F.

Corporate books and records

I. Records to be kept at principal office

Including but not limited to:

(a) The articles of incorporation and bylaws of the corporation and all their
amendments;

(b) The current ownership structure and voting rights of the corporation, including
lists of stockholders or members group structures, intra-group relations,
ownership data, and beneficial ownership.

(c) The names and addresses of all the members of the board of directors or
trustees and the executive officers;

(d) A record of all business transactions;

(e) A record of the resolutions of the board of directors or trustees and of the
stockholders or members;

(f) Copies of the latest reportorial requirements submitted to the Commission;

and

(g) The minutes of all meetings . Such minutes shall set forth in detail among
others; the time and the place of the meeting held, how it was authorized, the
notice given, the agenda therefor, whether the meeting was regular or special, its
object if special, those present and absent, and every act done or ordered done
at the meeting. Upon the demand of a director trustee, stockholder or member,
the time when any director, trustee, stockholder or member entered or left the
meeting must be noted in the minutes; and on a similar demand, the yeas and
nays must be taken on any motion or proposition, and a record thereof carefully
made. The protest of a director, trustee, stock holder or member on any action or
proposed action must be recorded in full upon their demand.

II. Right to inspect corporate records

Corporate records regardless of the form, shall be open to inspections by any

dir./trustees/Stockh/members or by any representative at any reasonable hours
on business day, or demand in writing may be made also by the persons
mentioned and expense for copy shall be borne by them

III. Effect of refusal to inspect records.

 Any officer or agent of the corporation who shall refuse to allow the inspection
and/or reproduction of records shall be liable to such director, trustee,
stockholder or member for damages, and in addition, shall be guilty of an offense
which shall be punishable under Section 161 of this Code

If such refusal is pursuant from an order of dir/trustees, liability shall accrue on

them.

11. Dissolution and liquidation

Modes of dissolution

 Voluntary

 Involuntary

Voluntary

Where no creditors are affected

If no creditors having a right of claim are affected from the dissolution

of the corpo, the dissolution may be effected by majority vote of the
BOD/BOT and by a resolution adopted by the affirmative vote of the
stockholders owning at least majority of the outstanding capital stock
or majority of the members fo a meeting to be held upon the call of the
directors or trustees.

Where creditors are affected

Where the dissolution of a corporation may prejudice the rights of any

creditor; a verified petition for dissolution shall be filed with the
Commission. The petition shall be signed by a majority of the
corporation's board of directors or trustees, verified by its president or
secretary or one of its director or trustees, and shall set forth all claims
and demands against it, and that its dissolution was resolved upon by
the affirmative vote of the stockholders representing at least two-thirds
(2/3) of the outstanding capital stock or at least two-thirds (2/3) of the
member at a meeting of its stockholder or members called for that
purpose.

By shortening corporate term

Voluntary dissolution may be effected to shorten corpo term by

submitting to the Commission the amended AOI. (Amend the aoi first)
 In case of expiration, the corpo is deemed dissolve on the day
following the last day stated in the amended AOI. No need of certificate
of dissolution from the commission

Withdrawal of dissolution

A withdrawal of the request for dissolution shall be made in writing,

duly verified by any incorporator, director, trustees, shareholder, or
member and signed by them.

withdrawal shall be submitted no later than fifteen (15) days

from receipt by the Commission of the request for dissolution, the
Commission shall withhold action on the request for dissolution and
shall, after investigation:

make a pronouncement that the request for dissolution is deemed

withdrawn;

direct joint meeting of the board of directors or trustees and the

stockholders or members for the purpose of ascertaining whether to
proceed with dissolution; or

issue such other orders as it may deem appropriate.

Withdrawal shall be verified and filed prior to publication.

Involuntary dissolution

ID may be done moto propio by the commission or by filing a verified

complain by any interested party.

The following may be grounds for dissolution of the corporation:

 None-use of corporate charter as provided under Section 21 of his

Code;

 Continuous inoperation of a corporation as provided under Section 21

of this Code;

 Upon receipt of a lawful court order dissolving the corporation;

 Upon finding by the final judgment that the corporation procured its
incorporation through fraud;

 Upon finding by final judgment that the corporation:

  Was created for the purpose of committing, concealing or aiding the
commission of securities violation, smuggling, tax evasion, money
laundering, or graft and corrupt practices;

 Committed or aided in the commission of securities violations,

smuggling, tax evasion, money laundering, or graft and corrupt
practices, and its stockholders knew of the same; and

 Repeatedly and knowingly tolerated the commission of graft and

corrupt practices or other fraudulent or illegal acts by its directors,
trustees, officers, or employees

o Under par. (e), upon petition of the commission to the

appropriate court, its assets after paying its liabilities shall be
forfeited in favor of the govt. Without prejudice to the right of
Stockh or employees for the services rendered.

Methods of liquidation

By the corporate itself

A corpo whose charter expires pursuant to its AOI or its existence is

annulled in any other manner, shall still remain a corporate bodies for 3
years after its dissolution for the purpose of settling its own affairs or
dispose of and convey its property, and distribute its assets, but not for
the purpose of continuing the business for which it was established.

Conveyance to a trustee within the 3 years period.

At any time during said three (3) years, the corporation is authorized
and empowered to convey all of its property to trustees for the it of
stockholders, members, creditors, and other persons in interest. After
any such conveyance by the corporation of its property in trust for the
benefit of its stockholders, members, creditors and others in interest,
all interest which the corporation had in the property terminates, the
legal interest vests in the trustees, and the beneficial interest in the
stockholders, members, creditors or other persons-in-interest.

By management committee or rehabilitation receiver.

If the bylaws so provide, the board may create an executive committee

composed of at least three (3) directors. Said committee may act, by
 majority of vote of all its members, on such specific matters within the
competence of the board, such as the liquidation of its assets.

By rehabilitation receiver . Refer to RA 7653; RA 3591; Financial

Rehabilitation and Insolvency Act (FRIA)

Liquidation after 3 years

If liquidation has not completed within 3 yrs., it may still continue until
the disposition of the remaining undistributed assets.

After final disposition of assets even beyond 3yrs, the Company shall
not engage in any business activities except to the extent necessary to
preserve the value of its assets, wind up its business affairs, and
distribute its assets in accordance with this Plan.

12. Other corporation

A. Close corporation

I. Characteristic of a close corporation

The AoI of a close corporation includes:

all the corporation's issued stock of all classes, exclusive of treasury shares,
shall be held of record by not more than a specified number of persons, not
exceeding twenty (20);

all the issued stock of all classes shall be subject to one (1) or more specified
restrictions on transfer permitted by this Title; and

the corporation shall not list in any stock exchange or make any public
offering of its stocks of any class.

Notwithstanding the foregoing, a corporation shall not be deemed a close

corporation when at least two-thirds (2/3) of its voting stock or voting rights is
owned or controlled by another corporation which is not a close corporation
within the meaning of this Code.

II. Validity of restriction on transfer of share

 The reatriction on transfer of share in order to be valid must appear in AoI,
bylaws and cert of stock. Otherwise the same shall not be binding on any
purchase in good faith.

Said restrictions shall not more onerous than granting the existing
stockholders or the corporation the option to purchase the shares of the
transferring stockholder may sell their shares to any third person.

III. Issuance or transfer of stock in breach of qualifying conditions

If a stock of a close corporation is issued or transferred to any person who is

not eligible to be a holder, such person is conclusively presumed to have
notice of the fact of the ineligibility to be a stockholder.

If the articles of incorporation of a close corporation states the number of

persons, not exceeding twenty (20), who are entitled to be stockholders of
record, and if the certificate for such stock conspicuously states such number,
and the issuance or transfer of stock to any person would cause the stock to
be held by more than such number of persons, the person to whom such
stock is issued of transferred is conclusively presumed to have notice of this
fact.

If a stock certificate of a close corporation conspicuously shows a restriction

on transfer of the corporation has been issued or transferred has or is
conclusively presumed to have notice of the fact that the stock in violation of
such restriction, the transferee is conclusively presumed to have notice of the
fact that the stock was acquired in violation of the restriction.

Whenever a person to whom stock of a close corporation has been issued or

transferred has or is conclusively presumed under this section to have notice
of: (1) the person's ineligibility to be a stockholder of the corporation; or (2)
that the transfer of stock would cause the stock of the corporation to be held
by more than the number of persons permitted under its articles of
incorporation ; or (3) that the transfer violates a restriction on transfer of stock,
the corporation may, at its option, refuse to register the tansfer in the name of
the transferee.

The provisions of subsection (d) shall not be applicable if the transfer of stock,
though contrary to subsections (a), (b) or (c), has been consented to by all
stockholders of the close corporation, or if the close corporation has amended
its articles of incorporation in accordance with this Title.

The term "transfer", as used in this section, is not limited to a transfeer for
value.
 The provisions of this section shall not impair any right which the transferee
may have to either rescind the transfer or recover the stock under any
express or implied warranty.

IV. When board meeting is unnecessary or improperly held.

Any action taken by the directors, even without proper meeting called for, so
long as there is due notice, it is deemed valid if:

o Before or after such action is taken, a written consent thereto is signed by

all the directors; or

o All the stockholders have actual or implied knowledge of the action and
make no prompt objection in writing; or

o The directors are accustomed to take informal action with the express or
implied acquiescence of all the stockholders; or

o All the directors have express or implied knowledge of the action in

question and none of them makes prompt objection in writing.

V. Preemptive right

The preemptive right of stockholders in close corporations shall extend to all

stock to be issues, including reissuance of services, or in payment or
corporate debts, unless the article s of incorporation provide otherwise.

VI. Amendment of articles of incorporation

Any amendment which seeks to delete or remove any provision or to

reduce a quorum or voting requirement stated in said articles of incorporation
shall require affirmative vote of at least two-thirds (2/3) of the outstanding
capital, whether with or without voting rights.

VII. Deadlock

if the directors or stockholders are so divided on the management of the

corporation's business and affairs that the votes required for a corporate
action cannot be obtained, the commission may intervene to arbitrate by
petition of any of the stockholder.

Power of the commission regarding deadlock;

: (a) cancelling or altering any provision contained in the articles of

incorporation, bylaws, ot any stockholders' agreement; (b) cancelling, altering
or enjoining a resolution or act of the corporation or its board of directors,
 stockholders, officers, or other person party to the action; (d) requiring the
purchase at their fair value of shares of any stockholder, either by the
corporation regardless of the availability or unrestricted retained earnings in
its, books or by the other stockholder; (e) appointing a provisional director; (f)
dissolving the corporation; or (g) granting such other relief as the
circumstances may warrant.

B. Non-stock corporation

Definition: A nonstock corporation is one where no part of its income is

distributable as dividends to its members, trustees, or officers

Purpose: Nonstock corporations may be formed or organized for charitable,

religious, educational, professional, cultural, fraternal, literary, scientific,
social, civic service, or similar purposes. like trade industry, agricultural and
like chambers, or any combination thereof

Treatment of its profits: any profits obtained incidental to its operation, shall
be used for its purpose for which the corporation was organized.

Plan and distribution of asset after dissolution: A plan with regard to

distribution of its asset may be adopted in the following manner:

 The board of trustees shall, by majority vote, adopt a resolution

recommending a plan of distribution and directing the submission
thereof to a vote at a regular or special meeting of members having
voting rights;

 Each member entitled to vote shall be given a written notice setting

forth the proposed plan of distribution or summary thereof and the
date, time and place of such meeting within the time and in the
manner provided in this Code for the giving of notice of meetings;
and

 Such plan of distribution shall be adopted upon approval of at least

two-thirds (2/3) of the members having voting rights present or
represented by proxy at such meeting.

C. Educational Corporation.

EC shall be governed by special law and by general provision of this Code..

 Board of trustees shall not be less than 5 members and not more than 15
members.

as soon as organized the EC, so classify themeselves that the term of office of
one-fifth (1/5) of their number shall expire every year.

Trustees elected to fill vacancies of the vacated office, shall hold office only for
the unexpired period.

Trustees elected thereafter to fill vacancies caused by expiration of term shall

hold office for five (5) years.

A majority of the trustees shall constitute a quorum for the transaction of

business. The powers and authority of trustees shall be defined in the bylaws.

D. Religious Corporation

Corporation Sole; Nationality

a corporation sole may be formed by the chief archbishop, bishop, priest,

minister, rabbi, or other presiding elder of such religious denomination, sect or
church to manage its affairs and properties and denominations as religious sect.

The place where the AoI of sole corporation is established shall determine its
nationality.

Religious society.

Religious sect or any church which is a part of a religious society may

incorporate its constitution for the management of its affairs, properties, estate
upon written consent or by affirmative vote of at least 2/3 by filing to the
Commission its AOI and setting forth the following:

 That religious society is part of religious organization

 At least 2/3 of its member voted to incorporate

 That the incorporation of religious society is not forbidden

 The the purpose of its incorporation it to manage its affairs, estate,

properties
  The principal office to be established must be within the Philippines

 The names, nationalities, and residence addresses of the trustees, not

less than five (5) no more than fifteen (15), elected by the religious society

E. One person Corporations

I. Excepted corporation

Banks and quasi-banks, preneed, trust, insurance, public and publicly-

listed companies, and non-chartered government-owned and -controlled
corporations may not incorporate as ONe Person Corporations:

II. Capital stock requirement

A One Person Corporation shall not be required to have a minimum

authorized capital stock except as otherwise provided by special law.

III. Articles of incorporation and by laws

 Its AOI must contain:

If the single stockholder is a trust or an estate, the name,

nationality, and residence of the trustee, administrator, executor,
guardian, conservator, custodian, or other person exercising
fiduciary duties together with the proof of such authority to act on
behalf of the trust or estate; and

Name, nationality, residence of the nominee and alternate

nominee, and the extent, coverage and limitation of the a oruthority.

 Not required to submit by-laws

IV. Corporate name

A One Person Corporation shall indicate the letters "OPC" either below or
at the end of its corporate name.

V. Corporate structure and officers.

A one person Corp shall compose;

Single stockholder which shall be the president and sole director

 One Person Corporation shall appoint a treasurer, corporate secretary,
and other officers as it may deem necessary within 15 days from issuance
of cert of incorporation

The single stockholder may not be appointed as the corporate secretary.

VI. Nominees

The single stockholder shall nominate a nominees and alternate

nominees, incase of death or incapacity of single stockholder, such
nominee will take place

AOI shall indicate all the details of the Nominee including name, address
and contact and the extent and limitation of authority in managing affairs
until the single stockH resume his position.

In case of death of single sH, the nominee shall sit as dir/president to

manage the corporation until the lawful heirs of the single sh have
determined.

In case of death/incapacity of the nominee, the alternate nominee shall sit.

VII.Minutes and records

An OPC shall have minute book which shall contain all actions, decisions,
and resolutions taken

When action is needed on any matter, it shall be sufficient to prepare a

written resolution, signed and dated by the single stockholder; and
recorded in the minutes book of the One Person Corporation.

VIII.Liability

The single SH has the burder of proving that the OPC is financially stable

If the single SH cannot prove that the property of the OPC is independent
to his property, he shall be jointly and severally liable for the debts of the
OPC.

Piercing the veil also applicable to the OPC.

IX. Conversion of corporation to one person and vice versa

The stock corporation may apply to the Commission to become an OPC if
the OPC acquires all the stock of the ordinary corporation. If the
application for conversion is approved, the Commission shall issue a
certificate of filing of amended articles of incorporation reflecting the
coversion. All liabilities of the ordinary corporation shall be carry by the
OPC.

Vice versa: (OPC to stock corpo)

First must give due notice to the commission of such fact and
circumstances leading to conversion and after compliance to the
requirements of an ordinary stock corpo.

Notice must be given within 60 days , and if all the requirements have
complied, the Commission shall issue a certificate of filing or amended
articles of incorporation reflecting the conversion.

Liabilities of the OPC shall be carried by the ordinary stock corpo as of the
date of conversion.