f Het St OF REPRES| NTATIVES

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon C}

SEVENTEENTH CONGRE!
First Regular Session

nous Bit oL324

Introduced by: Representative JOHNNY T. PIMENTEL

EXPLANATORY NOTE

Batas Pambansa Big. 68, otherwise known as the Corporation Code of the
Philippines, has served as the rule governing the corporate world since its
enactment on May 1, 1980. For almost four decades after its effectivity,
various developments have occurred technologically and economically. In
light of these advancements, the provisions of the Code need to be reviewed
to better cater the needs of the 215 century commerce in the Philippines.

‘This Bill grants a perpetual corporate existence for corporations formed in
the Philippines. From the present 50 — year limit, the amendment to the
same intends to prompt and entice entrepreneurs and businesses alike to
take a more long term attitude in promoting sustainable ventures. This
would in turn redound to the national economy with the formation of highly
competitive corporations.

It also updates the provisions of the Code in accommodating the fast
changing technological developments. For the Philippines to effectively
compete in the global market, the laws governing its corporations must be
able to lay the foundations for the quick and accessible means in the flow of
communication. The prevalence of digital devices, electronic channels and
remote communication mechanisms has created a new regime of interaction
not available during the inception of the Corporation Code. As such,
modern-day business operations occur in real-time undermining the
challenges of physical presence, distance and geographical limits through
the use of digital conferences.


‘This Bill seeks to keep the Corporation Code abreast with the new economic
and technological trends.

‘The approval of this Bill is earnestly sought.

JOHNNY T, PIMENTEL ,



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bit no.l324

Introduced by: Representative JOHNNY T. PIMENTEL

AN ACT

AMENDING SECTIONS 11, 14, 19, 51 and 53 OF
BATAS PAMBANSA BLG. 68 OR

THE CORPORATION CODE OF THE PHILIPPINES

SECTION 1. Section 11 of the Batas Pambansa Blg. 68 or the

Corporation Code of the Philippines (hereinafter, Code), is hereby
amended to read as follows:

“Sec. 11.Corporate term. - A corporation shail exist [for a
period] PERPETUALLY, OR AS OTHERWISE PROVIDED FOR
IN THE ARTICLES OF INCORPORATION. CORPORATIONS
[not exceeding fifty (50) years from the date of incorporation
unless sooner dissolved or unless said period is] MAY ALSO BE
RENEWED OR extended [. The corporate term as originally
stated in the articles of incorporation may be extended for
periods not exceeding fifty (50) years in any single instance] by
an amendment of the articles of incorporation, in accordance
with this Code; Provided, That no extension can be made earlier
than five (5) 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 Securities and Exchange
Commission.”

SECTION 2. Section 14 of the Code is hereby amended to read as follows:

“Sec. 14. Contents of articles of incorporation. - All
corporations organized under this Code shall file with the
Securities and Exchange Commission articles of incorporation
in any of the official languages, duly signed and acknowledged


by all of the incorporators, containing substantially the
following matters, except as otherwise prescribed by this Code
or by special law:

1, The name of the corporation;

XXX XXX XXX

4. [The term for which the corporation is to exist]
THE PROVISION SPECIFYING THE PERIOD OF THE
CORPORATE TERM; OTHERWISE, THE CORPORATION
SHALL BE CONSIDERED TO EMBODY A PERPETUAL
EXISTENCE;

2x xxx Xxx

The Securities and Exchange Commission shall not
accept the articles of incorporation of any stock corporation
unless accompanied by a sworn statement of the Treasurer
elected by the subscribers showing that at least twenty-five
(25%) percent of the authorized capital stock of the corporation
has been subscribed, and at least twenty-five (25%) of the total
subscription has been fully paid to him in actual cash and/or in
property the fair valuation of which is equal to at least twenty-
five (25%) percent of the said subscription, such paid-up capital
being not less than fivethousand (P5,000.00) pesos.

THE ARTICLES OF INCORPORATION OR THE
AMENDMENTS TO THE SAME MAY BE FILED THROUGH
ELECTORNIC OR DIGITAL CHANNELS, IN ACCORDANCE
WITH THE RULES AND REGULATIONS OF THE
COMMISSION ON THE USE OF ELECTRONIC DATA
MESSAGES.”

SECTION 3. Section 19 of the Code is hereby amended to read as follows:

A private corporation formed or organized under this Code
commences to have corporate existence and juridical personality
and is deemed incorporated from the date the Securities and
Exchange Commission issues a certificate of incorporation
under its official seal; PROVIDED, THAT THE COMMISSION
MAY ISSUE THE CERTIFICATE OF INCORPORATION IN THE
FORM OF A DIGITAL OR ELECTRONIC DOCUMENT, IN
ACCORDANCE WITH THE RULES AND REGULATIONS OF
THE COMMISSION ON THE USE OF ELECTRONIC DATA


MESSAGES; and thereupon _—the__incorporators,
stockholders/members and their successors shall constitute a
body politic and corporate under the name stated in the articles
of incorporation for the period of time mentioned therein, unless
said period is extended or the corporation is sooner dissolved in
accordance with law.”

SECTION 4. Section 51 of the Code is hereby amended to read as follows:

“Sec. 51. Place and time of meetings of stockholders of
members. - Stockholder’s or member's meetings, whether
regular or special, shall be held in the city or municipality
where the principal office of the corporation is located, and if
practicable in the principal office of the corporation: Provided,
‘That Metro Manila shall, for purposes of this section, be
considered a city or municipality.

WHEN ALLOWED BY THE BY-LAWS OR BY A
MAJORITY OF THE BOARD OF DIRECTORS OR TRUSTEES,
ATTENDANCE AT REGULAR OR SPECIAL MEETINGS MAY
BE MADE THROUGH REMOTE COMMUNICATION AND
VOTING MAY BE CAST IN ABSENTIA.

THE SECURITY AND EXCHANGE COMMISSION SHALL
PROVIDE THE RULES, STANDARDS, OR GUIDELINES
GOVERNING THE ATTENDANCE BY REMOTE
COMMUNICATION AND VOTING IN ABSENTIA.

Notice of meetings shall be in writing, and the time and
place thereof stated therein.

xxx xxx xxx’

SECTION 5. Section 53 of the Code is hereby amended to read as follows:

“Sec. 53. Regular and special meetings of directors or
trustees. - Regular meetings of the board of directors or trustees
of every corporation shall be held monthly, unless the by-laws
provide otherwise

xx xxx 2x

Meetings of directors or trustees of corporations may be
held anywhere in or outside of the Philippines, unless the by-
laws provide otherwise. 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 one (1) day prior to the
scheduled meeting, unless otherwise provided by the by-laws. A
director or trustee may waive this requirement, either expressly
or impliedly.

DIRECTORS OR TRUSTEES ARE NOT ALLOWED ATTEND
OR VOTE BY PROXY AT BOARD MEETINGS; HOWEVER,
WHEN PROVIDED AND PERMITTED BY THE BY-LAWS, THE
DIRECTORS AND TRUSTEES CAN ATTEND BOARD
MEETINGS THROUGH DIGITAL OR ELECTRONIC CHANNELS
THAT ALLOW THEM AN OPPORTUNITY TO PARTICIPATE.”

SECTION 6. Separability Clause. ~ If any part of this Act shall be held
invalid, other provisions which are not affected shall continue to be in force.

SECTION 7. Repealing Clause. - Any law, presidential decree or issuance,
executive order, letter of instruction, administrative order, rule, regulation or
ordinance contrary to or inconsistent with the provisions of the Act is hereby
repealed, modified or amended accordingly.

SECTION 8. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) national newspapers
of general circulation.

Approved,