Title VI

Section 49: Kinds of meetings

-Meetings of directors, trustees, stock holders or members may be REGULAR or SPECIAL
Section 50: Regular and special meetings of stockholders or
members
Regular meetings
 Shall be held annually on a date fixed in the by-laws
 If not so fixed, on any date in April of every year as determined by the board of directors or
trustees.
 Written notice shall be sent to all stockholders or members of record of at least 2 weeks prior
to the
meeting.
Special meetings
 Shall be held at any time deemed necessary or as provided by by-laws.
 Written notice shall be sent to all stockholders or members of record of at least 1 week prior to
the
meeting.
Notes: If there is no person authorized to call for a meeting, the SEC, upon petition of a
stockholder or
member on a showing of good cause thereof, may issue an order to the petitioning stockholder or
member
directing him to call a meeting of the corporation by giving proper notice required by this Code.
 The petitioning stockholder or member shall preside thereat until at least a majority of the
stockholders or members present have chosen one of their number as presiding officer.
Kinds of directors or trustees:
Regular meeting - Held by the board monthly, unless the by-laws provide otherwise.
Special meeting – Held by the board at any time upon call of the president or as provided in the
by-laws.
Note: The president shall preside at all meetings of directors or trustees and of the stockholders
or members,
unless otherwise provided in the by-laws. Thus, the by-laws may provide that the chairman
instead of the
President shall preside at board meetings.
Necessity of meeting
 The corporate powers vested in the board of directors or trustees and to stockholders or
members are
as a BODY and NOT as INDIVIDUALS.
 Stockholders/members can act only in meetings properly convened and assembled.
 Written assent of the stockholders/members without a meeting to a matter requiring action by
them is
not sufficient.
Exceptions to the rule
 Amendment of AIO
 Any action of taken by the directors of a CLOSE CORPORATION without a meeting shall
nevertheless
be deemed valid, unless otherwise provided in the by-laws.
Requisites for a valid meeting of stockholder or members
1. Must be held at the proper place
2. Must be held at the stated date and at the appointed time or at a reasonable time thereof
3. Must be called by the proper person
4. There must be a previous notice
5. There must be a quorum
SECTION 51: Place and time of meetings of stockholders or
members
WHO: Stockholders or members meeting
WHAT: Whether regular or special
WHERE: City or municipality where the principal office of the corporation is located
Proper person to call meeting
Call – Exercised by the person who has the power to call the meeting. It may consist of a
direction to the secretary
of the corporation to notify the stockholders or members of the meeting
Notice – The writing informing the stockholders or members of the meeting
1. Person or persons designated in the by-laws have authority to call stockholders’ or members
meetings
2. In absence of such provision in the by-laws, the meeting may be called by a director or trustee
or by an
officer entrusted with the management of the corporation unless otherwise provided by law.
3. A stockholder or member may make the call on order of the SEC whenever any cause, is no
person
authorized to call a meeting.
4. Special meeting for the removal of directors or trustees may be called by the secretary of the
corporation
or by a stockholder or members
Notice of every meeting required
Regular meetings – No notice need to be given other than that contained in the by-laws when
the time and place
of such meeting are specially designated therein.
Special meetings – Notice must be given.
 If required by the law, whether regular or special notice must be given.
 Under present law, WRITTEN NOTICE must be given 2 weeks before a REGULAR meeting
and 1 week
before a SPECIAL meeting.
 Meetings ordered by SEC, notice is not necessary.
Requisites of notice of meetings
1. Must be issued by one who has authority to issue it
2. Must be in writing
3. Must state the date, time and place of meeting, unless otherwise provided in the by-laws
4. Must state the business to be transacted thereat
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5. Must be send at a certain time before the scheduled meeting as fixed by law, unless a diferrent
period is
required by the by-laws
6. Notice must comply with any other requirements prescribed by the law or by the by-laws of
the
corporation.
Effect of failure to comply with requisites for meeting
Shall be valid even if the meeting be improperly held or called provided the two following
requisites are present.
1. Proceedings had and the business transacted are WITHIN the power or authority of the
corporation (not
ultra vires)
2. All the stockholders or members of the corporation are present of represented at the meeting
SECTION 52: Quorum in meetings
Note: Unless otherwise provided in this code or in the by-laws, a quorum shall consist of the stockholders
representing a
majority of the outstanding capital stock or a majority of the members in case of non-stock corporations.
Corporate Acts Minimum votes required
1. Amendment of articles of
incorporation
 Majority vote of the Board of Directors or trustees
 Vote or written assent of 2/3 of outstanding capital stock.
2. Election of directors or trustees  Majority of the outstanding capital stock or members
entitled
to vote
3. Removal of directors or trustees  2/3 of outstanding capital stock or members entitled to vote
4. To call a special meeting to remove
directors or trustees
 Majority of the outstanding capital stock or members entitled
to vote
5. Ratify a contract of a director/trustee
or officer with the corporation
 2/3 of outstanding capital stock or members entitled to vote
6. Extend or shorten corporate term  Majority vote of the Board of Directors or trustees
 2/3 of outstanding capital stock or members entitled to vote
7. To increase or decrease capital stock  Majority vote of the Board of Directors or trustees
 2/3 of outstanding capital stock or members entitled to vote
8. To incur, create or increase bonded
indebtedness
 Majority vote of the Board of Directors or trustees
 2/3 of outstanding capital stock or members entitled to vote
9. To sell, lease, exchange, mortgage,
pledge or otherwise dispose of all or
substantially all of the corporate
assets
 Majority vote of the Board of Directors or trustees
 2/3 of outstanding capital stock or members entitled to vote
10. To invest corporate funds in another
corporation or business or for any
purpose other than the primary
purpose
 Majority vote of the Board of Directors or trustees
 2/3 of outstanding capital stock or members entitled to vote
11. To issue stock dividends  Majority of the quorum of the Board of Directors
 2/3 of outstanding capital stock or members entitled to vote
Note: Approval of the stockholders is not required with respect to
other dividends such as cash and bond dividends.
12. Enter into a management contract  Majority of the quorum of the Board of Directors or
Trustees
 Majority of the outstanding capital stock or members of
BOTH the MANAGING an MANAGED corporation.
In some cases..
 2/3 of outstanding capital stock or members entitled to vote
of the MANAGED corporation
13. Adopt by-laws  Majority of the outstanding capital stock or members
14. To amend or repeal by-laws or adopt  Majority vote of the Board of Directors or Trustees
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new by-laws  Majority of the outstanding capital stock or members

15. To delegate to the Board of
Directors or Trustees the power to
amend or repeal the by-laws or
adopt new by-laws
 2/3 of outstanding capital stock or members
16. To revoke the preceding power
delegated to the Board of Directors
or Trustees
 Majority of the outstanding capital stock or members
17. To fix the issued price of no-par
value shares
If authorized by the AIO:
 Majority of the quorum of the Board of Directors or Trustees
In the absence of such authority:
 Majority of the outstanding capital stock
18. To effect or amend a plan of merger
or consolidation
 Majority vote of the Board of Directors or Trustees
 2/3 of outstanding capital stock or members of the
CONSTITUENT CORPORATION
19. To dissolve a corporation  Majority vote of the Board of Directors or Trustees
 2/3 of outstanding capital stock or members
20. To adopt a plan of distribution of
assets of a non-stock corporation
 Majority vote of the Board of Directors or Trustees
 2/3 of the members having voting rights.
Greater voting requirement
 A corporation may prescribe a greater voting requirement for the approval of any of the above
corporate
acts in the AIO or by-laws in order to protect the rights of minority stockholders or members.
 If an issue to be resolved requires a majority for it to be passed and there is a tie, a proposition
or proposal
losses.
SECTION 53: Regular and special meeting of directors or trustees
WHO: Directors or trsutees
WHAT: Whether regular or special meeting
WHERE: May be held anywhere in or outside of the Philippines unless the laws provide
otherwise
WHEN: (Regular) Shall be held monthly, unless the by-laws provide otherwise
(Special) May be held at any time upon the call of the president or as provided in the by-laws.
Note: Although it requires the sending of notice of every meeting, whether regular or special,
notice of a regular
meeting need not to be given if the AIO or by-laws specify the time of the meeting.
A director or a trustee may waive the requirement of notice of any meeting, expressly or
impliedly.
SECTION 54: Who shall preside at meetings
Presiding officer at meetings
1. President/Chairman/Vice-Chairman
- The president shall preside at all meetings of directors or trustees and of the stockholders or
members
even where the chairman of the board is present at such meeting, unless otherwise provided in
the bylaws.
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- The by-laws may provide that the chairman, instead of the president, shall preside at board
meetings.
2. Stockholder or member in a temporary capacity
- Where the officer entitled to preside is not present at the time of the meeting
- It can be selected by viva voce vote of the stockholders or members present.
3. Stockholder or member chosen
- If no person is authorized to call a meeting
- The petitioning stockholder or member authorized by the SEC to call a meeting of the
corporation
shall preside thereat until at least majority of the stockholders or members present have chosen
one of
their number as presiding officer
SECTION 55: Right to vote of pledgors, mortgagors and
administrators
Notes: Pledged or mortgaged shares in stock corporations, the pledgor or mortgagor shall have
the right to attend
and vote at meetings of stockholders
 Executors, administrators, receivers and other legal representatives duly appointed by the court
may attend
and vote in behalf of the stockholders or members without need of written proxy.
 Except as provided in section 55, one who does not appear to be a stockholder on the books of
the
corporation is not eligible to vote a stock although he may be entitled to the legal title of the
stock
 A transferee of stock cannot vote upon it if his transfer is not registered in the books of the
corporation.
Manner of voting
1. Directly
2. Indirectly, through a representative
a. By means of a proxy
b. By a trustee under a voting trust agreement
c. By executors, administrators, receivers, or other legal representative duly appointed by the
court
Note: Voting may be cumulative or straight.
Representative voting
1. Legal representative of stockholder or member
2. Pledgee or mortgage of stockholder’s shares – authorization is required by the Code to be
recorded on the
appropriate corporate books by such pledgor or mortgagor.
3. Officer or agent of corporation owning shares
SECTION 56: Voting in case of joint ownership of stock
Notes: The consent of all the co-owners shall be necessary, unless there is a written proxy,
signed by all the coowners
authorizing one or some of them or any other person to vote such share or shares.
SECTION 57: Voting right for treasury shares
Notes: Shall have no voting rights as long as such shares remain in the Treasury
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In case of sale or reissue, treasury shares regain whatever dividends and voting rights to which
they were
originally entitled.
SECTION 58: Proxies
Notes: Proxy designates the formal written authority given by the owner or holder of the stock,
who has a right to
vote it, or by a member, as a principal, to another person, as agent, to exercise the voting rights
of the
former.
 Can also refer to the instrument which evidences the authority of an agent.
Voting by proxy
In non-stock corporations, the right to vote by proxy, or even the right to vote itself may be
denied to members in
the AIO or the by-laws.
Limitations on proxies
 Must be in writing signed by the stockholder or member and filed before the scheduled
meeting with the
corporate secretary.
 Unless otherwise provided in the proxy, it is valid only for the meeting for which it is intended
 A continuing proxy must be for a period not exceeding 5 years at any one time, otherwise it
shall not be
valid and effective after such period.
 DIRECTORS or TRUSTEES CANNOT attend or vote by proxy at board meetings.
Revocation of proxy
 Revocable anytime unless made irrevocable by the giver.
 A proxy becomes irrevocable when “coupled with interest” meaning the proxy-holder has
given or
promised the stockholder a consideration (eg. Loan of money) in return of irrevocable proxy.
Revocation can be made by:
1. Notifying the proxy-holder of the same
2. Signing a new proxy in favor of another
3. Attending the meeting and voting itself
SECTION 59: Voting trusts
Note: Is an arrangement whereby the shares in a company of one or more shareholders and the
voting rights
attached thereto are legally transferred to a trustee, usually for a period not more than 5 years.
 Voting trust specifically required as a condition in a loan agreement, said voting trust may be
for a period
exceeding 5 years but shall automatically expire upon full payment of the loan.
 Unless renewed, all rights granted in a voting trust agreement shall automatically expire at the
end of the
agreed period
 The voting trust certificates as well as the certificate of stock in the name of the trustee/s shall
thereby be
deemed CANCELLED and new certificates of stocks shall be reissued again in the name of the
transferor.
 Voting trustee/s MAY VOTE BY PROXY unless the agreement provides otherwise.
Requirements:
 Must be in writing and notarized, and shall specify the terms and conditions thereof.
 A certified copy of such agreement shall be filed with the corporation and SEC
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 Certificate of stocks covered by the voting trust agreement shall be canceled and new one shall
be issued
in the name of the trustee/s stating that they are issued pursuant to the said agreement.
 Trustee/s shall execute and deliver to the transferors voting trust certificates, which shall be
transferable in
the same manner and with the same effect as certificates of stock.
Limitations
 No voting trust agreement shall be entered into for the purpose of bypassing the law against
monopolies
and illegal combinations in restraint of trade or used for purposes of fraud.
 Voting trust agreement filed with the corporation shall be subject to examination BY ANY
STOCKHOLDER of the corporation in the same manner as any other corporate book or record.
Powers
 Shall possess the right to vote and other rights pertaining to the shares transferred and
registered in his or
their names
 They may vote in person or proxy
 Both the transferor and the trustee/s may also exercise the right of inspection.
 The trustee/s is the legal title holder or owner of the shares so transferred under the agreement.
He is
therefore qualified to be a DIRECTOR.
 Irrevocable if validly executed
 Not limited to any particular meeting