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2019 Legislation Revised Corporation Code Comparative Matrix As of March 22 2019
2019 Legislation Revised Corporation Code Comparative Matrix As of March 22 2019
2019 Legislation Revised Corporation Code Comparative Matrix As of March 22 2019
Section 1. Title of the Code. – This Code shall SEC. 1. Title of the Code. – This Code shall be
be known as "The Corporation Code of the known as the “Revised Corporation Code of the
Philippines." (n) Philippines”.
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Section 7. Founders’ shares. – Founders’ SEC. 7. Founders’ Shares. – Founders’ shares may
shares classified as such in the articles of be given certain rights and privileges not enjoyed by
incorporation may be given certain rights and the owners of other stocks. Where the exclusive
privileges not enjoyed by the owners of other right to vote and be voted for in the election of
stocks, provided that where the exclusive directors is granted, it must be for a limited period
right to vote and be voted for in the election not to exceed five (5) years from the date of
of directors is granted, it must be for a limited incorporation: Provided, That such exclusive
period not to exceed five (5) years subject to right shall not be allowed if its exercise will
the approval of the Securities and Exchange violate Commonwealth Act No. 108, otherwise
Commission. The five-year period shall known as the “Anti-Dummy Law”; Republic Act
commence from the date of the aforesaid No. 7042, otherwise known as the “Foreign
approval by the Securities and Exchange Investments Act of 1991”; and other pertinent
Commission. (n) laws.
Section 9. Treasury shares. – Treasury SEC. 9. Treasury Shares. – Treasury shares are
shares are shares of stock which have been shares of stock which have been issued and fully
issued and fully paid for, but subsequently paid for, but subsequently reacquired by the issuing
reacquired by the issuing corporation by corporation through purchase, redemption,
purchase, redemption, donation or through donation, or some other lawful means. Such shares
some other lawful means. Such shares may may again be disposed of for a reasonable price
again be disposed of for a reasonable price fixed by the board of directors.
fixed by the board of directors. (n)
TITLE II TITLE II
Section 10. Number and qualifications of SEC. 10. Number and Qualifications of
incorporators. – Any number of natural Incorporators. – Any person, partnership,
persons not less than five (5) but not more association or corporation, singly or jointly with
than fifteen (15), all of legal age and a others but not more than fifteen (15) in number,
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majority of whom are residents of the may organize a corporation for any lawful purpose
Philippines, may form a private corporation or purposes: Provided, That natural persons who
for any lawful purpose or purposes. Each of are licensed to practice a profession, and
the incorporators of s stock corporation must partnerships or associations organized for the
own or be a subscriber to at least one (1) purpose of practicing a profession, shall not be
share of the capital stock of the corporation. allowed to organize as a corporation unless
(6a) otherwise provided under special laws.
Incorporators who are natural persons must be
of legal age.
Section 11. Corporate term. – A corporation SEC. 11. Corporate Term. – A corporation shall
shall exist for a period not exceeding fifty (50) have perpetual existence unless its articles of
years from the date of incorporation unless incorporation provides otherwise.
sooner dissolved or unless said period is
extended. The corporate term as originally Corporations with certificates of incorporation
stated in the articles of incorporation may be issued prior to the effectivity of this Code, and
extended for periods not exceeding fifty (50) which continue to exist, shall have perpetual
years in any single instance by an existence, unless the corporation, upon a vote
amendment of the articles of incorporation, in of its stockholders representing a majority of its
accordance with this Code; Provided, That outstanding capital stock, notifies the
no extension can be made earlier than five Commission that it elects to retain its specific
(5) years prior to the original or subsequent corporate term pursuant to its articles of
expiry date(s) unless there are justifiable incorporation: Provided, That any change in the
reasons for an earlier extension as may be corporate term under this section is without
determined by the Securities and Exchange prejudice to the appraisal right of dissenting
Commission. (6) stockholders in accordance with the provisions
of this Code.
A corporate term for a specific period may be
extended or shortened by amending the articles
of incorporation: Provided, That no extension
may be made earlier than three (3) years prior to
the original or subsequent expiry date(s) unless
there are justifiable reasons for an earlier
extension as may be determined by the
Commission: Provided, further, That such
extension of the corporate term shall take effect
only on the day following the original or
subsequent expiry date(s).
A corporation whose term has expired may,
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Section 12. Minimum capital stock required SEC. 12. Minimum Capital Stock Not Required of
of stock corporations. – Stock corporations Stock Corporations. – Stock corporations shall
incorporated under this Code shall not be not be required to have a minimum capital
required to have any minimum authorized stock, except as otherwise specifically provided
capital stock except as otherwise specifically by special law.
provided for by special law, and subject to the
provisions of the following section.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 14. Contents of the articles of SEC. 13. Contents of the Articles of Incorporation.
incorporation. – All corporations organized – All corporations shall file with the Commission
under this code shall file with the Securities articles of incorporation in any of the official
and Exchange Commission articles of languages, duly signed and acknowledged or
incorporation in any of the official languages authenticated, in such form and manner as may be
duly signed and acknowledged by all of the allowed by the Commission, containing
incorporators, containing substantially the substantially the following matters, except as
following matters, except as otherwise otherwise prescribed by this Code or by special law:
prescribed by this Code or by special law:
(a)The name of the corporation;
1. The name of the corporation;
2. The specific purpose or purposes for which (b)The specific purpose or purposes for which the
the corporation is being incorporated. Where corporation is being formed. Where a corporation
a corporation has more than one stated has more than one stated purpose, the articles of
purpose, the articles of incorporation shall incorporation shall indicate the primary purpose and
state which is the primary purpose and which the secondary purpose or purposes: Provided, That
is/are the secondary purpose or purposes: a non-stock corporation may not include a purpose
Provided, That a non-stock corporation may which would change or contradict its nature as
not include a purpose which would change or such;
contradict its nature as such;
3. The place where the principal office of the (c)The place where the principal office of the
corporation is to be located, which must be corporation is to be located, which must be within
within the Philippines; the Philippines;
4. The term for which the corporation is to
exist; (d)The term for which the corporation is to exist, if
5. The names, nationalities and residences of the corporation has not elected perpetual existence;
the incorporators;
6. The number of directors or trustees, which (e)The names, nationalities, and residence
shall not be less than five (5) nor more than addresses of the incorporators;
fifteen (15);
7. The names, nationalities and residences of (f)The number of directors, which shall not be more
persons who shall act as directors or trustees than fifteen (15) or the number of trustees which
until the first regular directors or trustees are may be more than fifteen (15);
duly elected and qualified in accordance with
this Code; (g)The names, nationalities, and residence
8. If it be a stock corporation, the amount of addresses of persons who shall act as directors or
its authorized capital stock in lawful money of trustees until the first regular directors or trustees
the Philippines, the number of shares into are duly elected and qualified in accordance with
which it is divided, and in case the share are this Code;
par value shares, the par value of each, the
names, nationalities and residences of the (h)If it be a stock corporation, the amount of its
original subscribers, and the amount authorized capital stock, number of shares into
subscribed and paid by each on his which it is divided, the par value of each, names,
subscription, and if some or all of the shares nationalities, and residence addresses of the
are without par value, such fact must be original subscribers, amount subscribed and paid
stated; by each on the subscription, and a statement that
9. If it be a non-stock corporation, the amount
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of its capital, the names, nationalities and some or all of the shares are without par value, if
residences of the contributors and the applicable;
amount contributed by each; and
10. Such other matters as are not (i)If it be a nonstock corporation, the amount of its
inconsistent with law and which the capital, the names, nationalities, and residence
incorporators may deem necessary and addresses of the contributors, and amount
convenient. contributed by each; and
The Securities and Exchange (j)Such other matters consistent with law and which
Commission shall not accept the articles the incorporators may deem necessary and
of incorporation of any stock corporation convenient.
unless accompanied by a sworn
statement of the Treasurer elected by the An arbitration agreement may be provided in
subscribers showing that at least twenty- the articles of incorporation pursuant to Section
five (25%) percent of the authorized 181 of this Code.
capital stock of the corporation has been
subscribed, and at least twenty-five (25%)
of the total subscription has been fully The articles of incorporation and applications
paid to him in actual cash and/or in for amendments thereto may be filed with the
property the fair valuation of which is Commission in the form of an electronic
equal to at least twenty-five (25%) percent document, in accordance with the
of the said subscription, such paid-up Commission’s rules and regulations on
capital being not less than five thousand electronic filing.
(P5,000.00) pesos.
Section 15. Forms of Articles of SEC. 14. Form of Articles of Incorporation. – Unless
Incorporation. – Unless otherwise prescribed otherwise prescribed by special law, the articles of
by special law, articles of incorporation of all incorporation of all domestic corporations shall
domestic corporations shall comply comply substantially with the following form:
substantially with the following form:
ARTICLES OF INCORPORATION Articles of Incorporation
OF of
__________________________ __________________________
(Name of Corporation) (Name of Corporation)
KNOW ALL MEN BY THESE PRESENTS:
The undersigned incorporators, all of legal The undersigned incorporators, all of legal
age and a majority of whom are residents of age, have voluntarily agreed to form a (stock) (non-
the Philippines, have this day voluntarily stock) corporation under the laws of the Republic of
agreed to form a (stock) (non-stock) the Philippines and certify the following:
corporation under the laws of the Republic
of the Philippines; First: That the name of said corporation shall
AND WE HEREBY CERTIFY: be “_______________, Inc., Corporation or
FIRST: That the name of said corporation OPC”;
shall be "_____________________, INC. or
CORPORATION";
SECOND: That the purpose or purposes for Second: That the purpose or purposes for
which such corporation is incorporated are: which such corporation is incorporated are:
(If there is more than one purpose, indicate
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primary and secondary purposes); (If there is more than one purpose, indicate
primary and secondary purposes);
SIXTH: That the number of directors or Sixth: That the number of directors or
trustees of the corporation shall be _______; trustees of the corporation shall be
and the names, nationalities and residences _________________; and the names,
of the first directors or trustees of the nationalities, and residence addresses of the
corporation are as follows: first directors or trustees of the corporation
are as follows:
Name Nationality Residence
_________ _________ _________ Name Nationality Residence
_________ _________ _________
_________ _________ _________
_________ _________ _________
_________ _________ _________
_________ _________ _________
_________ _________ _________
_________ _________ _________
_________ _________ _________
_________ _________ _________
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SEVENTH: That the authorized capital stock Seventh: That the authorized capital stock
of the corporation is of the corporation is ______________
______________________ PESOS (P________), divided into _____
(P___________) PESOS in lawful money of shares with the par value of ____________
the Philippines, divided into __________ PESOS (P_______________) per share.
shares with the par value of
____________________ (In case all the shares are without par value):
(P_____________) Pesos per share. That the capital stock of the corporation is
(In case all the share are without par value): __________________________ shares
That the capital stock of the corporation is without par value.
______________ shares without par value.
(In case some shares have par value and (In case some shares have par value and
some are without par value): That the capital some are without par value): That the capital
stock of said corporation consists of stock of said corporation consists of
_____________ shares of which __________________________ shares, of
______________ shares are of the par which _______________________ shares
value of _________________ have a par value of _________________
(P____________) PESOS each, and of PESOS (P____________) each, and of
which _________________ shares are which _______________________ shares
without par value. are without par value.
EIGHTH: That at least twenty five (25%) Eighth: That the number of shares of the
per cent of the authorized capital stock authorized capital stock above stated has
above stated has been subscribed as been subscribed as follows:
follows:
Name of Nationality No. of Shares Amount Amount Paid
Name of Nationality No. of Amount Amount Paid Subscribed
Subscriber Subscribed
Shares
Subscriber Subscribed Subscribed
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(Notarial Acknowledgment)
TREASURER’S AFFIDAVIT
REPUBLIC OF THE PHILIPPINES)
CITY/MUNICIPALITY OF ) S.S.
PROVINCE OF )
I, ____________________, being duly
sworn, depose and say:
That I have been elected by the
subscribers of the corporation as
Treasurer thereof, to act as such until my
successor has been duly elected and
qualified in accordance with the by-laws
of the corporation, and that as such
Treasurer, I hereby certify under oath that
at least 25% of the authorized capital
stock of the corporation has been
subscribed and at least 25% of the total
subscription has been paid, and received
by me, in cash or property, in the amount
of not less than P5,000.00, in accordance
with the Corporation Code.
____________________
(Signature of Treasurer)
SUBSCRIBED AND SWORN to before me,
a Notary Public, for and in the
City/Municipality
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of___________________Province of
_____________________, this _______
day of ___________, 19 _____; by
__________________ with Res. Cert. No.
___________ issued at
_______________________ on
____________, 19 ______
NOTARY PUBLIC
My commission expires on _________, 19
_____
Doc. No. _________;
Page No. _________;
Book No. ________;
Series of 19____ (7a)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 17. Grounds when articles of SEC. 16. Grounds When Articles of Incorporation or
incorporation or amendment may be rejected Amendment may be Disapproved. – The
or disapproved. – The Securities and Commission may disapprove the articles of
Exchange Commission may reject the incorporation or any amendment thereto if the same
articles of incorporation or disapprove any is not compliant with the requirements of this
amendment thereto if the same is not in Code: Provided, That the Commission shall give the
compliance with the requirements of this incorporators, directors, trustees, or officers a
Code: Provided, That the Commission shall reasonable time from receipt of the disapproval
give the incorporators a reasonable time within which to modify the objectionable portions of
within which to correct or modify the the articles or amendment. The following are
objectionable portions of the articles or grounds for such disapproval:
amendment. The following are grounds for
such rejection or disapproval: (a)The articles of incorporation or any amendment
thereto is not substantially in accordance with the
1. That the articles of incorporation or any form prescribed herein;
amendment thereto is not substantially in
accordance with the form prescribed herein; (b)The purpose or purposes of the corporation are
patently unconstitutional, illegal, immoral or
2. That the purpose or purposes of the contrary to government rules and regulations;
corporation are patently unconstitutional,
illegal, immoral, or contrary to government (c)The certification concerning the amount of capital
rules and regulations; stock subscribed and/or paid is false; and
3. That the Treasurer’s Affidavit concerning (d)The required percentage of Filipino ownership of
the amount of capital stock subscribed and/or the capital stock under existing laws or the
paid is false; Constitution has not been complied with.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 18. Corporate name. – No corporate SEC. 17. Corporate Name. – No corporate name
name may be allowed by the Securities and shall be allowed by the Commission if it is not
Exchange Commission if the proposed distinguishable from that already reserved or
name is identical or deceptively or registered for the use of another corporation, or
confusingly similar to that of any existing if such name is already protected by law, or
corporation or to any other name already when its use is contrary to existing law, rules
protected by law or is patently deceptive, and regulations.
confusing or contrary to existing laws. When
a change in the corporate name is approved, A name is not distinguishable even if it contains
the Commission shall issue an amended one or more of the following:
certificate of incorporation under the
amended name. (n) (a) The word “corporation”, “company”,
“incorporated”, “limited”, “limited liability”, or
an abbreviation of one of such words; and
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Section 20. De facto corporations. – The due SEC. 19. De facto Corporations. – The due
incorporation of any corporation claiming in incorporation of any corporation claiming in good
good faith to be a corporation under this faith to be a corporation under this Code, and its
Code, and its right to exercise corporate right to exercise corporate powers, shall not be
powers, shall not be inquired into collaterally inquired into collaterally in any private suit to which
in any private suit to which such corporation such corporation may be a party. Such inquiry may
may be a party. Such inquiry may be made be made by the Solicitor General in a quo warranto
by the Solicitor General in a quo warranto proceeding.
proceeding. (n)
Section 21. Corporation by estoppel. – All SEC. 20. Corporation by Estoppel. – All persons
persons who assume to act as a corporation who assume to act as a corporation knowing it to be
knowing it to be without authority to do so without authority to do so shall be liable as general
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shall be liable as general partners for all partners for all debts, liabilities and damages
debts, liabilities and damages incurred or incurred or arising as a result thereof: Provided,
arising as a result thereof: Provided, however, That when any such ostensible
however, That when any such ostensible corporation is sued on any transaction entered by it
corporation is sued on any transaction as a corporation or on any tort committed by it as
entered by it as a corporation or on any tort such, it shall not be allowed to use its lack of
committed by it as such, it shall not be corporate personality as a defense. Anyone who
allowed to use as a defense its lack of assumes an obligation to an ostensible corporation
corporate personality. as such cannot resist performance thereof on the
On who assumes an obligation to an ground that there was in fact no corporation.
ostensible corporation as such, cannot resist
performance thereof on the ground that there
was in fact no corporation. (n)
Section 22. Effects on non-use of corporate SEC. 21. Effects of Non-Use of Corporate Charter
charter and continuous inoperation of a and Continuous Inoperation. – If a corporation does
corporation. – If a corporation does not not formally organize and commence its business
formally organize and commence the within five (5) years from the date of its
transaction of its business or the construction incorporation, its certificate of incorporation
of its works within two (2) years from the date shall be deemed revoked as of the day following
of its incorporation, its corporate powers the end of the five-year period.
cease and the corporation shall be deemed
dissolved. However, if a corporation has However, if a corporation has commenced its
commenced the transaction of its business business but subsequently becomes inoperative for
but subsequently becomes continuously a period of at least five (5) consecutive years, the
inoperative for a period of at least five (5) Commission may, after due notice and hearing,
years, the same shall be a ground for the place the corporation under delinquent status.
suspension or revocation of its corporate
franchise or certificate of incorporation. (19a) A delinquent corporation shall have a period of
This provision shall not apply if the failure two (2) years to resume operations and comply
to organize, commence the transaction of with all requirements that the Commission shall
its businesses or the construction of its prescribe. Upon compliance by the corporation,
works, or to continuously operate is due the Commission shall issue an order lifting the
to causes beyond the control of the delinquent status. Failure to comply with the
corporation as may be determined by the requirements and resume operations within the
Securities and Exchange Commission. period given by the Commission shall cause the
revocation of the corporation’s certificate of
incorporation.
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Section 23. The board of directors or SEC. 22. The Board of Directors or Trustees of a
trustees. – Unless otherwise provided in this Corporation; Qualification and Term. – Unless
Code, the corporate powers of all otherwise provided in this Code, the board of
corporations formed under this Code shall be directors or trustees shall exercise the corporate
exercised, all business conducted and all powers, conduct all business, and control all
property of such corporations controlled and properties of the corporation.
held by the board of directors or trustees to
be elected from among the holders of stocks, Directors shall be elected for a term of one (1) year
or where there is no stock, from among the from among the holders of stocks registered in the
members of the corporation, who shall hold corporation’s books, while trustees shall be elected
office for one (1) year until their successors for a term not exceeding three (3) years from among
are elected and qualified. (28a) the members of the corporation. Each director and
Every director must own at least one (1) trustee shall hold office until the successor is
share of the capital stock of the corporation elected and qualified. A director who ceases to own
of which he is a director, which share shall at least one (1) share of stock or a trustee who
stand in his name on the books of the ceases to be a member of the corporation shall
corporation. Any director who ceases to be cease to be such.
the owner of at least one (1) share of the
capital stock of the corporation of which he is The board of the following corporations vested
a director shall thereby cease to be a director. with public interest shall have independent
Trustees of non-stock corporations must be directors constituting at least twenty percent
members thereof. A majority of the directors (20%) of such board:
or trustees of all corporations organized
under this Code must be residents of the a. Corporations covered by Section 17.2 of
Philippines. Republic Act No. 8799, otherwise known as
“The Securities Regulation Code”, namely
those whose securities are registered with the
Commission, corporations listed with an
exchange or with assets of at least Fifty million
pesos (P50,000,000.00) and having two hundred
(200) or more holders of shares, each holding at
least one hundred (100) shares of a class of its
equity shares;
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 24. Election of directors or trustees. SEC. 23. Election of Directors or Trustees. –
– At all elections of directors or trustees, Except when the exclusive right is reserved for
there must be present, either in person or by holders of founders’ shares under Section 7 of
representative authorized to act by written this Code, each stockholder or member shall
proxy, the owners of a majority of the have the right to nominate any director or
outstanding capital stock, or if there be no trustee who possesses all of the qualifications
capital stock, a majority of the members and none of the disqualifications set forth in this
entitled to vote. The election must be by Code.
ballot if requested by any voting stockholder
or member. In stock corporations, every At all elections of directors or trustees, there must
stockholder entitled to vote shall have the be present, either in person or through a
right to vote in person or by proxy the number representative authorized to act by written proxy,
of shares of stock standing, at the time fixed the owners of majority of the outstanding capital
in the by-laws, in his own name on the stock stock, or if there be no capital stock, a majority of
books of the corporation, or where the by- the members entitled to vote. When so authorized
laws are silent, at the time of the election; and in the bylaws or by a majority of the board of
said stockholder may vote such number of directors, the stockholders or members may also
shares for as many persons as there are vote through remote communication or in absentia:
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directors to be elected or he may cumulate Provided, That the right to vote through such modes
said shares and give one candidate as many may be exercised in corporations vested with public
votes as the number of directors to be elected interest, notwithstanding the absence of a provision
multiplied by the number of his shares shall in the by-laws of such corporations.
equal, or he may distribute them on the same
principle among as many candidates as he A stockholder or member who participates
shall see fit: Provided, That the total number through remote communication or in absentia,
of votes cast by him shall not exceed the shall be deemed present for purposes of
number of shares owned by him as shown in quorum.
the books of the corporation multiplied by the
whole number of directors to be elected: The election must be by ballot if requested by any
Provided, however, That no delinquent stock voting stockholder or member.
shall be voted. Unless otherwise provided in
the articles of incorporation or in the by-laws, In stock corporations, stockholders entitled to
members of corporations which have no vote shall have the right to vote the number of
capital stock may cast as many votes as shares of stock standing in their own names in
there are trustees to be elected but may not the stock books of the corporation at the time
cast more than one vote for one candidate. fixed in the bylaws or where the bylaws are
Candidates receiving the highest number of silent, at the time of the election. The said
votes shall be declared elected. Any meeting stockholder may: (a) vote such number of
of the stockholders or members called for an shares for as many persons as there are
election may adjourn from day to day or from directors to be elected; (b) cumulate said shares
time to time but not sine die or indefinitely if, and give one (1) candidate as many votes as the
for any reason, no election is held, or if there number of directors to be elected multiplied by
are not present or represented by proxy, at the number of the shares owned; or (c)
the meeting, the owners of a majority of the distribute them on the same principle among as
outstanding capital stock, or if there be no many candidates as may be seen fit: Provided,
capital stock, a majority of the members That the total number of votes cast shall not
entitled to vote. (31a) exceed the number of shares owned by the
stockholders as shown in the books of the
corporation multiplied by the whole number of
directors to be elected: Provided, however, That
no delinquent stock shall be voted. Unless
otherwise provided in the articles of
incorporation or in the bylaws, members of non-
stock corporations may cast as many votes as
there are trustees to be elected but may not cast
more than one (1) vote for one (1) candidate.
Nominees for directors or trustees receiving the
highest number of votes shall be declared
elected.
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Section 25. Corporate officers, quorum. – SEC. 24. Corporate Officers. – Immediately after
Immediately after their election, the directors their election, the directors of a corporation must
of a corporation must formally organize by formally organize and elect: (a) a president, who
the election of a president, who shall be a must be a director; (b) a treasurer, who must be a
director, a treasurer who may or may not be resident; (c) a secretary, who must be a citizen and
a director, a secretary who shall be a resident resident of the Philippines; and (d) such other
and citizen of the Philippines, and such other officers as may be provided in the bylaws. If the
officers as may be provided for in the by- corporation is vested with public interest, the board
laws. Any two (2) or more positions may be shall also elect a compliance officer. The same
held concurrently by the same person, person may hold two (2) or more positions
except that no one shall act as president and concurrently, except that no one shall act as
secretary or as president and treasurer at the president and secretary or as president and
same time. treasurer at the same time, unless otherwise
The directors or trustees and officers to allowed in this Code.
be elected shall perform the duties
enjoined on them by law and the by-laws The officers shall manage the corporation and
of the corporation. Unless the articles of perform such duties as may be provided in the
incorporation or the by-laws provide for a bylaws and/or as resolved by the board of directors.
greater majority, a majority of the number
of directors or trustees as fixed in the
articles of incorporation shall constitute a
quorum for the transaction of corporate
business, and every decision of at least a
majority of the directors or trustees
present at a meeting at which there is a
quorum shall be valid as a corporate act,
except for the election of officers which
shall require the vote of a majority of all
the members of the board.
Directors or trustees cannot attend or
vote by proxy at board meetings. (33a)
Section 26. Report of election of directors, SEC. 25. Report of Election of Directors, Trustees
trustees and officers. – Within thirty (30) days and Officers, Non-holding of Election and Cessation
after the election of the directors, trustees from Office. – Within thirty (30) days after the
and officers of the corporation, the secretary, election of the directors, trustees and officers of the
or any other officer of the corporation, shall corporation, the secretary, or any other officer of the
submit to the Securities and Exchange corporation, shall submit to the Commission, the
Commission, the names, nationalities and names, nationalities, shareholdings, and residence
residences of the directors, trustees, and
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officers elected. Should a director, trustee or addresses of the directors, trustees, and officers
officer die, resign or in any manner cease to elected.
hold office, his heirs in case of his death, the
secretary, or any other officer of the The non-holding of elections and the reasons
corporation, or the director, trustee or officer therefor shall be reported to the Commission
himself, shall immediately report such fact to within thirty (30) days from the date of the
the Securities and Exchange Commission. scheduled election. The report shall specify a
(n) new date for the election, which shall not be
later than sixty (60) days from the scheduled
date.
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Section 28. Removal of directors or trustees. SEC. 27. Removal of Directors or Trustees. – Any
– Any director or trustee of a corporation may director or trustee of a corporation may be removed
be removed from office by a vote of the from office by a vote of the stockholders holding or
stockholders holding or representing at least representing at least two-thirds (2/3) of the
two-thirds (2/3) of the outstanding capital outstanding capital stock, or in a nonstock
stock, or if the corporation be a non-stock corporation, by a vote of at least two-thirds (2/3) of
corporation, by a vote of at least two-thirds the members entitled to vote: Provided, That such
(2/3) of the members entitled to vote: removal shall take place either at a regular meeting
Provided, That such removal shall take place of the corporation or at a special meeting called for
either at a regular meeting of the corporation the purpose, and in either case, after previous
or at a special meeting called for the purpose, notice to stockholders or members of the
and in either case, after previous notice to corporation of the intention to propose such removal
stockholders or members of the corporation at the meeting. A special meeting of the
of the intention to propose such removal at stockholders or members for the purpose of
the meeting. A special meeting of the removing any director or trustee must be called by
stockholders or members of a corporation for the secretary on order of the president, or upon
the purpose of removal of directors or written demand of the stockholders representing or
trustees, or any of them, must be called by holding at least a majority of the outstanding capital
the secretary on order of the president or on stock, or a majority of the members entitled to vote.
the written demand of the stockholders If there is no secretary, or if the secretary, despite
representing or holding at least a majority of demand, fails or refuses to call the special meeting
the outstanding capital stock, or, if it be a or to give notice thereof, the stockholder or member
non-stock corporation, on the written demand of the corporation signing the demand may call for
of a majority of the members entitled to vote. the meeting by directly addressing the stockholders
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Should the secretary fail or refuse to call the or members. Notice of the time and place of such
special meeting upon such demand or fail or meeting, as well as of the intention to propose such
refuse to give the notice, or if there is no removal, must be given by publication or by written
secretary, the call for the meeting may be notice prescribed in this Code. Removal may be
addressed directly to the stockholders or with or without cause: Provided, That removal
members by any stockholder or member of without cause may not be used to deprive minority
the corporation signing the demand. Notice stockholders or members of the right of
of the time and place of such meeting, as well representation to which they may be entitled under
as of the intention to propose such removal, Section 23 of this Code.
must be given by publication or by written
notice prescribed in this Code. Removal may The Commission shall, motu proprio or upon
be with or without cause: Provided, That verified complaint, and after due notice and
removal without cause may not be used to hearing, order the removal of a director or
deprive minority stockholders or members of trustee elected despite the disqualification, or
the right of representation to which they may whose disqualification arose or is discovered
be entitled under Section 24 of this Code. (n) subsequent to an election. The removal of a
disqualified director shall be without prejudice
to other sanctions that the Commission may
impose on the board of directors or trustees
who, with knowledge of the disqualification,
failed to remove such director or trustee.
Section 29. Vacancies in the office of director SEC. 28. Vacancies in the Office of Director or
or trustee. – Any vacancy occurring in the Trustee; Emergency Board. – Any vacancy
board of directors or trustees other than by occurring in the board of directors or trustees other
removal by the stockholders or members or than by removal or by expiration of term may be
by expiration of term, may be filled by the filled by the vote of at least a majority of the
vote of at least a majority of the remaining remaining directors or trustees, if still constituting a
directors or trustees, if still constituting a quorum; otherwise, said vacancies must be filled by
quorum; otherwise, said vacancies must be the stockholders or members in a regular or special
filled by the stockholders in a regular or meeting called for that purpose.
special meeting called for that purpose. A
director or trustee so elected to fill a vacancy When the vacancy is due to term expiration, the
shall be elected only or the unexpired term of election shall be held no later than the day of
his predecessor in office. such expiration at a meeting called for that
Any directorship or trusteeship to be purpose. When the vacancy arises as a result
filled by reason of an increase in the number of removal by the stockholders or members, the
of directors or trustees shall be filled only by election may be held on the same day of the
an election at a regular or at a special meeting authorizing the removal and this fact
meeting of stockholders or members duly must be so stated in the agenda and notice of
called for the purpose, or in the same said meeting. In all other cases, the election
meeting authorizing the increase of directors must be held no later than forty-five (45) days
or trustees if so stated in the notice of the from the time the vacancy arose. A director or
meeting. (n) trustee elected to fill a vacancy shall be referred
to as replacement director or trustee and shall
serve only for the unexpired term of the
predecessor in office.
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Section 31. Liability of directors, trustees or SEC. 30. Liability of Directors, Trustees or Officers.
officers. - Directors or trustees who willfully – Directors or trustees who willfully and knowingly
and knowingly vote for or assent to patently vote for or assent to patently unlawful acts of the
unlawful acts of the corporation or who are corporation or who are guilty of gross negligence or
guilty of gross negligence or bad faith in bad faith in directing the affairs of the corporation or
directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict
acquire any personal or pecuniary interest in with their duty as such directors or trustees shall be
conflict with their duty as such directors or liable jointly and severally for all damages resulting
trustees shall be liable jointly and severally therefrom suffered by the corporation, its
for all damages resulting therefrom suffered stockholders or members and other persons.
by the corporation, its stockholders or
members and other persons.
When a director, trustee or officer A director, trustee, or officer shall not attempt to
attempts to acquire or acquire, in violation of acquire, or acquire any interest adverse to the
his duty, any interest adverse to the corporation in respect of any matter which has been
corporation in respect of any matter which reposed in them in confidence, and upon which,
has been reposed in him in confidence, as to equity imposes a disability upon themselves to deal
which equity imposes a disability upon him to in their own behalf; otherwise the said director,
deal in his own behalf, he shall be liable as a trustee, or officer shall be liable as a trustee for the
trustee for the corporation and must account corporation and must account for the profits which
for the profits which otherwise would have otherwise would have accrued to the corporation.
accrued to the corporation. (n)
Section 32. Dealings of directors, trustees or SEC. 31. Dealings of Directors, Trustees or Officers
officers with the corporation. – A contract of with the Corporation. – A contract of the corporation
the corporation with one or more of its with (1) one or more of its directors, trustees,
directors or trustees or officers is voidable, at officers or their spouses and relatives within the
the option of such corporation, unless all the fourth civil degree of consanguinity or affinity is
following conditions are present: voidable, at the option of such corporation, unless
1. That the presence of such director or all the following conditions are present:
trustee in the board meeting in which the
contract was approved was not necessary to (a) The presence of such director or trustee in the
constitute a quorum for such meeting; board meeting in which the contract was approved
2. That the vote of such director or trustee was not necessary to constitute a quorum for such
was not necessary for the approval of the meeting;
contract;
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3. That the contract is fair and reasonable (b) The vote of such director or trustee was not
under the circumstances; and necessary for the approval of the contract;
4. That in case of an officer, the contract has
been previously authorized by the board of (c) The contract is fair and reasonable under the
directors. circumstances;
Where any of the first two conditions set forth
in the preceding paragraph is absent, in the (d) In case of corporations vested with public
case of a contract with a director or trustee, interest, material contracts are approved by at
such contract may be ratified by the vote of least two-thirds (2/3) of the entire membership
the stockholders representing at least two- of the board, with at least a majority of the
thirds (2/3) of the outstanding capital stock or independent directors voting to approve the
of at least two-thirds (2/3) of the members in material contract; and
a meeting called for the purpose: Provided,
That full disclosure of the adverse interest of (e) In case of an officer, the contract has been
the directors or trustees involved is made at previously authorized by the board of directors.
such meeting: Provided, however, That the
contract is fair and reasonable under the Where any of the first three (3) conditions set
circumstances. (n) forth in the preceding paragraph is absent, in
the case of a contract with a director or trustee,
such contract may be ratified by the vote of the
stockholders representing at least two-thirds
(2/3) of the outstanding capital stock or of at
least two-thirds (2/3) of the members in a
meeting called for the purpose: Provided, That
full disclosure of the adverse interest of the
directors or trustees involved is made at such
meeting and the contract is fair and reasonable
under the circumstances.
Section 33. Contracts between corporations SEC. 32. Contracts Between Corporations with
with interlocking directors. – Except in cases Interlocking Directors. – Except in cases of fraud,
of fraud, and provided the contract is fair and and provided the contract is fair and reasonable
reasonable under the circumstances, a under the circumstances, a contract between two
contract between two or more corporations (2) or more corporations having interlocking
having interlocking directors shall not be directors shall not be invalidated on that ground
invalidated on that ground alone: Provided, alone: Provided, That if the interest of the
That if the interest of the interlocking director interlocking director in one (1) corporation is
in one corporation is substantial and his substantial and the interest in the other corporation
interest in the other corporation or or corporations is merely nominal, the contract shall
corporations is merely nominal, he shall be be subject to the provisions of the preceding section
subject to the provisions of the preceding insofar as the latter corporation or corporations are
section insofar as the latter corporation or concerned.
corporations are concerned.
Stockholdings exceeding twenty (20%) percent of
Stockholdings exceeding twenty (20%) the outstanding capital stock shall be considered
percent of the outstanding capital stock shall substantial for purposes of interlocking directors.
be considered substantial for purposes of
interlocking directors. (n)
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Section 35. Executive committee. – The by- SEC. 34. Executive, Management, and Other
laws of a corporation may create an Special Committees. – If the bylaws so provide, the
executive committee, composed of not less board may create an executive committee
than three members of the board, to be composed of at least three (3) directors. Said
appointed by the board. Said committee may committee may act, by majority vote of all its
act, by majority vote of all its members, on members, on such specific matters within the
such specific matters within the competence competence of the board, as may be delegated to it
of the board, as may be delegated to it in the in the bylaws or by majority vote of the board,
by-laws or on a majority vote of the board, except with respect to the: (a) approval of any action
except with respect to: (1) approval of any for which shareholders’ approval is also required;
action for which shareholders’ approval is (b) filling of vacancies in the board; (c) amendment
also required; (2) the filing of vacancies in the or repeal of bylaws or the adoption of new bylaws;
board; (3) the amendment or repeal of by- (d) amendment or repeal of any resolution of the
laws or the adoption of new by-laws; (4) the board which by its express terms is not amendable
amendment or repeal of any resolution of the or repealable; and (e) distribution of cash dividends
board which by its express terms is not so to the shareholders.
amendable or repealable; and (5) a
distribution of cash dividends to the The board of directors may create special
shareholders. committees of temporary or permanent nature
and determine the members’ term, composition,
compensation, powers, and responsibilities.
TITLE IV TITLE IV
Section 36. Corporate powers and capacity. SEC. 35. Corporate Powers and Capacity. – Every
– Every corporation incorporated under this corporation incorporated under this Code has the
Code has the power and capacity: power and capacity:
1. To sue and be sued in its corporate name;
2. Of succession by its corporate name for (a)To sue and be sued in its corporate name;
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Section 37. Power to extend or shorten SEC. 36. Power to Extend or Shorten Corporate
corporate term. – A private corporation may Term. – A private corporation may extend or
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extend or shorten its term as stated in the shorten its term as stated in the articles of
articles of incorporation when approved by a incorporation when approved by a majority vote of
majority vote of the board of directors or the board of directors or trustees, and ratified at a
trustees and ratified at a meeting by the meeting by the stockholders or members
stockholders representing at least two-thirds representing at least two-thirds (2/3) of the
(2/3) of the outstanding capital stock or by at outstanding capital stock or of its members.
least two-thirds (2/3) of the members in case Written notice of the proposed action and the time
of non-stock corporations. Written notice of and place of the meeting shall be sent to
the proposed action and of the time and place stockholders or members at their respective place
of the meeting shall be addressed to each of residence as shown in the books of the
stockholder or member at his place of corporation, and must either be deposited to the
residence as shown on the books of the addressee in the post office with postage prepaid,
corporation and deposited to the addressee served personally, or when allowed in the by-laws
in the post office with postage prepaid, or or done with the consent of the stockholder, sent
served personally: Provided, That in case of electronically in accordance with the rules and
extension of corporate term, any dissenting regulations of the Commission on the use of
stockholder may exercise his appraisal right electronic data messages. In case of extension of
under the conditions provided in this code. (n) corporate term, a dissenting stockholder may
exercise the right of appraisal under the conditions
provided in this Code.
Section 38. Power to increase or decrease SEC. 37. Power to Increase or Decrease Capital
capital stock; incur, create or increase Stock; Incur, Create or Increase Bonded
bonded indebtedness. – No corporation shall Indebtedness. – No corporation shall increase or
increase or decrease its capital stock or decrease its capital stock or incur, create or
incur, create or increase any bonded increase any bonded indebtedness unless
indebtedness unless approved by a majority approved by a majority vote of the board of directors
vote of the board of directors and, at a and by two-thirds (2/3) of the outstanding capital
stockholder’s meeting duly called for the stock at a stockholders’ meeting duly called for the
purpose, two-thirds (2/3) of the outstanding purpose. Written notice of the time and place of the
capital stock shall favor the increase or stockholders’ meeting and the purpose for said
diminution of the capital stock, or the meeting must be sent to the stockholders at their
incurring, creating or increasing of any places of residence as shown in the books of the
bonded indebtedness. Written notice of the corporation and served on the stockholders
proposed increase or diminution of the personally, or through electronic means recognized
capital stock or of the incurring, creating, or in the corporation’s bylaws and/or the
increasing of any bonded indebtedness and Commission’s rules as a valid mode for service of
of the time and place of the stockholder’s notices.
meeting at which the proposed increase or
diminution of the capital stock or the incurring A certificate must be signed by a majority of the
or increasing of any bonded indebtedness is directors of the corporation and countersigned by
to be considered, must be addressed to each the chairperson and secretary of the stockholders’
stockholder at his place of residence as meeting, setting forth:
shown on the books of the corporation and
deposited to the addressee in the post office (a)That the requirements of this section have been
with postage prepaid, or served personally. complied with;
A certificate in duplicate must be signed by a
majority of the directors of the corporation
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and countersigned by the chairman and the (b)The amount of the increase or decrease of the
secretary of the stockholders’ meeting, capital stock;
setting forth:
(1) That the requirements of this section have (c)In case of an increase of the capital stock, the
been complied with; amount of capital stock or number of shares of no-
(2) The amount of the increase or diminution par stock thereof actually subscribed, the names,
of the capital stock; nationalities and addresses of the persons
(3) If an increase of the capital stock, the subscribing, the amount of capital stock or number
amount of capital stock or number of shares of no-par stock subscribed by each, and the amount
of no-par stock thereof actually subscribed, paid by each on the subscription in cash or property,
the names, nationalities and residences of or the amount of capital stock or number of shares
the persons subscribing, the amount of of no-par stock allotted to each stockholder if such
capital stock or number of no-par stock increase is for the purpose of making effective stock
subscribed by each, and the amount paid by dividend therefor authorized;
each on his subscription in cash or property,
or the amount of capital stock or number of (d)Any bonded indebtedness to be incurred,
shares of no-par stock allotted to each stock- created or increased;
holder if such increase is for the purpose of
making effective stock dividend therefor (e)The amount of stock represented at the meeting;
authorized; and
(4) Any bonded indebtedness to be incurred,
created or increased; (f)The vote authorizing the increase or decrease of
(5) The actual indebtedness of the the capital stock, or the incurring, creating or
corporation on the day of the meeting; increasing of any bonded indebtedness.
(6) The amount of stock represented at the
meeting; and Any increase or decrease in the capital stock or the
(7) The vote authorizing the increase or incurring, creating or increasing of any bonded
diminution of the capital stock, or the indebtedness shall require prior approval of the
incurring, creating or increasing of any Commission, and where appropriate, of the
bonded indebtedness. Philippine Competition Commission. The
Any increase or decrease in the capital stock application with the Commission shall be made
or the incurring, creating or increasing of any within six (6) months from the date of approval
bonded indebtedness shall require prior of the board of directors and stockholders,
approval of the Securities and Exchange which period may be extended for justifiable
Commission. reasons.
One of the duplicate certificates shall be kept
on file in the office of the corporation and the Copies of the certificate shall be kept on file in
other shall be filed with the Securities and the office of the corporation and filed with the
Exchange Commission and attached to1 the Commission and attached to the original
original articles of incorporation. From 8and articles of incorporation. After approval by the
after approval by the Securities and Commission and the issuance by the
Exchange Commission and the issuance by Commission of its certificate of filing, the capital
the Commission of its certificate of filing, the stock shall be deemed increased or decreased
capital stock shall stand increased or and the incurring, creating or increasing of any
decreased and the incurring, creating or bonded indebtedness authorized, as the
increasing of any bonded indebtedness certificate of filing may declare: Provided, That
authorized, as the certificate of filing may the Commission shall not accept for filing any
declare: Provided, That the Securities and certificate of increase of capital stock unless
Exchange Commission shall not accept for accompanied by a sworn statement of the
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filing any certificate of increase of capital treasurer of the corporation lawfully holding
stock unless accompanied by the sworn office at the time of the filing of the certificate,
statement of the treasurer of the corporation showing that at least twenty-five percent (25%)
lawfully holding office at the time of the filing of the increase in capital stock has been
of the certificate, showing that at least twenty- subscribed and that at least twenty-five percent
five (25%) percent of such increased capital (25%) of the amount subscribed has been paid
stock has been subscribed and that at least in actual cash to the corporation or that
twenty-five (25%) percent of the amount property, the valuation of which is equal to
subscribed has been paid either in actual twenty-five percent (25%) of the subscription,
cash to the corporation or that there has been has been transferred to the corporation:
transferred to the corporation property the Provided further, That no decrease in capital
valuation of which is equal to twenty-five stock shall be approved by the Commission if
(25%) percent of the subscription: Provided, its effect shall prejudice the rights of corporate
further, That no decrease of the capital stock creditors.
shall be approved by the Commission if its
effect shall prejudice the rights of corporate Nonstock corporations may incur, create or
creditors. increase bonded indebtedness when approved by a
Non-stock corporations may incur or create majority of the board of trustees and of at least two-
bonded indebtedness, or increase the same, thirds (2/3) of the members in a meeting duly called
with the approval by a majority vote of the for the purpose.
board of trustees and of at least two-thirds
(2/3) of the members in a meeting duly called Bonds issued by a corporation shall be registered
for the purpose. with the Commission, which shall have the authority
Bonds issued by a corporation shall be to determine the sufficiency of the terms thereof.
registered with the Securities and Exchange
Commission, which shall have the authority
to determine the sufficiency of the terms
thereof. (17a)
Section 39. Power to deny pre-emptive right. SEC. 38. Power to Deny Preemptive Right. – All
– All stockholders of a stock corporation shall stockholders of a stock corporation shall enjoy
enjoy pre-emptive right to subscribe to all preemptive right to subscribe to all issues or
issues or disposition of shares of any class, disposition of shares of any class, in proportion to
in proportion to their respective their respective shareholdings, unless such right is
shareholdings, unless such right is denied by denied by the articles of incorporation or an
the articles of incorporation or an amendment amendment thereto: Provided, That such
thereto: Provided, That such pre-emptive preemptive right shall not extend to shares issued
right shall not extend to shares to be issued in compliance with laws requiring stock offerings or
in compliance with laws requiring stock minimum stock ownership by the public; or to
offerings or minimum stock ownership by the shares issued in good faith with the approval of the
public; or to shares to be issued in good faith stockholders representing two-thirds (2/3) of the
with the approval of the stockholders outstanding capital stock, in exchange for property
representing two-thirds (2/3) of the needed for corporate purposes or in payment of a
outstanding capital stock, in exchange for previously contracted debt.
property needed for corporate purposes or in
payment of a previously contracted debt.
Section 40. Sale or other disposition of SEC. 39. Sale or Other Disposition of Assets. –
assets. – Subject to the provisions of existing Subject to the provisions of Republic Act No.
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necessary in the usual and regular course of stockholder may exercise the right of appraisal
business of said corporation or if the under the conditions provided in this Code.
proceeds of the sale or other disposition of
such property and assets be appropriated for After such authorization or approval by the
the conduct of its remaining business. stockholders or members, the board of
In non-stock corporations where there directors or trustees may, nevertheless, in its
are no members with voting rights, the vote discretion, abandon such sale, lease, exchange,
of at least a majority of the trustees in office mortgage, pledge, or other disposition of
will be sufficient authorization for the property and assets, subject to the rights of
corporation to enter into any transaction third parties under any contract relating thereto,
authorized by this section. without further action or approval by the
stockholders or members.
Section 41. Power to acquire own shares. – SEC. 40. Power to Acquire Own Shares. –
A stock corporation shall have the power to Provided that the corporation has unrestricted
purchase or acquire its own shares for a retained earnings in its books to cover the
legitimate corporate purpose or purposes, shares to be purchased or acquired, a stock
including but not limited to the following corporation shall have the power to purchase or
cases: Provided, That the corporation has acquire its own shares for a legitimate corporate
unrestricted retained earnings in its books to purpose or purposes, including the following
cover the shares to be purchased or cases:
acquired:
1. To eliminate fractional shares arising out (a)To eliminate fractional shares arising out of stock
of stock dividends; dividends;
2. To collect or compromise an indebtedness
to the corporation, arising out of unpaid (b)To collect or compromise an indebtedness to the
subscription, in a delinquency sale, and to corporation, arising out of unpaid subscription, in a
purchase delinquent shares sold during said delinquency sale, and to purchase delinquent
sale; and shares sold during said sale; and
3. To pay dissenting or withdrawing
stockholders entitled to payment for their (c)To pay dissenting or withdrawing stockholders
shares under the provisions of this Code. (a) entitled to payment for their shares under the
provisions of this Code.
Section 42. Power to invest corporate funds SEC. 41. Power to Invest Corporate Funds in
in another corporation or business or for any Another Corporation or Business or for Any Other
other purpose. – Subject to the provisions of Purpose. – Subject to the provisions of this Code, a
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this Code, a private corporation may invest private corporation may invest its funds in any other
its funds in any other corporation or business corporation, business, or for any purpose other than
or for any purpose other than the primary the primary purpose for which it was organized,
purpose for which it was organized when when approved by a majority of the board of
approved by a majority of the board of directors or trustees and ratified by the stockholders
directors or trustees and ratified by the representing at least two-thirds (2/3) of the
stockholders representing at least two-thirds outstanding capital stock, or by at least two thirds
(2/3) of the outstanding capital stock, or by at (2/3) of the members in the case of nonstock
least two thirds (2/3) of the members in the corporations, at a meeting duly called for the
case of non-stock corporations, at a purpose. Notice of the proposed investment and the
stockholder’s or member’s meeting duly time and place of the meeting shall be addressed to
called for the purpose. Written notice of the each stockholder or member at the place of
proposed investment and the time and place residence as shown in the books of the corporation
of the meeting shall be addressed to each and deposited to the addressee in the post office
stockholder or member at his place of with postage prepaid, served personally, or sent
residence as shown on the books of the electronically in accordance with the rules and
corporation and deposited to the addressee regulations of the Commission on the use of
in the post office with postage prepaid, or electronic data message, when allowed by the by-
served personally: Provided, That any laws or done with the consent of the stockholders:
dissenting stockholder shall have appraisal Provided, That any dissenting stockholder shall
right as provided in this Code: Provided, have appraisal right as provided in this Code:
however, That where the investment by the Provided however, That where the investment by
corporation is reasonably necessary to the corporation is reasonably necessary to
accomplish its primary purpose as stated in accomplish its primary purpose as stated in the
the articles of incorporation, the approval of articles of incorporation, the approval of the
the stockholders or members shall not be stockholders or members shall not be necessary.
necessary. (17 1/2a)
Section 43. Power to declare dividends. - The SEC. 42. Power to Declare Dividends. – The board
board of directors of a stock corporation may of directors of a stock corporation may declare
declare dividends out of the unrestricted dividends out of the unrestricted retained earnings
retained earnings which shall be payable in which shall be payable in cash, property, or in stock
cash, in property, or in stock to all to all stockholders on the basis of outstanding stock
stockholders on the basis of outstanding held by them: Provided, That any cash dividends
stock held by them: Provided, That any cash due on delinquent stock shall first be applied to the
dividends due on delinquent stock shall first unpaid balance on the subscription plus costs and
be applied to the unpaid balance on the expenses, while stock dividends shall be withheld
subscription plus costs and expenses, while from the delinquent stockholders until their unpaid
stock dividends shall be withheld from the subscription is fully paid: Provided, further, That no
delinquent stockholder until his unpaid stock dividend shall be issued without the approval
subscription is fully paid: Provided, further, of stockholders representing at least two-thirds (2/3)
That no stock dividend shall be issued of the outstanding capital stock at a regular or
without the approval of stockholders special meeting duly called for the purpose.
representing not less than two-thirds (2/3) of
the outstanding capital stock at a regular or Stock corporations are prohibited from retaining
special meeting duly called for the purpose. surplus profits in excess of one hundred percent
(16a) (100%) of their paid-in capital stock, except: (a)
when justified by definite corporate expansion
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Stock corporations are prohibited from projects or programs approved by the board of
retaining surplus profits in excess of one directors; or (b) when the corporation is prohibited
hundred (100%) percent of their paid-in under any loan agreement with financial institutions
capital stock, except: (1) when justified by or creditors, whether local or foreign, from declaring
definite corporate expansion projects or dividends without their consent, and such consent
programs approved by the board of directors; has not yet been secured; or (c) when it can be
or (2) when the corporation is prohibited clearly shown that such retention is necessary
under any loan agreement with any financial under special circumstances obtaining in the
institution or creditor, whether local or corporation, such as when there is need for special
foreign, from declaring dividends without reserve for probable contingencies.
its/his consent, and such consent has not yet
been secured; or (3) when it can be clearly
shown that such retention is necessary under
special circumstances obtaining in the
corporation, such as when there is need for
special reserve for probable contingencies.
(n)
Section 44. Power to enter into management SEC. 43. Power to Enter into Management
contract. – No corporation shall conclude a Contract. – No corporation shall conclude a
management contract with another management contract with another corporation
corporation unless such contract shall have unless such contract is approved by the board of
been approved by the board of directors and directors and by stockholders owning at least the
by stockholders owning at least the majority majority of the outstanding capital stock, or by at
of the outstanding capital stock, or by at least least a majority of the members in the case of a non-
a majority of the members in the case of a stock corporation, of both the managing and the
non-stock corporation, of both the managing managed corporation, at a meeting duly called for
and the managed corporation, at a meeting the purpose: Provided, That (a) where a stockholder
duly called for the purpose: Provided, That or stockholders representing the same interest of
(1) where a stockholder or stockholders both the managing and the managed corporations
representing the same interest of both the own or control more than one-third (1/3) of the total
managing and the managed corporations outstanding capital stock entitled to vote of the
own or control more than one-third (1/3) of managing corporation; or (b) where a majority of the
the total outstanding capital stock entitled to members of the board of directors of the managing
vote of the managing corporation; or (2) corporation also constitute a majority of the
where a majority of the members of the board members of the board of directors of the managed
of directors of the managing corporation also corporation, then the management contract must be
constitute a majority of the members of the approved by the stockholders of the managed
board of directors of the managed corporation owning at least two-thirds (2/3) of the
corporation, then the management contract total outstanding capital stock entitled to vote, or by
must be approved by the stockholders of the at least two-thirds (2/3) of the members in the case
managed corporation owning at least two- of a non-stock corporation.
thirds (2/3) of the total outstanding capital
stock entitled to vote, or by at least two-thirds These shall apply to any contract whereby a
(2/3) of the members in the case of a non- corporation undertakes to manage or operate all or
stock corporation. No management contract substantially all of the business of another
shall be entered into for a period longer than corporation, whether such contracts are called
five years for any one term. service contracts, operating agreements or
otherwise: Provided however, That such service
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The provisions of the next preceding contracts or operating agreements which relate to
paragraph shall apply to any contract the exploration, development, exploitation or
whereby a corporation undertakes to utilization of natural resources may be entered into
manage or operate all or substantially all of for such periods as may be provided by the
the business of another corporation, whether pertinent laws or regulations.
such contracts are called service contracts,
operating agreements or otherwise: No management contract shall be entered into
Provided, however, That such service for a period longer than five (5) years for any one
contracts or operating agreements which (1) term.
relate to the exploration, development,
exploitation or utilization of natural resources
may be entered into for such periods as may
be provided by the pertinent laws or
regulations. (n)
Section 45. Ultra vires acts of corporations. – SEC. 44. Ultra Vires Acts of Corporations. – No
No corporation under this Code shall corporation shall possess or exercise corporate
possess or exercise any corporate powers powers other than those conferred by this Code or
except those conferred by this Code or by its by its articles of incorporation and except as
articles of incorporation and except such as necessary or incidental to the exercise of the
are necessary or incidental to the exercise of powers conferred.
the powers so conferred. (n)
TITLE V TITLE V
BY LAWS BYLAWS
Section 46. Adoption of by-laws. – Every SEC. 45. Adoption of Bylaws. – For the adoption
corporation formed under this Code must, of bylaws by the corporation, the affirmative
within one (1) month after receipt of vote of the stockholders representing at least a
official notice of the issuance of its majority of the outstanding capital stock, or of
certificate of incorporation by the at least a majority of the members in case of
Securities and Exchange Commission, nonstock corporations, shall be necessary. The
adopt a code of by-laws for its bylaws shall be signed by the stockholders or
government not inconsistent with this members voting for them and shall be kept in the
Code. For the adoption of by-laws by the principal office of the corporation, subject to the
corporation the affirmative vote of the inspection of the stockholders or members during
stockholders representing at least a office hours. A copy thereof, duly certified by a
majority of the outstanding capital stock, majority of the directors or trustees and
or of at least a majority of the members in countersigned by the secretary of the corporation,
case of non-stock corporations, shall be shall be filed with the Commission and attached to
necessary. The by-laws shall be signed by the original articles of incorporation.
the stockholders or members voting for them
and shall be kept in the principal office of the Notwithstanding the provisions of the preceding
corporation, subject to the inspection of the paragraph, bylaws may be adopted and filed prior
stockholders or members during office hours. to incorporation; in such case, such bylaws shall be
A copy thereof, duly certified to by a majority approved and signed by all the incorporators and
of the directors or trustees countersigned by
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the secretary of the corporation, shall be filed submitted to the Commission, together with the
with the Securities and Exchange articles of incorporation.
Commission which shall be attached to the
original articles of incorporation. In all cases, bylaws shall be effective only upon the
issuance by the Commission of a certification that
Notwithstanding the provisions of the the bylaws are in accordance with this Code.
preceding paragraph, by-laws may be
adopted and filed prior to incorporation; The Commission shall not accept for filing the
in such case, such by-laws shall be bylaws or any amendment thereto of any bank,
approved and signed by all the banking institution, building and loan association,
incorporators and submitted to the trust company, insurance company, public utility,
Securities and Exchange Commission, educational institution, or other special corporations
together with the articles of incorporation. governed by special laws, unless accompanied by
In all cases, by-laws shall be effective only a certificate of the appropriate government agency
upon the issuance by the Securities and to the effect that such bylaws or amendments are in
Exchange Commission of a certification that accordance with law.
the by-laws are not inconsistent with this
Code.
Section 47. Contents of by-laws. – Subject to SEC. 46. Contents of Bylaws. – A private
the provisions of the Constitution, this Code, corporation may provide the following in its
other special laws, and the articles of bylaws:
incorporation, a private corporation may
provide in its by-laws for: (a) The time, place and manner of calling and
1. The time, place and manner of calling and conducting regular or special meetings of the
conducting regular or special meetings of the directors or trustees;
directors or trustees;
2. The time and manner of calling and (b) The time and manner of calling and conducting
conducting regular or special meetings of the regular or special meetings and mode of notifying
stockholders or members; the stockholders or members thereof;
3. The required quorum in meetings of
stockholders or members and the manner of (c) The required quorum in meetings of stockholders
voting therein; or members and the manner of voting therein;
4. The form for proxies of stockholders and
members and the manner of voting them; (d) The modes by which a stockholder, member,
5. The qualifications, duties and director, or trustee may attend meetings and
compensation of directors or trustees, cast their votes;
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Section 48. Amendments to by-laws. – The SEC. 47. Amendment to Bylaws. – A majority of the
board of directors or trustees, by a majority board of directors or trustees, and the owners of at
vote thereof, and the owners of at least a least a majority of the outstanding capital stock, or
majority of the outstanding capital stock, or at at least a majority of the members of a nonstock
least a majority of the members of a non- corporation, at a regular or special meeting duly
stock corporation, at a regular or special called for the purpose, may amend or repeal the
meeting duly called for the purpose, may bylaws or adopt new bylaws. The owners of two-
amend or repeal any by-laws or adopt new thirds (2/3) of the outstanding capital stock or two-
by-laws. The owners of two-thirds (2/3) of the thirds (2/3) of the members in a non-stock
outstanding capital stock or two-thirds (2/3) corporation may delegate to the board of directors
of the members in a non-stock corporation or trustees the power to amend or repeal the bylaws
may delegate to the board of directors or or adopt new bylaws: Provided, That any power
trustees the power to amend or repeal any delegated to the board of directors or trustees to
by-laws or adopt new by-laws: Provided, amend or repeal the bylaws or adopt new bylaws
That any power delegated to the board of shall be considered as revoked whenever
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TITLE VI TITLE VI
MEETINGS MEETINGS
Section 49. Kinds of meetings. – Meetings of SEC. 48. Kinds of Meetings. – Meetings of
directors, trustees, stockholders, or members directors, trustees, stockholders, or members may
may be regular or special. (n) be regular or special.
Section 50. Regular and special meetings of SEC. 49. Regular and Special Meetings of
stockholders or members. - Regular Stockholders or Members. – Regular meetings of
meetings of stockholders or members shall stockholders or members shall be held annually on
be held annually on a date fixed in the by- a date fixed in the bylaws, or if not so fixed, on any
laws, or if not so fixed, on any date in April of date after April 15 of every year as determined by
every year as determined by the board of the board of directors or trustees: Provided, That
directors or trustees: Provided, That written written notice of regular meetings shall be sent to all
notice of regular meetings shall be sent to all stockholders or members of record at least twenty-
stockholders or members of record at least one (21) days prior to the meeting, unless a
two (2) weeks prior to the meeting, unless a different period is required in the bylaws, law, or
different period is required by the by-laws. regulation: Provided further, That written notice of
Special meetings of stockholders or regular meetings may be sent to all
members shall be held at any time deemed stockholders or members of record through
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necessary or as provided in the by-laws: electronic mail or such other manner as the
Provided, however, That at least one (1) Commission shall allow under its guidelines.
week written notice shall be sent to all
stockholders or members, unless otherwise At each regular meeting of stockholders or
provided in the by-laws. members, the board of directors or trustees
Notice of any meeting may be waived, shall endeavor to present to stockholders or
expressly or impliedly, by any stockholder or members the following:
member.
Whenever, for any cause, there is no a) The minutes of the most recent regular
person authorized to call a meeting, the meeting which shall include, among others:
Securities and Exchange Commission, upon
petition of a stockholder or member on a (1) A description of the voting and vote
showing of good cause therefor, may issue tabulation procedures used in the previous
an order to the petitioning stockholder or meeting;
member directing him to call a meeting of the
corporation by giving proper notice required (2) A description of the opportunity given to
by this Code or by the by-laws. The stockholders or members to ask questions and
petitioning stockholder or member shall a record of the questions asked and answers
preside thereat until at least a majority of the given;
stockholders or members present have
chosen one of their number as presiding (3) The matters discussed and resolutions
officer. (24, 26) reached;
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 51. Place and time of meetings of SEC. 50. Place and Time of Meetings of
stockholders of members. – Stockholder’s or Stockholders or Members. – Stockholders’ or
member’s meetings, whether regular or members’ meetings, whether regular or special,
special, shall be held in the city or shall be held in the principal office of the
municipality where the principal office of the corporation as set forth in the articles of
corporation is located, and if practicable in incorporation, or, if not practicable, in the city or
the principal office of the corporation: municipality where the principal office of the
Provided, That Metro Manila shall, for corporation is located: Provided, That any city
purposes of this section, be considered a city or municipality in Metro Manila, Metro Cebu,
or municipality. Metro Davao, and other Metropolitan areas
Notice of meetings shall be in writing, and the shall, for purposes of this section, be
time and place thereof stated therein. considered a city or municipality.
All proceedings had and any business
transacted at any meeting of the Notice of meetings shall be sent through the
stockholders or members, if within the means of communication provided in the
powers or authority of the corporation, shall bylaws, which notice shall state the time, place
be valid even if the meeting be improperly and purpose of the meetings.
held or called, provided all the stockholders
or members of the corporation are present or Each notice of meeting shall further be
duly represented at the meeting. (24 and 25) accompanied by the following:
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Section 52. Quorum in meetings. – SEC. 51. Quorum in Meetings. – Unless otherwise
Unless otherwise provided for in this Code or provided in this Code or in the bylaws, a quorum
in the by-laws, a quorum shall consist of the shall consist of the stockholders representing a
stockholders representing a majority of the majority of the outstanding capital stock or a
outstanding capital stock or a majority of the majority of the members in the case of nonstock
members in the case of non-stock corporations.
corporations. (n)
Section 53. Regular and special meetings of SEC. 52. Regular and Special Meetings of Directors
directors or trustees. – Regular meetings of or Trustees; Quorum. – Unless the articles of
the board of directors or trustees of every incorporation or the by-laws provides for a
corporation shall be held monthly, unless the greater majority, a majority of the directors or
by-laws provide otherwise. trustees as stated in the articles of
Special meetings of the board of directors or incorporation shall constitute a quorum to
trustees may be held at any time upon the transact corporate business, and every
call of the president or as provided in the by- decision reached by at least a majority of the
laws. directors or trustees constituting a quorum,
Meetings of directors or trustees of except for the election of officers which shall
corporations may be held anywhere in or require the vote of a majority of all the members
outside of the Philippines, unless the by-laws of the board, shall be valid as a corporate act.
provide otherwise. Notice of regular or
special meetings stating the date, time and Regular meetings of the board of directors or
place of the meeting must be sent to every trustees of every corporation shall be held
director or trustee at least one (1) day prior to monthly, unless the bylaws provide otherwise.
the scheduled meeting, unless otherwise
provided by the by-laws. A director or trustee Special meetings of the board of directors or
may waive this requirement, either expressly trustees may be held at any time upon the call
or impliedly. (n) of the president or as provided in the bylaws.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 54. Who shall preside at SEC. 53. Who Shall Preside at Meetings. – The
meetings. – The president shall preside at all chairman or, in his absence, the president shall
meetings of the directors or trustee as well as preside at all meetings of the directors or trustees
of the stockholders or members, unless the as well as of the stockholders or members, unless
by-laws provide otherwise. (n) the bylaws provide otherwise.
Section 55. Right to vote of pledgors, SEC. 54. Right to Vote of Secured Creditors and
mortgagors, and administrators. – In case of Administrators. – In case a stockholder grants
pledged or mortgaged shares in stock security interest in his or her shares in stock
corporations, the pledgor or mortgagor shall corporations, the stockholder-grantor shall have
have the right to attend and vote at meetings the right to attend and vote at meetings of
of stockholders, unless the pledgee or stockholders, unless the secured creditor is
mortgagee is expressly given by the pledgor expressly given by the stockholder-grantor such
or mortgagor such right in writing which is right in writing which is recorded in the appropriate
recorded on the appropriate corporate books. corporate books.
(n)
Executors, administrators, receivers, Executors, administrators, receivers, and other
and other legal representatives duly legal representatives duly appointed by the court
appointed by the court may attend and vote may attend and vote in behalf of the stockholders or
in behalf of the stockholders or members members without need of any written proxy.
without need of any written proxy. (27a)
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Section 56. Voting in case of joint ownership SEC. 55. Voting in Case of Joint Ownership of
of stock. – In case of shares of stock owned Stock. – The consent of all the co-owners shall
jointly by two or more persons, in order to be necessary in voting shares of stock owned
vote the same, the consent of all the co- jointly by two (2) or more persons, unless there
owners shall be necessary, unless there is a is a written proxy, signed by all the co-owners,
written proxy, signed by all the co-owners, authorizing one (1) or some of them or any other
authorizing one or some of them or any other person to vote such share or shares: Provided,
person to vote such share or shares: That when the shares are owned in an “and/or”
Provided, That when the shares are owned in capacity by the holders thereof, any one of the joint
an "and/or" capacity by the holders thereof, owners can vote said shares or appoint a proxy
any one of the joint owners can vote said therefor.
shares or appoint a proxy therefor. (n)
Section 57. Voting right for treasury shares. SEC. 56. Voting Right for Treasury Shares. –
– Treasury shares shall have no voting right Treasury shares shall have no voting right as long
as long as such shares remain in the as such shares remain in the Treasury.
Treasury. (n)
Section 58. Proxies. – Stockholders and SEC. 57. Manner of Voting; Proxies. –
members may vote in person or by proxy in Stockholders and members may vote in person or
all meetings of stockholders or members. by proxy in all meetings of stockholders or
Proxies shall in writing, signed by the members.
stockholder or member and filed before the
scheduled meeting with the corporate When so authorized in the bylaws or by a
secretary. Unless otherwise provided in the majority of the board of directors, the
proxy, it shall be valid only for the meeting for stockholders or members of corporations may
which it is intended. No proxy shall be valid also vote through remote communication or in
and effective for a period longer than five (5) absentia: Provided, That the votes are received
years at any one time. (n) before the corporation finishes the tally of
votes.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 59. Voting trusts. – One or more SEC. 58. Voting Trusts. – One or more
stockholders of a stock corporation may stockholders of a stock corporation may create a
create a voting trust for the purpose of voting trust for the purpose of conferring upon a
conferring upon a trustee or trustees the right trustee or trustees the right to vote and other rights
to vote and other rights pertaining to the pertaining to the shares for a period not exceeding
shares for a period not exceeding five (5) five (5) years at any time: Provided, That in the case
years at any time: Provided, That in the case of a voting trust specifically required as a condition
of a voting trust specifically required as a in a loan agreement, said voting trust may be for a
condition in a loan agreement, said voting period exceeding five (5) years but shall
trust may be for a period exceeding five (5) automatically expire upon full payment of the loan.
years but shall automatically expire upon full A voting trust agreement must be in writing and
payment of the loan. A voting trust agreement notarized, and shall specify the terms and
must be in writing and notarized, and shall conditions thereof. A certified copy of such
specify the terms and conditions thereof. A agreement shall be filed with the corporation and
certified copy of such agreement shall be with the Commission; otherwise, the agreement is
filed with the corporation and with the ineffective and unenforceable. The certificate or
Securities and Exchange Commission; certificates of stock covered by the voting trust
otherwise, said agreement is ineffective and agreement shall be cancelled and new ones shall
unenforceable. The certificate or certificates be issued in the name of the trustee or trustees,
of stock covered by the voting trust stating that they are issued pursuant to said
agreement shall be cancelled and new ones agreement. The books of the corporation shall state
shall be issued in the name of the trustee or that the transfer in the name of the trustee or
trustees stating that they are issued pursuant trustees is made pursuant to the voting trust
to said agreement. In the books of the agreement.
corporation, it shall be noted that the transfer
in the name of the trustee or trustees is made The trustee or trustees shall execute and deliver to
pursuant to said voting trust agreement. the transferors, voting trust certificates, which shall
The trustee or trustees shall execute and be transferable in the same manner and with the
deliver to the transferors voting trust same effect as certificates of stock.
certificates, which shall be transferable in the
same manner and with the same effect as The voting trust agreement filed with the corporation
certificates of stock. shall be subject to examination by any stockholder
The voting trust agreement filed with the of the corporation in the same manner as any other
corporation shall be subject to examination corporate book or record: Provided, That both the
by any stockholder of the corporation in the trustor and the trustee or trustees may exercise the
same manner as any other corporate book or right of inspection of all corporate books and
record: Provided, That both the transferor records in accordance with the provisions of this
and the trustee or trustees may exercise the Code.
right of inspection of all corporate books and
records in accordance with the provisions of Any other stockholder may transfer the shares to
this Code. the same trustee or trustees upon the terms and
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Any other stockholder may transfer his conditions stated in the voting trust agreement, and
shares to the same trustee or trustees upon thereupon shall be bound by all the provisions of
the terms and conditions stated in the voting said agreement.
trust agreement, and thereupon shall be
bound by all the provisions of said No voting trust agreement shall be entered into for
agreement. purposes of circumventing the laws against anti-
No voting trust agreement shall be entered competitive agreements, abuse of dominant
into for the purpose of circumventing the law position, anti-competitive mergers and acquisitions,
against monopolies and illegal combinations violation of nationality and capital requirements, or
in restraint of trade or used for purposes of for the perpetuation of fraud.
fraud.
Unless expressly renewed, all rights granted Unless expressly renewed, all rights granted in a
in a voting trust agreement shall voting trust agreement shall automatically expire at
automatically expire at the end of the agreed the end of the agreed period. The voting trust
period, and the voting trust certificates as well certificates as well as the certificates of stock in the
as the certificates of stock in the name of the name of the trustee or trustees shall thereby be
trustee or trustees shall thereby be deemed deemed cancelled and new certificates of stock
cancelled and new certificates of stock shall shall be reissued in the name of the trustors.
be reissued in the name of the transferors.
The voting trustee or trustees may vote by The voting trustee or trustees may vote by proxy or
proxy unless the agreement provides in any manner authorized under the bylaws unless
otherwise. (36a) the agreement provides otherwise.
Section 60. Subscription contract. – Any SEC. 59. Subscription Contract. – Any contract for
contract for the acquisition of unissued stock the acquisition of unissued stock in an existing
in an existing corporation or a corporation still corporation or a corporation still to be formed shall
to be formed shall be deemed a subscription be deemed a subscription within the meaning of this
within the meaning of this Title, Title, notwithstanding the fact that the parties refer
notwithstanding the fact that the parties refer to it as a purchase or some other contract.
to it as a purchase or some other contract. (n)
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Section 62. Consideration for stocks. – SEC. 61. Consideration for Stocks. – Stocks shall
Stocks shall not be issued for a consideration not be issued for a consideration less than the par
less than the par or issued price thereof. or issued price thereof. Consideration for the
Consideration for the issuance of stock may issuance of stock may be:
be any or a combination of any two or
more of the following: (a) Actual cash paid to the corporation;
1. Actual cash paid to the corporation; (b) Property, tangible or intangible, actually
2. Property, tangible or intangible, actually received by the corporation and necessary or
received by the corporation and necessary or convenient for its use and lawful purposes at a fair
convenient for its use and lawful purposes at valuation equal to the par or issued value of the
a fair valuation equal to the par or issued stock issued;
value of the stock issued;
3. Labor performed for or services actually (c) Labor performed for or services actually
rendered to the corporation; rendered to the corporation;
4. Previously incurred indebtedness of the
corporation; (d) Previously incurred indebtedness of the
5. Amounts transferred from unrestricted corporation;
retained earnings to stated capital; and
6. Outstanding shares exchanged for stocks (e) Amounts transferred from unrestricted retained
in the event of reclassification or conversion. earnings to stated capital;
The same considerations provided for in this Shares of stock shall not be issued in exchange for
section, insofar as they may be applicable, promissory notes or future service. The same
may be used for the issuance of bonds by the considerations provided in this section, insofar as
corporation. applicable, may be used for the issuance of bonds
by the corporation.
The issued price of no-par value shares
may be fixed in the articles of incorporation or The issued price of no-par value shares may be
by the board of directors pursuant to authority fixed in the articles of incorporation or by the board
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Section 63. Certificate of stock and transfer SEC. 62. Certificate of Stock and Transfer of
of shares. – The capital stock of stock Shares. – The capital stock of corporations shall be
corporations shall be divided into shares for divided into shares for which certificates signed by
which certificates signed by the president or the president or vice president, countersigned by
vice president, countersigned by the the secretary or assistant secretary, and sealed with
secretary or assistant secretary, and sealed the seal of the corporation shall be issued in
with the seal of the corporation shall be accordance with the bylaws. Shares of stock so
issued in accordance with the by-laws. issued are personal property and may be
Shares of stock so issued are personal transferred by delivery of the certificate or
property and may be transferred by delivery certificates indorsed by the owner, his attorney-in-
of the certificate or certificates indorsed by fact, or any other person legally authorized to make
the owner or his attorney-in-fact or other the transfer. No transfer, however, shall be valid,
person legally authorized to make the except as between the parties, until the transfer is
transfer. No transfer, however, shall be valid, recorded in the books of the corporation showing
except as between the parties, until the the names of the parties to the transaction, the date
transfer is recorded in the books of the of the transfer, the number of the certificate or
corporation showing the names of the parties certificates, and the number of shares transferred.
to the transaction, the date of the transfer, the The Commission may require corporations
number of the certificate or certificates and whose securities are traded in trading markets
the number of shares transferred. and which can reasonably demonstrate their
No shares of stock against which the capability to do so to issue their securities or
corporation holds any unpaid claim shall be shares of stocks in uncertificated or scripless
transferable in the books of the corporation. form in accordance with the rules of the
(35) Commission.
Section 65. Liability of directors for SEC. 64. Liability of Directors for Watered Stocks. –
watered stocks. – Any director or officer of A director or officer of a corporation who: (a)
a corporation consenting to the issuance of consents to the issuance of stocks for a
stocks for a consideration less than its par or consideration less than its par or issued value; (b)
issued value or for a consideration in any consents to the issuance of stocks for a
form other than cash, valued in excess of its consideration other than cash, valued in excess of
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fair value, or who, having knowledge thereof, its fair value; or (c) having knowledge of the
does not forthwith express his objection in insufficient consideration, does not file a written
writing and file the same with the corporate objection with the corporate secretary, shall be
secretary, shall be solidarily, liable with the liable to the corporation or its creditors, solidarily
stockholder concerned to the corporation and with the stockholder concerned for the difference
its creditors for the difference between the between the value received at the time of issuance
fair value received at the time of issuance of of the stock and the par or issued value of the same.
the stock and the par or issued value of the
same. (n)
Section 66. Interest on unpaid subscriptions. SEC. 65. Interest on Unpaid Subscriptions. –
– Subscribers for stock shall pay to the Subscribers to stocks shall be liable to the
corporation interest on all unpaid corporation for interest on all unpaid subscriptions
subscriptions from the date of subscription, if from the date of subscription, if so required by and
so required by, and at the rate of interest at the rate of interest fixed in the subscription
fixed in the by-laws. If no rate of interest is contract. If no rate of interest is fixed in the
fixed in the by-laws, such rate shall be subscription contract, the prevailing legal rate shall
deemed to be the legal rate. (37) apply.
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Section 68. Delinquency sale. – The board of SEC. 67. Delinquency Sale. – The board of
directors may, by resolution, order the sale of directors may, by resolution, order the sale of
delinquent stock and shall specifically state delinquent stock and shall specifically state the
the amount due on each subscription plus all amount due on each subscription plus all accrued
accrued interest, and the date, time and interest, and the date, time and place of the sale
place of the sale which shall not be less than which shall not be less than thirty (30) days nor
thirty (30) days nor more than sixty (60) days more than sixty (60) days from the date the stocks
from the date the stocks become delinquent. become delinquent.
Notice of said sale, with a copy of the
resolution, shall be sent to every delinquent Notice of the sale, with a copy of the resolution, shall
stockholder either personally or by registered be sent to every delinquent stockholder either
mail. The same shall furthermore be personally, by registered mail, or through other
published once a week for two (2) means provided in the bylaws. The same shall be
consecutive weeks in a newspaper of published once a week for two (2) consecutive
general circulation in the province or city weeks in a newspaper of general circulation in the
where the principal office of the corporation is province or city where the principal office of the
located. corporation is located.
Unless the delinquent stockholder pays to Unless the delinquent stockholder pays to the
the corporation, on or before the date corporation, on or before the date specified for the
specified for the sale of the delinquent stock, sale of the delinquent stock, the balance due on the
the balance due on his subscription, plus former’s subscription, plus accrued interest, costs of
accrued interest, costs of advertisement and advertisement and expenses of sale, or unless the
expenses of sale, or unless the board of board of directors otherwise orders, said delinquent
directors otherwise orders, said delinquent stock shall be sold at a public auction to such bidder
stock shall be sold at public auction to such who shall offer to pay the full amount of the balance
bidder who shall offer to pay the full amount on the subscription together with accrued interest,
of the balance on the subscription together costs of advertisement and expenses of sale, for the
with accrued interest, costs of advertisement smallest number of shares or fraction of a share.
and expenses of sale, for the smallest The stock so purchased shall be transferred to such
number of shares or fraction of a share. The purchaser in the books of the corporation and a
stock so purchased shall be transferred to certificate for such stock shall be issued in the
such purchaser in the books of the purchaser’s favor. The remaining shares, if any,
corporation and a certificate for such stock shall be credited in favor of the delinquent
shall be issued in his favor. The remaining stockholder who shall likewise be entitled to the
shares, if any, shall be credited in favor of the issuance of a certificate of stock covering such
delinquent stockholder who shall likewise be shares.
entitled to the issuance of a certificate of
stock covering such shares. Should there be no bidder at the public auction who
offers to pay the full amount of the balance on the
Should there be no bidder at the public subscription together with accrued interest, costs of
auction who offers to pay the full amount of advertisement, and expenses of sale, for the
the balance on the subscription together with smallest number of shares or fraction of a share, the
accrued interest, costs of advertisement and corporation may, subject to the provisions of this
expenses of sale, for the smallest number of Code, bid for the same, and the total amount due
shares or fraction of a share, the corporation shall be credited as fully paid in the books of the
may, subject to the provisions of this Code, corporation. Title to all the shares of stock covered
bid for the same, and the total amount due by the subscription shall be vested in the
shall be credited as paid in full in the books corporation as treasury shares and may be
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of the corporation. Title to all the shares of disposed of by said corporation in accordance with
stock covered by the subscription shall be the provisions of this Code.
vested in the corporation as treasury shares
and may be disposed of by said corporation
in accordance with the provisions of this
Code. (39a-46a)
Section 69. When sale may be questioned. – SEC. 68. When Sale May be Questioned. – No
No action to recover delinquent stock sold action to recover delinquent stock sold can be
can be sustained upon the ground of sustained upon the ground of irregularity or defect
irregularity or defect in the notice of sale, or in the notice of sale, or in the sale itself of the
in the sale itself of the delinquent stock, delinquent stock, unless the party seeking to
unless the party seeking to maintain such maintain such action first pays or tenders to the
action first pays or tenders to the party party holding the stock the sum for which the same
holding the stock the sum for which the same was sold, with interest from the date of sale at the
was sold, with interest from the date of sale legal rate. No such action shall be maintained
at the legal rate; and no such action shall be unless a complaint is filed within six (6) months from
maintained unless it is commenced by the the date of sale.
filing of a complaint within six (6) months from
the date of sale. (47a)
Section 70. Court action to recover SEC. 69. Court Action to Recover Unpaid
unpaid subscription. – Nothing in this Code Subscription. – Nothing in this Code shall prevent
shall prevent the corporation from collecting the corporation from collecting through court action,
by action in a court of proper jurisdiction the the amount due on any unpaid subscription, with
amount due on any unpaid subscription, with accrued interest, costs and expenses.
accrued interest, costs and expenses. (49a)
Section 72. Rights of unpaid shares. – SEC. 71. Rights of Unpaid Shares, Nondelinquent.
Holders of subscribed shares not fully paid – Holders of subscribed shares not fully paid which
which are not delinquent shall have all the are not delinquent shall have all the rights of a
rights of a stockholder. (n) stockholder.
Section 73. Lost or destroyed certificates. – SEC. 72. Lost or Destroyed Certificates. – The
The following procedure shall be followed for following procedure shall be followed by a
the issuance by a corporation of new corporation in issuing new certificates of stock in
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certificates of stock in lieu of those which lieu of those which have been lost, stolen or
have been lost, stolen or destroyed: destroyed:
1. The registered owner of a certificate of (a) The registered owner of a certificate of stock in
stock in a corporation or his legal a corporation or such person’s legal representative
representative shall file with the corporation shall file with the corporation an affidavit in triplicate
an affidavit in triplicate setting forth, if setting forth, if possible, the circumstances as to
possible, the circumstances as to how the how the certificate was lost, stolen or destroyed, the
certificate was lost, stolen or destroyed, the number of shares represented by such certificate,
number of shares represented by such the serial number of the certificate and the name of
certificate, the serial number of the certificate the corporation which issued the same. The owner
and the name of the corporation which issued of such certificate of stock shall also submit such
the same. He shall also submit such other other information and evidence as may be deemed
information and evidence which he may necessary;
deem necessary;
(b) After verifying the affidavit and other information
2. After verifying the affidavit and other and evidence with the books of the corporation, the
information and evidence with the books of corporation shall publish a notice in a newspaper of
the corporation, said corporation shall general circulation in the place where the
publish a notice in a newspaper of general corporation has its principal office, once a week for
circulation published in the place where the three (3) consecutive weeks at the expense of the
corporation has its principal office, once a registered owner of the certificate of stock which
week for three (3) consecutive weeks at the has been lost, stolen or destroyed. The notice shall
expense of the registered owner of the state the name of the corporation, the name of the
certificate of stock which has been lost, registered owner, the serial number of the
stolen or destroyed. The notice shall state the certificate, the number of shares represented by
name of said corporation, the name of the such certificate, and shall state that after the
registered owner and the serial number of expiration of one (1) year from the date of the last
said certificate, and the number of shares publication, if no contest has been presented to the
represented by such certificate, and that after corporation regarding the certificate of stock, the
the expiration of one (1) year from the date of right to make such contest shall be barred and the
the last publication, if no contest has been corporation shall cancel the lost, destroyed or stolen
presented to said corporation regarding said certificate of stock in its books. In lieu thereof, the
certificate of stock, the right to make such corporation shall issue a new certificate of stock,
contest shall be barred and said corporation unless the registered owner files a bond or other
shall cancel in its books the certificate of security as may be required, effective for a period
stock which has been lost, stolen or of one (1) year, for such amount and in such form
destroyed and issue in lieu thereof new and with such sureties as may be satisfactory to the
certificate of stock, unless the registered board of directors, in which case a new certificate
owner files a bond or other security in lieu may be issued even before the expiration of the one
thereof as may be required, effective for a (1) year period provided herein. If a contest has
period of one (1) year, for such amount and been presented to the corporation or if an action is
in such form and with such sureties as may pending in court regarding the ownership of the
be satisfactory to the board of directors, in certificate of stock which has been lost, stolen or
which case a new certificate may be issued destroyed, the issuance of the new certificate of
even before the expiration of the one (1) year stock in lieu thereof shall be suspended until the
period provided herein: Provided, That if a court renders a final decision regarding the
contest has been presented to said ownership of the certificate of stock which has been
corporation or if an action is pending in court lost, stolen or destroyed.
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Section 74. Books to be kept; stock transfer SEC. 73. Books to be Kept; Stock Transfer
agent. – Every corporation shall keep and Agent. – Every corporation shall keep and
carefully preserve at its principal office a carefully preserve at its principal office all
record of all business transactions and information relating to the corporation
minutes of all meetings of stockholders or including, but not limited to:
members, or of the board of directors or
trustees, in which shall be set forth in detail (a) The articles of incorporation and by-laws of
the time and place of holding the meeting, the corporation and all their amendments;
how authorized, the notice given, whether the
meeting was regular or special, if special its (b) The current ownership structure and voting
object, those present and absent, and every rights of the corporation, including lists of
act done or ordered done at the meeting. stockholders or members, group structures,
Upon the demand of any director, trustee, intra-group relations, ownership data, and
stockholder or member, the time when any beneficial ownership;
director, trustee, stockholder or member
entered or left the meeting must be noted in (c) The names and addresses of all the members
the minutes; and on a similar demand, the of the board of directors or trustees and the
yeas and nays must be taken on any motion executive officers;
or proposition, and a record thereof carefully
made. The protest of any director, trustee, (d) A record of all business transactions;
stockholder or member on any action or
proposed action must be recorded in full on (e) A record of the resolutions of the board of
his demand. directors or trustees and of the stockholders or
members;
The records of all business transactions of
the corporation and the minutes of any (f) Copies of the latest reportorial requirements
meetings shall be open to inspection by any submitted to the Commission; and
director, trustee, stockholder or member of
the corporation at reasonable hours on
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business days and he may demand, in (g) The minutes of all meetings of stockholders
writing, for a copy of excerpts from said or members, or of the board of directors or
records or minutes, at his expense. trustees. Such minutes shall set forth in detail,
Any officer or agent of the corporation who among others: the time and place of the meeting
shall refuse to allow any director, trustees, held, how it was authorized, the notice given,
stockholder or member of the corporation to the agenda therefor, whether the meeting was
examine and copy excerpts from its records regular or special, its object if special, those
or minutes, in accordance with the provisions present and absent, and every act done or
of this Code, shall be liable to such director, ordered done at the meeting. Upon the demand
trustee, stockholder or member for damages, of a director, trustee, stockholder or member,
and in addition, shall be guilty of an offense the time when any director, trustee, stockholder
which shall be punishable under Section 144 or member entered or left the meeting must be
of this Code: Provided, That if such refusal is noted in the minutes; and on a similar demand,
made pursuant to a resolution or order of the the yeas and nays must be taken on any motion
board of directors or trustees, the liability or proposition, and a record thereof carefully
under this section for such action shall be made. The protest of a director, trustee,
imposed upon the directors or trustees who stockholder or member on any action or
voted for such refusal: and Provided, further, proposed action must be recorded in full upon
That it shall be a defense to any action under their demand.
this section that the person demanding to
examine and copy excerpts from the Corporate records, regardless of the form in
corporation’s records and minutes has which they are stored, shall be open to
improperly used any information secured inspection by any director, trustee, stockholder
through any prior examination of the records or member of the corporation in person or by a
or minutes of such corporation or of any other representative at reasonable hours on business
corporation, or was not acting in good faith or days, and a demand in writing may be made by
for a legitimate purpose in making his such director, trustee or stockholder at their
demand. expense, for copies of such records or excerpts
from said records. The inspecting or
Stock corporations must also keep a book to reproducing party shall remain bound by
be known as the "stock and transfer book", in confidentiality rules under prevailing laws, such
which must be kept a record of all stocks in as the rules on trade secrets or processes under
the names of the stockholders alphabetically Republic Act No. 8293, otherwise known as the
arranged; the installments paid and unpaid “Intellectual Property Code of the Philippines”,
on all stock for which subscription has been as amended, Republic Act No. 10173, otherwise
made, and the date of payment of any known as the “Data Privacy Act of 2012”,
installment; a statement of every alienation, Republic Act No. 8799, otherwise known as
sale or transfer of stock made, the date “The Securities Regulation Code”, and the
thereof, and by and to whom made; and such Rules of Court.
other entries as the by-laws may prescribe.
The stock and transfer book shall be kept in A requesting party who is not a stockholder or
the principal office of the corporation or in the member of record, or is a competitor, director,
office of its stock transfer agent and shall be officer, controlling stockholder or otherwise
open for inspection by any director or represents the interests of a competitor shall
stockholder of the corporation at reasonable have no right to inspect or demand
hours on business days. reproduction of corporate records.
No stock transfer agent or one engaged Any stockholder who shall abuse the rights
principally in the business of registering granted under this section shall be penalized
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transfers of stocks in behalf of a stock under Section 158 of this Code, without
corporation shall be allowed to operate in the prejudice to the provisions of Republic Act No.
Philippines unless he secures a license from 8293, otherwise known as the “Intellectual
the Securities and Exchange Commission Property Code of the Philippines”, as amended,
and pays a fee as may be fixed by the and Republic Act No. 10173, otherwise known
Commission, which shall be renewable as the “Data Privacy Act of 2012”.
annually: Provided, That a stock corporation
is not precluded from performing or making Any officer or agent of the corporation who shall
transfer of its own stocks, in which case all refuse to allow the inspection and/or
the rules and regulations imposed on stock reproduction of records in accordance with the
transfer agents, except the payment of a provisions of this Code shall be liable to such
license fee herein provided, shall be director, trustee, stockholder or member for
applicable. (51a and 32a; P.B. No. 268.) damages, and in addition, shall be guilty of an
offense which shall be punishable under
Section 161 of this Code: Provided, That if such
refusal is made pursuant to a resolution or order
of the board of directors or trustees, the liability
under this section for such action shall be
imposed upon the directors or trustees who
voted for such refusal: Provided further, That it
shall be a defense to any action under this
section that the person demanding to examine
and copy excerpts from the corporation’s
records and minutes has improperly used any
information secured through any prior
examination of the records or minutes of such
corporation or of any other corporation, or was
not acting in good faith or for a legitimate
purpose in making the demand to examine or
reproduce corporate records, or is a competitor,
director, officer, controlling stockholder or
otherwise represents the interests of a
competitor.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 75. Right to financial statements. – SEC. 74. Right to Financial Statements. – A
Within ten (10) days from receipt of a written corporation shall furnish a stockholder or
request of any stockholder or member, the member, within ten (10) days from receipt of their
corporation shall furnish to him its most written request, its most recent financial statement,
recent financial statement, which shall in the form and substance of the financial reporting
include a balance sheet as of the end of the required by the Commission.
last taxable year and a profit or loss
statement for said taxable year, showing in At the regular meeting of stockholders or members,
reasonable detail its assets and liabilities and the board of directors or trustees shall present to
the result of its operations. such stockholders or members a financial report of
At the regular meeting of stockholders or the operations of the corporation for the preceding
members, the board of directors or trustees year, which shall include financial statements, duly
shall present to such stockholders or signed and certified in accordance with this Code,
members a financial report of the operations and the rules the Commission may prescribe.
of the corporation for the preceding year,
which shall include financial statements, duly However, if the total assets or total liabilities of the
signed and certified by an independent corporation is less than Six hundred thousand
certified public accountant. pesos (P600,000.00), or such other amount as
may be determined appropriate by the
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However, if the paid-up capital of the Department of Finance, the financial statements
corporation is less than P50,000.00, the may be certified under oath by the treasurer and
financial statements may be certified under the president.
oath by the treasurer or any responsible
officer of the corporation. (n)
TITLE IX TITLE IX
Section 76. Plan or merger of consolidation. SEC. 75. Plan of Merger or Consolidation. – Two (2)
– Two or more corporations may merge into or more corporations may merge into a single
a single corporation which shall be one of the corporation which shall be one of the constituent
constituent corporations or may consolidate corporations or may consolidate into a new single
into a new single corporation which shall be corporation which shall be the consolidated
the consolidated corporation. corporation.
The board of directors or trustees of each The board of directors or trustees of each
corporation, party to the merger or corporation, party to the merger or consolidation,
consolidation, shall approve a plan of merger shall approve a plan of merger or consolidation
or consolidation setting forth the following: setting forth the following:
1. The names of the corporations proposing (a) The names of the corporations proposing to
to merge or consolidate, hereinafter referred merge or consolidate, hereinafter referred to as the
to as the constituent corporations; constituent corporations;
2. The terms of the merger or consolidation (b) The terms of the merger or consolidation and the
and the mode of carrying the same into mode of carrying the same into effect;
effect;
3. A statement of the changes, if any, in the (c) A statement of the changes, if any, in the articles
articles of incorporation of the surviving of incorporation of the surviving corporation in case
corporation in case of merger; and, with of merger; and, in case of consolidation, all the
respect to the consolidated corporation in statements required to be set forth in the articles of
case of consolidation, all the statements incorporation for corporations organized under this
required to be set forth in the articles of Code; and
incorporation for corporations organized
under this Code; and (d) Such other provisions with respect to the
4. Such other provisions with respect to the proposed merger or consolidation as are deemed
proposed merger or consolidation as are necessary or desirable.
deemed necessary or desirable. (n)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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merger or consolidation, the same shall be the same shall be submitted for approval by the
submitted for approval by the stockholders or stockholders or members of each of such
members of each of such corporations at corporations at separate corporate meetings duly
separate corporate meetings duly called for called for the purpose. Notice of such meetings
the purpose. Notice of such meetings shall shall be given to all stockholders or members of
be given to all stockholders or members the respective corporations in the same manner
of the respective corporations, at least as giving notice of regular or special meetings
two (2) weeks prior to the date of the under Section 49 of this Code. The notice shall
meeting, either personally or by registered state the purpose of the meeting and include a
mail. Said notice shall state the purpose of copy or a summary of the plan of merger or
the meeting and shall include a copy or a consolidation.
summary of the plan of merger or
consolidation. The affirmative vote of The affirmative vote of stockholders
stockholders representing at least two-thirds representing at least two-thirds (2/3) of the
(2/3) of the outstanding capital stock of each outstanding capital stock of each corporation in
corporation in the case of stock corporations the case of stock corporations or at least two-
or at least two-thirds (2/3) of the members in thirds (2/3) of the members in the case of non-
the case of non-stock corporations shall be stock corporations shall be necessary for the
necessary for the approval of such plan. Any approval of such plan. Any dissenting
dissenting stockholder in stock corporations stockholder may exercise the right of appraisal
may exercise his appraisal right in in accordance with this Code: Provided, That if
accordance with the Code: Provided, That if after the approval by the stockholders of such
after the approval by the stockholders of such plan, the board of directors decides to abandon
plan, the board of directors decides to the plan, the right of appraisal shall be
abandon the plan, the appraisal right shall be extinguished.
extinguished.
Any amendment to the plan of merger Any amendment to the plan of merger or
or consolidation may be made, provided such consolidation may be made: Provided, That such
amendment is approved by majority vote of amendment is approved by a majority vote of the
the respective boards of directors or trustees respective boards of directors or trustees of all the
of all the constituent corporations and ratified constituent corporations and ratified by the
by the affirmative vote of stockholders affirmative vote of stockholders representing at
representing at least two-thirds (2/3) of the least two-thirds (2/3) of the outstanding capital stock
outstanding capital stock or of two-thirds or of two-thirds (2/3) of the members of each of the
(2/3) of the members of each of the constituent corporations. Such plan, together with
constituent corporations. Such plan, together any amendment, shall be considered as the
with any amendment, shall be considered as agreement of merger or consolidation.
the agreement of merger or consolidation. (n)
Section 78. Articles of merger or SEC. 77. Articles of Merger or Consolidation. – After
consolidation. – After the approval by the the approval by the stockholders or members as
stockholders or members as required by the required by the preceding section, articles of merger
preceding section, articles of merger or or articles of consolidation shall be executed by
articles of consolidation shall be executed by each of the constituent corporations, to be signed
each of the constituent corporations, to be by the president or vice president and certified by
signed by the president or vice-president and the secretary or assistant secretary of each
certified by the secretary or assistant corporation setting forth:
secretary of each corporation setting forth:
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1. The plan of the merger or the plan of (a) The plan of the merger or the plan of
consolidation; consolidation;
2. As to stock corporations, the number of
shares outstanding, or in the case of non- (b) As to stock corporations, the number of shares
stock corporations, the number of members; outstanding, or in the case of non-stock
and corporations, the number of members;
3. As to each corporation, the number of
shares or members voting for and against (c) As to each corporation, the number of shares or
such plan, respectively. (n) members voting for or against such plan,
respectively;
(d) The carrying amounts and fair values of the
assets and liabilities of the respective
companies as of the agreed cut-off date;
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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that the proposed merger or consolidation is be heard. Written notice of the date, time, and place
contrary to or inconsistent with the provisions of hearing shall be given to each constituent
of this Code or existing laws, it shall set a corporation at least two (2) weeks before said
hearing to give the corporations concerned hearing. The Commission shall thereafter proceed
the opportunity to be heard. Written notice of as provided in this Code.
the date, time and place of hearing shall be
given to each constituent corporation at least
two (2) weeks before said hearing. The
Commission shall thereafter proceed as
provided in this Code. (n)
Section 80. Effects of merger or SEC. 79. Effects of Merger or Consolidation. – The
consolidation. – The merger or consolidation merger or consolidation shall have the following
shall have the following effects: effects:
1. The constituent corporations shall become (a) The constituent corporations shall become a
a single corporation which, in case of merger, single corporation which, in case of merger, shall be
shall be the surviving corporation designated the surviving corporation designated in the plan of
in the plan of merger; and, in case of merger; and, in case of consolidation, shall be the
consolidation, shall be the consolidated consolidated corporation designated in the plan of
corporation designated in the plan of consolidation;
consolidation;
2. The separate existence of the constituent (b) The separate existence of the constituent
corporations shall cease, except that of the corporations shall cease, except that of the
surviving or the consolidated corporation; surviving or the consolidated corporation;
3. The surviving or the consolidated
corporation shall possess all the rights, (c) The surviving or the consolidated corporation
privileges, immunities and powers and shall shall possess all the rights, privileges, immunities,
be subject to all the duties and liabilities of a and powers and shall be subject to all the duties and
corporation organized under this Code; liabilities of a corporation organized under this
4. The surviving or the consolidated Code;
corporation shall thereupon and thereafter
possess all the rights, privileges, immunities (d) The surviving or the consolidated corporation
and franchises of each of the constituent shall possess all the rights, privileges, immunities
corporations; and all property, real or and franchises of each constituent corporation; and
personal, and all receivables due on all real or personal property, all receivables due on
whatever account, including subscriptions to whatever account, including subscriptions to shares
shares and other choses in action, and all and other choses in action, and every other interest
and every other interest of, or belonging to, of, belonging to, or due to each constituent
or due to each constituent corporation, shall corporation, shall be deemed transferred to and
be deemed transferred to and vested in such vested in such surviving or consolidated corporation
surviving or consolidated corporation without without further act or deed; and
further act or deed; and
5. The surviving or consolidated corporation (e) The surviving or consolidated corporation shall
shall be responsible and liable for all the be responsible for all the liabilities and obligations
liabilities and obligations of each of the of each constituent corporation as though such
constituent corporations in the same manner surviving or consolidated corporation had itself
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TITLE X TITLE X
Section 81. Instances of appraisal right. – SEC. 80. When the Right of Appraisal May Be
Any stockholder of a corporation shall have Exercised. – Any stockholder of a corporation shall
the right to dissent and demand payment of have the right to dissent and demand payment of
the fair value of his shares in the following the fair value of the shares in the following
instances: instances:
1. In case any amendment to the articles of (a) In case an amendment to the articles of
incorporation has the effect of changing or incorporation has the effect of changing or
restricting the rights of any stockholder or restricting the rights of any stockholder or class of
class of shares, or of authorizing preferences shares, or of authorizing preferences in any respect
in any respect superior to those of superior to those of outstanding shares of any
outstanding shares of any class, or of class, or of extending or shortening the term of
extending or shortening the term of corporate corporate existence;
existence;
(b) In case of sale, lease, exchange, transfer,
2. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or
mortgage, pledge or other disposition of all or substantially all of the corporate property and
substantially all of the corporate property and assets as provided in this Code;
assets as provided in the Code; and
3. In case of merger or consolidation. (n) (c) In case of merger or consolidation; and
Section 82. How right is exercised. – The SEC. 81. How Right is Exercised. – The
appraisal right may be exercised by any dissenting stockholder who votes against a
stockholder who shall have voted against the proposed corporate action may exercise the
proposed corporate action, by making a right of appraisal by making a written demand
written demand on the corporation within on the corporation for the payment of the fair
thirty (30) days after the date on which the value of shares held within thirty (30) days from
vote was taken for payment of the fair value the date on which the vote was taken: Provided,
of his shares: Provided, That failure to make That failure to make the demand within such period
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the demand within such period shall be shall be deemed a waiver of the appraisal right. If
deemed a waiver of the appraisal right. If the the proposed corporate action is implemented, the
proposed corporate action is implemented or corporation shall pay the stockholder, upon
affected, the corporation shall pay to such surrender of the certificate or certificates of stock
stockholder, upon surrender of the certificate representing the stockholder’s shares, the fair
or certificates of stock representing his value thereof as of the day before the vote was
shares, the fair value thereof as of the day taken, excluding any appreciation or depreciation in
prior to the date on which the vote was taken, anticipation of such corporate action.
excluding any appreciation or depreciation in
anticipation of such corporate action.
If within a period of sixty (60) days from the If, within sixty (60) days from the approval of the
date the corporate action was approved by corporate action by the stockholders, the
the stockholders, the withdrawing withdrawing stockholder and the corporation
stockholder and the corporation cannot cannot agree on the fair value of the shares, it shall
agree on the fair value of the shares, it shall be determined and appraised by three (3)
be determined and appraised by three (3) disinterested persons, one of whom shall be named
disinterested persons, one of whom shall be by the stockholder, another by the corporation, and
named by the stockholder, another by the the third by the two (2) thus chosen. The findings of
corporation, and the third by the two thus the majority of the appraisers shall be final, and
chosen. The findings of the majority of the their award shall be paid by the corporation within
appraisers shall be final, and their award thirty (30) days after such award is made: Provided,
shall be paid by the corporation within thirty That no payment shall be made to any dissenting
(30) days after such award is made: stockholder unless the corporation has unrestricted
Provided, That no payment shall be made to retained earnings in its books to cover such
any dissenting stockholder unless the payment: Provided, further, That upon payment by
corporation has unrestricted retained the corporation of the agreed or awarded price, the
earnings in its books to cover such payment: stockholder shall forthwith transfer the shares to the
and Provided, further, That upon payment by corporation.
the corporation of the agreed or awarded
price, the stockholder shall forthwith transfer
his shares to the corporation. (n)
Section 83. Effect of demand and termination SEC. 82. Effect of Demand and Termination of
of right. – From the time of demand for Right. – From the time of demand for payment of
payment of the fair value of a stockholder’s the fair value of a stockholder’s shares until either
shares until either the abandonment of the the abandonment of the corporate action involved
corporate action involved or the purchase of or the purchase of the said shares by the
the said shares by the corporation, all rights corporation, all rights accruing to such shares,
accruing to such shares, including voting and including voting and dividend rights, shall be
dividend rights, shall be suspended in suspended in accordance with the provisions of this
accordance with the provisions of this Code, Code, except the right of such stockholder to
except the right of such stockholder to receive payment of the fair value thereof: Provided,
receive payment of the fair value thereof: That if the dissenting stockholder is not paid the
Provided, That if the dissenting stockholder is value of the said shares within thirty (30) days after
not paid the value of his shares within 30 the award, the voting and dividend rights shall
days after the award, his voting and dividend immediately be restored.
rights shall immediately be restored. (n)
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Section 84. When right to payment ceases. – SEC. 83. When Right to Payment Ceases. – No
No demand for payment under this Title may demand for payment under this Title may be
be withdrawn unless the corporation withdrawn unless the corporation consents thereto.
consents thereto. If, however, such demand If, however, such demand for payment is withdrawn
for payment is withdrawn with the consent of with the consent of the corporation, or if the
the corporation, or if the proposed corporate proposed corporate action is abandoned or
action is abandoned or rescinded by the rescinded by the corporation or disapproved by the
corporation or disapproved by the Securities Commission where such approval is necessary, or
and Exchange Commission where such if the Commission determines that such
approval is necessary, or if the Securities and stockholder is not entitled to the appraisal right,
Exchange Commission determines that such then the right of the stockholder to be paid the fair
stockholder is not entitled to the appraisal value of the shares shall cease, the status as the
right, then the right of said stockholder to be stockholder shall be restored, and all dividend
paid the fair value of his shares shall cease, distributions which would have accrued on the
his status as a stockholder shall thereupon shares shall be paid to the stockholder.
be restored, and all dividend distributions
which would have accrued on his shares
shall be paid to him. (n)
Section 85. Who bears costs of appraisal. – SEC. 84. Who Bears Costs of Appraisal. – The
The costs and expenses of appraisal shall be costs and expenses of appraisal shall be borne by
borne by the corporation, unless the fair the corporation, unless the fair value ascertained by
value ascertained by the appraisers is the appraisers is approximately the same as the
approximately the same as the price which price which the corporation may have offered to pay
the corporation may have offered to pay the the stockholder, in which case they shall be borne
stockholder, in which case they shall be by the latter. In the case of an action to recover
borne by the latter. In the case of an action to such fair value, all costs and expenses shall be
recover such fair value, all costs and assessed against the corporation, unless the
expenses shall be assessed against the refusal of the stockholder to receive payment was
corporation, unless the refusal of the unjustified.
stockholder to receive payment was
unjustified. (n)
Section 86. Notation on certificates; rights of SEC. 85. Notation on Certificates; Rights of
transferee. – Within ten (10) days after Transferee. – Within ten (10) days after demanding
demanding payment for his shares, a payment for shares held, a dissenting stockholder
dissenting stockholder shall submit the shall submit the certificates of stock representing
certificates of stock representing his shares the shares to the corporation for notation that such
to the corporation for notation thereon that shares are dissenting shares. Failure to do so shall,
such shares are dissenting shares. His at the option of the corporation, terminate the rights
failure to do so shall, at the option of the under this Title. If shares represented by the
corporation, terminate his rights under this certificates bearing such notation are transferred,
Title. If shares represented by the certificates and the certificates consequently cancelled, the
bearing such notation are transferred, and rights of the transferor as a dissenting stockholder
the certificates consequently cancelled, the under this Title shall cease and the transferee shall
rights of the transferor as a dissenting have all the rights of a regular stockholder; and all
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stockholder under this Title shall cease and dividend distributions which would have accrued on
the transferee shall have all the rights of a such shares shall be paid to the transferee.
regular stockholder; and all dividend
distributions which would have accrued on
such shares shall be paid to the transferee.
(n)
TITLE XI TITLE XI
Section 87. Definition. – For the purposes of SEC. 86. Definition. – For purposes of this Code
this Code, a non-stock corporation is one and subject to its provisions on dissolution, a non-
where no part of its income is distributable as stock corporation is one where no part of its income
dividends to its members, trustees, or is distributable as dividends to its members,
officers, subject to the provisions of this Code trustees, or officers: Provided, That any profit which
on dissolution: Provided, That any profit a non-stock corporation may obtain incidental to its
which a non-stock corporation may obtain as operations shall, whenever necessary or proper, be
an incident to its operations shall, whenever used for the furtherance of the purpose or purposes
necessary or proper, be used for the for which the corporation was organized, subject to
furtherance of the purpose or purposes for the provisions of this Title.
which the corporation was organized, subject
to the provisions of this Title. The provisions governing stock corporations, when
pertinent, shall be applicable to non-stock
The provisions governing stock corporation, corporations, except as may be covered by specific
when pertinent, shall be applicable to non- provisions of this Title.
stock corporations, except as may be
covered by specific provisions of this Title. (n)
Section 88. Purposes. – Non-stock SEC. 87. Purposes. – Non-stock corporations may
corporations may be formed or organized for be formed or organized for charitable, religious,
charitable, religious, educational, educational, professional, cultural, fraternal,
professional, cultural, fraternal, literary, literary, scientific, social, civic service, or similar
scientific, social, civic service, or similar purposes, like trade, industry, agricultural and like
purposes, like trade, industry, agricultural chambers, or any combination thereof, subject to
and like chambers, or any combination the special provisions of this Title governing
thereof, subject to the special provisions of particular classes of non-stock corporations.
this Title governing particular classes of non-
stock corporations. (n)
CHAPTER I Chapter I
MEMBERS MEMBERS
Section 89. Right to vote. – The right of the SEC. 88. Right to Vote. – The right of the members
members of any class or classes to vote may of any class or classes to vote may be limited,
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be limited, broadened or denied to the extent broadened, or denied to the extent specified in the
specified in the articles of incorporation or the articles of incorporation or the bylaws. Unless so
by-laws. Unless so limited, broadened or limited, broadened, or denied, each member,
denied, each member, regardless of class, regardless of class, shall be entitled to one (1) vote.
shall be entitled to one vote.
CHAPTER II Chapter II
Section 92. Election and term of trustees. – SEC. 91. Election and Term of Trustees. – The
Unless otherwise provided in the articles of number of trustees shall be fixed in the articles of
incorporation or the by-laws, the board of incorporation or bylaws which may or may not be
trustees of non-stock corporations, which more than fifteen (15). They shall hold office for
may be more than fifteen (15) in number as not more than three (3) years until their successors
may be fixed in their articles of incorporation are elected and qualified. Trustees elected to fill
or by-laws, shall, as soon as organized, so vacancies occurring before the expiration of a
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classify themselves that the term of office particular term shall hold office only for the
of one-third (1/3) of their number shall unexpired period.
expire every year; and subsequent
elections of trustees comprising one-third Except with respect to independent trustees of non-
(1/3) of the board of trustees shall be held stock corporations vested with public interest, only
annually and trustees so elected shall a member of the corporation shall be elected as
have a term of three (3) years. Trustees trustee.
thereafter elected to fill vacancies occurring
before the expiration of a particular term shall Unless otherwise provided in the articles of
hold office only for the unexpired period. incorporation or the bylaws, the members may
directly elect officers of a nonstock corporation.
No person shall be elected as trustee unless
he is a member of the corporation.
Section 93. Place of meetings. – The SEC. 92. List of Members and Proxies, Place of
by-laws may provide that the members of a Meetings. – The corporation shall, at all times,
non-stock corporation may hold their regular keep a list of its members and their proxies in
or special meetings at any place even outside the form the Commission may require. The list
the place where the principal office of the shall be updated to reflect the members and
corporation is located: Provided, That proper proxies of record twenty (20) days prior to any
notice is sent to all members indicating the scheduled election. The bylaws may provide that
date, time and place of the meeting: and the members of a nonstock corporation may hold
Provided, further, That the place of meeting their regular or special meetings at any place even
shall be within the Philippines. (n) outside the place where the principal office of the
corporation is located: Provided, That proper notice
is sent to all members indicating the date, time and
place of the meeting: Provided, further, That the
place of meeting shall be within Philippine territory.
Section 94. Rules of distribution. – In case SEC. 93. Rules of Distribution. – The assets of a
dissolution of a non-stock corporation in nonstock corporation undergoing the process
accordance with the provisions of this Code, of dissolution for reasons other than those set
its assets shall be applied and distributed as forth in Section 139 of this Code, shall be applied
follows: and distributed as follows:
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corporation shall be paid, satisfied and (a) All liabilities and obligations of the corporation
discharged, or adequate provision shall be shall be paid, satisfied and discharged, or adequate
made therefore; provision shall be made therefor;
2. Assets held by the corporation upon a (b) Assets held by the corporation upon a condition
condition requiring return, transfer or requiring return, transfer or conveyance, and which
conveyance, and which condition occurs by condition occurs by reason of the dissolution, shall
reason of the dissolution, shall be returned, be returned, transferred or conveyed in accordance
transferred or conveyed in accordance with with such requirements;
such requirements;
3. Assets received and held by the (c) Assets received and held by the corporation
corporation subject to limitations permitting subject to limitations permitting their use only for
their use only for charitable, religious, charitable, religious, benevolent, educational or
benevolent, educational or similar purposes, similar purposes, but not held upon a condition
but not held upon a condition requiring return, requiring return, transfer or conveyance by reason
transfer or conveyance by reason of the of the dissolution, shall be transferred or conveyed
dissolution, shall be transferred or conveyed to one (1) or more corporations, societies or
to one or more corporations, societies or organizations engaged in activities in the
organizations engaged in activities in the Philippines substantially similar to those of the
Philippines substantially similar to those of dissolving corporation according to a plan of
the dissolving corporation according to a plan distribution adopted pursuant to this Chapter;
of distribution adopted pursuant to this
Chapter; (d) Assets other than those mentioned in the
4. Assets other than those mentioned in the preceding paragraphs, if any, shall be distributed in
preceding paragraphs, if any, shall be accordance with the provisions of the articles of
distributed in accordance with the provisions incorporation or the bylaws, to the extent that the
of the articles of incorporation or the by-laws, articles of incorporation or the bylaws determine the
to the extent that the articles of incorporation distributive rights of members, or any class or
or the by-laws, determine the distributive classes of members, or provide for distribution; and
rights of members, or any class or classes of
members, or provide for distribution; and (e) In any other case, assets may be distributed to
5. In any other case, assets may be such persons, societies, organizations or
distributed to such persons, societies, corporations, whether or not organized for profit, as
organizations or corporations, whether or not may be specified in a plan of distribution adopted
organized for profit, as may be specified in a pursuant to this Chapter.
plan of distribution adopted pursuant to this
Chapter. (n)
Section 95. Plan of distribution of assets. – A SEC. 94. Plan of Distribution of Assets. – A plan
plan providing for the distribution of assets, providing for the distribution of assets, consistent
not inconsistent with the provisions of this with the provisions of this Title, may be adopted by
Title, may be adopted by a non-stock a non-stock corporation in the process of
corporation in the process of dissolution in dissolution in the following manner:
the following manner:
The board of trustees shall, by majority a) The board of trustees shall, by majority vote,
vote, adopt a resolution recommending a adopt a resolution recommending a plan of
plan of distribution and directing the distribution and directing the submission thereof to
submission thereof to a vote at a regular or a vote at a regular or special meeting of members
special meeting of members having voting having voting rights;
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Section 96. Definition and applicability of SEC. 95. Definition and Applicability of Title. – A
Title. - A close corporation, within the close corporation, within the meaning of this Code,
meaning of this Code, is one whose articles is one whose articles of incorporation provides that:
of incorporation provide that: (1) All the (a) all the corporation’s issued stock of all classes,
corporation’s issued stock of all classes, exclusive of treasury shares, shall be held of record
exclusive of treasury shares, shall be held of by not more than a specified number of persons,
record by not more than a specified number not exceeding twenty (20); (b) all the issued stock
of persons, not exceeding twenty (20); (2) all of all classes shall be subject to one or more
the issued stock of all classes shall be specified restrictions on transfer permitted by this
subject to one or more specified restrictions Title; and (c) the corporation shall not list in any
on transfer permitted by this Title; and (3) The stock exchange or make any public offering of its
corporation shall not list in any stock stocks of any class. Notwithstanding the foregoing,
exchange or make any public offering of any a corporation shall not be deemed a close
of its stock of any class. Notwithstanding the corporation when at least two-thirds (2/3) of its
foregoing, a corporation shall not be deemed voting stock or voting rights is owned or controlled
a close corporation when at least two-thirds by another corporation which is not a close
(2/3) of its voting stock or voting rights is corporation within the meaning of this Code.
owned or controlled by another corporation
which is not a close corporation within the Any corporation may be incorporated as a close
meaning of this Code. corporation, except mining or oil companies, stock
Any corporation may be incorporated as a exchanges, banks, insurance companies, public
close corporation, except mining or oil utilities, educational institutions and corporations
companies, stock exchanges, banks, declared to be vested with public interest in
insurance companies, public utilities, accordance with the provisions of this Code.
educational institutions and corporations
declared to be vested with public interest in The provisions of this Title shall primarily govern
accordance with the provisions of this Code. close corporations: Provided, That other Titles in
The provisions of this Title shall primarily this Code shall apply suppletorily, except as
govern close corporations: Provided, That otherwise provided under this Title.
the provisions of other Titles of this Code
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Section 97. Articles of incorporation. – The SEC. 96. Articles of Incorporation. – The articles of
articles of incorporation of a close incorporation of a close corporation may provide
corporation may provide: for:
1. For a classification of shares or rights and
the qualifications for owning or holding the (a) A classification of shares or rights, the
same and restrictions on their transfers as qualifications for owning or holding the same, and
may be stated therein, subject to the restrictions on their transfers, subject to the
provisions of the following section; provisions of the following section;
2. For a classification of directors into one or
more classes, each of whom may be voted (b) A classification of directors into one (1) or more
for and elected solely by a particular class of classes, each of whom may be voted for and
stock; and elected solely by a particular class of stock; and
3. For a greater quorum or voting
requirements in meetings of stockholders or (c) Greater quorum or voting requirements in
directors than those provided in this Code. meetings of stockholders or directors than those
The articles of incorporation of a close provided in this Code.
corporation may provide that the business of
the corporation shall be managed by the The articles of incorporation of a close
stockholders of the corporation rather than by corporation may provide that the business of
a board of directors. So long as this provision the corporation shall be managed by the
continues in effect: stockholders of the corporation rather than by
1. No meeting of stockholders need be a board of directors. So long as this provision
called to elect directors; continues in effect, no meeting of stockholders
2. Unless the context clearly requires need be called to elect directors: Provided, That
otherwise, the stockholders of the the stockholders of the corporation shall be
corporation shall be deemed to be deemed to be directors for the purpose of
directors for the purpose of applying the applying the provisions of this Code, unless the
provisions of this Code; and context clearly requires otherwise: Provided,
3. The stockholders of the corporation further, That the stockholders of the
shall be subject to all liabilities of corporation shall be subject to all liabilities of
directors. directors.
The articles of incorporation may likewise The articles of incorporation may likewise provide
provide that all officers or employees or that that all officers or employees or that specified
specified officers or employees shall be officers or employees shall be elected or appointed
elected or appointed by the stockholders, by the stockholders, instead of by the board of
instead of by the board of directors. directors.
Section 98. Validity of restrictions on transfer SEC. 97. Validity of Restrictions on Transfer of
of shares. – Restrictions on the right to Shares. – Restrictions on the right to transfer
transfer shares must appear in the articles of shares must appear in the articles of incorporation,
incorporation and in the by-laws as well as in in the by-laws, as well as in the certificate of stock;
the certificate of stock; otherwise, the same otherwise, the same shall not be binding on any
shall not be binding on any purchaser thereof purchaser in good faith. Said restrictions shall not
in good faith. Said restrictions shall not be be more onerous than granting the existing
more onerous than granting the existing stockholders or the corporation the option to
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stockholders or the corporation the option to purchase the shares of the transferring stockholder
purchase the shares of the transferring with such reasonable terms, conditions or period
stockholder with such reasonable terms, stated. If, upon the expiration of said period, the
conditions or period stated therein. If upon existing stockholders or the corporation fails to
the expiration of said period, the existing exercise the option to purchase, the transferring
stockholders or the corporation fails to stockholder may sell their shares to any third
exercise the option to purchase, the person.
transferring stockholder may sell his shares
to any third person.
Section 99. Effects of issuance or transfer of SEC. 98. Effects of Issuance or Transfer of Stock
stock in breach of qualifying conditions. - in Breach of Qualifying Conditions. –
1. If stock of a close corporation is issued or
transferred to any person who is not entitled (a) If a stock of a close corporation is issued or
under any provision of the articles of transferred to any person who is not eligible to be a
incorporation to be a holder of record of its holder thereof under any provision of the articles of
stock, and if the certificate for such stock incorporation, and if the certificate for such stock
conspicuously shows the qualifications of the conspicuously shows the qualifications of the
persons entitled to be holders of record persons entitled to be holders of record thereof,
thereof, such person is conclusively such person is conclusively presumed to have
presumed to have notice of the fact of his notice of the fact of the ineligibility to be a
ineligibility to be a stockholder. stockholder.
2. If the articles of incorporation of a close
corporation states the number of persons, (b) If the articles of incorporation of a close
not exceeding twenty (20), who are entitled corporation states the number of persons, not
to be holders of record of its stock, and if the exceeding twenty (20), who are entitled to be
certificate for such stock conspicuously stockholders of record, and if the certificate for such
states such number, and if the issuance or stock conspicuously states such number, and the
transfer of stock to any person would cause issuance or transfer of stock to any person would
the stock to be held by more than such cause the stock to be held by more than such
number of persons, the person to whom such number of persons, the person to whom such stock
stock is issued or transferred is conclusively is issued or transferred is conclusively presumed to
presumed to have notice of this fact. have notice of this fact.
3. If a stock certificate of any close
corporation conspicuously shows a (c) If a stock certificate of a close corporation
restriction on transfer of stock of the conspicuously shows a restriction on transfer of the
corporation, the transferee of the stock is corporation’s stock and the transferee acquires the
conclusively presumed to have notice of the stock in violation of such restriction, the transferee
fact that he has acquired stock in violation of is conclusively presumed to have notice of the fact
the restriction, if such acquisition violates the that the stock was acquired in violation of the
restriction. restriction.
4. Whenever any person to whom stock of a
close corporation has been issued or (d) Whenever a person to whom stock of a close
transferred has, or is conclusively presumed corporation has been issued or transferred has or
under this section to have, notice either (a) is conclusively presumed under this section to have
that he is a person not eligible to be a holder notice of: (1) the person’s ineligibility to be a
of stock of the corporation, or (b) that transfer stockholder of the corporation; or (2) that the
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of stock to him would cause the stock of the transfer of stock would cause the stock of the
corporation to be held by more than the corporation to be held by more than the number of
number of persons permitted by its articles of persons permitted under its articles of
incorporation to hold stock of the corporation, incorporation; or (3) that the transfer violates a
or (c) that the transfer of stock is in violation restriction on transfer of stock, and the corporation
of a restriction on transfer of stock, the may, at its option, refuse to register the transfer in
corporation may, at its option, refuse to the name of the transferee.
register the transfer of stock in the name of
the transferee. (e) The provisions of subsection (d) shall not be
5. The provisions of subsection (4) shall not applicable if the transfer of stock, though contrary
be applicable if the transfer of stock, though to subsections (a), (b) or (c), has been consented
contrary to subsections (1), (2) or (3), has to by all the stockholders of the close corporation,
been consented to by all the stockholders of or if the close corporation has amended its articles
the close corporation, or if the close of incorporation in accordance with this Title.
corporation has amended its articles of
incorporation in accordance with this Title. (f) The term “transfer”, as used in this section, is not
6. The term "transfer", as used in this section, limited to a transfer for value.
is not limited to a transfer for value.
7. The provisions of this section shall not (g) The provisions of this section shall not impair
impair any right which the transferee may any right which the transferee may have to either
have to rescind the transfer or to recover rescind the transfer or recover the stock under any
under any applicable warranty, express or express or implied warranty.
implied.
1. Agreements by and among stockholders (a) Agreements duly signed and executed by and
executed before the formation and among all stockholders before the formation and
organization of a close corporation, signed by organization of a close corporation shall survive the
all stockholders, shall survive the incorporation and shall continue to be valid and
incorporation of such corporation and shall binding between such stockholders, if such be their
continue to be valid and binding between and intent, to the extent that such agreements are
among such stockholders, if such be their consistent with the articles of incorporation,
intent, to the extent that such agreements are irrespective of where the provisions of such
not inconsistent with the articles of agreements are contained, except those required
incorporation, irrespective of where the by this Title to be embodied in said articles of
provisions of such agreements are incorporation.
contained, except those required by this Title
to be embodied in said articles of (b) A written agreement signed by two (2) or more
incorporation. stockholders may provide that in exercising any
2. An agreement between two or more voting right, the shares held by them shall be voted
stockholders, if in writing and signed by the as provided as agreed, or in accordance with a
parties thereto, may provide that in procedure agreed upon by them.
exercising any voting rights, the shares held
by them shall be voted as therein provided, (c) No provision in a written agreement signed by
or as they may agree, or as determined in the stockholders, relating to any phase of corporate
accordance with a procedure agreed upon by affairs, shall be invalidated between the parties on
them. the ground that its effect is to make them partners
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Section 101. When board meeting is SEC. 100. When a Board Meeting is Unnecessary
unnecessary or improperly held. - Unless the or Improperly Held. – Unless the by-laws provide
by-laws provide otherwise, any action by the otherwise, any action taken by the directors of a
directors of a close corporation without a close corporation without a meeting called properly
meeting shall nevertheless be deemed valid and with due notice shall nevertheless be deemed
if: valid if:
1. Before or after such action is taken, written
consent thereto is signed by all the directors; (a) Before or after such action is taken, a written
or consent thereto is signed by all the directors; or
2. All the stockholders have actual or implied
knowledge of the action and make no prompt (b) All the stockholders have actual or implied
objection thereto in writing; or knowledge of the action and make no prompt
3. The directors are accustomed to take objection in writing; or
informal action with the express or implied
acquiescence of all the stockholders; or (c) The directors are accustomed to take informal
4. All the directors have express or implied action with the express or implied acquiescence of
knowledge of the action in question and none all the stockholders; or
of them makes prompt objection thereto in
writing. (d) All the directors have express or implied
If a director’s meeting is held without knowledge of the action in question and none of
proper call or notice, an action taken therein them makes a prompt objection in writing.
within the corporate powers is deemed
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ratified by a director who failed to attend, An action within the corporate powers taken at a
unless he promptly files his written objection meeting held without proper call or notice, is
with the secretary of the corporation after deemed ratified by a director who failed to attend,
having knowledge thereof. unless after having knowledge thereof, the
director promptly files his written objection with
the secretary of the corporation.
Section 102. Pre-emptive right in close SEC. 101. Preemptive Right in Close Corporations.
corporations. – The pre-emptive right of – The preemptive right of stockholders in close
stockholders in close corporations shall corporations shall extend to all stock to be issued,
extend to all stock to be issued, including including reissuance of treasury shares, whether
reissuance of treasury shares, whether for for money, property or personal services, or in
money, property or personal services, or in payment of corporate debts, unless the articles of
payment of corporate debts, unless the incorporation provide otherwise.
articles of incorporation provide otherwise.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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shall have the power to arbitrate the dispute. appropriate orders, such as: (a) cancelling or
In the exercise of such power, the altering any provision contained in the articles of
Commission shall have authority to make incorporation, bylaws, or any stockholder’s
such order as it deems appropriate, including agreement; (b) cancelling, altering or enjoining a
an order: (1) cancelling or altering any resolution or act of the corporation or its board of
provision contained in the articles of directors, stockholders, or officers; (c) directing or
incorporation, by-laws, or any stockholder’s prohibiting any act of the corporation or its board of
agreement; (2) cancelling, altering or directors, stockholders, officers, or other persons
enjoining any resolution or act of the party to the action; (d) requiring the purchase at
corporation or its board of directors, their fair value of shares of any stockholder, either
stockholders, or officers; (3) directing or by the corporation regardless of the availability of
prohibiting any act of the corporation or its unrestricted retained earnings in its books, or by the
board of directors, stockholders, officers, or other stockholders; (e) appointing a provisional
other persons party to the action; (4) director; (f) dissolving the corporation; or (g)
requiring the purchase at their fair value of granting such other relief as the circumstances may
shares of any stockholder, either by the warrant.
corporation regardless of the availability of
unrestricted retained earnings in its books, or A provisional director shall be an impartial person
by the other stockholders; (5) appointing a who is neither a stockholder nor a creditor of the
provisional director; (6) dissolving the corporation or any of its subsidiaries or affiliates,
corporation; or (7) granting such other relief and whose further qualifications, if any, may be
as the circumstances may warrant. determined by the Commission. A provisional
A provisional director shall be an impartial director is not a receiver of the corporation and
person who is neither a stockholder nor a does not have the title and powers of a custodian
creditor of the corporation or of any or receiver. A provisional director shall have all the
subsidiary or affiliate of the corporation, and rights and powers of a duly elected director,
whose further qualifications, if any, may be including the right to be notified of and to vote at
determined by the Commission. A provisional meetings of directors until removed by order of the
director is not a receiver of the corporation Commission or by all the stockholders. The
and does not have the title and powers of a compensation of the provisional director shall be
custodian or receiver. A provisional director determined by agreement between such director
shall have all the rights and powers of a duly and the corporation, subject to approval of the
elected director of the corporation, including Commission, which may fix the compensation
the right to notice of and to vote at meetings absent an agreement or in the event of
of directors, until such time as he shall be disagreement between the provisional director and
removed by order of the Commission or by all the corporation.
the stockholders. His compensation shall be
determined by agreement between him and
the corporation subject to approval of the
Commission, which may fix his
compensation in the absence of agreement
or in the event of disagreement between the
provisional director and the corporation.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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corporation may, for any reason, compel the shares held at fair value, which shall not be less
said corporation to purchase his shares at than the par or issued value, when the corporation
their fair value, which shall not be less than has sufficient assets in its books to cover its debts
their par or issued value, when the and liabilities exclusive of capital stock: Provided,
corporation has sufficient assets in its books That any stockholder of a close corporation may, by
to cover its debts and liabilities exclusive of written petition to the Commission, compel the
capital stock: Provided, That any stockholder dissolution of such corporation whenever any of
of a close corporation may, by written petition acts of the directors, officers, or those in control of
to the Securities and Exchange Commission, the corporation is illegal, fraudulent, dishonest,
compel the dissolution of such corporation oppressive or unfairly prejudicial to the corporation
whenever any of acts of the directors, officers or any stockholder, or whenever corporate assets
or those in control of the corporation is illegal, are being misapplied or wasted.
or fraudulent, or dishonest, or oppressive or
unfairly prejudicial to the corporation or any
stockholder, or whenever corporate assets
are being misapplied or wasted.
CHAPTER I – CHAPTER I
Section 108. Board of trustees. – Trustees of SEC. 106. Board of Trustees. –Trustees of
educational institutions organized as non- educational institutions organized as nonstock
stock corporations shall not be less than five corporations shall not be less than five (5) nor more
(5) nor more than fifteen (15): Provided, than fifteen (15): Provided, That the number of
however, That the number of trustees shall trustees shall be in multiples of five (5).
be in multiples of five (5).
Unless otherwise provided in the articles of Unless otherwise provided in the articles of
incorporation on the by-laws, the board of incorporation or by-laws, the board of trustees of
trustees of incorporated schools, colleges, or incorporated schools, colleges, or other institutions
other institutions of learning shall, as soon as of learning shall, as soon as organized, so classify
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organized, so classify themselves that the themselves that the term of office of one-fifth (1/5)
term of office of one-fifth (1/5) of their number of their number shall expire every year. Trustees
shall expire every year. Trustees thereafter thereafter elected to fill vacancies, occurring before
elected to fill vacancies, occurring before the the expiration of a particular term, shall hold office
expiration of a particular term, shall hold only for the unexpired period. Trustees elected
office only for the unexpired period. Trustees thereafter to fill vacancies caused by expiration of
elected thereafter to fill vacancies caused by term shall hold office for five (5) years. A majority of
expiration of term shall hold office for five (5) the trustees shall constitute a quorum for the
years. A majority of the trustees shall transaction of business. The powers and authority
constitute a quorum for the transaction of of trustees shall be defined in the bylaws.
business. The powers and authority of
trustees shall be defined in the by-laws. For institutions organized as stock corporations, the
For institutions organized as stock number and term of directors shall be governed by
corporations, the number and term of the provisions on stock corporations.
directors shall be governed by the provisions
on stock corporations. (169a)
CHAPTER II Chapter II
Section 110. Corporation sole. – For the SEC. 108. Corporation Sole. – For the purpose of
purpose of administering and managing, as administering and managing, as trustee, the affairs,
trustee, the affairs, property and property and temporalities of any religious
temporalities of any religious denomination, denomination, sect or church, a corporation sole
sect or church, a corporation sole may be may be formed by the chief archbishop, bishop,
formed by the chief archbishop, bishop, priest, minister, rabbi, or other presiding elder of
priest, minister, rabbi or other presiding elder such religious denomination, sect, or church.
of such religious denomination, sect or
church. (154a)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 112. Submission of the articles of SEC. 110. Submission of the Articles of
incorporation. – The articles of incorporation Incorporation. – The articles of incorporation must
must be verified, before filing, by affidavit or be verified, by affidavit or affirmation of the chief
affirmation of the chief archbishop, bishop, archbishop, bishop, priest, minister, rabbi, or
priest, minister, rabbi or presiding elder, as presiding elder, as the case may be, and
the case may be, and accompanied by a accompanied by a copy of the commission,
copy of the commission, certificate of election certificate of election or letter of appointment of
or letter of appointment of such chief such chief archbishop, bishop, priest, minister,
archbishop, bishop, priest, minister, rabbi or rabbi, or presiding elder, duly certified to be correct
presiding elder, duly certified to be correct by by any notary public.
any notary public.
From and after the filing with the From and after filing with the Commission of the
Securities and Exchange Commission of the said articles of incorporation, verified by affidavit or
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Section 113. Acquisition and alienation of SEC. 111. Acquisition and Alienation of Property. –
property. – Any corporation sole may A corporation sole may purchase and hold real
purchase and hold real estate and personal estate and personal property for its church,
property for its church, charitable, benevolent charitable, benevolent, or educational purposes,
or educational purposes, and may receive and may receive bequests or gifts for such
bequests or gifts for such purposes. Such purposes. Such corporation may sell or mortgage
corporation may sell or mortgage real real property held by it by obtaining an order for that
property held by it by obtaining an order for purpose from the Regional Trial Court of the
that purpose from the Court of First Instance province where the property is situated upon proof
of the province where the property is situated that the notice of the application for leave to sell or
upon proof made to the satisfaction of the mortgage has been made through publication or as
court that notice of the application for leave directed by the Court, and that it is in the interest of
to sell or mortgage has been given by the corporation that leave to sell or mortgage be
publication or otherwise in such manner and granted. The application for leave to sell or
for such time as said court may have mortgage must be made by petition, duly verified,
directed, and that it is to the interest of the by the chief archbishop, bishop, priest, minister,
corporation that leave to sell or mortgage rabbi, or presiding elder acting as corporation sole,
should be granted. The application for leave and may be opposed by any member of the
to sell or mortgage must be made by petition, religious denomination, sect or church represented
duly verified, by the chief archbishop, bishop, by the corporation sole: Provided, That in cases
priest, minister, rabbi or presiding elder where the rules, regulations, and discipline of the
acting as corporation sole, and may be religious denomination, sect or church, religious
opposed by any member of the religious society, or order concerned represented by such
denomination, sect or church represented by corporation sole regulate the method of acquiring,
the corporation sole: Provided, That in cases holding, selling, and mortgaging real estate and
where the rules, regulations and discipline of personal property, such rules, regulations and
the religious denomination, sect or church, discipline shall govern, and the intervention of the
religious society or order concerned courts shall not be necessary.
represented by such corporation sole
regulate the method of acquiring, holding,
selling and mortgaging real estate and
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Section 114. Filling of vacancies. – The SEC. 112. Filling of Vacancies. – The successors
successors in office of any chief archbishop, in office of any chief archbishop, bishop, priest,
bishop, priest, minister, rabbi or presiding minister, rabbi, or presiding elder in a corporation
elder in a corporation sole shall become the sole shall become the corporation sole on their
corporation sole on their accession to office accession to office and shall be permitted to
and shall be permitted to transact business transact business as such upon filing a copy of their
as such on the filing with the Securities and commission, certificate of election, or letters of
Exchange Commission of a copy of their appointment, duly certified by any notary public with
commission, certificate of election, or letters the Commission.
of appointment, duly certified by any notary
public. During any vacancy in the office of chief
During any vacancy in the office of chief archbishop, bishop, priest, minister, rabbi, or
archbishop, bishop, priest, minister, rabbi or presiding elder of any religious denomination, sect
presiding elder of any religious or church incorporated as a corporation sole, the
denomination, sect or church incorporated as person or persons authorized by the rules,
a corporation sole, the person or persons regulations or discipline of the religious
authorized and empowered by the rules, denomination, sect or church represented by the
regulations or discipline of the religious corporation sole to administer the temporalities and
denomination, sect or church represented by manage the affairs, estate, and properties of the
the corporation sole to administer the corporation sole shall exercise all the powers and
temporalities and manage the affairs, estate authority of the corporation sole during such
and properties of the corporation sole during vacancy.
the vacancy shall exercise all the powers and
authority of the corporation sole during such
vacancy. (158a)
Section 115. Dissolution. – A corporation SEC. 113. Dissolution. – A corporation sole may be
sole may be dissolved and its affairs settled dissolved and its affairs settled voluntarily by
voluntarily by submitting to the Securities submitting to the Commission a verified declaration
and Exchange Commission a verified of dissolution, setting forth:
declaration of dissolution.
(a) The name of the corporation;
The declaration of dissolution shall set
forth: (b) The reason for dissolution and winding up;
1. The name of the corporation;
2. The reason for dissolution and winding up; (c) The authorization for the dissolution of the
3. The authorization for the dissolution of the corporation by the particular religious
corporation by the particular religious denomination, sect or church; and
denomination, sect or church;
4. The names and addresses of the persons (d) The names and addresses of the persons who
who are to supervise the winding up of the are to supervise the winding up of the affairs of the
affairs of the corporation. corporation.
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Section 116. Religious societies. – Any SEC. 114. Religious Societies. – Unless forbidden
religious society or religious order, or any by competent authority, the Constitution, pertinent
diocese, synod, or district organization of any rules, regulations, or discipline of the religious
religious denomination, sect or church, denomination, sect or church of which it is a part,
unless forbidden by the constitution, rules, any religious society, religious order, diocese,
regulations, or discipline of the religious synod, or district organization of any religious
denomination, sect or church of which it is a denomination, sect or church, may, upon written
part, or by competent authority, may, upon consent and/or by an affirmative vote at a meeting
written consent and/or by an affirmative vote called for the purpose of at least two-thirds (2/3) of
at a meeting called for the purpose of at least its membership, incorporate for the administration
two-thirds (2/3) of its membership, of its temporalities or for the management of its
incorporate for the administration of its affairs, properties, and estate by filing with the
temporalities or for the management of its Commission, articles of incorporation verified by
affairs, properties and estate by filing with the the affidavit of the presiding elder, secretary, or
Securities and Exchange Commission, clerk or other member of such religious society or
articles of incorporation verified by the religious order, or diocese, synod, or district
affidavit of the presiding elder, secretary, or organization of the religious denomination, sect or
clerk or other member of such religious church, setting forth the following:
society or religious order, or diocese, synod,
or district organization of the religious (a) That the religious society or religious order, or
denomination, sect or church, setting forth diocese, synod, or district organization is a religious
the following: organization of a religious denomination, sect or
1. That the religious society or religious order, church;
or diocese, synod, or district organization is a
religious organization of a religious (b) That at least two-thirds (2/3) of its membership
denomination, sect or church; has given written consent or has voted to
2. That at least two-thirds (2/3) of its incorporate, at a duly convened meeting of the
membership have given their written consent body;
or have voted to incorporate, at a duly
convened meeting of the body; (c) That the incorporation of the religious society or
3. That the incorporation of the religious religious order, or diocese, synod, or district
society or religious order, or diocese, synod, organization is not forbidden by competent
or district organization desiring to incorporate authority or by the Constitution, rules, regulations
is not forbidden by competent authority or by or discipline of the religious denomination, sect, or
the constitution, rules, regulations or church of which it forms part;
discipline of the religious denomination, sect,
or church of which it forms a part; (d) That the religious society or religious order, or
4. That the religious society or religious order, diocese, synod, or district organization desires to
or diocese, synod, or district organization incorporate for the administration of its affairs,
desires to incorporate for the administration properties and estate;
of its affairs, properties and estate;
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5. The place where the principal office of the (e) The place within the Philippines where the
corporation is to be established and located, principal office of the corporation is to be
which place must be within the Philippines; established and located; and
and
6. The names, nationalities, and residences (f) The names, nationalities, and residence
of the trustees elected by the religious society addresses of the trustees, not less than five (5) nor
or religious order, or the diocese, synod, or more than fifteen (15), elected by the religious
district organization to serve for the first year society or religious order, or the diocese, synod, or
or such other period as may be prescribed by district organization to serve for the first year or
the laws of the religious society or religious such other period as may be prescribed by the laws
order, or of the diocese, synod, or district of the religious society or religious order, or of the
organization, the board of trustees to be diocese, synod, or district organization.
not less than five (5) nor more than fifteen
(15). (160a)
Chapter III
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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DISSOLUTION DISSOLUTION
Section 118. Voluntary dissolution where no SEC. 134. Voluntary Dissolution Where No
creditors are affected. – If dissolution of a Creditors are Affected. – If dissolution of a
corporation does not prejudice the rights of corporation does not prejudice the rights of any
any creditor having a claim against it, the creditor having a claim against it, the dissolution
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dissolution may be effected by majority vote may be effected by majority vote of the board of
of the board of directors or trustees, and by a directors or trustees, and by a resolution adopted
resolution duly adopted by the affirmative by the affirmative vote of the stockholders owning
vote of the stockholders owning at least at least majority of the outstanding capital
two-thirds (2/3) of the outstanding capital stock or majority of the members of a meeting
stock or of at least two-thirds (2/3) of the to be held upon the call of the directors or
members of a meeting to be held upon call trustees.
of the directors or trustees after
publication of the notice of time, place At least twenty (20) days prior to the meeting,
and object of the meeting for three (3) notice shall be given to each shareholder or
consecutive weeks in a newspaper member of record personally, by registered
published in the place where the principal mail, or by any means authorized under its by-
office of said corporation is located; and laws whether or not entitled to vote at the
if no newspaper is published in such meeting, in the manner provided in Section 50
place, then in a newspaper of general of this Code and shall state that the purpose of
circulation in the Philippines, after the meeting is to vote on the dissolution of the
sending such notice to each stockholder corporation. Notice of the time, place, and
or member either by registered mail or by object of the meeting shall be published once
personal delivery at least thirty (30) days prior to the date of the meeting in a newspaper
prior to said meeting. A copy of the published in the place where the principal office
resolution authorizing the dissolution of said corporation is located, or if no
shall be certified by a majority of the newspaper is published in such place, in a
board of directors or trustees and newspaper of general circulation in the
countersigned by the secretary of the Philippines.
corporation. The Securities and Exchange
Commission shall thereupon issue the A verified request for dissolution shall be filed
certificate of dissolution. (62a) with the Commission stating: (a) the reason for
the dissolution; (b) the form, manner, and time
when the notices were given; (c) names of the
stockholders and directors or members and
trustees who approved the dissolution; (d) the
date, place, and time of the meeting in which the
vote was made; and (e) details of publication.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 119. Voluntary dissolution where SEC. 135. Voluntary Dissolution Where Creditors
creditors are affected. – Where the are Affected; Procedure and Contents of Petition. –
dissolution of a corporation may prejudice the Where the dissolution of a corporation may
rights of any creditor, the petition for prejudice the rights of any creditor, a verified
dissolution shall be filed with the Securities petition for dissolution shall be filed with the
and Exchange Commission. The petition Commission. The petition shall be signed by a
shall be signed by a majority of its board of majority of the corporation’s board of directors or
directors or trustees or other officers having trustees, verified by its president or secretary or
the management of its affairs, verified by its one of its directors or trustees, and shall set forth all
president or secretary or one of its directors claims and demands against it, and that its
or trustees, and shall set forth all claims and dissolution was resolved upon by the affirmative
demands against it, and that its dissolution vote of the stockholders representing at least two-
was resolved upon by the affirmative vote of thirds (2/3) of the outstanding capital stock or at
the stockholders representing at least two- least two-thirds (2/3) of the members at a meeting
thirds (2/3) of the outstanding capital stock or of its stockholders or members called for that
by at least two-thirds (2/3) of the members at purpose. The petition shall likewise state: (a) the
a meeting of its stockholders or members reason for the dissolution; (b) the form, manner,
called for that purpose. and time when the notices were given; and (c) the
If the petition is sufficient in form and date, place, and time of the meeting in which the
substance, the Commission shall, by an vote was made. The corporation shall submit to the
order reciting the purpose of the petition, fix Commission the following: (1) a copy of the
a date on or before which objections thereto resolution authorizing the dissolution, certified by a
may be filed by any person, which date shall majority of the board of directors or trustees and
not be less than thirty (30) days nor more countersigned by the secretary of the corporation;
than sixty (60) days after the entry of the and (2) a list of all its creditors.
order. Before such date, a copy of the order
shall be published at least once a week for If the petition is sufficient in form and substance, the
three (3) consecutive weeks in a newspaper Commission shall, by an order reciting the purpose
of general circulation published in the of the petition, fix a deadline for filing objections to
municipality or city where the principal office the petition which date shall not be less than thirty
of the corporation is situated, or if there be no (30) days nor more than sixty (60) days after the
such newspaper, then in a newspaper of entry of the order. Before such date, a copy of the
general circulation in the Philippines, and a order shall be published at least once a week for
similar copy shall be posted for three (3) three (3) consecutive weeks in a newspaper of
consecutive weeks in three (3) public places general circulation published in the municipality or
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in such municipality or city. city where the principal office of the corporation is
Upon five (5) day’s notice, given after the situated, or if there be no such newspaper, then in
date on which the right to file objections as a newspaper of general circulation in the
fixed in the order has expired, the Philippines, and a similar copy shall be posted for
Commission shall proceed to hear the three (3) consecutive weeks in three (3) public
petition and try any issue made by the places in such municipality or city.
objections filed; and if no such objection is
sufficient, and the material allegations of the Upon five (5) days’ notice, given after the date on
petition are true, it shall render judgment which the right to file objections as fixed in the order
dissolving the corporation and directing such has expired, the Commission shall proceed to hear
disposition of its assets as justice requires, the petition and try any issue raised in the
and may appoint a receiver to collect such objections filed; and if no such objection is
assets and pay the debts of the corporation. sufficient, and the material allegations of the
(Rule 104, RCa) petition are true, it shall render judgment dissolving
the corporation and directing such disposition of its
assets as justice requires, and may appoint a
receiver to collect such assets and pay the debts of
the corporation.
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Section 122. Corporate liquidation. – Every SEC. 139. Corporate Liquidation. – Except for
corporation whose charter expires by its own banks, which shall be covered by the applicable
limitation or is annulled by forfeiture or provisions of Republic Act No. 7653, otherwise
otherwise, or whose corporate existence for known as the “New Central Bank Act”, as amended,
other purposes is terminated in any other and Republic Act No. 3591, otherwise known as the
manner, shall nevertheless be continued as Philippine Deposit Insurance Corporation Charter,
a body corporate for three (3) years after the as amended, every corporation whose charter
time when it would have been so dissolved, expires pursuant to its articles of incorporation, is
for the purpose of prosecuting and defending annulled by forfeiture, or whose corporate
suits by or against it and enabling it to settle existence is terminated in any other manner, shall
and close its affairs, to dispose of and convey nevertheless remain as a body corporate for three
its property and to distribute its assets, but (3) years after the effective date of dissolution, for
not for the purpose of continuing the business the purpose of prosecuting and defending suits by
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for which it was established. or against it and enabling it to settle and close its
affairs, dispose of and convey its property, and
distribute its assets, but not for the purpose of
continuing the business for which it was
established.
At any time during said three (3) years, the At any time during said three (3) years, the
corporation is authorized and empowered to corporation is authorized and empowered to
convey all of its property to trustees for the convey all of its property to trustees for the benefit
benefit of stockholders, members, creditors, of stockholders, members, creditors and other
and other persons in interest. From and after persons in interest. After any such conveyance by
any such conveyance by the corporation of the corporation of its property in trust for the benefit
its property in trust for the benefit of its of its stockholders, members, creditors and others
stockholders, members, creditors and others in interest, all interest which the corporation had in
in interest, all interest which the corporation the property terminates, the legal interest vests in
had in the property terminates, the legal the trustees, and the beneficial interest in the
interest vests in the trustees, and the stockholders, members, creditors or other persons-
beneficial interest in the stockholders, in-interest.
members, creditors or other persons in
interest. Except as otherwise provided for in Sections 93
and 94 of this Code, upon the winding up of
Upon the winding up of the corporate affairs, corporate affairs, any asset distributable to any
any asset distributable to any creditor or creditor or stockholder or member who is unknown
stockholder or member who is unknown or or cannot be found shall be escheated in favor of
cannot be found shall be escheated to the the national government.
city or municipality where such assets are
located. Except by decrease of capital stock and as
otherwise allowed by this Code, no corporation
Except by decrease of capital stock and as shall distribute any of its assets or property except
otherwise allowed by this Code, no upon lawful dissolution and after payment of all its
corporation shall distribute any of its assets debts and liabilities.
or property except upon lawful dissolution
and after payment of all its debts and
liabilities. (77a, 89a, 16a)
TITLE XV TITLE XV
Section 123. Definition and rights of foreign SEC. 140. Definition and Rights of Foreign
corporations. – For the purposes of this Corporations. – For purposes of this Code, a foreign
Code, a foreign corporation is one formed, corporation is one formed, organized or existing
organized or existing under any laws other under laws other than those of the Philippines’ and
than those of the Philippines and whose laws whose laws allow Filipino citizens and corporations
allow Filipino citizens and corporations to do to do business in its own country or State. It shall
business in its own country or state. It shall have the right to transact business in the Philippines
have the right to transact business in the after obtaining a license for that purpose in
Philippines after it shall have obtained a accordance with this Code and a certificate of
license to transact business in this country in authority from the appropriate government agency.
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Section 124. Application to existing foreign SEC. 141. Application to Existing Foreign
corporations. – Every foreign corporation Corporations. – Every foreign corporation which on
which on the date of the effectivity of this the date of the effectivity of this Code, is authorized
Code is authorized to do business in the to do business in the Philippines under a license
Philippines under a license therefore issued issued to it shall continue to have such authority
to it, shall continue to have such authority under the terms and conditions of its license,
under the terms and condition of its license, subject to the provisions of this Code and other
subject to the provisions of this Code and special laws.
other special laws. (n)
Section 125. Application for a license. – A SEC. 142. Application for a License. – A foreign
foreign corporation applying for a license to corporation applying for a license to transact
transact business in the Philippines shall business in the Philippines shall submit to the
submit to the Securities and Exchange Commission a copy of its articles of incorporation
Commission a copy of its articles of and bylaws, certified in accordance with law, and
incorporation and by-laws, certified in their translation to an official language of the
accordance with law, and their translation to Philippines, if necessary. The application shall be
an official language of the Philippines, if under oath and, unless already stated in its articles
necessary. The application shall be under of incorporation, shall specifically set forth the
oath and, unless already stated in its articles following:
of incorporation, shall specifically set forth
the following: (a) The date and term of incorporation;
1. The date and term of incorporation;
2. The address, including the street number, (b) The address, including the street number, of the
of the principal office of the corporation in the principal office of the corporation in the country or
country or state of incorporation; State of incorporation;
3. The name and address of its resident
agent authorized to accept summons and (c) The name and address of its resident agent
process in all legal proceedings and, pending authorized to accept summons and process in all
the establishment of a local office, all notices legal proceedings and all notices affecting the
affecting the corporation; corporation, pending the establishment of a local
4. The place in the Philippines where the office;
corporation intends to operate;
5. The specific purpose or purposes which (d) The place in the Philippines where the
the corporation intends to pursue in the corporation intends to operate;
transaction of its business in the Philippines:
Provided, That said purpose or purposes are (e) The specific purpose or purposes which the
those specifically stated in the certificate of corporation intends to pursue in the transaction of
authority issued by the appropriate its business in the Philippines: Provided, That said
government agency; purpose or purposes are those specifically stated in
6. The names and addresses of the present the certificate of authority issued by the appropriate
directors and officers of the corporation; government agency;
7. A statement of its authorized capital stock
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and the aggregate number of shares which (f) The names and addresses of the present
the corporation has authority to issue, directors and officers of the corporation;
itemized by classes, par value of shares,
shares without par value, and series, if any;
8. A statement of its outstanding capital stock (g) A statement of its authorized capital stock and
and the aggregate number of shares which the aggregate number of shares which the
the corporation has issued, itemized by corporation has authority to issue, itemized by
classes, par value of shares, shares without class, par value of shares, shares without par value,
par value, and series, if any; and series, if any;
9. A statement of the amount actually paid in;
and (h) A statement of its outstanding capital stock and
10. Such additional information as may be the aggregate number of shares which the
necessary or appropriate in order to enable corporation has issued, itemized by class, par value
the Securities and Exchange Commission to of shares, shares without par value, and series, if
determine whether such corporation is any;
entitled to a license to transact business in
the Philippines, and to determine and assess (i) A statement of the amount actually paid in; and
the fees payable.
(j) Such additional information as may be necessary
Attached to the application for license shall or appropriate in order to enable the Commission to
be a duly executed certificate under oath by determine whether such corporation is entitled to a
the authorized official or officials of the license to transact business in the Philippines, and
jurisdiction of its incorporation, attesting to to determine and assess the fees payable.
the fact that the laws of the country or state
of the applicant allow Filipino citizens and Attached to the application for license shall be a
corporations to do business therein, and that certificate under oath duly executed by the
the applicant is an existing corporation in authorized official or officials of the jurisdiction of its
good standing. If such certificate is in a incorporation, attesting to the fact that the laws of
foreign language, a translation thereof in the country or State of the applicant allow Filipino
English under oath of the translator shall be citizens and corporations to do business therein,
attached thereto. and that the applicant is an existing corporation in
good standing. If the certificate is in a foreign
The application for a license to transact language, a translation thereof in English under
business in the Philippines shall likewise be oath of the translator shall be attached to the
accompanied by a statement under oath of application.
the president or any other person authorized
by the corporation, showing to the The application for a license to transact business in
satisfaction of the Securities and Exchange the Philippines shall likewise be accompanied by a
Commission and other governmental agency statement under oath of the president or any other
in the proper cases that the applicant is person authorized by the corporation, showing to
solvent and in sound financial condition, and the satisfaction of the Commission and when
setting forth the assets and liabilities of the appropriate, other governmental agencies that the
corporation as of the date not exceeding one applicant is solvent and in sound financial condition,
(1) year immediately prior to the filing of the setting forth the assets and liabilities of the
application. corporation as of the date not exceeding one (1)
Foreign banking, financial and insurance year immediately prior to the filing of the application.
corporations shall, in addition to the above
requirements, comply with the provisions of Foreign banking, financial, and insurance
existing laws applicable to them. In the case corporations shall, in addition to the above
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of all other foreign corporations, no requirements, comply with the provisions of existing
application for license to transact business in laws applicable to them. In the case of all other
the Philippines shall be accepted by the foreign corporations, no application for license to
Securities and Exchange Commission transact business in the Philippines shall be
without previous authority from the accepted by the Commission without previous
appropriate government agency, whenever authority from the appropriate government agency,
required by law. (68a) whenever required by law.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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pesos; Provided, however, That within six (6) amount by which the licensee’s gross income for
months after each fiscal year of the licensee, that fiscal year exceeds Ten million pesos
the Securities and Exchange Commission (P10,000,000.00). The Commission shall also
shall require the licensee to deposit require the deposit of additional securities or
additional securities equivalent in actual financial instruments if the actual market value of
market value to two (2%) percent of the the deposited securities or financial instruments
amount by which the licensee’s gross income has decreased by at least ten percent (10%) of their
for that fiscal year exceeds five million actual market value at the time they were
(P5,000,000.00) pesos. The Securities and deposited. The Commission may, at its discretion,
Exchange Commission shall also require release part of the additional deposit if the gross
deposit of additional securities if the actual income of the licensee has decreased, or if the
market value of the securities on deposit has actual market value of the total deposit has
decreased by at least ten (10%) percent of increased, by more than ten percent (10%) of their
their actual market value at the time they actual market value at the time they were
were deposited. The Securities and deposited. The Commission may, from time to time,
Exchange Commission may at its discretion allow the licensee to make substitute deposits for
release part of the additional securities those already on deposit as long as the licensee is
deposited with it if the gross income of the solvent. Such licensee shall be entitled to collect
licensee has decreased, or if the actual the interest or dividends on such deposits. In the
market value of the total securities on deposit event the licensee ceases to do business in the
has increased, by more than ten (10%) Philippines, its deposits shall be returned, upon the
percent of the actual market value of the licensee’s application and upon proof to the
securities at the time they were deposited. satisfaction of the Commission that the licensee
The Securities and Exchange Commission has no liability to Philippine residents, including the
may, from time to time, allow the licensee to Government of the Republic of the Philippines. For
substitute other securities for those already purposes of computing the securities deposit,
on deposit as long as the licensee is solvent. the composition of gross income and allowable
Such licensee shall be entitled to collect the deductions therefrom shall be in accordance
interest or dividends on the securities with the rules of the Commission.
deposited. In the event the licensee ceases
to do business in the Philippines, the
securities deposited as aforesaid shall be
returned, upon the licensee’s application
therefor and upon proof to the satisfaction of
the Securities and Exchange Commission
that the licensee has no liability to Philippine
residents, including the Government of the
Republic of the Philippines. (n)
Section 127. Who may be a resident agent. – SEC. 144. Who May be a Resident Agent. – A
A resident agent may be either an individual resident agent may be either an individual residing
residing in the Philippines or a domestic in the Philippines or a domestic corporation lawfully
corporation lawfully transacting business in transacting business in the Philippines: Provided,
the Philippines: Provided, That in the case of That an individual resident agent must be of good
an individual, he must be of good moral moral character and of sound financial standing:
character and of sound financial standing. (n) Provided, further, That in case of a domestic
corporation who will act as a resident agent, it
must likewise be of sound financial standing
and must show proof that it is in good standing
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Section 128. Resident agent; service of SEC. 145. Resident Agent; Service of Process. –
process. – The Securities and Exchange As a condition to the issuance of the license for
Commission shall require as a condition a foreign corporation to transact business in the
precedent to the issuance of the license to Philippines, such corporation shall file with the
transact business in the Philippines by any Commission a written power of attorney
foreign corporation that such corporation file designating a person who must be a resident of
with the Securities and Exchange the Philippines, on whom summons and other
Commission a written power of attorney legal processes may be served in all actions or
designating some person who must be a other legal proceedings against such
resident of the Philippines, on whom any corporation, and consenting that service upon
summons and other legal processes may be such resident agent shall be admitted and held
served in all actions or other legal as valid as if served upon the duly authorized
proceedings against such corporation, and officers of the foreign corporation at its home
consenting that service upon such resident office. Such foreign corporation shall likewise
agent shall be admitted and held as valid as execute and file with the Commission an
if served upon the duly authorized officers of agreement or stipulation, executed by the
the foreign corporation at its home office. Any proper authorities of said corporation, in form
such foreign corporation shall likewise and substance as follows:
execute and file with the Securities and
Exchange Commission an agreement or “The (name of foreign corporation) hereby
stipulation, executed by the proper stipulates and agrees, in consideration of being
authorities of said corporation, in form and granted a license to transact business in the
substance as follows: Philippines, that if the corporation shall cease to
"The (name of foreign corporation) does transact business in the Philippines, or shall be
hereby stipulate and agree, in consideration without any resident agent in the Philippines on
of its being granted by the Securities and whom any summons or other legal processes may
Exchange Commission a license to transact be served, then service of any summons or other
business in the Philippines, that if at any time legal process may be made upon the Commission
said corporation shall cease to transact in any action or proceeding arising out of any
business in the Philippines, or shall be business or transaction which occurred in the
without any resident agent in the Philippines Philippines and such service shall have the same
on whom any summons or other legal force and effect as if made upon the duly authorized
processes may be served, then in any action officers of the corporation at its home office.”
or proceeding arising out of any business or
transaction which occurred in the Philippines, Whenever such service of summons or other
service of any summons or other legal process is made upon the Commission, the
process may be made upon the Securities Commission shall, within ten (10) days thereafter,
and Exchange Commission and that such transmit by mail a copy of such summons or other
service shall have the same force and effect legal process to the corporation at its home or
as if made upon the duly-authorized officers principal office. The sending of such copy by the
of the corporation at its home office." Commission shall be a necessary part of and shall
Whenever such service of summons or other complete such service. All expenses incurred by the
process shall be made upon the Securities Commission for such service shall be paid in
and Exchange Commission, the Commission advance by the party at whose instance the service
shall, within ten (10) days thereafter, transmit is made.
by mail a copy of such summons or other
legal process to the corporation at its home It shall be the duty of the resident agent to
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or principal office. The sending of such copy immediately notify the Commission in writing of any
by the Commission shall be necessary part change in the resident agent’s address.
of and shall complete such service. All
expenses incurred by the Commission for
such service shall be paid in advance by the
party at whose instance the service is made.
In case of a change of address of the resident
agent, it shall be his or its duty to immediately
notify in writing the Securities and Exchange
Commission of the new address. (72a; and n)
Section 129. Law applicable. – Any SEC. 146. Law Applicable. – A foreign corporation
foreign corporation lawfully doing business in lawfully doing business in the Philippines shall be
the Philippines shall be bound by all laws, bound by all laws, rules and regulations applicable
rules and regulations applicable to domestic to domestic corporations of the same class, except
corporations of the same class, except such those which provide for the creation, formation,
only as provide for the creation, formation, organization or dissolution of corporations or those
organization or dissolution of corporations or which fix the relations, liabilities, responsibilities, or
those which fix the relations, liabilities, duties of stockholders, members, or officers of
responsibilities, or duties of stockholders, corporations to each other or to the corporation.
members, or officers of corporations to each
other or to the corporation. (73a)
Section 131. Amended license. – A foreign SEC. 148. Amended License. – A foreign
corporation authorized to transact business corporation authorized to transact business in the
in the Philippines shall obtain an amended Philippines shall obtain an amended license in the
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license in the event it changes its corporate event it changes its corporate name, or desires to
name, or desires to pursue in the Philippines pursue other or additional purposes in the
other or additional purposes, by submitting Philippines, by submitting an application with the
an application therefor to the Securities and Commission, favorably endorsed by the
Exchange Commission, favorably endorsed appropriate government agency in the proper
by the appropriate government agency in the cases.
proper cases. (n)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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such corporation may be sued or proceeded corporation may be sued or proceeded against
against before Philippine courts or before Philippine courts or administrative tribunals
administrative tribunals on any valid cause of on any valid cause of action recognized under
action recognized under Philippine laws. Philippine laws.
(69a)
Section 134. Revocation of license. – Without SEC. 151. Revocation of License. – Without
prejudice to other grounds provided by prejudice to other grounds provided under special
special laws, the license of a foreign laws, the license of a foreign corporation to transact
corporation to transact business in the business in the Philippines may be revoked or
Philippines may be revoked or suspended by suspended by the Commission upon any of the
the Securities and Exchange Commission following grounds:
upon any of the following grounds:
1. Failure to file its annual report or pay any (a) Failure to file its annual report or pay any fees
fees as required by this Code; as required by this Code;
2. Failure to appoint and maintain a resident
agent in the Philippines as required by this (b) Failure to appoint and maintain a resident agent
Title; in the Philippines as required by this Title;
3. Failure, after change of its resident agent
or of his address, to submit to the Securities (c) Failure, after change of its resident agent or
and Exchange Commission a statement of address, to submit to the Commission a statement
such change as required by this Title; of such change as required by this Title;
4. Failure to submit to the Securities and
Exchange Commission an authenticated (d) Failure to submit to the Commission an
copy of any amendment to its articles of authenticated copy of any amendment to its articles
incorporation or by-laws or of any articles of of incorporation or bylaws or of any articles of
merger or consolidation within the time merger or consolidation within the time prescribed
prescribed by this Title; by this Title;
5. A misrepresentation of any material matter
in any application, report, affidavit or other (e) A misrepresentation of any material matter in
document submitted by such corporation any application, report, affidavit or other document
pursuant to this Title; submitted by such corporation pursuant to this
6. Failure to pay any and all taxes, imposts, Title;
assessments or penalties, if any, lawfully due
to the Philippine Government or any of its (f) Failure to pay any and all taxes, imposts,
agencies or political subdivisions; assessments or penalties, if any, lawfully due to the
7. Transacting business in the Philippines Philippine Government or any of its agencies or
outside of the purpose or purposes for which political subdivisions;
such corporation is authorized under its
license; (g) Transacting business in the Philippines outside
8. Transacting business in the Philippines as of the purpose or purposes for which such
agent of or acting for and in behalf of any corporation is authorized under its license;
foreign corporation or entity not duly licensed
to do business in the Philippines; or (h) Transacting business in the Philippines as
9. Any other ground as would render it unfit agent of or acting on behalf of any foreign
to transact business in the Philippines. (n) corporation or entity not duly licensed to do
business in the Philippines; or
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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TITLE XVI
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Section 144. Violations of the Code. – SEC. 158. Administrative Sanctions. – If, after
Violations of any of the provisions of this due notice and hearing, the Commission finds
Code or its amendments not otherwise that any provision of this Code, rules or
specifically penalized therein shall be regulations, or any of the Commission’s orders
punished by a fine of not less than one has been violated, the Commission may impose
thousand (P1,000.00) pesos but not more any or all of the following sanctions, taking into
than ten thousand (P10,000.00) pesos or consideration the extent of participation,
by imprisonment for not less than thirty nature, effects, frequency and seriousness of
(30) days but not more than five (5) years, the violation:
or both, in the discretion of the court. If
the violation is committed by a (a) Imposition of a fine ranging from Five
corporation, the same may, after notice thousand pesos (P5,000.00) to Two million
and hearing, be dissolved in appropriate pesos (P2,000,000.00), and not more than One
proceedings before the Securities and thousand pesos (P1,000.00) for each day of
Exchange Commission: Provided, That continuing violation but in no case to exceed
such dissolution shall not preclude the Two million pesos (P2,000,000.00);
institution of appropriate action against
the director, trustee or officer of the (b) Issuance of a permanent cease and desist
corporation responsible for said order;
violation: Provided, further, That nothing
in this section shall be construed to (c) Suspension or revocation of the certificate
repeal the other causes for dissolution of of incorporation; and
a corporation provided in this Code. (190
1/2 a) (d) Dissolution of the corporation and forfeiture
of its assets under the conditions in Title XIV of
this Code.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 137. Outstanding capital stock SEC. 173. Outstanding Capital Stock Defined. –
defined. – The term "outstanding capital The term “outstanding capital stock”, as used in this
stock", as used in this Code, means the total Code, shall mean the total shares of stock issued
shares of stock issued under binding under binding subscription contracts to subscribers
subscription agreements to subscribers or or stockholders, whether fully or partially paid,
stockholders, whether or not fully or partially except treasury shares.
paid, except treasury shares. (n)
Section 138. Designation of governing SEC. 174. Designation of Governing Boards. – The
boards. – The provisions of specific provisions of specific provisions of this Code to the
provisions of this Code to the contrary contrary notwithstanding, nonstock or special
notwithstanding, non-stock or special corporations may, through their articles of
corporations may, through their articles of incorporation or their bylaws, designate their
incorporation or their by-laws, designate their governing boards by any name other than as board
governing boards by any name other than as of trustees.
board of trustees. (n)
Section 139. Incorporation and other fees. – SEC. 175. Collection and Use of Registration,
The Securities and Exchange Commission is Incorporation and Other Fees. – For a more
hereby authorized to collect and receive fees effective implementation of this Code, the
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Section 140. Stock ownership in certain SEC. 176. Stock Ownership in Corporations. –
corporations. – Pursuant to the duties Pursuant to the duties specified by Article XIV of the
specified by Article XIV of the Constitution, Constitution, the National Economic and
the National Economic and Development Development Authority (NEDA) shall, from time to
Authority shall, from time to time, make a time, determine if the corporate vehicle has been
determination of whether the corporate used by any corporation, business, or industry to
vehicle has been used by any corporation or frustrate the provisions of this Code or applicable
by business or industry to frustrate the laws, and shall submit to Congress, whenever
provisions thereof or of applicable laws, and deemed necessary, a report of its findings,
shall submit to the Batasang Pambansa, including recommendations for their prevention or
whenever deemed necessary, a report of its correction.
findings, including recommendations for their
prevention or correction. The Congress of the Philippines may set
Maximum limits may be set by the Batasang maximum limits for stock ownership of individuals
Pambansa for stockholdings in corporations or groups of individuals related to each other by
declared by it to be vested with a public consanguinity, affinity, or by close business
interest pursuant to the provisions of this interests, in corporations declared to be vested with
section, belonging to individuals or groups of public interest pursuant to the provisions of this
individuals related to each other by section, or whenever necessary to prevent anti-
consanguinity or affinity or by close business competitive practices as provided in Republic Act
interests, or whenever it is necessary to No. 10667, otherwise known as the “Philippine
achieve national objectives, prevent illegal Competition Act”, or to implement national
monopolies or combinations in restraint or economic policies designed to promote general
trade, or to implement national economic welfare and economic development, as declared in
policies declared in laws, rules and laws, rules, and regulations.
regulations designed to promote the general
welfare and foster economic development. In recommending to the Congress which
In recommending to the Batasang Pambansa corporations, businesses and industries will be
corporations, businesses or industries to be declared as vested with public interest, and in
declared vested with a public interest and in formulating proposals for limitations on stock
formulating proposals for limitations on stock ownership, the NEDA shall consider the type and
ownership, the National Economic and nature of the industry, size of the enterprise,
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Development Authority shall consider the economies of scale, geographic location, extent of
type and nature of the industry, the size of the Filipino ownership, labor intensity of the activity,
enterprise, the economies of scale, the export potential, as well as other factors which are
geographic location, the extent of Filipino germane to the realization and promotion of
ownership, the labor intensity of the activity, business and industry.
the export potential, as well as other factors
which are germane to the realization and
promotion of business and industry.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Section 142. Confidential nature of SEC. 178. Visitorial Power and Confidential
examination results. – All interrogatories Nature of Examination Results. – The
propounded by the Securities and Exchange Commission shall exercise visitorial powers
Commission and the answers thereto, as well over all corporations, which powers shall
as the results of any examination made by include the examination and inspection of
the Commission or by any other official records, regulation and supervision of
authorized by law to make an examination of activities, enforcement of compliance, and
the operations, books and records of any imposition of sanctions in accordance with this
corporation, shall be kept strictly confidential, Code.
except insofar as the law may require the
same to be made public or where such Should the corporation, without justifiable
interrogatories, answers or results are cause, refuse or obstruct the Commission’s
necessary to be presented as evidence exercise of its visitorial powers, the
before any court. (n) Commission may revoke its certificate of
incorporation, without prejudice to the
imposition of other penalties and sanctions
under this Code.
Section 143. Rule-making power of the SEC. 179. Powers, Functions, and Jurisdiction
Securities and Exchange Commission. – The of the Commission. – The Commission shall have
Securities and Exchange Commission shall the power and authority to:
have the power and authority to implement
the provisions of this Code, and to
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promulgate rules and regulations reasonably (a) Exercise supervision and jurisdiction over
necessary to enable it to perform its duties all corporations and persons acting on their
hereunder, particularly in the prevention of behalf, except as otherwise provided under this
fraud and abuses on the part of the Code;
controlling stockholders, members, directors,
trustees or officers. (n) (b) Pursuant to Presidential Decree No. 902-A,
retain jurisdiction over pending cases involving
intracorporate disputes submitted for final
resolution. The Commission shall retain
jurisdiction over pending suspension of
payment/rehabilitation cases filed as of 30 June
2000 until finally disposed;
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
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Corporation Code (1980) Revised Corporation Code (2019)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
Comparative Matrix
Corporation Code (1980) Revised Corporation Code (2019)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
Comparative Matrix
Corporation Code (1980) Revised Corporation Code (2019)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
Comparative Matrix
Corporation Code (1980) Revised Corporation Code (2019)
Section 146. Repealing clause. – Except as SEC. 187. Repealing Clause. – Batas Pambansa
expressly provided by this Code, all laws or Blg. 68, otherwise known as “The Corporation
parts thereof inconsistent with any provision Code of the Philippines”, is hereby repealed.
of this Code shall be deemed repealed. (n) Any law, presidential decree or issuance,
executive order, letter of instruction,
administrative order, rule or regulation contrary
to or inconsistent with any provision of this Act
is hereby repealed or modified accordingly.
Section 147. Separability of provisions. – SEC. 186. Separability Clause. – If any provision
Should any provision of this Code or any part of this Act is declared invalid or
thereof be declared invalid or unconstitutional, other provisions hereof which
unconstitutional, the other provisions, so far are not affected thereby shall continue to be in
as they are separable, shall remain in force. full force and effect.
(n)
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)
Comparative Matrix
Corporation Code (1980) Revised Corporation Code (2019)
Section 149. Effectivity. – This Code shall SEC. 188. Effectivity. – This Act shall take effect
take effect immediately upon its approval. upon completion of its publication in the Official
Gazette or in at least two (2) newspapers of
general circulation.
(Note: Please check the official versions of the Codes; SEC-OCS March 22, 2019)