws restricting the stockholder’s or
member’s right in this respect are void (De Leon,
supra).
Further, same person may act as proxy for one or
several stockholders or members.
Duration of proxy
1. Specific proxy – authority granted to the proxy
holder to vote only for a particular meeting on
a specific date.
2. Continuing proxy – authority granted a proxy to
appear and vote for and in behalf of a
shareholder for a continuing period which
should not be more than 5 years at any one
duration of a continuing proxy.
Extent of authority of a proxy
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