Law on Corporation

1.) Enumerate and Discuss the Corporate powers and capacity.

A corporation created by law has its own corporate powers and capacity.
These powers may be divided into three, which are the Express Powers which are
Granted by the law itself, Inherent/Incidental which are not expressly stated as
powers but are deemed to be within the capacity of Corporate Entities, and
Implied/Necessary which Exists as a consequence of the exercise of the express
powers of the corporation in pursuit of its purposes. Further, the powers of the
corporation are further explained in detail in Sec 35 to 44 of the Revised
Corporation Code of the Philippines.

The Corporate Powers and Capacity section (Sec 35) of the Revised
Corporation code delineates the broad spectrum of actions that corporations are
authorized to undertake, including litigation, stock issuance, property management,
agreements, donations, benefit plans, and other essential powers essential for
achieving their objectives. Following this, subsequent sections outline specific
powers and regulations governing corporate activities. For instance, Section 36
enables private corporations to extend or shorten their terms with board majority
approval and subsequent ratification by two-thirds of stakeholders, with provisions
for dissenting stockholders to exercise their right of Appraisal. Section 37 mandates
board and stockholder approval for changes in capital stock or bonded
indebtedness, with detailed notification rules, submission procedures, and
safeguards for corporate creditors' rights.

Further sections address specific corporate actions and requirements, such as

the denial of preemptive rights (Sec 38), procedures for asset sales or disposition
(Sec 39), the power to repurchase own shares (Sec 40), and the authority to invest
in ventures beyond the primary objective (Sec 41), among others. These
regulations ensure transparency, shareholder protection, and adherence to
corporate governance principles. Additionally, provisions are in place to prevent
corporations from engaging in ultra vires acts (Sec 44), thereby restricting them
from exercising powers beyond those granted by the Corporation Code or their
articles of incorporation, except as incidental or necessary to their authorized
activities.

2.) What is a By-Law, its purpose, and how adopted.

A by-law is defined as the rules of action adopted by the corporation for its internal
regulations and for the government of its officers and of its stockholders or
members. In simpler terms it is a rule or regulation established by an organization
or authority to govern its internal affairs or the behavior of those within its
jurisdiction.

Purpose of By-laws in a Corporation:

Internal Governance: By-laws define the structure of the corporation, including the
roles and responsibilities of directors, officers, and shareholders. They establish
procedures for holding meetings, making decisions, and conducting corporate
business.

Shareholder Rights: By-laws may outline the rights and privileges of shareholders,
including voting rights, dividend distributions, and procedures for selling or
transferring shares.

Corporate Procedures: By-laws establish procedures for important corporate actions

such as mergers, acquisitions, amendments to the articles of incorporation, and
dissolution of the corporation.

Legal Compliance: By-laws ensure that the corporation operates in accordance with
applicable laws and regulations governing corporations in its jurisdiction.

The adoption of by-laws in a Philippine corporation follows a process outlined in the

Corporation Code of the Philippines (Batas Pambansa Bilang 68), along with
regulations set by the Securities and Exchange Commission (SEC). Here's an
overview of the typical steps involved:

Drafting: The initial step involves drafting the proposed by-laws. This can be done
by the incorporators, directors, or a committee appointed for this purpose. It's
common for legal counsel to be involved to ensure compliance with Philippine laws
and regulations.

Board Approval: Once the by-laws are drafted, they need to be approved by the
board of directors. A meeting of the board must be called, and a quorum must be
present for the approval. The by-laws may be adopted with a majority vote of the
directors present at the meeting.

Submission to SEC: After the board approval, the by-laws need to be submitted to
the Securities and Exchange Commission (SEC) for review and approval. The SEC
ensures that the proposed by-laws comply with the Corporation Code and other
relevant laws and regulations. The by-laws should be submitted together with other
required documents, such as the articles of incorporation and treasurer's affidavit.

SEC Approval: The SEC will review the submitted by-laws and other documents. If
everything is in order and complies with the law, the SEC will approve the by-laws.
It's important to note that the corporation cannot operate with its by-laws until they
are approved by the SEC.

Filing and Documentation: Once the by-laws are approved by the SEC, they should
be filed with the SEC and kept as part of the corporation's official records. Copies of
the approved by-laws should also be provided to shareholders and other
stakeholders upon request.

Amendment: If there are changes or amendments needed to the by-laws in the

future, the same process outlined above should be followed. Amendments to the
by-laws also require approval by the board of directors and submission to the SEC
for approval.

3.) What is the content of a by law--- can it be amended?

SEC. 46. Contents of Bylaws. - A private corporation may provide the following in
its bylaws:
(a) The time, place and manner of calling and conducting regular or special

meetings of the directors or trustees;

(b) The time and manner of calling and conducting regular or special meetings and
mode of notifying the stockholders or members thereof;

(c) The required quorum in meetings of stockholders or members and the manner
of voting therein.

(d) The modes by which a stockholder, member, director, or trustee may attend
meetings and cast their votes;

(e) The form for proxies of stockholders and members and the manner of voting
them;

(f) Directors' qualifications, duties, responsibilities, and guidelines for director

compensation are to be outlined, along with limits on the number of board
representations for independent directors.

(g) The timing and notification method for annual director elections are to be
specified.

(h) The process for electing officers other than directors and their terms of office
must be detailed.

(i) Penalties for bylaw violations are to be defined.

(j) Stock issuance procedures are to be established for stock corporations.

(k) Any other necessary matters for corporate affairs and governance, including
anti-corruption measures, should be addressed.

In terms of Amendment to Bylaws. -

The majority of the board of directors or trustees, along with owners holding at
least half of the company's stock, or in a nonstock corporation, at least half of the
members, can change or create new bylaws during a meeting called for that
purpose. If two-thirds of the stockholders or members agree, they can give the
board of directors or trustees the power to make these changes. However, this
power can be taken back if the majority of stockholders or members vote for it
during a meeting.

After any changes or new bylaws are made, the company must submit them to the
Commission, along with a certified resolution from the majority of directors or
trustees and the secretary. The Commission will review and certify the bylaws,
ensuring they comply with the law before they become effective.

General Rule and Exception:

The majority of the board of directors or trustees, along with owners holding
at least half of the company's stock (or members in a non-stock corporation), can
change or create new bylaws during a meeting called for that purpose. However, if
two-thirds of the stockholders or members agree, they can give the board the
power to make these changes without needing the majority vote each time.

Therefore, the by-laws can be amended based on the decisions/ votes of the
majority or those with control over the corporation by that I mean owners of the
majority of the outstanding capital stock and also if the Securities and Exchange
Commission approves of the changes or new bylaws.

4.) What are the two types of meetings of the directors, Discuss.

SEC. 52. Regular and Special Meetings of Directors or Trustees; Quorum.

Regular meetings - Regular meetings of the board of directors or trustees of

every corporation shall be held monthly, unless the bylaws provide otherwise.

Special Meetings - Special meetings of the board of directors or trustees may be

held at any time upon the call of the president or as provided in the bylaws.

Meeting Place - Meetings of directors or trustees of corporations may be held

anywhere in or outside of the Philippines, unless the bylaws provide otherwise.

Notice of Meetings - Notice of regular or special meetings stating the date, time
and place of the meeting must be sent to every director or trustee at least two
(2) days prior to the scheduled meeting.

Directors or trustees who cannot physically attend or vote at board meetings can
participate and vote through remote communication such as videoconferencing,
teleconferencing, or other alternative modes of communication that allow them
reasonable opportunities to participate.

5.) How often is it conducted—Is proxy allowed?

- Regular meetings of the board of directors or trustees of every corporation

shall be held monthly, unless the bylaws provide otherwise.
- Special meetings of the board of directors or trustees may be held at any
time upon the call of the president or as provided in the bylaws.
 - Directors or trustees who cannot physically attend or vote at board meetings
can participate and vote through remote communication such as
videoconferencing, teleconferencing, or other alternative modes of
communication that allow them reasonable opportunities to participate.
Directors or trustees cannot attend or vote by proxy at board meetings.

6.) What are the two types of meetings of the stockholders/members , Discuss.

Frequency: (Salient features and major differences)

Regular (usually held once a year)

Special (no period, regardless how often, will depend on the need)

Need of Notice:

Regular (notice should be sent 21 days prior to the conduct of the meeting)

Special (7 days)

Location:

For stockholders:

Conducted at the main/head office as stated in their articles of incorporation as

stated in the articles of incorporation

Mode of Meeting:

Personal inaattend yung meeting (face to face)

7.) How often is it conducted—Is proxy allowed? -

Regular meetings of stockholders or members shall be held annually on a date fixed

in the bylaws, or if not so fixed, on any date after April 15 of every year as
determined by the board of directors or trustees. Proxy voting is generally
recognized and permitted by corporate law and the regulations governing
corporations.