SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
SENATE 
S.B. 2194 
Introduced by Senator Sonny M. Angara 
AN ACT AMENDING BATAS PAMBANSA IBLG. 68 
OR THE CORPORATION CODE OF THE PHILIPPINES 
EXPLANATORY NOTE 
'14 
APfl30 f'S :<17 
Enacted in 1980, the Corporation Code, while still good law for the most part, is 
dated and fails to keep up with the changing times. While other countries reap the 
benefits of a more long-term focus and the acceptance of new business models, the 
Philippines lags behind, remaining bound by express limitations in the Code on the life 
of corporations, who may incorporate, and the form and manner of incorporation. 
Traditional procedures and processes embedded in the Code, which were expedient and 
effective thirty years ago, have been reduced to stumbling blocks for businesses 
struggling to thrive in an increasingly fast-paced environment where communication 
and information exchange steadily accelerate. The constant evolution and escalating 
prevalence of abuses and fraudulent practices in the corporate scene, and the more 
technologically advanced ways of propagating the same, have rendered once-effective 
safeguards in the Code grossly inadequate. 
In addition, the Philippines' performance in international evaluations indicates a 
need for reform. While garnering the distinction of "most improved" in the Ease of 
Doing Business ranking for 2013 (after jumping 30 places to 108th of 189 countries), the 
Philippines is still in the bottom. half of the list, trailing far behind several of its 
Southeast Asian counterparts. 
In the 2012-2013 ASEAN corporate governance 
scorecard report and assessment of its top 100 publicly listed companies, the Philippine 
PLCs merely scored an average of 48.9%. Additionally, in the 2012 Civil Society Report 
by Transparency and Accountability Network (presented to the Conference of the States 
Parties to the United Nations Convention against Corruption in 2012), the Philippines 
was found as having only partially complied with the standards and principles of the UN 
Convention Against Corruption, indicating a vulnerability to "Napoles-like" scams. 
Under this light, the proposed amendments incorporate international best 
standards and practices, specifically tailored to address the needs and realities of the 
1 


Philippine corporate setting, and introduce new concepts and mechanisms to help the 
Philippines keep up with the changing times. In the same manner, the amendments 
are geared towards enabling the Philippines to move towards full compliance with the 
requirements of international bodies and, in the process, make it more attractive to 
investors. Thus, amendments have been introduced to, among others, encourage new 
businesses, contribute to the ease of doing business, strengthen corporate governance, 
better protect the rights of stockholders, minimize/deter corporate abuses and fraud, 
strengthen anti-corruption measures, and fortify the regulatory authority of the 
Commission. 
To encourage new businesses, the amendments include shifting to perpetuity, 
removing the minimum number of incorporators, and allowing the formation of one 
person corporations. 
Thus, corporations in general will have perpetual existence, 
enabling a more long-term mindset that will foster sustainability; smaller businesses 
may reap the advantages of the corporate vehicle with as few as two incorporators; and 
single proprietors may protect their personal properties by setting up one person 
corporations. 
To improve on the ease of doing business, the name verification process will be 
simplified with the use of only "distinguishability" as a criterion, electronic submissions 
and notices will be accepted, and the Commission will have the authority to develop 
new systems such as online registration. 
Additionally, the amendments clarify the 
procedures for dissolution, as well as give non-compliant corporations a grace period for 
compliance. In lieu of immediate revocation, action on matters brought by delinquent 
corporations to the Commission shall be withheld until full compliance is made. 
A good number of the amendments are proposed to strengthen corporate 
governance, which will also better protect the rights of stockholders, and deter 
corporate abuses and fraud as well as graft and corrupt practices. These amendments 
incorporate into the Code most of the standards for good corporate governance found 
in the ASEAN corporate governance scorecard. The Philippines would be the first to 
apply these standards not only to publicly listed companies but to all corporations. 
Thus, provisions have been introduced for increased disclosure and transparency, 
increased director disqualifications, independent directors, allowing attendance at 
meetings by remote communication, and allowing voting in absentia, among others. 
The concept of an emergency board is also introduced to enable the board to act in an 
emergency even when there is a failure of quorum. 
In addition, the amendments to improve corporate governance also protect 
stockholders. Other amendments have likewise been introduced for this particular 
purpose, including expressly extending the right of inspection to a stockholder's counsel 
or representative and providing a solution to the problem of perpetual holdovers. With 
respect to the latter, the Commission will have the authority to direct the holding of a 
meeting upon notice of a failure to hold the same, and will have access to corporate 
2 


records necessary for this purpose. The meeting called by the Commission will have a 
special measure of quorum, i.e. whoever is in attendance, in order to compel 
attendance at the meeting and to reduce instances of deliberate non-attendance to 
avoid quorum. 
The proposed amendments for corporate governance are also intended to curb 
corporate abuses and fraud, as well as strengthen anti-corruption measures. In the 
fight against corporate abuses and fraud, and graft and corrupt practices, whistleblower 
provisions have been included and a code of ethics/standards of conduct will be 
required in the by-laws. 
These are in addition to the proposal to include criminal 
liability for the usage of the corporate vehide for fraud, and ~)raft and corrupt practices 
whether done directly or through an intermediary (including the dissolution of the 
corporation and the forfeiture of its assets) and for retaliation against whistleblowers. 
In these instances, corporate criminal liability shall be separate and distinct from the 
criminal liability of responsible officers and directors. 
The other amendments are intended to fortify the regulatory authority of the 
Commission. Thus, provisions on the following, among others, have been included: the 
harmonization of its powers with those in the Securities and Regulation Code, greater 
visitorial powers, powers to remove signages of deregistered names, issuance of ex 
parte cease and desist orders to prevent fraud or injury to the public, forfeiture of 
assets when the corporate vehicle is used for fraud or graft and corrupt practices, and 
fiscal autonomy. 
With the foregoing backdrop and objectives in mind, the urgency of the 
amendments becomes apparent. It is hoped that these amendments will be given 
priority status so that the vision of a globally competitive Philippines may be achieved. 
In view of the foregoing, immediate approval of this bill is earnestly sought. 
~~J 
~ 
M.ANGARA 
3 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
) 
) 
SENATE 
S.B. 2194 
'14 
APR 30 
115 :47 
I) {,' J '~'" I'. r It,"" 
,,, 
~~!.J" ", , 
, .. " 
d 
----------"~-----. ----- - -- ., 
- - - -- ."--- ------
-~- ---, --.-.--~-
----~-- -----.. ~----~---
Introduced by Senator Soilny M. Angara 
AN ACT AMENDING BATAS PAMBANSA ERG. 68 
OR THE CORPORATION CODE OF THE PHILIPPINES 
Be it enacted by the Senate and House of Representatives of the PI7ilippines in Congress 
assembled: 
SECTION 1. 
Section 6 of Batas Pambansa Big. 68 or The Corporation Code of the 
2 
Philippines (hereinafter, Code), is hereby amended to read as follows: 
3 
"Sec. 6, Classification of shares. -
The shares of stock of stock 
4 
corporations may be divided into classes or series of shares, or both, any of 
5 
which classes or series of shares may have such rights, privileges or 
6 
restrictions as may be stated in the articles of incorporation: Provided, That no 
7 
share may be deprived of voting rights except those classified and issued as 
8 
"preferred" or "redeemable" shat'es, unless otherwise provided in this Code: 
9 
Provided further, That there shall always be a class or series of shares [which 
10 
have] WITH complete voting rights. Any or all of the shares or series of 
11 
shares may have a par value or have no par value as may be provided for in 
12 
the articles of incorporation: Provided, however, That banks, trust companies, 
13 
insurance companies, PRE-NEED COMPANIES, public utilities, and building 
14 
and loan associations shall not be pet'mitted to issue no .. par value shares of 
15 
stock. 
16 
Preferred shat'es of stock issued by any corporatton may be given 
17 
preference in the distribution of the assets of the cot'poration in case of 
18 
liquidation and in the distribution of dividends, or such other preferences as 
19 • 
may be stated in the articles of incot'poration which are not violative of the 
20 
provisions of this Code: Provided, That preferred shares of stock may be issued 
21 
only with a stated par value. The board of directors, where authorized in the 
22 
articles of incorporation, may Fix the terms and conditions of preferred shares 
23 
of stock or any series thereof: Provided,That such terms and conditions shall 
Page 1 oJ85 


be effective upon[filing of a certificate thereof with the Securities and 
2 
Exchange 
Commission]THE 
ISSUANCE 
BY 
THE 
SECURITIES AND 
3 
EXCHANGE COMMISSION, HEREINAFTER REFERRED TO AS THE 
4 
"COMMISSION", 
OF 
A 
CERTIFICATE 
THAT 
THE 
TERMS 
AND 
5 
CONDITIONS OF THE PREFERRED SHARES ARE NOT INCONSISTENT 
6 
WITH THE PROVISIONS OF THIS CODE, THE CONSTITUTION OF THE 
7 
PHILIPPINES, 
AND 
OTHER 
EXISTING 
LAWS, 
RULES 
AND 
8 
REGULATIONS. 
9 
xxx xxx 
xxx" 
10 
SECTION 2. 
Section 7 of the Code is hereby amended to read as follows: 
11 
"Sec. 7. Founders'shares. - Founders' shares classified as such in the 
12 
articles of incorporation may be given certain rights and privileges not enjoyed 
13 
by the owners of other stocks, provided that where the exclusive right to vote 
14 
and be voted for in the election of directors is granted, it must be for a limited 
15 
period not to exceed five (5) years subject to the approval of the [Securities 
16 
and Exchange]Commission. The five-year period shall commence from the 
17 
date of the aforesaid approval by the [Securities and Exchange] Commission: 
18 
PROVIDED, THAT THE EXCLUSIVE RIGHT TO VOTE OR BE VOTED FOR 
19 
SHALL NOT BE ALLOWED If ITS EXERCISE WILL VIOLATE THE RULES 
20 
AND REGULATIONS OF THE COMMISSION,COMMONWEALTH ACT NO. 
21 
108, AND REPUBLIC ACT 7042iPROVIDED, FURTHER, THAT THE SAID 
22 
RIGHT SHALL BE GRANTED ONLY ONCE. 
23 
AFTER THE LAPSE OF THE FIVE-YEAR PERIOD, THE SHARES 
24 
SHALL AUTOMATICALLY HAVE THE SAME VOTING RIGHTS AND 
25 
PRIVILEGES AS COMMON SHARES." 
26 
SECTION 3. 
Section 8 of the Code is hereby amended to read as follows: 
27 
"Sec. 8. Redeemable shares. -Redeemable shares Inay be issued by the 
28 
corporation when expressly so pmvided in tile articles of Incorporation. [They 
29 
may be purchased or taken up by the corporation upon the expiration of a 
30 
fixed period, regardless of the existence of unrestricted ,-etained earnings in 
31 
the books of the corporation, and upon such other terms and conditions as 
32 
may be stated in the articles of incorporation, which terms and conditions must 
33 
also be stated in the certificate of stock representing said shares.]THE 
34 
CORPORATION MAY REDEEM THE SAID SHARES ONLY If, AFTER 
35 
SUCH REDEMPTION, IT SHALL STILL HAVE SUFfICIENT ASSETS IN 
36 
ITS BOOKS TO COVER LIABILITIES INCLUSIVE OF THE SUBSCRIBED 
Page 2 or 85 


1 
CAPITAL STOCK, AND SUCH REDEMPTION IS IN ACCORDANCE WITH 
2 
THE TERMS AND CONDITIONS STATED IN THE ARTICLES OF 
3 
INCORPORATION 
AND/OR 
THE 
CERTIFICATE 
OF 
STOCK 
4 
REPRESENTING SAID SHARES. 
5 
EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING 
6 
PARAGRAPH, NO CORPORATION SHALL REDEEM, REPURCHASE OR 
7 
REACQUIRE ITS OWN SHARES OF WHATEVER CLASS, UNLESS IT HAS 
8 
SUFFICIENT UNRESTRICTED RETAINED EARNINGS TO FUND THE 
9 
COST 
OF 
SUCH 
REDEMPTION, 
REPURCHASE 
OR 
10 . 
REACQUISITION;PROVIDED, THAT SUCH REQUIREMENT SHALL NOT 
11 
APPLY IF THE REDEMPTION, REPURCHASE OR REACQUISITION IS 
12 
MADE UNDER ANY OF THE FOLLOWING CIRCUMSTIl.NCES: 
13 
a) PURSUANT TO A CONVERSION RIGHT PROVIDED FOR IN 
14 
THE ARTICLES OF INCORPORATION; 
15 
b) TO EFFECT A DECREASE IN THE AUTHORIZED CAPITAL 
16 
STOCK OF THE CORPORATION AS APPROVED BY THE COMMISSION; 
17 
AND 
18 
c) UPON INSTRUCTION TO A CLOSE CORPORATION BY THE 
19 
COMMISSION TO RESOLVE A DEADLOCK." 
20 
SECTION 4. 
Section lOot the Code is hereby amended to read as follows: 
21 
22 
7" 
_., 
24 
25 
26 
"Sec. 10. Number and qUd/ifications of incorporators. - Any number of 
PERSONS,naturaIOR JURIDICAL,[persons not less trldn five (5)] but not 
more than fifteen (15), [all of legal age] and d majority of whom are residents 
of the Philippines], may form a private corporation for any lawful purpose or 
purposes. Each of the incorporators of a stock corporation must own or be a 
subscriber to at least one (1) share of the capital stock of the corporation." 
27 
SECTION 5. 
Section 11 of the Code is hereby amendeel to read as follows: 
2g 
"Sec. 
11.eo/porale 
terJ71. 
-
UNL.ESS 
SOONER 
DISSOL.VED,a 
29 
corporation Slloll exist [for a period] PERPETW\lL Y, OR AS OTHERWISE 
JO 
STATEDIN THE ARTICLES OF INCORPORATION. A TERM LESS THAN 
31 
PERPETUAL[not exceeding fifty (50) years from the elate of incorporation 
32 
unless sooner dissolved or unless said period is] MAY BE extended[. The 
33 
corporate term as originally stated in the articles of incorporation may be 
34 
extended for periods not exceeding fifty (50) years in any single instance] by an 
Page 3 01'85 


amendment of the articles of Incorporation, in accordance with this Code; 
2 
Provided, That no extension can be made earlier theln [five (5)]THREE (3) 
3 
years prior to the original or subsequent expiry date(s) unless there are 
4 
justifiable reasons for an earlier extension as may be determined by the 
5 
[Securities and Exchange] Commission; PROVIDED, FURTHER, THAT SUCH 
6 
EXTENSION OF THE CORPORATE TERM SHALL TAKIE EFFECT ONLY ON 
7 
THE DAY FOLLOWING THE ORIGINAL OR SUB:5EQUENT EXPIRY 
8 
DATE(S). 
9 
THE 
CORPORATE 
TERM 
MAY 
BE 
SHORTENED 
BY 
AN 
10 
AMENDMENT 
OF 
THE 
ARTICLES 
OF 
INCORPORATION 
IN 
I I 
ACCORDANCE WITH THIS CODE. 
12 
REGARDLESS 
OF 
THE TERM, 
ALL CORPORATIONS SHALL 
13 
REMAIN 
UNDER 
THE 
SUPERVISION 
AND 
REVIEW 
OF 
THE 
14 
COMMISSION. A CORPORATION WITH A PERPETUAL TERM OR A 
15 
TERM EXCEEDING TWENTY-FIVE YEARS SHAll COMPLY WITH THE 
16 
RENEWAL 
REQUIREMENTS THE 
COMMISSION 
MAY 
PRESCRIBE 
17 
THEREFOR ON THE TWENTY-fIFTH· YEAR AND EVIERY TWENTY-fIVE 
18 
YEARS THEREAFTER, OR AT SUCH INTERVALS AS THE COMMISSION 
19 
MAY LATER DETERMINE. THE COMMISSION SHALL CHARGE SUCH 
20 
PENALTIES AS IT MAY DEEM APPROPRIATE AND WITHHOLD ACTION 
21 
ON 
ANY MATTER BROUGHT BY A 
RENEWING CORPORATION, 
22 
INCLUDING 
BUT 
NOT 
LIMITED 
TO 
APPLICATIONS 
FOR 
THE 
23 
AMENDMENT OF THE ARTICLES OF INCORPORATION AND/OR BY-
24 
LAWS AND THE ISSUANCE OF CERTIFICATIONS OF GOOD STANDING 
25 
OR 
THOSE 
REQUIRED 
FOR 
TRANSACTIONS 
WITH 
OTHER 
26 
GOVERNMENT AGENCIES, UNTIL FULL COMPLIANCE WITH THE 
27 . 
COMMISSION'S RENEWAL REQUIREMENTS IS MADI:. 
28 
A CORPORATION WHOSE TERM EXPIRED OR LAPSED WITHIN 
29 
TEN YEARS PRIOR TO THE EFFECTIVITY OF THIS CODE,AND WHICH 
J() 
HAS NOT REINCORPORATED,MAY APPLY WITH lfHE COMMISSION 
31 
FOR THE REVIVAL OF ITS CERTIFICATE OF INCORPORATION IF IT 
32 
CAN SHOW THAT REINCORPORATION WOULD BE DIFFICULT OR 
33 
DELETERIOUS TO IT AND THAT IT CONTINUES TO BE A GOING 
34 
CONCERN OR CAN READILY REVIVE ITS OPERATIONS. 
UPON 
JS 
APPROVAL 
BY 
THE 
COMMISSION 
AND 
SUlBJECT 
TO 
THE 
36 
CORPORATION'S 
COMPLIANCE 
WITH 
THE 
COMMISSION'S 
37 
REQUIREMENTS OR CONDITIONS FOR REVIVAL AND THE PAYMENT 
38 
OF THE PRESCRIBED FEES, THE COMMISSION SliALL REVIVE THE 
39 
CORPORATION'S 
CERTIFICATE 
OF 
INCORPORATION 
AND 
THE 
Page 4 01'85 


CORPORATION SHALLTHENCEFORTHEXIST IN ACCORDANCE WITH 
2 
THIS SECTION." 
:l 
SECTION 6. 
Section 12 of the Code is hereby amended to read as follows: 
4 
"Sec. 12. Minimum capital stock required of stock corporations. -Stock 
5 
corporations incorporated under this Code shall [not be required to have 
6 
any]HAVE A minimum 
authorized 
capital 
stock 
OF 
ONE 
MILLION 
7 
(Pl,OOO,OOO.OO) PESOS [except as] OR SUCH AMOUNT AS MAY BE 
R 
DETERMINED BY THE COMMISSION AFTER DUE NOTICE TO THE 
9 
PUBLIC, UNLESSA DIFFERENT AMOUNT IS REQUIRED BY ANY 
10 
LAW[otherwise specifically provided for by special law], and subject to the 
11 
provisions of the following section[,l; PROVIDED, HOWEVER, THAT FOR 
12 
CORPORATIONS ISSUING NO PAR VALUE SHARES, THE MINIMUM 
13 
AUTHORIZED CAPITAL STOCK SHALL BE 200,000 SHARES; AND 
14 
PROVIDED, FURTHER, THAT WHERE CAPITAL CONSISTS OF BOTH 
IS 
PAR AND NO-PAR VALUE SHARES, THE MINIMUM AUTHORIZED 
16 
CAPITAL STOCK SHALL BE ONE MILLION (Pl,OOO,OOO.OO) PESOS." 
17 
SECTION 7. 
Section 13 of the Code is hereby amended to read as follows: 
18 
"Sec. 13, Amount of capital stock to be subscribed and paid for 
19 
purposes of Iflcorporatlol7.-EXCEPT WITH RESPECT TO ONE PERSON 
20 
CORPORATIONS AND SMALL CORPORATIONS WHOSE CAPITAL 
21 
STOCK SHALL BE PAID IN FULL UPON SUBSCRIPTION, at least twenty-
22 
five (25%) percent of the NUMBER OF SHARES OF THiE authol'ized capital 
23 
stock as stated in the articles of incorporation must be subscribed at the time 
24 
of incorporation, and at least twenty-five (25%) perceni: of the VALUE OF 
25 
THE total subscription must be paid upon subscription, the balance to be 
26 
payable 011 a date or dates fixed in Ule contract of subscription without need of 
27 
call, or in the absence of a fixed date 01' dates, upon call for payment by the 
28 
board of directors: Provided, however, That in no case shall the paid-Up capital 
29 
be less than[five thousand (P5,OOO.OO) pesos,]SIXTY TWO THOUSAND 
30 
FIVE HUNDRED (P62,500.00) PESOS, OR SUCH AMOUNT AS MAY BE 
31 
DETERMINED BY HIE COMMISSION OR REQUIRED IN OTHER LAWS; 
32 
PROVIDED, HOWEVER, THAT WITH RESPECT TO NO PAR VALUE 
33 
SHARES, AT LEAST TWENTY-FIVE PERCENT (25%) OF SAID SHARES 
34 
OF THE AUTHORIZED CAPITAL STOCK MUST BE SUBSCRIBED AND 
35 
FULLY PAID UPON SUBSCRIPTION." 
36 
SECTION 8. 
Section 1'1 of the Coue is hel'eby amended to read as follows: 
Page 5 of 85 


"Sec, 14, Contents of articles of incorporation,' - All corporations 
2 • 
organized under this Code shall file with the [Securities and Exchange] 
3 
Commission articles of incorporation in any of the official languages, duly 
4 
signed and acknowledged by all of the incorporators, containing substantially 
5 
the following matters, except as othelwise prescribed by this Code or by 
6 
special law: 
7 
1. The name of the corporation; 
8 
xxx 
xxx 
xxx 
9 
3, [The place where the principal office of the corporation is to be 
10 
located, which must be within the Philippines] THE SPECIFIC ADDRESS, 
11 
WHICH SHALL INCLUDE, WHERE APPLICABLE, THE STREET NUMBER, 
12 
STREET NAME, BARAN GAY, CITY OR MUNICIPALITY, AND PROVINCE 
13 
OF THE PRINCIPAL OFFICE OF THE CORPORATION, WHICH MUST BE 
14 
WITHIN THE PHILIPPINES; 
15 
4, [The terrn fOl' which the corpol'ation is to eXist] A PROVISION 
16 
LIMITING THE DURATION OF THE CORPORATION'S EXISTENCE TO A 
17 
SPECIFIED DATE; OTHERWISE, THE CORPORATION SHALL HAVE 
18 
PERPETUAL EXISTENCEi 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
xxx 
xxx 
xxx 
9, If it be a non-stock corporation, [the amount of its capital,] the 
names, nationalities and residences of the contnbutoro, and [the amount 
contl'ibuted by each] THE TOTAL AMOUNT OF CONTRIBUTED CAPITAL 
BY THE INCORPORATORS AND MEMBERS THEREOf'; [and] 
10. IF IT BE A STOCK CORPORATION, A STATEMENT OF THE 
TREASURER, WHO SHALL BE AN INCORPORATOR, THAT AT LEAST 
TWENTY-FIVE PERCENT (25%) OF THE NUMBER OF SHARES IN THE 
AUTHORIZED CAPITAL STOCK OF THE CORPORJnION HAS BEEN 
SUBSCRIBED AND AT LEAST TWENTY-FIVE PERCENT (25%) OF THE 
TOTAL SUBSCRIPTION HAS BEEN FULLY PAID TO HIM IN ACTUAL 
CASH AND/OR IN PROPERTY HIE 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 
SIXTY TWO THOUSAND FIVE HUNDRED PESOS (1'62,500.00) ;"AND 
xxx 
xxx 
xxx 
Page 6 01'85 


1 
[The Securities and Exchange Commission shall not accept the articles 
2 
of incorporation of any stock corporation unless accompanied by a sworn 
3 
statement of the Treasurer elected by the subscribers showing that at least 
4 
twenty-five (25%) percent of the authorized capital stock of the corporation 
5 
has been subscribed, and at least twenty-five (25%) of the total subscription 
6 
has been fully paid to him in actual cash and/or in propel'ty the fair valuation 
7 
of which is equal to at least twenty-five (25%) percent of the said subscription, 
S 
such paid-up capital being not less than fivethousand (P5,000.00) pesos.] 
9 
ARTICLES OF INCORPORATION OR AMENDtMENTS THERETO 
10 
MAY BE FILED IN THE FORM OF AN ELECTRONIC DOCUMENT, IN 
11 
ACCORDANCE 
WITH THE 
RULES 
AND 
REGULATIONS 
OF 
THE 
12 
COMMISSION ON THE USE OF ELECTRONIC DATA MESSAGES." 
13 
SECTION 9. 
Section 15 is hereby amended to delete the form on the Treasurer's 
14 
Affidavit and to read as follows: 
15 
"Sec. 15. Form[sjof articies of incorporation; Filing. - Unless otherwise 
16 
prescribed by special law, articles of 'Incorporation of all domestic corporations 
17 • 
shall comply substantially with the following form: 
18 
ARTICLES Of- lNCORPORA nON 
19 
OF 
20 
21 
(Name of Corporation) 
22 
2] 
KNOW ALL [MEN] PERSONSBY THESE PRESENTS: 
24 
25 
26 
27 
xxx 
xxx 
xxx 
28 
TENTH: That ________________________ has been elected by the subsc.ribers as 
29 
Treasurer of the Corporation to .act as SUdl until his successor is duly elected 
]0 
and qualified in accordance with the by-laws, [and] that as such Treasurer, he 
31 
has been authorized to receive for and in the name and for the benefit of the 
32 
corporation, all subscription (or fees) or contributions or donations paid or 
33 
given 
by the subscribers or members, THAT HE CERTIFIES THE 
34 
INFORMATION SET FORTH IN THE SEVENTH, EIGHT AND NINTH 
35 
CLAUSES ABOVE, AND THAT liE HAS RECEIVED THE PAID-UP 
36 
PORTION OF THE SUBSCRIPTION IN CASH OR PROPERTY FOR THE 
37 
BENEFIT AND CREDIT OF THE CORPORATION. 
Page 7 01'85 


xxx 
xxx 
xxx 
2 
3 
IN WITNESS WHEREOF, 
we 
have hereunto signed 
these Articles of 
4 
Incorporation, this ................... day of ............................... , [19]20 ........... in 
5 
the 
City/Municipality 
of 
....................................... , 
Province 
of 
6 
................................................. , Republic of the Philippines. 
7 
8 
9 
10 
1 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
14 
25 
26 
27 
2g 
29 
xxx 
xxx 
xxx 
[TREASURER'S AFFIDAVIT 
xxx 
xxx 
xxx 
NOTARY PUBLIC 
My commission expires on ........................... , 19 
Doc. No ................ ; 
Page No ................ ; 
Book No ............... ; 
Series of 19 ........ ] 
SECTION 10. 
Section Hi of the Code IS hereby amelldE:~d to delete "Securities and 
Exchange" from "Securities and Exchange Commission" in each instance. 
SECTION 11. 
Section 17 of the Code is hereby amended to read as follows: 
"Sec. 17. Groullds wlien articles ulincorpurdtiufl 0/ dmendment may be 
rejected or disdpplOved. - The [Secul'ities and Exchange] Commission may 
reject the articles of incol'poration or disapprove any amendment trlereto if the 
same is not in compliance with the requirements of this Code: Provided, That 
the Commission shall give the incorporators, DIRECTORS, TRUSTEES OR 
OFFICERS a reasonable time within which to correct or modify the 
objectionable portiOlls of the articles or amendment. The following are grounds 
for such rejection or disapproval: 
1. That the articles of incorporation or any amendment thereto is 
not substantially in accordance with the form prescribed herein; 
xxx 
xxx 
xxx 
Page 8 or 85 


[No articles of incorporation or amendment to articles of incorporation of 
2 
banks, banking and quasi-banking institutions, building and loan associations, 
3 
trust companies and other financial intermediaries, insurance companies, public 
4 
utilities, educational institutions, and other corporations governed by special 
5 
laws shall be accepted or approved by the Commission unless accompanied by 
6 
a favorable recommendation of the appropriate government agency to the 
7 
effect that such article~ or amendment is in accordance with law.] 
8 
THE 
COMMISSION 
MAY REQUIRE 
AN 
ENDORSEMENT OR 
9 
FAVORABLE 
RECOMMENDATION 
FROM 
ANOTHIER 
APPROPRIATE 
10 
GOVERNMENT AGENCY. 
11 
SECTION 12. 
Section 18 of the Code is hereby amended to read as follows: 
12 
"Sec. 18. Corporate name. - No corporate name may be allowed by the 
13 
[Securities and Exchange] Commission if the proposed name is [identical or 
14 
deceptively or confusingly similar] NOT DISTINGUISHABLE[to that of] 
15 
FROM THAT ALREADY RESERVED OR REGISTERED IN FAVOR OF any 
16 
existing corporation or to any other name already protected by law, or WHEN 
17 
THE SAMEis [patently deceptive, confUSing or] contrary to existing laws. 
IX 
THE COMMISSION SHALL DETERMINE WHETHER A NAME IS 
19 
DISTINGUISHABLE fROM ANOTHER NAME FOR PURPOSES OF THIS 
20 
CODE. WITHOUT EXCLUDING OTHER NAMES WHICH MAY NOT 
21 
CONSTITUTE DISTINGUISHABLE NAMES AS DETERMINED BY THE 
22 
COMMISSION, AND SUBJECT TO THE RULES OR GUIDELINES THE 
23 
COMMISSION MAY SET WITH RESPECT THERETO, A NAME IS NOT 
24 
CONSIDERED DISTINGUISHABLE FOR PURPOSES OF THIS CODE 
25 
SOLELY BECAUSE IT CONTAINS ONE OR MORE OF THE FOLLOWING: 
26 
1. 
THE 
WORD 
'''CORPORATION'', 
"COMPANY", 
27 
"INCORPORATED", OR "LIMITED", "LIMITED LIABILITY" OR 
28 
AN ABBREVIATION OF ONE OF SUCH WORDS; 
29 
30 
2. 
PUNCTUATIONS, 
ARTICLES, 
CONJUNCTIONS, 
31 
CONTRACTIONS, 
ABBREVIATIONS, 
DIfFERENT 
TENSES, 
32 
SPACING OR NUMBER OF THE SAME WORD OIR PHRASE. 
33 
THE FACT THAT A CORPORATE NAME COMPLIES WITH THIS 
34 
SECTION DOES NOT CREATE SUBSTANTIVE RIGHTS TO THE USE OF 
35 
THAT CORPORATE NAME. 
THE COMMISSION SHAll HAVE THE 
3() 
AUTHORITY TO SUIV1MARIl Y REMOVE FROM REGISTRATION OR 
Page 9 01'85 


RESERVATION ANY NAME WHICH IT LATER DETERMINES TO BE NOT 
2 
DISTINGUISHABLE AS STATED ABOVE. 
3 
WHEN 
A 
CORPORATE 
NAME 
IS 
REMOVED 
FROM 
4 
REGISTRATION, THE CORPORATION SHALL IMMIEDIATELY CEASE 
5 
FROM USING THE SAME AND APPLY FOR THE REGISTRATION OF A 
6 
NEW CORPORATE NAME. SIMILARLY, A CORPORATION DIRECTED BY 
7 
FINAL JUDGMENT TO CHANGE ITS CORPORATE NAME SHALL NOT 
8 
USE THE SAME IN ITS OPERATIONS OR IN ANY OTHER WAY, EVEN 
9 
AFTER ITS DISSOLUTION OR REVOCATION AS A CORPORATION. 
1 () 
When a change in the corporate name is approved, the Commission 
11 
shall issue an amended certificate of incorporation under the amended name. 
12 
IF A 
CORPORATION 
USES 
OR 
CONTINUES 
TO 
USE 
A 
13 
CORPORATE NAME ALREADY REMOVED FROM RIEGISTRATION OR 
14 
RESERVATION, OR WHICH HAS BEEN DIRECTED TO BE CHANGED BY 
15 
FINAL JUDGMENT, THE COMMISSION SHALL DULY NOTIFY SAID 
16 
CORPORATION AND REQUIRE IT TO CEASE AND DESIST FROM THE 
17 
CONTINUED USE OF SUCH CORPORATE NAME WITHIN A PERIOD OF 
1 g 
FIVE (5) DAYS. IF THE CORPORATION FAILS TO C<DMPL Y WITH THE 
19 
COMMISSION'S 
ORDER WITHIN 
THE 
FIVE-DAY 
PERIOD, THE 
20 
COMMISSION 
MAY 
HOLD 
THE 
CORPORATIOII'l 
AND/OR 
ITS 
21 
RESPONSIBLE DIRECTORS OR OFFICERS IN CONTEMPT, AND/OR 
22 
CAUSE 
THE 
REMOVAL 
OF 
ALL 
VISIBLE 
SIGNAGES, 
MARKS, 
23 
ADVERTISEMENTS, LABELS, PRINTS AND OTHER F.'FFECTS BEARING 
24 
SUCH CORPORATE NAME IN THEIR POSSESSION. ILIABILITY UNDER 
25 
THIS 
SECTION 
SHALL 
BE 
WITHOUT 
PREJUDICE 
TO 
THE 
26 
CORPORATION'S 
AND/OR 
ITS 
RESPONSIBLE 
DIRECTORS' 
OR 
27 
OFFICERS' LIABILITY FOR OTHER ADMINISTRATIVE, CIVIL, OR 
28 
CRIMINAL SANCTIONS UNDER THIS CODe AND OTHER LAWS." 
29 
SECTION 13. 
Sectioll 19 of the Code is hereby amendeci to read as follows: 
30 
"Sec. 19. REGISTRATION, INCORPORATION AND commencement 
]1 
of corporate existence,'-A PERSON OR GROUP OF PEIRSONS DESIRING 
32 
TO INCORPORATE SHALLSUBMIT THE INTENDED CORPORATE NAME 
33 
TO THE COMMISSION FOR VERIFICATION. 
IF THE COMMISSION 
34 
FINDS THAT THE NAME IS DISTINGUISHABLE, THI: NAME SHALL BE 
35 
RESERVED 
IN 
FAVOR 
OF 
THE 
INCORPORATORS. 
THE 
36 
INCORPORATORS SHALL THEN:(A) SUBMn~ AS MAY BE APPLICABLE, 
37 
THEIR ARTICLES Of' INCORPORATION, THEIR BY"LAWS,AND SUCH 
Page 10 ofS5 


OTHER DOCUMENTS AND/OR INFORMATION AS IIilAY BE REQUIRED 
2 
BY THE COMMISSION; AND (B) PAY THE PRESCRIBED fEES. 
3 
INCORPORATORS SHALL HAVE THE OPTIONI OF RESERVING A 
4 
CORPORATE 
NAME, 
SUBMITTING 
THE 
REQUIREMENTS 
FOR 
5 
INCORPORATION AND PAYING THE PRESCRmED FEES EITHER 
6 
THROUGH 
THE 
MANUAL 
PROCESS 
AT 
THE 
OfFICE 
OF 
THE 
7 
COMMISSION OR THROUGH ANY OTHER SYSTEM Of REGISTRATION 
8 
AND INCORPORATION WHICH HIE COMMISSIONI fv1AY ESTABLISH, 
9 
SUBJECT TO THE CORRESPONDING RULES AND PROCEDURES THE 
10 
COMMISSION SHALL PRESCRIBE THEREFOR. 
II 
IF 
THE 
COMMISSION 
FINDS 
THAT 
THE 
SUBMITTED 
12 
DOCUMENTS, INFORMATION AND PAYMENT ARE COMPLETE AND IN 
13 
FULL COMPLIANCE OF THE REQUIREMENTS UNDER THIS CODE AND 
14 
THE RULES Of THE COMMISSION, AND THERE IS NO OTHER GROUND 
15 
TO REJECT OR DISAPPROVE ANY OF THE SUBMISSIONS, THE 
16 
COMMISSION SHALL ISSUE THE CORRESPONDING CERTIFICATE OF 
17 
INCORPORATION AND REGISTER THE CORPORATE NAME EARLIER 
18 
RESERVED. 
19 
A private corporation formed or organized under this Code commences 
20 
to have corporate existence and juridical personality and 
is deemed 
2 I 
incorporated from the date the [Securities and Exchange] Commission issues 
22 
[a] THEcertificate of incorporation under its official seal; PROVIDED, THAT 
23 
THE 
COMMISSION 
MAY 
ISSUE 
THE 
CERTIFICATE 
OF 
24 
INCORPORATION IN THE FORM OF AN ELECTRONIC DOCUMENT, IN 
25 
ACCORDANCE 
WITH THE 
RULES 
AND REGUU\TIONS Of THE 
26 
COMMISSION ON THE USE OF ElECTRONIC DATA MESSAGES; and 
27 
thel'eupon the incorporators, stockholders/members and their successors shall 
28 
constitute a body politic and corporate under the name stated in the alticles of 
29 
incorporation for the period of time mentioned therein, unless said period is 
:10 
extended or the corporation is sooner dissolved in accordance with law, 
3 I 
SECTION 14. 
Section 22 of the Code is hereby amended to read as follows: 
32 
"Sec. 22, Effects of non-use of corporate charter and continuous 
33 
inoperation of a corporation' DELINQUENCY AND REVOCATION. - If a 
34 
corporation does not formally organize and commence [the transaction of] its 
35 
businessor the construction of its works within [two (2)] FIVE (5)yearsfrom 
36 
the date of its incorporation,its [corporate powers cease Clnd ttle corporation] 
37 
CERTIFICATE 
OF 
INCORPORATION 
shall 
be 
deemed 
[dissolved] 
Page 11 0("85 


REVOKED AS OF THE DAY FOLLOWING THE END OF SAID FIVE-YEAR 
2 
PERIOD, 
WITHOUT 
NEED 
OF 
FURTHER 
JKTION 
BY 
THE 
3 
COMMISSION. 
4 
However,if a corporation [has] commenced [the transaction of] its 
5 
business but subsequently [becomes]BECAME [continuously] inoperative for 
6 
a period of at least five (5) CONSECUTIVE years, [tile silmeshall be a ground 
7 
for the suspension or revocation of its corporate franchise or certificate of 
8 
incorporation] THE COMMISSION MAY, AFTER DUE NOTICE AND 
9 
HEARING, EITliER REVOKE THE CORPORATION'S; CERTIFICATE OF 
10 
INCORPORATION 
OR 
PLACE 
THE 
CORPORATION 
UNDER 
11 
DELINQUENCY STATUS.THE CORPORATION'S fAILURE TO COMPLY 
12 
WITH THE REPORTORIAL REQUIREMENTS UNDER SECTION 180 
13 
SHALL RENDER IT INOPERATIVE FOR PURPOSES OF THIS CODE. 
14' 
THE COMMISSION SHALL GIVE A DELINQUENT CORPORATION 
15 
A PERIOD OF TWO YEARS WITHIN WHICH IT MUST RESUME 
16 
OPERATIONS, COMPLY WITH ALL REQUIREMENTS, AND PAY ALL 
17 
FINES THE COMMISSION SHALL PRESCRIBE. 
THE COMMISSION 
18 
SHALL CHARGE SUCH PENALTIES AS IT MAY DEEM APPROPRIATE 
19 
AND WITHHOLD ACTION 
ON 
ANY 
MATTER 
BROUGHT 
BY 
A 
20 
DELINQUENT CORPORATION, INCLUDING BUT NOT LIMITED TO 
21 
APPLICATIONS FOR THE 
AMENDMENT OF 
THIE 
ARTICLES 
OF 
22 
INCORPORATION 
AND/OR 
BY-LAWS 
AND 
THIE 
ISSUANCE 
OF 
23 
CERTIFICATIONS OF GOOD STANDING OR THOSE REQUIRED FOR 
24 
TRANSACTIONS WITH OTHER GOVERNMENT AGENCIES, UNTIL FULL 
25 
COMPLIANCE WITH THE 
COMMISSION'S REQIUIREMENTS 
AND 
26 
PAYMENT OF ALL FINES AND PENALTIES ARE MADE. 
27 
ONCE COMPLIANCE WITH THE COMMISSION'S REQUIREMENTS 
28 
AND PAYMENT OF FINES AND PENALTIES ARE COMPLETED, THE 
29 
COMMISSION SHALL ISSUE AN ORDER LIFTING HIE DELINQUENCY 
30 
STATUS. 
FAILURE TO RESUME OPERATIONS, COMPLY WITH THE 
31 
COMMISSION'S 
REQUIREMENTS, 
AND 
PAY 
THE 
PENALTIES 
32 
PRESCRIBED WITHIN THE PERIOD GIVEN BY THE COMMISSION OR 
33 
ANY EXTENSION GRANTED BY IT, HOWEVER, SHALL RENDER THE 
34 
CORPORATION'S CERTIFICATE OF II'lCORPORAHON REVOKED AS OF 
35 
THE LAPSE OF SAID PERIOD WITHOUT NEED OF FURTHER ACTION 
36 
BY THE COMMISSION. 
37 
THE COMMISSION SHALL REVOKE THE CERTIFICATE OF 
38 
INCORPORATION OF A CORPORATION WHEN DIRECTED BY FINAL 
Page 12 of85 


JUDGMENT OF A COMPETENT COURT OR WHEN, J1~FTER DUE NOTICE 
2, 
AND 
HEARING, 
THE 
COMMISSION 
DETERMINES 
THAT 
THE 
3 
CORPORATION COMMITTED VIOLATIONS OF nils CODE OR ITS 
4 
RULES WHICH WARRANT THE REVOCATION Of ITS CERTIFICATE OF 
5 
INCORPORATION. 
6 
ONCE THE REVOCATION BECOMES FINAL,I.£. AFTER THE LAPSE 
7 
OF 
FIFTEEN 
DAYS 
FROM 
THE 
DATE 
OF 
REVOCATION, 
THE 
8 
CORPORATION SHALL BE BANNED FROM ANY fURTHER USE OF THE 
9 
CORPORATE NAME AND SHALL BE DISSOLVED IN ACCORDANCE 
10 
WITH THE PROVISIONS ON DISSOLUTION UNDER nTLE XIV OF THIS 
11 
CODE. 
12 
[The provision shall not apply if the failure to organize, commence the 
13 
transaction of its business or the construction of its works, or to continuously 
J 4 
opel"ate is due to causes beyond the control of the cOI"poration as may be 
15 
determined by tile Securities and Exchange Commission]." 
16 
SECTION 15. 
Section 23 of the Code is hereby amended to read as follows: 
17 
"Sec. 23. The board of directors or trustees. - Unless otherwise provided 
18 
in this Code, the corporate powers of all corporations formed under this Code 
J 9 
shall be exercised, all business conducted and all property of such corporations 
20 
controlled and held by the board of directors or trustees [to be elected from 
21 
among the holders of stocks, or where there is no stock, from among the 
22 
members of the corporation,] who shall hold office for one (1) year until their 
23 
successors are elected and qualified. 
24 
ONE PERSON CORPORATIONS SHALL HAVE ONLY ONE (1) 
25 
DIRECTOR OR TRUSTEE. SMALL CORPORATIONS SHALL IiAVE AS 
26 
MANY 
DIRECTORS 
AS 
THERE 
ARE 
INCORf'ORATORS, 
NOT 
27 
EXCEEDING THREE (3). A CORPORATION SHALL BE DEEMED TO BE A 
28 
SMALL CORPORATION WHEN IT liAS ONLY TWO (2)OR THREE (3) 
29 
INCORPORATORS AND ITS TOTAL ASSETS DO NOT EXCEED FIVE 
30 
MILLION PESOS (PHP5,OOO,OOO.OO) 
3 J 
CORPORATIONS WITH TEN (10) OR MORE MEMBERS, AS WELL 
32 
AS THOSE WITH TEN (to) OR MORESTOCKHOlDERS AND WITH 
33 
TOTAL ASSETS OF AT LEAST ONE HUNDRED MILLION PESOS 
34 
(Pl00,OOO,OOO.OO), OR SUCH NUMBER AND AMOUNT AS MAY BE 
35 
LATER SET BY THE COMMISSION,SHALL HAVE AT LEAST ONE (1) 
36 
INDEPENDENT DIRECTOR OR TRUSTEE, OR SUCH OTHER MINIMUM 
Page 13 of 85 


NUMBER WHICH HIE COMMISSION MAY DETERMINE AS NECESSARY 
2 
FOR GOOD CORPORATE GOVERNANCE. THE COMMISSION SHALL 
3 
PRESCRIBE 
THE 
MINIMUM 
STANDARDS 
OIR 
CRITERIA 
IN 
4 
DETERMINING THE INDEPENDENCE OF A DIRECTOR. 
5 
EXCEPT 
WITH 
RESPECT 
TO 
INDEPENDENT 
DIRECTORS, 
6 
DIRECTORS SHALL BE ELECTED fROM AMONG THE HOLDERS OF 
7 
STOCKS[Every director]AND must EACH own at least one (1) share of the 
8 
capital stock of the corporation of which he is a director, which share shall 
9 
stand in his name [on] IN the books of the corporation. [Any] IF ANY SUCH 
10 
director [who] ceases to be the owner of at least one (1) share of the capital 
11 
stock of the corporation,[of which he is a director]HE shall thereby cease to be 
12 
a director. 
13 
Trustees of non-stock corporations [must be members thereof.], 
14 
OTHER THAN INDEPENDENT TRUSTEES,SHALL BE ELECTED FROM 
15 
AMONG THE MEMBERS OF. THE CORPORATION. 
IF ANY SUCH 
16 
TRUSTEE CEASES TO BE A MEMBER OF THE CORPORATION, HE SHALL 
17 
THEREBY CEASE TO BE A TRUSTEE. 
18 
A majority of the directors or trustees of all corporations organized 
19 
under this Code, 
INCLUSIVE OF INDEPENDENT DIRECTORS OR 
20 
TRUSTEES, must be residents of the Philippines. 
21 
IT SHALL BE THE DUTY OF ALL DIRECTORS OR TRUSTEES TO 
22 
ATTEND ALL MEETINGS OF THE BOARD AND OF THE STOCKHOLDERS 
23 
OR MEMBERS AND THEIR ABSENCE MAY BE EXCUSED ONLY FOR 
24 
JUSTIFIABLE REASONS. WHEN RELATED PARTY TRANSACTIONS OR 
25 
SELF-DEALINGS OF A DIRECTOR ARE TAKEN UP, HIE CONCERNED 
26 
DIRECTOR SHALL ABSENT HIMSELF FROM THE MEETING AND HIS 
27 
ABSENCE SHALL NOT BE COUNTED AGAINST HIM. DIRECTORS AND 
28 
TRUSTEES 
SHALL 
HAVE 
SUCH 
OTHER 
DUTIES 
AND 
29 
RESPONSIBILITIES PROVIDED IN THE CORPORATION'S BY-LAWS 
30 
AND AS MAY BE PRESCRIBED BY THE COMMISSION FOR GOOD 
31 
CORPORATE GOVERNANCE. 
32 
SECTION 16. 
Section 24 of the Code is hereby amended to read as follows: 
33 
"Sec. 24. Election of directors or trustees. -
OTHER THAN IN 
34 
INSTANCES WHEN THE EXCLUSIVE RIGHT IS WITHHElD FOR 
35 
HOLDERS 
OF 
FOUNDERS' 
SHARES 
UNDER 
SECTION 
7,EACH 
36 
STOCKHOLDER OR MEMBER SHALL HAVE THE RIGHT TO NOMINATE 
Page 14 of8S 


ANY DIRECTOR OR TRUSTEE WHO POSSESSES 
ALL Of THE 
2 
QUALIFICATIONS AND NONE OF THE DISQUALIFICATIONS SET 
3 
FORTH IN THIS CODE OR IN THE RULES OF nlE COMMISSION. 
4 
EXCEPT AS PROVIDED IN SECTION 26 OF THIS CODE, at all 
5 
elections of directors or trustees, there must be present, either in person, BY 
6' 
REMOTE COMMUNICATION, or by representative authorized to act by 
7 
written proxy, the owners of a majority of the outstanding capital stock, or If 
8 
there be no capital stock, a majority of the members entitled to vote; 
'f 
PROVIDED THAT WHEN 
A VOTE 
IS CAST IN ABSENTIA, THE 
10 
STOCKHOLDER OR MEMBER WHO CAST THE VOTE SHALL BE DEEMED 
11 
PRESENT FOR PURPOSES OF QUORUM. 
12 
EACH STOCKHOLDER OR MEMBER SHALL HAVE THE RIGHT TO 
13 
VOTE IN PERSON,BY REMOTE COMMUNICATION, BY PROXY, AND/OR 
14 
IN 
ABSENTIA; 
PROVIDED 
THAT 
VOTING 
BY 
REMOTE 
15 
COMMUNICATION OR IN ABSENTIA MAY BE RESORTED TO ONLY 
16 
WHEN ALLOWED EITHER BY THE BY-LAWS OF TliE CORPORATION 
17 
OR BY A MAJORITY OF THE BOARD OF DIRECTORS AND WHEN THE 
18 
CORPORATION HAS INSTITUTED REASONABLE MEASURESTO VERIFY 
1'f 
THAT THE PERSON PERMITTED TO PARTICIPATE OR VOTE BY 
20 
REMOTE COMMUNICATION OR IN ABSENTIA IS A STOCI{HOLDER OR 
21 
MEMBER, OR A HOLDER OF A PROXY FROM A STOCKHOLDER OR 
22 
MEMBER, AND TO RECORD ALL VOTES AND OTHER ACTIONS TAKEN 
23 
AT THE MEETING. 
WHEN ATTENDANCE AT THE MEETING IS BY 
24 . 
REMOTE COMMUNICATION, THE CORPORATION SHALL PROVIDE THE 
25 
STOCKHOLDER OR MEMBER, OR PROXY-HOLDER, A REASONABLE 
26 
OPPORTUNITY TO PARTICIPATE IN THE MEETING, HEAR OR SEE THE 
27 
PROCEEDINGS AS WELL AS 
BE 
HEARD OR SEEN 
BY OTHER 
28 
STOCKHOLDERS 
OR 
MEMBERS, 
AND 
TO 
CAST 
THEIR 
VOTE 
29 
SUBSTANTIALLY CONCURRENTLY WITH SUCH PROCEEDINGS. WHEN 
30 
VOTING IN ABSENTIA, IS ALLOWED, THE CORPORATION SHALL 
31 
INSTITUTE 
REASONABLE 
MEASURES TOTIMELY 
PROVIDE 
THE 
32 
STOCKHOLDER OR MEMBER WITH INFORMATION ON THE NOMINEES 
33 
AND GIVE THEM A REASONABLE OPPORTUNITY TO ASK QUESTIONS 
34 
BEFORE 
CASTING 
THEIR 
VOTES. 
THE 
COMIMISSION 
SHALL 
3S 
PRESCRIBE THE MINIMUM STANDARDS OR GUIDELINES TO MAKE 
36 
ATTENDANCE 
BY REMOTE 
COMMUNICATION A,ND 
VOTING IN 
37 
ABSENTIA EFFICIENT AND ACCESSIBLE FORA FOR STOCKHOLDERS 
38 
OR MEMBERS. 
Page 150(,85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
The election must be by ballot if requested by any voting stockholder or 
member. 
In stock corporations, every stockholder entitled to vote shall have the 
right to vote [in personor by proxy] tile number of shares of stock standing, at 
the time fixed in the by-laws, in his own name [on] IN the stock books of the 
corporation, or where the by-laws are silent, at tile time of the election; and 
said stockholder may vote such number of shares for as many persons as there 
are directors to be elected or he may cumulate said shares and give one 
candidate as many votes as the number of directors to be elected multiplied by 
the number of his shares shall equal, or he may distribute them on the same 
principle among as many candidates as he shall see fit: Provided, That the 
total number of votes cast by him shall not exceed the number of shares 
owned by him 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 by-laws, members of corporations which have no capital 
stock may cast as many votes as there are trustees to be elected but may not 
cast more than one vote for one candidate. Candidates receiving the highest 
number of votes shall be declared elected. 
[Any meeting of the stockholders or members called for an election may 
adjourn from day to day or from time to time but not sine die or indefinitely] 
If, for any reason, no election is held, or if there are not present or 
represented by proxy, at the meeting, the owners of a majority of the 
outstanding capital stock, or if there be no capital stock, a majority of the 
members entitled to vote, THE MEETING MAY BE ADJOURNED AND THE 
CORPORATION SHALL PROCEED IN ACCORDANCE WITH SECTION 26 
OF THIS CODE." 
SECTION 17. 
Section 25 of the Code is hereby amendecl to read as follows: 
"Sec. 25. Corporate officers/ quorum. - Immediately after their election, 
the directors of a corporation must formally organize by the election of a 
presidentOR CHIEF EXECUTIVE OFFICER, who shall be a director, a 
treasurer OR CHIEF FINANCIAL OFFICER,who mayor may not be a 
director, a secretary who shall be a resident and citizen of the Philippines, A 
COMPLIANCE OFFICER WHO SHAll REPORT DIRECTlY TO THE 
CHAIRMAN OF THE BOARD, and such other officers as may be provided for 
in the by-laws. Any two (2) or more positionsOTHER THIAN THAT OF THE 
COMPLIANCE OFFICER may be held concurrently by the same person, 
Page 16 oC85 


except that no one shall act as president and secretary or as president and 
2 
treasurer at the same time. 
3 
[The directors or trustees and officers to be elected shall perform the 
4 
duties enjoined on them by law and by the by-laws of the corporation.]Unless 
5 
the articles of incorporation or the by-laws provide for a greater majority, a 
6 
majority of the number of directors or trustees as fixed in the articles of 
7 
incorporation shall constitute a quorum for the tram;action of corporate 
8 
business, and every decision of at least a majority of the directors or trustees 
9 
present at a meeting at which there is a quorum shall be valid as a corporate 
10 
act, except for the election of officers which shall require the vote of a majority 
11 
of all the members of the board. 
12 
[Directors 
01' trustees cannot attend or vote by proxy at board 
13 
meetings];HOWEVER, WHEN ALLOWED BY THE BY··LAWS, THEY CAN 
14 
ATTEND BOARD MEETINGS THROUGH REMOTE COMMUNICATION 
15 
SUCH AS VIDEOCONFERENCING,TELECONFERENCING OR OTHER 
16 
TECHNOLOGY THAT ALLOWS THEM A REASONABLE OPPORTUNITY 
17 
TO PARTICIPATE." 
18 
SECTION 18. 
Section 26 of the Code is hereby amended to read as follows: 
19 
"Sec. 26. Report of election of directors, trustees and officers}, NON-
20 
HOLDING OF ELECTION AND CESSATION FROM OFFICE. - Within thirty 
21 
(30) days after the election of the directors, trustees and officers of the 
22 
corporation, the secretary, or any other officer of the corporation, shall submit 
23 
to the [Securities and Exchange] Commission, the names, nationalities, 
24 
SHARE HOLDINGS and residences of the directors, trustees, and officers 
25 
elected. 
26 
THE NON-HOLDING OF 
ANY ElECnONAND THE REASONS 
27 
THEREFOR, SHALL BE REPORTED TO THE COMI\HSSION WITHIN 
28 
THREE (3) DAYS FROM THE DATE OF THE SCHEDULED ELECTION; 
29 
PROVIDED 
THAT, 
THE 
NOTICE 
OF 
NON-HOLDING 
MAY 
BE 
30 
SUBMITTED IN THE FORM OF AN ELECTRONIC DOCUMENT, IN 
31 
ACCORDANCE 
WITH THE 
RULES 
AND REGUU\TIONS OF THE 
32 
COMMISSION ON THE USE OF ELECTRONIC DATA MESSAGES. 
33 
WHEN 
PERTAINING TO THE 
ORIGINAL SCHEDULE, THE 
34 
REPORT OF NON-HOLDING SHALL FURTHER SPECIFYA NEW DATE 
35 
FOR THE elECTION, WHICH SHALL NOT BE LATER THAN THIRTY 
36 
DAYS FROM THE ORIGINAL DATE. 
Page 17 of85 


IF NO NEW DATE HAS BEEN DESIGNATED, OR IF THE NEWLY-
2 
SCHEDULED elECTION BE LIKEWISE NOT HELD, THE COMMISSION 
3 
MAY, 
MOTU PROPRIO OR UPON THE APPLICATION OF ANY 
4 
STOCKHOLDER, 
MEMBER, 
DIRECTOROR 
TRUSTEE 
AND 
AFTER 
5 
VERIFICATION OF THE 
NON-HOLDING OF THE 
ElECTION OF 
6 
DIRECTORS OR TRUSTEES, REQUIRE THE CORPORATE SECRETARY 
7 
ON RECORD TO IMMEDIATELY ISSUE A LIST OF STOCKHOLDERS OR 
8 
MEMBERS, THEIR ADDRESSES 
AND 
CONTACT 
NUMBERS 
AND 
9 
SIMILAR INFORMATION, AND 
SUMMARILY OIRDER 
THAT THE 
10 
ELECTION BE HElD. 
IN THIS REGARD, THE COMMISSION SHALL 
11 
HAVE 
THE 
POWER 
TO 
ISSUE 
SUCH 
ORDERS 
AS 
MAY 
BE 
12 
APPROPRIATE, 
INCLUDING, 
WITHOUT 
LIMITATION, 
ORDERS 
13 
DESIGNATING THE TIME AND PLACE OF THE ElECTION, THE RECORD 
14 
DATE OR DATES FOR DETERMINATION OF STOCKHOLDERS OR 
15 
MEMBERS ENTITlED TO NOTICE OF THE ELECTION AND TO VOTE 
16 
THEREAT, AND THE FORM OF NOTICE OF SUCH ElECTION. 
17 
THE SHARES OF STOCK OR MEMBERSHIP REPRESENTED AT 
1 R 
SUCH MEETING AND ENTITlED TO VOTE THEREAT, EITHER IN 
19 
PERSON, BY REMOTE COMMUNICATION,IN ABSENTIA,OR BY PROXY, 
20 
SHALL CONSTITUTE A QUORUM FOR THE PURPOSE OF SUCH 
21 
MEETING, NOTWITHSTANDING ANY PROVISION OF THE ARTICLES 
22 
OF INCORPORATION OR BY-LAWS TO THE CONTRARY. THE MEETING 
23 
SCHEDULED BY THE COMMISSION AND THE ELECTION HElD 
24 
THEREAT SHALL HAVE THE SAME EFFECT OF A VALID MEETING AND 
25 
ELECTION OF THE CORPORATION. 
26 
Should a director, trustee or officer die, resign or in any manner cease 
27 
to hold office, his heirs in case of his death, the secretary, or any other officer 
28 
of the corporation, or the director, trustee or officer himself, shall 
29 
[immediately] report such fact to the [Securities and Exchange] Commission 
30 
IN WRITINGWITHIN THREE (3) DAYS FROM CESSATION FROM 
31 
OFFICE, PROVIDED THAT SUCH NOTICE MAY GIVENI IN THE FORM OF 
32 
AN ElECTRONIC DOCUMENT, IN ACCORDANCE WITIrI THE RULES AND 
33 
REGULATIONS OF THE COMMISSION ON THE USE OF ELECTRONIC 
34 
DATA MESSAGES. 
35 
IN ElECTING DIRECTORS OR TRUSTEES TO FILL VACANCIES, 
36 
THE PROCEDURE SET FORTH IN SECTION 24 AND IN THIS SECTION 
37 
SHALL APPLY," 
38 
SECTION 19. 
Section 27 of the Code is hereby amended to read as follows: 
Page lR of85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
II 
12 
13 
14 . 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
"Sec. 27. Disqualification of directors, trustees or officers. -
THE 
FOLLOWING PERSONS SHALL BE 
DISQUALIFIIED FROM 
BEING 
ELECTED 
AS 
DIRECTOR, 
TRUSTEE 
OR 
OFFICER 
OF 
ANY 
CORPORATION: 
1. [No person) THOSE WHO HAvE BEEN convicted by final judgment 
of an offense punishable by imprisonment for a period exceeding six (6) years, 
or a violation of this Code OR REPUBLIC ACT 8799 [, committed] within five 
(5) years prior to the date of his election or appointment[,shall qualify as a 
director, trustee or officer of any corporation]; 
2. THOSE WHO, BY FINAL JUDGMENT, ARE CONVICTED OF, OR 
FOUND ADMINISTRATIVELY LIABLE FOR, ANY OFFENSE INVOLVING 
MORAL 
TURPITUDE, 
FRAUD, 
EMBEZZLEMENT, 
THEFT, 
ESTAFA, 
COUNTERFEITING, MISAPPROPRIATION, FORGERY, BRIBERY, FALSE 
OATH, PERJURY AND OTHER FRAUDULENT ACTS; 
3. THOSE CONVICTED BY FINAL JUDGMENT OF A FOREIGN 
COURT 
OR 
EQUIVALENT 
REGULATORY 
AUTHORITY 
OF 
ACTS, 
VIOLATIONS OR MISCONDUCT THE SAME AS OR SIMILAR TO THOSE 
ENUMERATED IN PARAGRAPHS 1 AND 2 ABOVE; AND 
4. 
THOSE 
WHO 
HAVE 
BEEN 
CONVICTED 
BY 
FINAL 
JUDGMENT OF ANY THREE OF THE OFFENSES AND/OR VIOLATIONS 
IN PARAGRAPHS 1 TO 3 ABOVE, REGARDLESS OF WHEN THE 
JUDGMENTS BECAME FINAL. 
THE MAXIMUM NUMBER OF BOARD REPRESENTATIONS ANY 
INDEPENDENT DIRECTOR OR TRUSTEE SHALL HAVE IN OTHER 
CORPORATIONS SHALL BE FIVE (5), OR SUCH LOWER NUMBER AS 
MAY BE PROVIDED IN THE BY-LAWS OF THE CORPORATION OR AS 
THE COMMISSION MAY LATER PRESCRIBE. 
THE 
FOREGOING 
IS 
WITHOUT 
PREJUDICE 
TO 
QUALIFICATIONS OR OTHER DISQUALIFICATIONS WHICH THE 
COMMISSION MAY IMPOSE IN ITS PROMOTION OF, AMONG OTHERS, 
GOOD CORPORATE GOVERNANCE." . 
SECTION 20. 
Section 28 of the Code is hereby amended to read as follows: 
"Sec. 28. Removal of directors or trustees. - Any director or trustee of a 
corporation may be removed from office by a vote of the stockholders holding 
Page 19 of 85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
II 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
33 
34 
35 
36 
37 
or representing at least two-thirds (2/3) of the outstanding capital stock, or if 
the corporation be a non-stock corporation, by a vote of at least two-thirds 
(2/3) of the members entitled to vote: Provided, That such removal shall take 
place either at a regulal' meeting of the corporation or at a special meeting 
called for the purpose, and in either case, after previous notice to stockholders 
or members of the corporation of the intention to propose such removal at the 
meeting. A special meeting of the stockholders or members of a corporation 
for the purpose of removal of directors or trustees, or any of them, must be 
called by the secretary on order of the president or on the written demand of 
the stockholders representing or holding at least a majority of the outstanding 
capital stock, or, if it be a non-stock corporation, on the written demand of a 
majority of the members entitled to vote. Should the secretary fail or refuse to 
call the special meeting upon such demand or fail or refuse to give the notice, 
or if there is no secretary, the call for the meeting may be addressed directly 
to the stockholders or membel's by any stockholder or member of the 
corporation signing the demand. Notice of the time and place of such meeting, 
as well as of the intention to propose such removal, must be given by 
publication or by written notice prescribed in this Code. Removal may be with 
or without cause: Provided, That removal without cause may not be used to 
deprive minority stockholders or members of the right of representation to 
which they may be entitled under Section 24 of this Code. 
THE COMMISSION SHALL, MOTU PROPRIO OIR UPON VERIFIED 
COMPLAINT AND AFTER DUE NOTICE AND HEARING, ORDER THE 
REMOVAL OF ANY DISQUALIFIED DIRECTOR OR TRUSTEE ELECTED 
DESPITE THE DISQUALIFICATION, OR WHOSE DISQUALIFICATION 
IS DISCOVERED OR AROSE SUBSEQUENT TO 
ELECTION. THE 
REMOVAL OF ANY DISQUALIFIED DIRECTOR SHALL BE WITHOUT 
PREJUDICE TO OTHER SANCTIONS THE COMMISSION MAY IMPOSE 
IN ACCORDANCE WITH THIS CODE, UPON SHOWING OF A WILLFUL 
OR DELIBERATE CONCEALMENT OF THE DISQUALIFICATION. 1/ 
SECTION 21. 
Section 29 of the Code is hereby amended to read as follows: 
"Sec. 29. Vacancies in the office of director or trustee. - Any vacancy 
occurring in the board of directors or trustees [other than by removal by the 
stockholders or members or by expiration of term, may be filled by the vote of 
at least a majority of the remaining directors or trustees, if still constituting a 
quol'um; otherwise, said vacancies] must be filled by the stockholders in a 
regular or special meeting called for that purpose. 
Page 20 of8S 


I 
WHEN THE VACANCY IS DUE TO EXPIRATION OF TERM, THE 
2 
ELECTION StiALL BE tiELD NO LATER THAN THE DAY OF SUCH 
3 
EXPIRATION OF TERM AT A MEETING CALLED FOR THAT PURPOSE. 
4 
WtiEN THE VACANCY ARISES AS A RESULT OF REMOVAL BY THE 
5 
STOCKHOLDERS OR MEMBERS, THE ELECTION MIUST BE HELD ON 
6 
THE SAME DAY OF THE MEETING AUTHORIZING THE REMOVAL AND 
7 
THIS FACT MUST BE SO STATED IN THE AGENDA AND NOTICE OF 
8 
SAID MEETING. IN ALL OTHER CASES, THE elECTION MUST BE HELD 
9 
NO LATER THAN FORTY-FIVE (45) DAYS FROM WHEN THE VACANCY 
10 
ARISES. A director or trustee so elected to fill a vacancy shall be elected only 
I 1 
for the unexpired term of his predecessor in office. 
12 
HOWEVER, WHEN THE VACANCY PREVENTS THE REMAINING 
13 
DIRECTORS FROM CONSTITUTING A QUORUM AND EMERGENCY 
14 
ACTION IS REQUIRED TO PREVENT GRAVE, SIJBSTANTIAl AND 
15 
IRREPARABLE LOSS OR DAMAGE TO THE CORPORATION, THE 
16 
VACANCY MAY BE TEMPORARILY FILLED BY IJNANIMOUS VOTE OF 
J 7 
THE REMAINING DIRECTORS OR TRUSTEESFROM AMONG THE 
18 
OFFICERS OF THE CORPORATION, PROVIDED THAT ACTION BY THE 
19 
APPOINTED DIRECTOR OR TRUSTEE SHALL BE LIMITED TO THE 
20 
EMERGENCY ACTION NECESSARY TO PREVENT GRJWE, SUBSTANTIAL 
21 
OR IRREPARABLE LOSS TO THE COMPANY AND HIS TERM SHALL NOT 
22 
CONTINUE FOR LONGER THAN REASONABLY NECESSARY AFTER THE 
23 
TERMINATION OF THE EMERGENCY. 
24 
Any directorship or trusteeship to be filled by reason of an increase in 
2S 
the number of directors or trustees shall be filled only by an election at a 
26 
regular or at a special meeting of stockholders or members duly called for the 
27 
purpose, or in the same meeting authorizing the increase of directors or 
28 
trustees if so stated in the notice of the meeting, 
29 
IN ALL ELECTIONS TO FILL VACANCIES UNDER THIS SeCTION, 
30 
THE PROCEDURE SET FORTH IN SECTIONS 24 AND 26 SHALL APPLY," 
31 
SECTION 22. 
Section 30 of the Code is hereby amendeci to reaci as follows: 
32 
"Sec. 30, Compensation of directors, -In the absence of any provision in 
33 
the by-laws fixing THE PARAMETERS OFtheir compensation, the ciirectorsOR 
34 
TRUSTEES shall not receive any compensation[,] as such directorsOR 
35 
TRUSTEES,except for reasollable per diems: Provide~ however, That any 
36 
such compensation other than per ciiems may be gl-anteci to directors OR 
37 
TRUSTEESby the vote of the stockholciers representing at least a majority of 
Page 21 of85 


2 
3 
4 
5 
6' 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
35 
the outstanding capital stock OR BY MAJORITY OF THE MEMBERS at a 
regular or special meeting. 
NO DIRECTOR OR TRUSTEE SHALL PARlrICIPATE IN THE 
DETERMINATION OF HIS OWN PER DIEMS OR Cm1PENSATION. PER 
DIEMS OR COMPENSATION GRANTED TO DIRECTORS OR TRUSTEES 
SHALL 
LIKEWISE 
BE 
APPROVED 
BY 
THE 
VOTE 
OF 
THE 
STOCKHOLDERS REPRESENTING AT LEAST A M'AJORITY OF THE 
OUTSTANDING CAPITAL STOCK OR BY MAJORITY OF THE MEMBERS 
AT A REGULAR OR SPECIAL MEETING. 
In no case shall the total yearly compensation of directorsOR 
TRUSTEES, as such directorsOR TRUSTEES, exceed ten (10%) percent of 
the net income before income tax of the corporation during the preceding 
year. 
THE CORPORATION SHALL SUBMIT AN ANNUAL REPORT ON 
THE COMPENSATION OF DIRECTORS OR TRUSTEES AS PRESCRIBED 
UNDER THIS CODE." 
SECTION 23. 
Section 35 of the Code is hereby amended to read as follows: 
"Sec. 35. Executive committee AND OTHER SPEGAL COMMITTEES. 
- The by-laws of a corporation may create an executive committee, composed 
of not less than three members of the board, to be appOinted by the board. 
Said committee may act, by majority vote of all its members, on such specific 
matters within the competence of the board, as may be e!elegatee! to it in the 
by-laws or on a majority vote of the. board, except with respect to: (1) 
approval of any action for which shareholders' approval is also required; (2) 
the filling of vacancies in the boare!; (3) the amendment or repeal of by-laws or 
the adoption of new by-laws; (4) the amendment or repeal of any resolution of 
the board which by its express terms is not so amendable or repealable; and 
(5) a distribution of cash dividends to the shareholders. 
FOR MERITORIOUS REASONS, THE BOARD MAY, UPON DUE 
AMENDMENT OF THE BY-LAWS, ORDER THE FORMATION OF OTHER 
SPECIAL COMMITTEES AND DETERMINE THE iVlEMBERS' TERM, 
COMPENSATION, POWERS AND RESPONSIBILITIES. 
WHEN 
NECESSARY 
TO 
ENSURE 
GOOD 
CORPORATE 
GOVERNANCE AND/OR COMBAT GRAFT AND CORRUPT PRACTICES, 
OR WHEN THE PARAMOUNT INTEREST OF THE PUBLIC OTHERWISE 
Page 22 01'85 


REQUIRES, HIE COMMISSION SHALL HAVE THE POWER TO REQUIRE 
2 
THE FORMATION OF OTHER COMMITTEES AND DESIGNATE THEIR 
3 
POWERS AND RESPONSIBILITIES; PROVIDED THJn THE TERM AND 
4 
COMPENSATION OF SUCH COMMITTEES SHALL BE DETERMINED BY 
5 
THE BOARD AND THE CORPORATION'S BY-LAWS SliALL BE AMENDED 
6 
ACCORDINGLY 
WITHIN 
THE 
PERIOD 
PRESCRIBED 
BY 
THE 
7 
COMMISSION." 
SECTION 24. 
Section 36 of the Code is hereby amended to read as follows: 
9 
"Sec. 
36. 
Corporate powers and capacity. 
-
Every corporation 
10 
incorporated under this Code has the power and capacity: 
11 
1. To sue and be sued in its corporate name; 
12 
2. Of PERPETUAL succession by its corporate name [for the], 
13 
UNLESS A LIMITED period of time IS stated in the articles of incorporation 
14 
and the certificate of incorporation; 
15 
xxxxxxxxx 
16 
8. [To enter into merger or consolidation with other corporations as 
17 
provided in this Code]TO ENTER INTO A JOINT VENTURE OR OTHER 
18 
COMMERCIAL 
AGREEMENT 
WITH 
PERSONS, 
JURIDICAL 
OR 
19 . 
OTHERWISE, 
AND 
MERGE 
OR 
CONSOLIDATEWITH 
OTHER 
20 
CORPORATIONS, 
21 
xxx 
xxx 
xxx" 
22 
SECTION 25. 
Section 37 of the Code is hereby amendeej to read as follows: 
23 
"Sec. 37. Power to extend or shorten corporate term. - A private 
24 
corporation may extend or shorten its term as stated in the articles of 
25 
incorporation when approved by a majority vote of the board of directors or 
26 
trustees and ratified at a meeting by the stockholders representing at least 
27 
two-thirds (2/3) of the outstanding capital stock or by at least two-thirds (2/3) 
28 
of the members in case of non-stock corporations. Written notice of the 
29 
proposed action and of the time and place of the meetin9 shall be addressed 
30 
to each stockholdel' ormember at his place of residence as shown on the books 
31 
of the corporation and deposited to the addressee in the post office with 
32 
postage prepaid, [or] served personally[.], OR, WHEN ,I\LLOWED IN THE 
]3 
BY-LAWS OR DONE WITH THE CONSENT OF THE CONCERNED 
Page 2301'85 


STOCKHOLDER, NOTICE UNDER nus SECTION ~~AY BE GIVEN IN 
2 
THE FORM OF AN ElECTRONIC DOCUMENT, IN ACCORDANCE WITH 
3 
THE RULES AND REGULATIONS OF THE COMMISSION ON THE USE OF 
4 
ELECTRONIC DATA MESSAGES: Provided, That in case of extension of 
5 
corporate term, any dissenting stockholder may exel'cise his appraisal right 
6 
under the conditions provided in this code," 
7 
SECTION 26. 
Section 38 of the Code is hereby amended to read as follows: 
8 
"Sec. 38, Power to increase or decrease capital stock; incur, create or 
9 
increase bonded indebtedness, - xxx xxx xxx 
10 
[(5) The actual indebtedness of the corporation on the day of the 
II 
meeting;] 
12 
xxx xxx xxx 
13 
Any increase or decrease in the capital stock or the incurring, creating 
14 
or increasing of any bonded indebtedness shall require prior approval of the 
15 
[Securities and Exchange] Commission, THE FILING OF THE APPLICATION 
16 
WITH THE COMMISSION SHALL BE MADE WITHIN THREE (3) 
17 
MONTHS FROM THE DATE OF APPROVAL BY THE BOARD OF 
18 
DIRECTORS AND STOCKHOLDERS, 
PRIOR TO THE COMMISSION'S 
19 
APPROVAL, THE RECOGNITION OF THE SUBSCRIPTION TO MEET THE 
20 
REQUIRED PAID-UP CAPITAL SHALL BE IN ACCORDANCE WITH 
21 
REQUIREMENTS SET BY THE COMMISSION. NON-PAYMENT OF THE 
22 
ADDITIONAL PAID-UP CAPITAL WITHIN ONE (1) YEAR FROM THE 
23 
DATE 
OF 
THE 
BOARD Of DIRECTORS 
AND 
STOCKHOLDERS' 
24 
APPROVAL SHALL 
RENDER THE 
PROPOSAL 
ABANDONED AND 
25 
INEFFECTIVE. 
26 
One of the duplicate certificates shall be kept on fil12 in the office of the 
27 
corporation and the othel' shall be filed with the [Securities and Exchange] 
28 
Commission and attached to the original articles of incorporation, From and 
29 
after approval by the [Securities and Exchange] Commission and the issuance 
30 
by the Commission of its certificate of filing, the capital stock shall stand 
31 
increased or decreased and the incurring, creating or increasing of any bonded 
32 
indebtedness authorized, as the certificate of filing may declare: Provided, That 
33 
the [Securities and Exchange] Commission shall not accept for filing any 
34 
certificate of increase of capital stock unless accompanied by the sworn 
35 
statement of the treasurer of the corporation lawfully holding office at the time 
36 
of the filing of the certificate, showing that at least twenty-five (25%) percent 
Page 24 of 85 


of [such inneased] THE INCREASE IN capital stock has been subscribed and 
2 
that at least twenty-five (25%) percent of the amount subscribed has been 
3 
paid either in actual cash to the corporation or that there has been transferred 
4 
to the corporation property the valuation of which is equal to twenty-five 
5 
(25%) percent of the subscription: Provided, further, That no decrease of the 
6 
capital stock shall be approved by the Commission if its effect shall prejudice 
7 
the rights of corporate creditors. 
8 
xxx xxx xxx 
9 
Bonds issued by a cOI'poration shall be registered with the [Securities 
10 
and Exchange] Commission, wilich shall have the author'ity to determine the 
11 
sufficiency of the terms thel'eof." 
12 
SECTION 27. 
Section 40 of the Code is hereby amended t.o read as follows: 
13 
"Sec. 40. Sale or other disposition of assets. - Subject to the provisions 
14 
of existing laws on illegal combinations and monopoliesAND SUBJECT, 
15 
FURTHER, TO SEC. 81 OF THIS CODE ON DE FA,CTO MERGERS, a 
16 
corporation may, by a majority vote of its board of directors or trustees, sell, 
17 
lease, exchange, mortgage, pledge or otherwise dispose of [all or substantially 
18 
all of] its property and assets, including its goodwill, upon such terms and 
19 
conditions and for such consideration, which may be money, stocks, bonds or 
20 
other instruments for the payment of money or other property or 
21 
consideration, as its board of directors or trustees may deem expedient. 
22 
WHEN THE SALE IS OF ALL OR SUBSTANTIALLY ALL OF THE 
23 
CORPORATION'S PROPERTY AND ASSETS, IT IMUST BE [when] 
24 
authorized by the vote of the stockholders representing! at least two-thirds 
25 
(2/3) of the outstanding capital stock, or in case of non-stock corporation, by 
26 
the vote of at least to two-thirds (2/3) of the members, in a stockholder's or 
27 
member'S meeting duly called for the purpose[.];WHENI THE SALE IS OF 
28 
LESS THAN ALL OR SUBSTANTIALLY ALL OF THE CORPORATION'S 
29 
PROPERTY AND ASSETS, A MAJORITY VOTE SHALL BE REQUIRED. In 
30 
non-stock corporations where there are no members wit.h voting rights, the 
31 
vote of at least a majority of the trustees in office will be sufficient 
32 
authorization for the corporation to entel' into allY transaction authorized by 
33 
this section. 
34 
Written notice of the proposed action and of the time and place of the 
35 
meeting shall be addressed to each stockholder or member at his place of 
36 
residence as shown on the books of the corporation and deposited to the 
Page 25 of85 


addressee in the post office with postage prepaid, or served personally: 
2 
Provided, That any dissenting stockholder may exercise his appraisal right 
3 
under the conditions provided In this Code. 
4 
[A sale or other disposition shall be deemed to cover substantially all 
5 
the corporate property and assets if thereby the corporation would be 
6 
rendered incapable of continuing the business or accomplishing the purpose 
7 
for which it was incorporated.] 
8 
After such authorization or approval by the stockholders or members, 
9 
the board of directors or trustees may, nevertheless, in its discretion, abandon 
10 
such sale, lease, exchange, mortgage, pledge or other disposition of property 
11 
and assets, subject to the rights of third parties under any contract relating 
12 
thereto, without further action or approval by the stockholdel's 01' members. 
13 . 
Nothing in this section is intended to restrict the power of any 
14 
corporation, without the authorization by the stocl,holders or members, to sell, 
15 
lease, exchange, mortgage, pledge or otherwise dispose of any of its property 
16 
and assets if the same is necessary in the usual and regular course of business 
17 
of said corporation or if the proceeds of the sale or other disposition of such 
18 
property and assets be appropriated for the conduct of its remaining business. 
19 
[In non-stock corporations where there are no members with voting 
20 
rights, the vote of at least a majority of the trustees in office will be sufficient 
21 
authorization for the corporation to enter into any transaction authorized by 
22 
this section.]" 
23 
24 
SECTION 28. 
Section 43 of tile Code is hereby amended to read as follows: 
25 
"Sec. 43. Power to dec/are dividends. - The board of directors of a stock 
26 
corporation may declare dividends out of the unrestricted I'etained earnings 
27 
whichSHALL 
BE 
DETERMINEDIN 
ACCORDANCE 
WITH 
THE 
28 
GUIDELINESSET BY THE COMMISSION ON UNREALIZED EARNINGS 
29 
AND LOSSES.SUCH DIVIDENDSshall be payable in cash, in property, or in 
30 
stock to all stockholders on the basis .of outstanding stock held by' them: 
31 
Provided, That any cash dividends due on delinquent stock shall first be 
32 
applied to the unpaid balance on the subscription plus costs and expenses, 
33 
while stock dividends shall be withheld from the delinquent stockholder until 
34 
his unpaid subscription is fully paid: Provided, further, That no stock dividend 
35 
shall be issued without the approval of stockholders representing not less than 
Page 26 or8S 


two-thirds (2/3) of the outstanding capital stock at a I-egular or special meeting 
2 
duly called for the purpose. 
3 
Stock corporations are prohibited from retaining sUl'plus pmfits in excess 
4 
of one hundred (100%) percent of their paid-in capital stock, except: (1) when 
5 
justified by definite corporate expansion projects or pmgrams approved by the 
6 
board of directors; or (2) when the corporation is prohibited under any loan 
7 
agreement with any financial institution or creditor, whether local or foreign, 
R 
from declaring dividends without its/his consent, and such consent has not yet 
9 
been secured; or (3) when it can be clearly shown that such retention is 
10 
necessary under special circumstances obtaining in the corporation, such as 
11 
when there is need for special reserve for probable contin(Jencies." 
12 
SECTION 29. 
Section 46 of the Code is hereby amended to read as follows: 
13 
"Sec. 46. Adoption of by-laws. - Every corporation formed under this 
14 
Code must, within one (1) month after receipt of official notice of the issuance 
15 
of its certificate of incorporation by the [Securities and Exchange] Commission, 
16 
adopt a code of by-laws for its government not inconsistent with this Code. For 
17 
the adoption of by-laws by the corporation the affirmative vote of the 
18 
stockholders representing at least a majority of the outstanding capital stock, 
19 
or of at least a majority of the members in case of non-stock corporations, 
20 
shall be necessary. The by-laws shall be signed by the stockholders or 
21 
members voting for them and shall be kept in the principal office of the 
22 
corporation, subject to the inspection of the stockholders or members during 
23 
office hours. A copy thereof, duly certified to by a majority of the directors or 
24 
trustees countersigned by the secretary of the corporation, shall be filed with 
25 
the [Securities and Exchange] Commission which shall be attached to the 
26 
original articles of incorporation. 
27 
Notwithstanding the pmvisions of the preceding paragraph, by-laws 
28 
may be adopted and filed prior to incorporation; in sucll case, such by-laws 
29 
shall be approved and signed by all the incorporators and submitted to the 
30 . 
[Securities and 
Exchange] Commission, together with tile articles of 
31 
incorporation. 
32 
BY-LAWS OR AMENDMENTS THERETO MAY BE FILED IN THE 
33 
FORM OF AN ELECTRONIC DOCUMENT, IN ACCORIDANCE WITH THE 
34 
RULES AND REGULATIONS OF THE COMMISSION ON THE USE OF 
35 
ELECTRONIC DATA MESSAGES. 
Page 27 of 85 


In all cases, by-laws shall be effective only upon the issuance by the 
2 
[Securities and Exchange] Commission of a certification that the by,"laws are 
3 
not inconsistent with this Code. 
4 
The [Securities and Exchange] Commission shall not accept for filing 
5 
the by-laws or any amendment thereto of any bank, banking institution, 
6 
building and loan association, trust company, insurance company, public utility, 
7 
educational institution or other special corporations govel'ned by special laws, 
8 
unless accompanied by a certificate of the appropriate government agency to 
9 
the effect that such by-laws or amendments are in accordance with law." 
10 
SECTION 30. 
Section 47 of the Code is hereby amended to read as follows: 
11 
"Sec. 47. Contents of by-laws. - Subject to the provisions of the 
12 
Constitution, this Code, other special laws, and the articles of incorporation, a 
13 
private corporation [may] SHALL provide in its by-laws fOI": 
14 
1. The time, place and manner of calling and conducting regular or 
15 
special meetings of the directors or trustees; 
16 
2. The time and manner of calling and conducting regular or special 
17 
meetings of the stockholders or members, PROVIDED UtAT THE BY-LAWS 
18 
SHALL CONTAIN NO PROVISION SUPPRESSING OR OTHERWISE 
19 
LIMITING IN ANY MANNER THE RIGHT OF A.NY MEMBER OR 
20 
STOCKHOLDER TO PROPOSE THE HOLDING OF MEETINGS AND THE 
21 
ITEMS FOR DISCUSSION IN THE AGENDA; 
22 
24 
25 
26 
27 
28 
29 
30 
xxx 
xxx 
xxx 
5. The qualifications, duties AND RESPONSIBILITIES, and THE 
PARAMETERS OR GUIDELINES TO CONSIDER IN SETTING THE 
compensation, of directol"s or trustees AND[,] officers [and employees], AS 
WELL 
AS 
THE 
MAXIMUM 
NUMBER 
OF 
OTHER 
BOARD 
REPRESENTATIONS AN INDEPENDENT DIRECTOR OR TRUSTEE MAY 
HAVE WHICH SHALL, IN NO CASE, BE MORE THAN FIVE (5) OR SUCH 
OTHER NUMBER THE COMMISSION MAY LATER PRESCRIBE; 
xxx 
xxx 
xxx 
31 
9. In the case of stock corporations, the manner of issuing stock 
32 
certificates; [and] 
Page 28 or8S 


10. THE TIME AND MANNER BY WHICH ACCURATE AND TIMELY 
2 
INFORMATION SHALL BE GIVEN TO STOCKHOLDERS OR MEMBERS 
3 
ON MATTERS AFFECTING THE CORPORATION, WHICH MAY INCLUDE 
4 
BUT SHALL NOT BE LIMITED TO THE PUBLICATION OF SUCH 
5 
INFORMATION ON THE CORPORATION'S WEBSITEj 
6' 
11. A CODE OF ETHICS OR STANDARDS OF CONDUCT FOR THE 
7 
CORRECT, 
HONORABLE 
AND 
PROPER 
PERFORMANCE 
OF 
A 
8 
CORPORATION'S 
BUSINESS 
AND 
ITS 
DEALINGS, 
DIRECT 
OR 
9 
INDIRECT, WITH THE GOVERNMENT AND ITS AGENCIES, AS WELL AS 
10 
MECHANISMS TO ENFORCE SUCH CODE OF Ennes OR STANDARDS 
11 
OF 
CONDUCT, 
WHICH 
SHALL 
CONTAIN 
THE 
MINIMUM 
12 
REQUIREMENTS THE COMMISSION MAY PROVIDE; 
13 
12. INTERNAL PROCEDURES 
TO 
PROVWE 
AVENUES 
OF 
14 
COMMUNICATION BY, TO PROTECT THE IDENTITY AND SECURITY OF 
15 
TENURE/COMPENSATION OF, AND TO PROVWE PIROTECTION FROM 
16 
RETALIATION BEFORE AND AFTER EMPLOYMENT OF: (A) THOSE 
17 
WHO REPORT VIOLATIONS OF THE CORPORATION'S CODE OF 
18 
ETHICS OR STANDARDS OF CONDUCT, GRAFT AND CORRUPT 
19 
PRACTICES, 
IMPROPRIETIES 
IN 
MATTERS 
OF 
FINANCIAL 
20 
REPORTING,OR 
OTHER 
UNLAWFUL 
OR 
ILLEGAL 
CONDUCT 
21 
COMMITTED BY THE CORPORATION OR ANY OF ITS DIRECTORS, 
22 
TRUSTEES, 
OFFICERS, 
EMPLOYEES 
OR 
AGENTS; 
(B) 
THOSE 
23 
WHORE PORT INSTRUCTIONS OR PRESSURE FROIM HIERARCHICAL 
24 
SUPERIORS TO COMMIT ANY OF THE ACTS IN (A); AND/OR (C) 
25 
THOSE WHO RAISE CONCERNS ABOUT THREATS OF OR POSSIBLE 
26 
ACTS CONSTITUTING ANY OF THE ACTS IN (A) ABOVE; 
27 
13.A 
SYSTEM, 
INCLUDING 
THE 
APPOINTMENT 
OF 
A 
28 
COMPLIANCE OFFICER, THAT WIll MONITOR COMPLIANCE WITH 
29 
THE 
RULES 
AND 
REGULATIONS 
ON 
GOOD 
CORPORATE 
30 
GOVERNANCE; AND 
31 
[10] 14.Such other matters as may be necessary for the proper or 
32 
convenient transaction of its corporate business and aff2lirsOR AS MAY BE 
33 
DEEMED NECESSARY BY THE COMMISSION FOR THE PROMOTION OF 
34 
GOOD GOVERNANCE AND/OR ITS POLICY AGAINST GRAFT AND 
35 
CORRUPTION. 
36 
THE COMMISSION SHALL FORMULATE AND MAKE AVAILABLE 
37 
SAMPLE BY-LAWS WITH THE FOREGOING REQUIREMENTS." 
Page 29 01'85 


SECTION 31. 
Section 48 of the Code is hereby amended to read as follows: 
2 
Section 48. 
Amendment to by-laws. -
The board of directors or 
3 
trustees, by a majority vote thereof, and the owners of at least [a 
4 
majority]TWO-THIRDS (2/3) of the outstanding capital stock, or at least [a 
5 
majority] TWO-THIRDS (2/3) of the members of a non·stock corporation, at 
6 
a regular or special meeting duly called for the purpose, may amend or repeal 
7 
any by-laws or adopt new by-laws. The owners of two-thirds (2./3) of the 
8 
outstanding capital stock or two-thirds (2/3) of the members in a non-stock 
9 
corporation may delegate to the boa I'd of directors or trustees the power to 
10 
amend or repeal any by-laws or adopt new by-laws: Provided, That any power 
II 
delegated to the board of directors or trustees to amend or I'epeal any by-laws 
12 
or adopt new by-laws shall be considered as revoked whenever stockholders 
13 
owning or representing a majority of the outstanding capital stock or a 
14 
majority of the members in non-stock corporations, shall so vote at a regular 
15 
or special meeting. 
16 
Whenever any amendment or new by-laws are adopted, such 
17 
amendment or new by-laws shall be attached to the original by-laws in the 
18 
office of the corporation, and a copy thereof, duly certified under oath by the 
19 
corporate secretary and a majority of the directors or trustees, INCLUDING 
20 
THE 
STOCKHOLDERS' 
OR 
MEMBERS' 
RESOLUTION 
ON 
THE 
21 
DELEGATION OF THE POWER TO AMEND OR ADOPT NEW BY· LAWS 
22 
OR ON THE REVOCATION OF SUCH DELEGATION, II' ANY, shall be filed 
23 
with the [Securities and Exchange] Commission the same to be attached to 
24 
the original articles of incorporation and original by-laws. 
25 
The amended or new by-laws shall only be effective upon the issuance 
26 
by the [Securities and Exchange] Commission of a certification that the same 
27 
are not inconsistent with this Code." 
28 
SECTION 32. 
Section 50 of the Code is hereby amended to read as follows: 
29 
"Sec. 50. Regular and special meetings of stockholders or members. -
30 
Regular meetings of stockholders or members shall be held annually on a date 
31 
fixed in the by-laws, or if not so fixed, on any date in April of every year as 
32 
determined by the board of directors or trustees.: Pro video: That written notice 
33 
of regular meetings shall be sent to all stockholders 01' members of record at 
34 
least [two (2)] THREE(3)weeks prior to the meeting, unless a [different] 
35 
LONGER period is required by the by-lawsOR BY ANY RIEl EVANT LAW OR 
36 
REGULATION, AND IN SUCH A MANNER AS TO IBE RECEIVED AT 
37 
LEAST FIVE DAYS BEFORE THE SCHEDULED MEETIN(;. 
Page 30 0[85 


AT EACH REGULAR MEETING OF STOCKHOLDERS OR MEMBERS, 
2 
THE BOARD OF DIRECTORS OR TRUSTEES SHALL" AMONG OTHERS, 
3 
PRESENT TO SUCH STOCKHOLDERS OR MEMBERS THE FOLLOWING: 
4 
a. 
THE MINUTES OF THE MOST RECENT REGULAR 
5 
MEETING WHICH SHALL INCLUDE, AMONG OTHERS: 
6 
(i) 
A DESCRIPTION OF THE VOTING AND VOTE 
7 
TABULATION PROCEDURES USED AND TO BE USED IN 
8 
THE CURRENT MEETING, 
9 
(ii) 
THE 
OPPORTUNITY 
GIVEN 
TO 
10 
STOCKHOLDERS OR MEMBERS TO ASII( QUESTIONS, AS 
11 
WelL AS A RECORD OF THE QUESTIONS THEY ASKED 
12 
AND THE ANSWERS RECEIVED, 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
(iii) 
THE 
MATTERS 
DISCUSSED 
AND 
RESOLUTIONS REACHED, 
(iv) 
A RECORD OF THE VOTmG RESULTS FOR 
EACH AGENDA ITEM, AND 
(v) 
A LIST OF THE DIRECTORS OR TRUSTEES, 
OFFICERS AND STOCKHOLDERS OR MEMBERS WHO 
ATTENDED THE MEETING; 
b. 
A 
MEMBERS' 
LIST 
FOIR 
NON-STOCK 
CORPORATIONS AND,FOR STOCK CORPORA1rIONS, MATERIAL 
INFORMATION 
ON 
THE 
CURRENT 
STOCK 
OWNERSHIPSTRUCTURE AND VOTING RIGHTS, INCLUDING 
GROUP STRUCTURES, INTRA-GROUP RelATIONS, OWNERSHIP 
DATA, 
AND 
BENEFICIAL 
OWNERSHIP 
WITH 
SPECIFIC 
DISCLOSURES 
ON 
THE 
DIRECT 
AND 
INDIRECT 
STOCKHOLDINGS OF DIRECTORS AND OFFICERS; 
c. 
A 
DETAILED, 
DESCRIPTIVE, 
BALANCED 
AND 
COMPREHENSIBLE ASSESSMENT 
OF 
THE 
CORPORATION'S 
PERFORMANCE WHICH SHALL INCLUDE INFORMATION ON THE 
CHANGES IN THE CORPORATION OR ITS BliSINESS AND ITS 
STRATEGY; 
Page 3101'85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
J 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
d. 
A FINANCIAL REPORT OF THE OPERATIONS OF THE 
CORPORATION FOR THE PRECEDING YEAR, WHICH SHALL 
INCLUDE 
FINANCIAL 
STATEMENTS 
DULY 
SIGNED 
AND 
CERTIFIED IN ACCORDANCE WITH THIS CO[)E AND THE RULES 
THE COMMISSION MAY PRESCRIBE,A ST/HEMENT ON THE 
ADEQUACY OF THE CORPORATION'S INTERNAL CONTROLS OR 
RISK MANAGEMENT SYSTEMS, AND A STATEMENT OF ALL 
'EXTERNAL AUDIT AND NON-AUDIT FEES; 
e. 
AN EXPLANATION OF THE DIVICIEND POLICY AND 
THE FACT OF PAYMENT OF DIVIDENDS OR THE REASONS FOR 
NON-PAYMENT THEREOF; 
f. 
DIRECTOR OR TRUSTEE PROFILES WHICH SHALL 
INCLUDE, AMONG OTHERS, THEIR QUALIFICATIONS AND 
RELEVANT 
EXPERIENCE, 
LENGTH 
OF 
SIERVICE 
IN 
THE 
CORPORATION, 
THE 
TRAININGS 
AND 
CONTINUING 
EDUCATION THEY ATTENDED, AND THE NUMBER OF THEIR 
BOARD REPRESENTATIONS IN OTHER CORPORATIONS; 
g. 
A DIRECTOR OR TRUSTEE ATTENDANCE REPORT, 
INDICATING THE ATTENDANCE 
OF 
EACH 
DIRECTOR OR 
TRUSTEE AT EACH OF THE MEETINGS OF THIE BOARD AND ITS 
COMMITTEES AND IN REGULAR OR SPECIJ\L STOCKHOLDER 
MEETINGS; 
h. 
A BOARD APPRAISAL OR PERFORMANCE REPORT 
AND THE STANDARDS OR CRITERIA AND PROCEDURE USED TO 
ASSESS THE BOARD; 
i. 
A 
DIRECTOR 
OR 
TRUSTEE 
APPRAISAL 
OR 
PERFORMANCE REPORT AND THE STANDARDS OR CRITERIA 
AND PROCEDURE USED TO ASSESS EACH DIRECTOR OR 
TRUSTEE; 
j. 
A DIRECTOR OR TRUSTEE COMPENSATION REPORT 
PREPARED IN ACCORDANCE WITH THIS CODE AND THE RULES 
THE COMMISSION MAY PRESCRIBE; 
k. 
DIRECTOR DISCLOSURES ON SELF-DEALINGS AND 
RElATED PARTY TRANSACTIONS; 
Page 32 of85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
I. 
THE PROFILES OF DIRECTORS NOMINATED OR 
SEEKING ElECTION OR RE-ElECTIONi 
m. 
THE COMPENSATION/BENEFITS OF 
EMPLOYEES 
WHO ARE IMMEDIATE FAMILY MEMBERS OF A DIRECTOR OR 
TRUSTEE OR ANY OFFICER OF THE CORPORATION OR WHOSE 
EMPLOYMENT WAS MADE WITH THEIR ENDORSEMENT; AND 
n. 
DETAILS OF THE ORIENTATION PROGRAM FOR 
NEW DIRECTORS. 
ANY DIRECTOR, TRUSTEE, STOCKHOLDER DR MEMBER MAY 
PROPOSE ANY OTHER MATTER FOR DISCUSSION OR INCLUSION IN 
THE AGENDA AT ANY REGULAR MEETING OF STOCKHOLDERS OR 
MEMBERS. 
SUBJECT TO THE RIGHT OF ANY MEMBER OR STOCI{HOLDER 
TO PROPOSE THE HOLDING OF SPECIAL MEETINGS AND THE ITEMS 
FOR DISCUSSION IN THE AGENDA THEREOF, special meetings of 
stockholders or members shall be held at any time deemed necessary or as 
provided in the by-laws: Provided, however, That at least [one (l)week] 
written notice shall be sent to all stockholders or membersAT LEAST THREE 
(3) WEEKS PRIOR TO THE MEETING, unless [otherwise] A LONGER 
PERIOD IS provided in the by-lawsOR BY ANY RE:LEVANT LAW OR 
REGULATION, AND IN SUCH A MANNER AS TO BE RECEIVED AT 
LEAST FIVE DAYS BEFORE THE SCHEDULED MEETINIG. 
Notice of any meeting may be waived, expressly or Impliedly, by any 
stockholder or member[.)i PROVIDED THAT GENERAL WAIVERS OF 
NOTICE IN THE ARTICLES OF INCORPORATION lOR THE BY-LAWS 
SHALL NOT BE ALLOWED; PROVIDED, FURTHER, THAT ATTENDANCE 
AT A MEETING SHALL CONSTITUTE A WAIVER OF NOTICE OF SUCH 
MEETING, EXCEPT WHEN THE PERSON ATTENDS A IViEETING FOR THE 
EXPRESS PURPOSE OF OBJECTING AT THE BEC,INNING OF THE 
MEETING, TO THE TRANSACTION OF ANY BUSINESS BECAUSE THE 
MEETING IS NOT LAWFULLY CALLED OR CONVENED. 
Whenever, for any cause, there is no person authorized to call a 
meeting, the [Securities and Exchange] Commission, upon petition of a 
stockholder or member on a showing of good cause therefor, may issue an 
order to the petitioning stockholder or member directing him to call a meeting 
of the corpol'ation by giving proper notice required by this Code or by the by-
Page 3301'85 


laws. The petitioning stockholder or member shall preside thereat until at least 
2 
a majority of the stockholders or members present have chosen one of their 
3 
number as presiding officer. 
4 
UNLESS THE BY-LAWS PROVIDE FOR A lONGER PERIOD, THE 
5 
STOCK AND TRANSFER BOOK/MEMBERSHIP BOOK SHALL BE CLOSED 
6 
AT LEAST TWENTY (20) DAYS BEFORE THE SCHEDULED DATE OF THE 
7 
MEETING. 
8 
IN 
CASE 
OF 
POSTPONEMENT 
OF 
STOCKHOLDERS' 
OR 
9 
MEMBERS' MEETINGS, WRITTEN NOTICE THEREOF AND THE REASON 
10 
THEREFOR SHALL BE SENT TO ALL STOCKHOLDERS OR MEMBERS OF 
II 
RECORD AT LEAST TWO (2) WEEKS PRIOR TO THE DATE OF THE 
12 
MEETING, UNLESS A DIFFERENT PERIOD IS REQUIRED BY THE BY-
13 
LAWS OR BY ANY RELEVANT LAW OR REGULATIOI\l, AND IN SUCH A 
14 
MANNER AS TO BE RECEIVED AT LEAST FIVE DAYS BEFORE THE DATE 
IS 
OF THE MEETING." 
16 
SECTION 33. 
Section 51 of the Code is hereby amended to read as follows: 
17 
Sec. 51. Place and time of meetings of stockholders of members. -
18 
Stockholder's or member's meetings, whether regular or special, shall be held 
19 
in the PRINCIPAL OFFICE OF THE CORPORATION AS SET FORTH IN 
20 
THE ARTICLES OF INCORPORATION, OR, IF NOT PRACTICABLE, IN 
21 
THEcity or municipality where the principal office of the corporation is located 
22 
L and if practicable in the principal office of the corporation]: Provided, That 
23 
Metro Manila shall, for purposes of this section, be considered a city or 
24 
municipality. 
25 
WHEN ALLOWED BY THE BY-lAWS OR BY A IVlAJORITY OF THE 
26 
BOARD OF DIRECTORS OR TRUSTEES, ATTENDANCE AT REGULAR OR 
27 
SPECIAL MEETINGS MAY BE BY REMOTE COMflliUNICATION AND 
28 
VOTING MAY BE MADE IN ABSENTIA. WHEN ATTENDANCE. BY 
29 . 
REMOTE COMMUNICATION IS ALLOWED, THE CORPORATION SHALL 
30 
PROVIDE THE STOCKHOLDER OR MEMBER, OR P'ROXY-HOLDER, A 
31 
REASONABLE OPPORTUNITY TO PARTICIPATE IN THE MEETING, TO 
32 
HEAR OR SEE THE PROCEEDINGS AS WELL AS BE HEARD OR SEEN BY 
33 
OTHER STOCKHOLDERS OR MEMBERS, AND TO CAST THEIR VOTE 
34 
SUBSTANTIALLY CONCURRENTlY WITH SUCH PROCEEDINGS. WHEN 
35 
VOTING IN ABSENTIA, IS ALLOWED, THE CORPORATION SHALL 
36 
INSTITUTE REASONABLE MEASURES TO TIMEt Y PROVIDE THE 
37 
STOCKHOLDER OR MEMBER WITH INFORMATION ON THE MATTERS 
Page 34 of S5 


TO BE TAKEN UP AT THE MEETING AND GIVE THE:M A REASONABLE 
2 
OPPORTUNITY TO ASK QUESTIONS BEFORE CASTJ[NG THEIR VOTES. 
3 
THE COMMISSION SHALL PRESCRIBE THE MINIMUM STANDARDS OR 
4 
GUIDELINES TO MAKE ATTENDANCE BY REMOTE COMMUNICATION 
5 
AND VOTING IN ABSENTIA EFFICIENT AND ACCESSIBLE FORA FOR 
6 
STOCKHOLDERS OR MEMBERS. 
7 
Notice of meetings shall be in writing, and the tir~e and place thereof 
8 
stated therein. EACH NOTICE OF MEETING SHALL FURTHER STATE OR 
9 
BE ACCOMPANIED BY THE FOLLOWING: 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
(A) 
THE AGENDA FOR THE MEETING; 
(B) 
A PROXY FORM; 
(C) 
WHEN 
ATTENDANCE 
IS 
ALLOWED 
BY 
REMOTE 
COMMUNICATION, 
THE 
FACT 
THEREOF 
AND 
THE 
REQUIREMENTS AND PROCEDURES TO BE FOLLOWED 
WHEN A STOCKHOLDER OR MEMBIER ELECTS SUCH 
OPTION; 
(D) 
WHEN VOTING IS ALLOWED IN ABSENTIA, THE FACT 
THEREOF AND THE REQUIREMENTS AND PROCEDURES 
TO BE FOLLOWED WHEN A STOCKHOLDER OR MEMBER 
ELECTS SUCH OPTION; 
(E) 
WHEN 
THE 
MEETING IS FOR THE 
ELECTION 
OF 
DIRECTORS OR TRUSTEES, THE RE<;!UIREMENTS AND 
PROCEDURE FOR NOMINATING AND THE CURRICULUM 
VITAE OR OTHER RELEVANT INFORMATION OF THOSE 
ALREADY NOMINATED INCLUDING, lliUT NOT LIMITED 
TO,SUCH NOMINEES' OTHER EXECUTIVE FUNCTIONS OR 
MEMBERSHIP IN OTHER BOARDS; 
(F) 
OTHER EXPLANATORY MATERIALS OR A STATEMENT 
THAT SUCH EXPLANATORY MATERIALSARE AVAILABLE 
FOR INSPECTION DURING OFFICE HOURS AT THE 
CORPORATION'S PRINCIPAL OFFICE AND/OR ONLINE 
AT THE CORPORATION'S WEBSITE, OR THAT SOFT 
COPIES THEREOF MAY BE SENT TO A STOCKHOLDER OR 
MEMBER UPON HIS REQUEST; AND 
Page 35 of 85 


2 
(G) 
THE 
PROCEDURE 
FOR 
MAKING 
INQUIRIES 
OR 
SOLICITING ADDITIONAL INFORMATION ABOUT THE 
3 
AGENDA ITEMS BEFORE THE MEETING. 
4 
WHEN ALLOWED BY THE BY-LAWS OF THE CORPORATION, 
5 
NOTICES OF MEETING MAY BE SENT ElECTRONICALLY, PROVIDED 
6' 
THAT THE SAME IS DONE IN ACCORDANCE WITH THE RULES OF THE 
7 
COMMISSION AND, PROVIDED FURTHER, THAT ANY STOCKHOLDER 
8 
OR MEMBER MAY, AT ANY TIME, OPT OUT OF RECE:IVING NOTICE BY 
9 
ElECTRONIC COMMUNICATION AND REQUEST THAT WRITTEN 
10 
NOTICE BE SENT IN A TRADITIONAL MANNER, I.E. BY PERSONAL 
11 
SERVICE, BY POST OR BY COURIER. 
12 
All proceedings had and any business transacted at any meeting of the 
13 
stockholders or members, if within the powers or authority of the corporation, 
14 
shall be valid even if the meeting be improperly held or called, provided all the 
15 
stockholders or members of the corporation are present 01' duly represented at 
16 
the 
meeting 
ANDNONE 
OF 
THEM 
EXPRESSLY 
STATE 
AT 
THE 
17 
BEGINNING OF THE MEETING THAT THE PURPOSE OF THEIR 
18 
ATTENDANCE IS TO OBJECT TO THE TRANS,!%CTION 
OF ANY 
19 
BUSINESS BECAUSE THE MEETING IS NOT lAWFULLY CALLED OR 
20 
CONVENED." 
21 
SECTION 34. 
Section 53 of the Code is hereby amended to read as follows: 
22 
"Sec. 53. Regular and special meetings of directors or trustees. -
23 
Regular meetings of the board of directors or trustees of every corporation 
24 
shall be held monthly, unless the by-laws. provide otherwise. 
25 
Special meetings of the board of directors or trustees may be held at 
26 
any time upon the call of the president or as provided in the by-laws. 
27 
Meetings of directors or trustees of corporations may be held anywhere 
28 
in or outside of the Philippines, unless the by-laws provide otherwise. Notice of 
29 
regular or special meetings stating the date, time and place of the meeting 
30 
must be sent to every director 01' trustee at least [one (1) day]FIVE (5) DAYS 
31 
prior to the scheduled meeting, unless [otherwise] A LONGER TIME IS 
32 . 
provided by the by-laws. A director or trustee may waive this requirement, 
33 
either expressly or impliedly. 
34 
DIRECTORS OR TRUSTEES CANNOT ATTEND OR VOTE BY 
35 
PROXY AT BOARD MEETINGS;HOWEVER, WHEN ALLOWED BY THE 
Page 36 of 85 


BY-LAWS, THEY CAN ATTEND BOARD MEETINGS THROUGH REMOTE 
2 
COMMUNICATION 
SUCH 
AS 
VIDEOCONFERENCING, 
3 
TELECONFERENCING OR OTHER TECHNOLOGY THAT ALLOWS THEM A 
4 
REASONABLE OPPORTUNITY TO PARTICIPATE. 
5 
SECTION 35. 
Section 58 of the Code is hereby amended to I-ead as follows: 
6 
Sec. 58. MANNER OF VOTING; Proxies_ - Stockholders and members 
7 
may vote in person, _TN ABSENTIA 01- by proxy in all meetings of stockholders 
R 
or members. VOTING DONE WHEN ATTENDANC!: IS BY REMOTE 
9 
COMMUNICATION SHALL BE EQUIVALENT TO VOTING IN PERSON. A 
10 
STOCKHOLDER OR MEMBER MAY VOTE WITHOUT ATTENDING THE 
11 
MEETING FOR AS LONG AS THE VOTE IS CAST AND RECEIVED ON OR 
12 
BEFORE THE TALLY OF VOTES IS COMPLETED AT THE MEETING, AND 
13 
THE VOTE IS MADE IN ACCORDANCE WITH THE CORPORATION'S 
14 
REQUIREMENTS AND PROCEDURES FOR VOTING .rllI ABSENTIA. THE 
15 
COMMISSION SHALL PRESCRIBE THE MINIMUM STANDARDS AND 
16 
GUIDELINES FOR VOTING WHEN ATTENDANCE IS DONE BY REMOTE 
17 
COMMUNICATIONOR WHEN VOTING IS IN ABSENTIA. 
18 
Proxies shall be in writing, signed by the stockholder or member and 
19 
filed before the scheduled meeting with the corporate secretary. Unless 
20 
otherwise provided in the proxy, it shall be valid only for the meeting for which 
21 
it is intended. No proxy shall be valid and effective For a period longer than five 
22 . 
(5) years at anyone time." 
23 
SECTION 36. 
Section 59 of the Code is hereby amende,j to read as follows: 
24 
Section 59. 
Voting Trusts. -One or mOI-e stockholders of a stock 
25 
corporation may create a voting trust for the purpose of conferring upon a 
26 
trustee or trustees the right to vote and other rights pertaining to the shares 
27 
for a period not exceeding five (5) years at any time: Provided, That in the 
28 
case of a voting trust specifically required as a condition in a loan agreement, 
29 
said voting trust may be for a period exceeding five. (5) years but shall 
30 
automatically expire upon full payment of the loan. A voting trust agreement 
31 
must be in writing and notarized, and shall specify the t.erms and conditions 
32 
thereof. A certified copy of such agreement shall be filed with the corporation 
33 
and with the [Securities and Exchange] Commission L otherwise, said 
34 
agreement is ineffective and unenforceable] AND SHJl,LL BE EFFECTIVE 
35 
AND ENFORCEABLE ONLY UPON APPROVAL THEREOF BY THE 
36 
COMMISSION. The certificate or certificates of stock covered by the voting 
37 
trust agreement shall be cancelled and new ones shall be issued in the name 
Page 37 of85 


of the trustee or trustees stating that they are issued pursuant to said 
2 
agreement. In the books of the corporation, it shall be noted that the transfer 
3 
in the name of the trustee or trustees is made pursuant: to said voting trust 
4 
agreement. 
5 
SECTION 37. 
Section 61 of the Code is hereby amended to delete "Securities and 
6 
Exchange" from "Securities and Exchange Commission". 
7 
SECTION 38. 
Section 62 of the Code is hereby amended to read as follows: 
8 . 
"Sec.62. 
Consideration for stocks. - Stocks shall not be issued for a 
9 
consideration less than the par or issued price thereof. Consideration for the 
1 (] 
issuance of stock may be any or a combination of any two or more of the 
11 
following: 
12 
1. 
Actual cash paid to the corporation; 
13 
2. 
Property, tangible or intangible, actually received 
by the 
14 
corporation and necessary or convenient for its use and lawful purposes at a 
15 
fair valuation equal to the par or issued value of the stock issued; 
16 
3. 
Labor performed for or services actually rendered to the 
17 
corporation; 
18 
4. 
Previously incurred indebtedness ofthe corporation; 
19 
5. 
Amounts transfen'ed from unrestricted retained earnings to 
20 
stated capital; [and] 
21 
6. 
Outstanding shares exchanged for stocks in the event of 
22 
reclassification or conversion[.]; 
23 
7. 
SHARES OF STOCK OF ANOTHER CORPORATION; AND 
24 
8. 
SUCH OTHER FORM OF CONSIDERA,nON THAT THE 
25 
COMMISSION MAY DETERMINE TO BE ACCEPTABLE: SUBJECT TO THE 
26 
PROVISIONS OF THE CODE. 
27 
Where the consideration is other than actual cash, or consists of 
28 
intangible property such as patents of copyrights, the valuation thereof shall 
29 
initially be determined by the incorporators or the board of directors, WHO 
30 
SHAll THEN SUBMIT SUCH DETERMINATION, WIrH SUPPORTING 
Page 38 or8S 


DOCUMENTS AS THE COMMISSION MAY PRESCRIBE, FOR THE 
2 
[subject to] approval[by] OF the [Securities and Exchange] Commission. 
3 
xxx xxx xxx" 
4 
SECTION 39. 
Section 63 of the Code is hereby amendeel to reael as follows: 
5 
"Sec. 63. Certificate of stock and transfer of shares. - The capital stock 
6 
of stock corporations shall be divieled into shares for which certificates signeel 
7 
by the president or vice president, countersigneel by the secretary or assistant 
8 
secretary, and sealeel with the seal of the corporation shall be issued in 
9 
accordance with the by-laws. Shares of stock so issueel al'e personal property 
10 
and may be transferred by delivery of the certificate 01' certificates indorsed by 
11 
the owner or his attorney-in-fact or other person legally authorized to make 
12 
the transfer. No transfer, however, shall be valid, except as between the 
13 
parties, until the transfer is recoreled in the books of the corporation so as to 
14 
show the names of the parties to the transaction, the elate of the transfer, the 
15 
number of the certificate or certificates and the number of shares transferred; 
16 
THE 
COMMISSION 
MAY 
REQUIRE 
CORPORATIONS 
WHOSE 
17 
SECURITIES ARE TRADED IN AN EXCHANGE OR OTHER AUTHORIZED 
18 
TRADING MARKETS TO ISSUE ITS SECURITIES OR SHARES OF 
19 
STOCKS IN UNCERTIFICATED OR SCRIPLESS FORIIIi BY VIRTUE OF, 
20 
AND IN ACCORDANCE WITH, THE RULES OF THE COMMISSION. 
21 
xxx 
xxx 
xxx" 
22 
SECTION 40. 
Section 74 of the Code is hereby amendeC:' to read as follows: 
23 
"Sec. 74. Books to be kept; stock transfer agent - Every corporation 
24 
shall keep and carefully preserve at its principal officeJlILLINFORMATION 
25 
RELATIVE TO THE CORPORATION INCLUDING, BUT NOT LIMITED TO: 
26 
(a) THE ARTICLES OF INCORPORATION AND BY-LAWS OF THE 
27 
CORPORATION AND ALL THEIR AMENDMENTS, (b) THE CURRENT 
28 
OWNERSHIP 
STRUCTURE 
AND 
VOTING 
RHiHTS 
OF 
THE 
29 
CORPORATION, INCLUDING LISTS OF STOCKHOLDERS OR MEMBERS, 
30 
GROUP 
STRUCTURES, 
INTRA-GROUP 
RELATIONS, 
OWNERSHIP 
31 
DATA, 
AND 
BENEFICIAL OWNERSHIP, 
(c) nlE NAMES 
AND 
32 
ADDRESSES OF ALL THE MEMBERS OF THE BOARD OF DIRECTORS OR 
33 
TRUSTEES AND OF THE EXECUTIVE OFFICERS, (d) a record of all 
34 
business transactions, (e) A RECORD OF THERESOLUTIONS OF THE 
35 
BOARD 
OF 
DIRECTORS 
OR 
TRUSTEES 
AND 
OF 
THE 
36 
STOCKHOLDERSOR 
MEMBERS, 
(f) 
COPIES 
OF 
THE 
LATEST 
Page 39 of 85 


REPORTORIAL REQUIREMENTS SUBMITTED TO THE COMMISSION, 
2 
and (9) THE minutes of all meetings of stockholders or members, or of the 
3 
board of directors or trusteesL]. SUCH MINUTES [in which] shall [be] set 
4 . 
forth in detail, AMONG OTHERS:the time and place of holding the meeting, 
5 
how authorized, the notice given, THE AGENDA THEREFOR, whether the 
6 
meeting was regular or special, if special its object, those present and absent, 
7 
THE VOTING AND VOTE TABULATION PROCEDURES USED AND THE 
8 
RESULTS OF ALL VOTING DONE, THE OPPORTUNITY GIVEN TO 
9 
STOCKHOLDERS OR MEMBERS TO ASK QUESTIONS, AS WelL AS A 
10 
RECORD OF THE QUESTIONS THEY ASKED AND THE ANSWERS 
II 
RECEIVED,and every act done or ordered done at the meeting. Upon the 
12 
demand of any director, trustee, stockholder or member, the time when any 
13 
director, trustee, stockholder or member entered or left the meeting must be 
14 
noted 'In the minutes; and on a similar demand, the yeas and nays must be 
15 
taken on any motion or proposition, and a record thereof carefully made. The 
16 
protest of any director, trustee, stockholder or member on any action or 
17 
proposed action must be recorded in full on his demand. 
18 
TheFOREGOING 
recordsSHALL 
BE 
RETAINED 
FOR 
SUCH 
19 
PERIODS AS THE COMMISSION MAY PRESCRIBE BY RULE AND,[of all 
20 
business 
transactions 
of the 
corporation 
and 
the 
minutes 
of any 
21 
meetings]REGARDLESS 
OF 
THE 
FORM 
IN 
WHICH 
THEY 
22 
ARESTORED,shali be open to inspection by any director, trustee, stockholder 
23 
or member of the corporation, IN PERSON OR BY COUNSel OR OTHER 
24 
REPRESENTATIVE POSSESSING AND EXHIBITING DUE AUTHORITY, 
2S 
at reasonable hours on business days and he may demand, in writing, for [a 
26 
copy of] COPIES of SUCH RECORDS OR excerpts from said records [or 
27 
minutes,] at his expense.THE INSPECTING OR REPRODUCING PARTY 
28 
UNDER THIS SECTION SHALL REMAIN BOUND BY CONFIDENTIALITY 
29 
UNDER PREVAILING LAWS. 
30 
IF A REQUEST FOR INSPECTION AND/OR RIEPRODUCTION IS 
31 
DENIED, THE AGGRIEVED PARTY MAY REPORT THE DENIAL TO THE 
32 
COMMISSION. 
WITHIN FIVE (5) DAYS FROM RECEIPT OF SUCH 
33 
REPORT, 
THE 
COMMISSION 
SHALL 
CONDUCT 
A 
SUMMARY 
34 
INVESTIGATION AND ISSUE AN ORDER EITHER DIRECTING THE 
3S 
INSPECTION/REPRODUCTION REQUESTED OR FINDING THAT THE 
36 
REQUESTING PARTY, NOT BEING A STOCKHOLDER OR MEMBER OF 
37 
RECORD, IS NOT ENTITLED TO THE RIGHT. 
38 
Any officer or agent of the corporation who shall refuse to allow [any 
39 
director, trustee, stockholder or member of the corporationto examine and/OR 
Page 40 of8S 


copy excerpts from its records or minutes,] THE INSPECTION AND/OR 
2 
REPRODUCTION OF RECORDS in accordance with the provisions of this 
3 
Code, shall be liable to such director, trustee, stockholder or member for 
4 
damages, and in addition, shall be guilty of an offense which shall be 
5 
punishable under Section 163 of this Code: Provided, That if such refusal is 
6 
made pursuant to a resolution or order of the board of directors or trustees, 
7 
the liability undel" this section for such action shall be imposed upon the 
8 
directors or trustees who voted for such refusal: and [Provided, further, That it 
9 
shall be a defense to any action under this section that the person demanding 
10 
to examine and copy excerpts from the corporation's records and minutes has 
11 
improperly used any information secured through any prior examination of the 
12 
records or minutes of such corporation or of any other corporation, or was not 
13 
acting in good faith or for a legitimate purpose in making his demand.] 
14 
THE DIRECTOR, TRUSTEE, STOCKHOLDER OR MEMBER WHOSE 
15 
RIGHT TO INSPECTION AND/OR REPRODUCTION OF RECORDS WAS 
16 
DENIED MAY FILE,BEFORE A COURT OF COMPETENT JURISDICTION, 
17 
AN ACTION TO COMPEL INSPECTIONOF CORPORATE RECORDS 
18 
SHOWING THAT, DESPITE THE LAPSE OF FIVE (5) DAYS FROM 
19 
RECEIPT OF HIS WRITTEN REQUEST OR DEMAND AND DESPITE 
20 
HAVING BEEN ORDERED BY THE COMMISSION TO DO SO, THE 
21 
CORPORATION, OR AN OFFICER OR AGENT THEREOF, REFUSED TO 
22 
ALLOW THE INSPECTION AND/OR REPRODUCTION OR FAILED TO 
23 
REPLY TO THE WRITTEN REQUEST OR DEMAND OR THE ORDER OF 
24 
THE 
COMMISSION. 
THE 
COURT 
MAY, 
AFTER 
SUMMARY 
25 
PROCEEDINGS, 
ORDER 
THE 
CORPORATION 
TO 
PERMIT 
THE 
26 
INSPECTION AND/OR REPRODUCTION OR ISSUE ANY SUCH OTHER 
27 
OR FURTHER RELIEF AS IT MAY DEEM JUST AND PROPER. 
28 
Stock corporations must also keep a book to be known as the '~stock 
29 
and transfer book", in which must be kept a record of all stocks in the names 
30 
of the stockholders alphabetically arranged; the installments paid and unpaid 
31 
on all stock for which subscription has been made, and the date of payment of 
32 
any installment; a statement of every alienation, sale or transfer of stock 
33 
made, the date thereof, and by and to whom made; and such other entries as 
34 
the by-laws may prescribe. The stock and transfer book shall be kept in the 
35 
principal office of the corporation or in the office of its stock transfer agent and 
36 
shall be open for inspection by any director or stockholder of the corporation at 
37 
reasonable hours on business days. 
38 
No stock transfer agent or one engaged principally in the business of 
39 
registering transfers of stocks in behalf of a stock corporation shall be allowed 
Page 41 of85 


to operate in the Philippines unless he secures a license from the [Securities 
2 
and Exchange] Commission and pays a fee as may be fixed by the 
3 
Commission, which shall be renewable annually: Provided, That a stock 
4 
corporation is not precluded from performing or making transfers of its own 
5 
stocks, in which case all the rules and r"egulations imposed on stock transfer 
6 
agents, except the payment of a license fee herein provided, shall be 
7 
applicable[.]; PROVIDED, FURTHER, THAT THE COMMISSION MAY 
8 
REQUIRE AN INDEPENDENT TRANSFER AGENT IN THE CASE OF 
9 
STOCK CORPORATIONS WHICH TRANSFER AND/OR TRADE STOCKS 
10 
IN SECONDARY MARKETS." 
11 
SECTION 41. Section 75 of the Code is hereby amended to read as follows: 
12 
"Sec. 75. Right to financial statements. - Within ten (10) days from 
13 
receipt of a written request of any stockholder or member, the corporation 
14 
shall furnish to him its most recent financial statement, IN THE FORM AND 
15 
SUBSTANCE OF THE FINANCIAL REPORTING REQUIRED BY THE 
16 
COMMISSION, [which shall include a balance sheet as of the end of the last 
17 
taxable year and a profit or loss statement for said taxable year, showing in 
18 
reasonable detail its assets and liabilities and the result of its operations.] 
19 
At the regular meeting of stockholders or members, the board of 
20 
directors or trustees shall present to such stockholders or members a financial 
21 
report of the operationsof the corporation for the preceding year, which shall 
22 
include financial statements, duly signed and certified[by an independent 
23 
certified public accountant] IN ACCORDANCE WITH THIS CODE AND THE 
24 
RULES THE COMMISSION MAY PRESCRIBE. 
25 
However, if the [paid-up capital] TOTAL ASSETS OR TOTAL 
26 
LIABILITIES 
of 
the 
corporation 
[is] 
AREless 
than 
[P50,OOO.OO] 
27 
P500,OOO.OO OR SUCH HIGHER AMOUNT AS MAY 8E LATER SET BY 
28 
THE COMMISSION, the financial statements may be certified under oath by 
29 
the CORPORATION'S INTERNAL AUDITOR[treasurer or any responsible 
30 
officer of the corporation], AND SHALL BE ACCOMPANIED BY THE 
31 
FURTHER CERTIFICATION BY THE CORPORATION'S OFFICERS AS 
32 
REQUIRED UNDER SECTION 180 OF THIS CODE. 
33 
SECTION 42. Section 77 of the Code is hereby amended to read as follows: 
34 
Sec. 77. Stockholder's or member's approval. - Upon approval by 
35 
majority vote of each of the board of directors or trustees of the constituent 
36 
corporations of the plan of merger or consolidation, the same shall be 
Page 42 of85 


submitted for approval by the stockholders or members of each of such 
2 
corporations at separate corporate meetings duly called for the purpose. Notice 
3 
of such meetings shall be given to all stockholders or members of the 
4 
respective corporationsIN THE SAME MANNER AS NOTICE OF REGULAR 
5 
OR SPECIAL MEETINGS UNDER SECTION 51. [, at least two (2) weeks 
6 
prior to the date of the meeting; either personally or by registered maiL] Said 
7 
notice shall state, IN ADDITION TO THE REQUIREMENTS FOR NOTICE 
8 
OF REGULAR OR SPECIAL MEETINGS UNDER SECTION 51, the purpose 
9 
of the meeting and shall include a copy or a summary of the plan of merger or 
10 
consolidation. 
1 1 
xxx xxx xxx" 
12 
SECTION 43. 
Section 78 of the Code is hereby amended to read as follows: 
13 
"Sec. 78. Articles of merger or consolidation. - After the approval by the 
14 
stockholders or members as required by the preceding section, articles of 
15 
merger or articles of consolidation shall be executed by each of the constituent 
16 
corporations, to be signed by the president or vice-president and certified by 
17 
the secretary or assistant secretary of each corporation setting forth: 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
1. 
The plan of the merger or the plan of consolidation; 
2. 
As 
to 
stock 
corporations, 
the 
number 
of shares 
outstanding, or in the case of non-stock corporations, the number of 
members; [and] 
3. 
As to each corporation, the number of shares or members 
voting for and against such plan, respectivelY[.]i 
4. 
THE CARRYING AMOUNTS AND FAIR VALUES OF 
THE 
ASSETS 
AND 
LIABILITIES 
OF 
THE 
RESPECTIVE 
COMPANIES AS OF CUT-OFF DATE AGREED BY THE PARTIESi 
5. 
THE METHOD THAT WILL BE USED IN THE MERGER 
OR CONSOLIDATION OF ACCOUNTS OF THE COMPANIES; 
6. 
THE PROVISIONAL OR PRO-FORMA VALUES, AS 
MERGED 
OR 
CONSOLIDATED, 
USING HIE 
ACCOUNTING 
METHOD; AND 
Page 43 of8S 


7. 
SUCH 
OTHER 
INFORMATION 
AS 
MAY 
BE 
2 
PRESCRIBED BY THE COMMISSION. 
3 
SECTION 44. 
Section 79 of the Code is hereby amended to read as follows: 
4 
"Sec. 79. Effectivity of merger or consolidation. - The articles of merger 
5 
or of consolidation, signed and certified as herein above required, shall be 
6 
submitted to the [Securities and Exchange] Comm'lss'lon in quadruplicate for its 
7 
approval: Provided, That in the case of merger or consolidation of banks or 
8 
banking institutions, building and loan associations, trust companies, insurance 
9 
companies, 
public 
utilities, 
educational 
institutions 
and 
other special 
10 
corporations governed by special laws, the favorable recommendation of the 
11 . 
appropriate government agency shall first be obtained[.]i PROVIDED, 
12 
FURTHER, THAT THE SUBMISSION OF ARTICLES OF MERGER OR 
13 
CONSOLIDATION, IN THE FORM OF AN ELECTRONIC DOCUMENT, 
14 
SHAll BE IN ACCORDANCE WITH THE RULES AND REGULATIONS OF 
15 
THE COMMISSION ON THE USE OF ELECTRONIC DATA MESSAGES. If 
16 
the Commission is satisfied that the merger or consolidation of the 
17 
corporations concerned is not inconsistent with the provisions of th is Code and 
18 
existing laws, it shall issue a certificate of merger 01" of consolidation, at which 
19 
time the merger or consolidation shall be effective. 
20 
If, upon investigation, the [Securities and Exchange] Commission has 
21 
reason to believe that the proposed merger or consolidation is contrary to or 
22 
inconsistent with the provisions of this Code or existing laws, it shall set a 
23 
hearing to give the corporations concerned the opportunity to be heard. 
24 
Written notice of the date, time and place of hearing shall be given to each 
25 
constituent corporation at least two (2) weeks before said hearing. The 
26 
Commission shall thereafter proceed as provided in this Co(je." 
27 
SECTION 45. 
A new provision is inserted in the Code as Section 81 as follows: 
28 
SEC. 81. DE FACTO MERGERS. - A SALE OF THE ASSETS OF A 
29 
CORPORATION, WHETHER EFFECTUATED THROUGH A SINGLE OR A 
30 
SERIES OF TRANSACTIONS, SHALL 13E DEEMED A. DE FACTO MERGER 
31 
AND TREATED AS A MERGER OR CONSOLIDATION UNDER THIS CODE 
32 
WHEN THE BUYER AND SELLER CORPORATIONS ENGAGE IN THE 
33 
SAME OR SIMILAR BUSINESS, WHETHER WHOLE OR IN PART, AND 
34 
THE TRANSACTION IS COUPLED WITH OR RESULTS IN ANY, SOME, 
35 
OR ALL OF THE FOLLOWING OR OTHER SIMILAR CIRCUMSTANCES: 
Page 44 of85 


1. 
THE SALE IS OF ALL OR SUBSTANTIALLY ALL OF THE 
2 
ASSETS OF THE CORPORATION. A SALE SHALL BE DEEMED TO BE OF 
3 
ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE CORPORATION 
4 
WHEN: 
5 
a. 
AT LEAST EIGHTY PERCENT (80%) OF THE SELLER 
6 
CORPORATION'S ASSETS ARE INCLUDED IN THE SALE, 
7 
b. 
THE SELLER CORPORATION IS LEFT WITH ONLY 
8 
BAD OR TOXIC ASSETS OR MASSIVE LIABILITIES, 
9 
c. 
THE REMAINING ASSETS ARE NOT SUFFICIENT FOR 
10 
THE 
CONTINUATION 
OF 
THE 
SELLER 
CORPORATION'S 
11 
ORDINARY OPERATIONS, OR 
12 
d. 
UNDER CIRCUMSTANCES CONGRUOUS TO THE 
13 
FOREGOING. 
14 
2. 
THE TRANSACTION RESULTS IN THE CESSATION OF THE 
15 
ORDINARY BUSINESS OF THE 
SELLER CORPORATION. 
SUCH 
16 
CESSATION SHALL BE DEEMED TO EXIST DESPITE THE NON-
17 
DISSOLUTION OF THE SELLER CORPORATION WHEN: 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
a. 
THE SELLER CORPORATION BEC:OMES MERELY A 
SHELL CORPORATION, 
b. 
THE SELLER CORPORATION HAS NO OPERATIONS 
WHICH ARE BY THEMSELVES ECONOMICALLY VIABLE, 
c. 
THE 
SELLER 
CORPORATION 
IS 
RENDERED 
INCAPABLE OF DOING BUSINESS EXCEPT THROUGH THE 
BUYER CORPORATION, OR 
d. 
UNDER CIRCUMSTANCES CONGiRUOUS TO THE 
FOREGOING. 
3. 
THERE 
IS 
AN 
INTEGRATION 
OF 
THE 
SELLER 
28 . 
CORPORATION'S PRODUCTIVE ASSETS AND OPERATIONS INTO THE 
29 
BUYER CORPORATION'S OWN BUSINESS OR A CONTINUITY OF THE 
30 
SELLER CORPORATION'S BUSINESS IN THE BUSINESS OF THE BUYER 
31 
CORPORATION. 
SUCH INTEGRATION OR CONTINUITY SHALL BE 
32 
DEEMED TO EXIST WHEN THE BUYER CORPORATION, WHETHER 
33 
WHOLLY OR IN PART, CONTINUES THE SELLER CORPORATION'S 
34 
BUSINESS IN TERMS OF MANAGEMENT, PERSONNEL, PHYSICAL 
35 
LOCATION, 
ASSETS, 
PROCESS, 
TECHNOLOGY 
ACTIVITIES, 
OR 
36 
GENERAL BUSINESS OPERATIONS, OR INTEGRATES AND COMBINES 
37 
THESE ASPECTS WITH ITS OWN BUSINESS MODR, WHETHER OR 
38 
NOT THERE IS A COMPLETE IDENTITY OR UNIFORMITY IN EVERY 
39 
MATERIAL CHARACTERISTIC. 
Page 45 of85 


4. 
THERE 
IS 
AN 
ASSUMPTION 
BY 
THE 
BUYER 
2 
3 
4 
CORPORATION OF THE SELLER CORPORATION'S LIABILITIES WHICH 
WOULD ORDINARILY BE NECESSARY TO CONTINUE THE SELLER 
CORPORATION'S BUSINESS OPERATIONS WITHOUT INTERRUPTION. 
5 
6 
5. 
THE 
BUYER CORPORATION PAYS 
FOR THE SELLER 
CORPORATION'S ASSETS WITH SHARES OF ITS OWN STOCK. 
7 
6. 
UNDER THE TERMS OF THE SALE OF THE ASSETS, THE 
8 
SELLER 
CORPORATION 
IS 
PROHIBITED 
BY 
THE 
BUYER 
9 
CORPORATION FROM CONTINUING OR ENGAGING IN THE SAME OR 
10 
SIMILAR BUSINESS. 
11 
THIS 
PROVISION 
SHALL 
APPLY 
WHETHER 
THE 
BUYER 
12 
CORPORATION CARRIES OUT THE WHOLE OR A PART OF THE 
13 
TRANSACTION OR SERIES OF TRANSACTIONS IN ITS OWN NAME OR 
14 
THROUGH 
ANY 
OF 
ITS WHOLLY 
OWNED 
AI\!D 
CONTROLLED 
15 
SUBSIDIARIES OR OTHER RELATED PARTIES. 
16 . 
SECTION 46. 
Section 81 of the Code is hereby Section 82 and amended to read as 
17 
follows: 
18 
Sec.[81]82. 
Instances of appraisal right/ 
REMEDY AGAINST 
19 
OPPRESSIVE ACTS. - Any stockholder of a corporation shall have the right to 
20 
dissent and demand payment of the fair value of his shares in the following 
21 
instances: 
22 
1. 
In case any amendment to the articles of incorporation 
23 
has the effect of changing or restricting the rights of any stockholder or 
24 
class of shares, or of authorizing preferences in any respect superior to 
25 
those of outstanding shares of any class, or of extending or shortening 
26 
the term of corporate existence; 
27 
2. 
In case of sale, lease, exchange, transfer, mortgage, 
28 
pledge or other disposition of all or substantially all of the corporate 
29 
property and assets as provided in the Code; [and] 
30 
3. 
In case of merger or consolidation WHETHER DE JURE 
31 
OR DE FACTO[.]; 
32 
4. 
WHEN THE CORPORATION SUBMITS FALSE OR 
33 
INACCURATE FINANCIAL STATEMENTS AND/OR REPORTORIAL 
34 
REQUIREMENTS OR WHEN THEY CONTAIN MISSTATEMENTS 
35 
OR MISREPRESENTATIONS; 
Page 4601'85 


2 
3 
4. 
5 
6 
7 
8 
9 
10 
11 
5. 
WHEN THE CORPORATION REFUSES TO HOLD THE 
REGULAR 
MEETINGS 
OF 
STOCKHOLDERS 
OR 
UNDULY 
PREVENTS ANY STOCKHOLDER FROM PARTICIPATING IN 
MEETINGS HELD; 
6. 
WHEN 
STOCKHOLDERS 
REPRESENTING 
A 
MAJORITY 
APPOINT 
THEIR 
NOMINEES 
AS 
DIRECTORS, 
WITHOUT HOLDING ELECTIONS; 
7. 
WHEN 
DIRECTORS AUTHORIZE: 
PAYMENTS TO 
ENTITIES RELATED TO THEM OR OTHERWISE ENGAGE IN 
RELATED PARTY TRANSACTIONS; AND 
8. 
IN INSTANCES WHEN THE 
CORPORATION IS 
12 
VIOLATING THE PROVISIONS OF THIS CODE, ITS RULES, OR 
13 
OTHER LAWS." 
14 
SECTION 47. Sections 82 and 83 of the Code are hereby renumbered as Sections 
15 
83 and 84, respectively. 
16 
SECTION 48. Section 84 of the Code is hereby renumbered as Section 85 and 
17 
amended to delete "Securities and Exchange" from "Securities and Exchange Commission" in 
18 
each instance. 
19 
SECTION 49. 
Sections 85 to 88 of the Code are hereby renumbered as Sections 86 
20 
to 89 accordingly. 
21 
SECTION 50. 
Section 89 of the Code is hereby renumbered as Section 90 and 
22 
amended to read as follows: 
23 
"Sec. [89]90. Right to vote. -EXCEPT AS OTHERWISE PROVIDED 
24 
IN THIS CODE, the right of the members of any class or classes to vote may 
2S 
be limited, broadened or denied to the extent specified in the articles of 
26 
incorporation or the by-laws. Unless so limited, broadened or denied, each 
27 
member, regardless of class, shall be entitled to one vote. 
28 
[Unless otherwise provided in the articles of incol'poration or the by-
29 
laws,] A member may vote IN PERSON, IN ABSENTIA/ ORby proxy in 
30 
accordance with the provisions of this Code. 
31 
[Voting by mail or other similar means by members of non-stock 
32 
corporations may be authorized by the by-laws of non-stock corporations with 
Page 47 of85 


the approval of, and under such conditions which may be prescribed by, the 
2 
Securities and Exchange Commission.]" 
3 
SECTION 51. 
Sections 90 and 91 of the Code are hereby renumbered as Sections 
4 
91 and 92, respectively. 
5 
SECTION 52. Section 92 of the Code is hereby renumbered as Section 93 and 
6 
amended to read as follows: 
7 
"Sec. [92]93. Election and term of trustees.-[Unless otherwise provided 
8 
in the articles of incorporation or the by-laws,]The board of trustees of non-
9 
stock corporationsSHALL BE IN SUCH NUMBER AS MAY BE FIXED IN 
10 
THE ARTICLES OF INCORPORATION OR BY-LAWS [, which may be more 
11 
than]NOT EXCEEDING fifteen (15) [in number as may be fixed in their 
12 
articles of incorporation or by-laws, shall]. THEY SHALL IHOLD OFFICE FOR 
13 
ONE 
YEARUNTIL 
THEIR 
SUCCESSORS 
ARE 
ELECTED 
AND 
14 
QUALIFIED.[as soon as organized, so classify themselves that the term of 
15 
officeof one-third (1/3) of their number shall expire everyyear; and subsequent 
16 
elections of trustees comprising one-third (1/3) of the board of trustees shall 
17 
be held annually and trustees so elected shall have a term of three (3) years.] 
18 
Trustees [thereafter] elected to fill vacancies occurring before the expiration of 
19 
a particular term shall hold office only for the unexpired period. 
20 
EXCEPT WITH RESPECT TO INDEPENDENT TRUSTEES UNDER 
21 
SECTION 23, no person shall be elected as trustee unless he is a member of 
22 
the corporation. 
23 
Unless otherwise provided in the articles of incorporation or the by-laws, 
24 
officers of a non-stock corporation may be directly elected by the members." 
25 
SECTION 53. 
Section 93 of the Code is hereby renumbered as Section 94 and 
26 
amended to read as follows: 
27 
"Sec. [93]94. [Place of meetings] LIST OF MEMBERS AND PROXIES. 
28 
- THE CORPORATION SHALL, AT ALL TIMES, KEEP A LIST OF ITS 
29 
MEMBERS AND THEIR PROXIES ON SITE AT ITS PRINCIPAL OFFICE, 
30 
IN THE FORM THE COMMISSION MAY REQUIRE, WHICH LIST SHALL 
31 
BE UPDATED IN A MANNER AS TO REFLECT THE MEMBERS AND 
32 
PROXIES OF RECORD AS OF TWENTY DAYS PRIOR TO ANY 
33 
SCHEDULED ELECTION. [The by-laws may provide that the members of a 
34 
non-stock corporation may hold their regular or special meetings at any place 
35 
even outside the place where the principal office of the corporation is located: 
Page 48 01'85 


1 
Provided, That proper notice is sent to all members indicating the date, time 
2 
and place of the meeting: and Provided, further, That the place of meeting 
3 
shall be within the Philippines.] 
4 
SECTION 54. 
Section 94 of the Code is hereby renumbered as Section 95 and 
5 
amended to read as follows: 
6 
"Sec. [94]95. Rules of distribution. - In case of ciissolution of a non-
7 
stock corporation in accordance with the provisions of this Code FOR 
8 
REASONS OTHER THAN THOSE SET FORTH IN SECTJ[ON 136 (4) (B) to 
9 
(I), its assets shall be applied and distributed as follows: 
1 0 
xxx xxx xxx" 
1 1 
12 
SECTION 55. 
Sections 95 to 103 of the Code are hereby renumbered as Sections 
13 
96 to 104 accordingly. 
14 
SECTION 56. 
Sections 104, 105, and 1070f the Code are hereby amended by 
15 
deleting "Securities and Exchange" from "Securities Exchange Commission" in each instance 
16 
and, in Section 107, changing "Ministry of Education and Culture" to "Department of 
17 
Education Culture anci Sports". Further Sections 104 to 107 are renumbered as Sections 105 
18 
to 108 accordingly. 
J 9 
SECTION 57. 
Section 108 of the Code is hereby deleted. 
20 
SECTION 58. 
Sections 111, 112, 113, 114, 115, and 116 of the Code are hereby 
21 
amended by deleting "Securities and Exchange" from "Securities Exchange Commission" in 
22 
each instance. 
23 
SECTION 59. 
A new chapter is hereby added to Title XIII on Special Corporations 
24 
and the succeeding provisions are renumbered accordingly. 
25 
CHAPTER III 
26 
ONE PERSON CORPORATIONS 
27 
SEC. 117. APPLICABILITY OF PROVISIONS TO ONE PERSON 
28 
CORPORATIONS, -THE PROVISIONS OF THIS CODE ARE APPLICABLE 
29 
TO ONE PERSON CORPORATIONS EXCEPT AS OTHERWISE PROVIDED 
Page 49 of85 


IN THIS TITlE AND IN THE OTHER SPECIFIC PROVISIONS OF THIS 
2 
CODE. 
3 
SEC. 118. 
ONE PERSON CORPORATION. -A ONE PERSON 
4 
CORPORATION 
IS A 
CORPORATION 
WITH 
ONLY 
A 
SINGLE 
5 
STOCKHOLDER WHO IS A NATURAL PERSON OR A JURIDICAL 
6 
PERSON. 
7 
SEC. 119. SINGLE STOCKHOLDER. - FOR PURPOSES OF THIS 
8 
CODE, THE FOLLOWING SHALL BE DEEMED A SINGL.E STOCKHOLDER: 
9 
a. A NATURAL PERSON WHO WHOLLY OWNS THE SHARES IN 
10 
THE ONE PERSON CORPORATION; 
II 
b. A JURIDICAL PERSON WHO WHOLLY OWNS THE SHARES IN 
12 
THE ONE PERSON CORPORATION AND WHO ACTS AS 
13 
SINGLE STOCKHOLDER THROUGH A DULY AUTHORIZED 
14 
REPRESENTATIVE; AND 
15 
c. A TRUST, ESTATE OR ACCOUNT WHO WttOLLY OWNS THE 
16 
SHARES IN THE ONE PERSON CORPORATION AND WHO 
17 
SHALL ACT AS STOCKHOLDER THROUG,H ITS TRUSTEE, 
18 
ADMINISTRATOR, EXECUTOR, GUARDIA"I, CONSERVATOR, 
19 
CUSTODIAN OR OTHER PERSON EXERCISING FIDUCIARY 
20 
CAPACITIES AND DULY AUTHORIZED AS SUCH. 
21 
SEC. 120. MINIMUM AMOUNT OF CAPITAL STOCK TO BE PAID 
22 . 
FOR PURPOSES OF INCORPORATION. - THE MINIMUM AMOUNT OF 
23 
AUTHORIZED CAPITAL STOCK FOR A ONE PERSON CORPORATION IS 
24 
ONE MILLION PESOS (PHP1,000,000.00), THE PAYMENT OF WHICH 
25 
SHALL BE MADE BY THE SINGLE STOCKHOLDER IN ONE LUMP SUM 
26 
AT THE· TIME OF INCORPORATION AND PHYSICALLY SEPARATED 
27 
FROM THE PERSONAL FUNDS OF THE SINGLE STOCI{HOLDER. 
28 
SEC. 121. 
ARTICLES OF INCORPORATION; BY-LAWS NOT 
29 
REQUIRED. 
-
INSOFAR 
AS 
APPLICABLE, 
A 
ONE 
PERSON 
30 
CORPORATION SHALL FILE ARTICLES OF INCORPORATION IN 
31 
ACCORDANCE WITH THE REQUIREMENTS UNDER SECTION 14 OF 
32 
THIS CODE, SUBJECT TO THE FOLLOWING: 
33 
34 
(1) 
THERE 
SHALL BE 
A STATEMENT AS TO 
WHETHER 
THE 
CAPITAL 
STOCK 
IS 
THE 
SOLE 
Page 50 of85 


2 
3 
INVESTMENT OF A NATURAL OR OF A JURIDICAL 
PERSON, OR OF A TRUST, ESTATE OR ACCOUNT; 
(2) 
IF 
THE 
SINGLE 
STOCKHOLDER 
IS 
A 
4 
JURIDICAL PERSON, IT SHALL CLEARLY INDICATE THE 
5 
NAME, NATIONALITY AND RESIDENCE OF HIE NATURAL 
6 
PERSON AUTHORIZED TO ACT ON ITS BEHALF AND 
7 
ATTACH PROOF OF SUCH AUTHORITY; 
8 
(3) 
IF THE SINGLE STOCKHOLDER IS A TRUST, 
9 
ESTATE OR ACCOUNT, IT SHALL CLEARLY INDICATE THE 
10 
NAME, NATIONALITY AND RESIDENCE OF nlE TRUSTEE, 
11 
ADMINISTRATOR, 
EXECUTOR, 
GUARDIAN, 
12 ' 
CONSERVATOR, 
CUSTODIAN 
OR 
OTHER 
PERSON 
13 
EXERCISING FIDUCIARY CAPACITIES 
AND ATTACH 
14 
PROOF OF SUCH AUTHORITY TO ACT ON BEHALF OF THE 
15 
TRUST, ESTATE OR ACCOUNT; 
16 
(4) 
IN ACCORDANCE WITH SECTION 127, IT 
17 
SHALL 
DESIGNATE 
A 
NOMINEE 
AND 
ALTERNATE 
18 
NOMINEE AND ATTACH THERETO THEIR PRIOR WRITTEN 
19 
CONSENT, AS WELL AS STATE THE COMPENSATION THEY 
20 
SHALL RECEIVE AND THE EXTENT OF OR LIMITATIONS 
21 
ON THEIR AUTHORITY; 
22 
(5) 
THE ARTICLES OF INCORPORATION SHALL 
23 
BE ACCOMPANIED BY A SWORN STATEMENT BY THE 
24 
STOCKHOLDER AS TO THE AMOUNT OF TtiE CAPITAL 
25 
STOCK AND THAT THE SAME HAS BEEN PAID IN FULL 
26 
AND MAINTAINED IN AN ACCOUNT SEPARATE FROM 
27 
THAT OF THE STOCKHOLDER; 
28 
(6) 
THERE 
SHALL 
BE 
ATTACHED 
TO 
THE 
29 
ARTICLES OF INCORPORATION A CODE OF ETHICS OR 
30 
STANDARDS OF CONDUCT AS SET FORTH IN SECTION 47, 
31 
SUBPARAGRAPH 11 OF THIS CODE; AND 
32 
(7) 
THERE 
SHALL 
BE 
ATTACHED 
TO 
THE 
33 
ARTICLES OF INCORPORATION INTERNAL PROCEDURES 
34 
FOR WHISTLE BLOWERS AS SET FORTH IN SECTION 47, 
35 
SUBPARAGRAPH 12 OF THIS CODE. 
36 
THE ONE PERSON CORPORATION SHALL BE EXEMPT FROM THE 
37 
FILING OF BY-LAWS. 
Page 51 of85 


SEC. 122. 
PROHIBITION AGAINST MUl TIPLE ONE PERSON 
2 
CORPORATIONS. - ANY PERSON, TRUST, ESTATE OR ACCOUNT MAY 
3 
ONLY 
INCORPORATE 
AND 
MAINTAIN 
ONE 
ONE 
PERSON 
4 
CORPORATION 
AT 
ANY GIVEN INSTANCE. 
A 
ONE 
PERSON 
5 
CORPORATION MAY NOT INCORPORATE A NEW ONE PERSON 
6 
CORPORATION. 
7 
SEC. 123. DISPLAY OF CORPORATE NAME. - A ONE PERSON 
8 
CORPORATION SHALL INDICATE EITHER BELOW OR AT THE END OF 
9 
ITS CORPORATE NAME, THE WORDS "ONE PERSON CORPORATION" 
10 
OR THE LETTERS "OPC", WHEREVER ITS NAIIilE IS PRINTED, 
11 
AFFIXED, ENGRAVED OR OTHERWISE PRESENTED. 
12 
SEC. 124. SINGLE STOCKHOLDER AS DIRECTOR, PRESIDENT 
13 
AND TREASURER. - THE SINGLE STOCKHOLDER SHALL BE THE SOLE 
14 
DIRECTOR, PRESIDENT (OR CHIEF EXECUTIVE OFFICER) AND 
15 
TREASURER (OR CHIEF FINANCE OFFICER) OF THE ONE PERSON 
16 
CORPORATION. 
17 
SEC. 125. CORPORATE SECRETARY AND OTHER OFFICERS. -
18 
WITHIN FIFTEEN DAYS FROM THE ,ISSUANCE OF ITS CERTIFICATE 
19 
OF INCORPORATION, THE ONE PERSON CORPORATION SHALL 
20 
APPOINT A CORPORATE SECRETARY, WHO SHALL BE OTHER THAN 
21 
THE 
SINGLE 
STOCKHOLDER, 
AND 
NOTIFY THE 
COMMISSION 
22 
THEREOF WITHIN FIVE DAYS FROM APPOINTMENT. 
23 
THE ONE PERSON CORPORATION MAY APPOINT SUCH OTHER 
24 
OFFICERS AS IT MAY DEEM NECESSARY. 
25 
SEC. 
126. 
SPECIAL 
FUNCTIONS 
OF 
THE 
CORPORA TE 
26 . 
SECRETARY. -
IN ADDITION TO THE FUNCTIONS DESIGNATED BY 
27 
THE ONE PERSON CORPORATION AND REQUIRED ELSEWHERE IN 
28 
THIS CODE, THE CORPORATE SECRETARY SHALL: 
29 
30 
31 
32 
33 
34 
35 
(a) 
BE RESPONSIBLE FOR MAINTAINING THE MINUTES-
BOOK OF THE CORPORATION; 
(b) 
NOTIFY THE NOMINEE, OR ALTERNATE NOMINEE AS THE 
CASE MAY BE, OF THE DEATH OR INCAPACITY OF THE 
SINGLE STOCKHOLDER, WHICH NOTICE: SHALL BE GIVEN 
NOT LATER THAN FIVE (5) DAYS FROM THE SINGLE 
STOCKHOLDER'S DEAHl OR INCAPACITY; 
Page 52 of85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
II 
12 
(c) 
NOTIFY THE COMMISSION OF THE DEATH OF THE SINGLE 
STOCKHOLDER WITHIN A PERIOD OF FIVE (5) DAYS 
FROM SUCH DEATH AND STATING IN SUCH NOTICE THE 
NAMES, RESIDENCES AND CONTACT DETAILS OF ALL 
KNOWN LEGAL HEIRS; AND 
(d) 
CALL THE NOMINEE OR ALTERNATIVE NOMINEE TO A 
MEETING WITH THE KNOWN LEGAL HEIRS AND GIVE 
GUIDANCE ON THE OPTIONS OF THE LIE GAL HEIRS WITH 
REGARD 
TO 
THE 
ONE 
PERSON 
CORPORATION, 
INCLUDING THE 
ELECTION 
OF 
A 
NEW DIRECTOR, 
AMENDING THE ARTICLES OF INCORPORATION AND 
OTHER ANCILLARY AND/OR CONSEQUENTIAL MATTERS. 
13 
SEC. 127. NOMINEE AND ALTERNATE NOMINEE. - THE SINGLE 
14 
STOCKHOLDER SHALL DESIGNATE A NOMINEE AND AN ALTERNATE 
IS 
NOMINEE 
WHO 
SHALL, 
IN 
THE 
EVENT 
OF 
THE 
SINGLE 
16 
STOCKHOLDER'S DEATH OR INCAPACITY AND AFTER RECEIVING 
17 
DUE NOTICE THEREOF FROM THE CORPORATE SECRETARY, TAKE 
18 
THE PLACE OF THE SINGLE STOCKHOLDER AS DIRECTOR AND 
19 
MANAGE THE AFFAIRS OF THE CORPORATION AS PROVIDED IN THE 
20 
ARTICLES OF INCORPORATION. 
21 
THE ARTICLES OF INCORPORATION SHALL STATE THE NAMES, 
22 
RESIDENCES AND CONTACT DETAILS OF THE 
NOMINEE AND 
23 
ALTERNATE 
NOMINEE, 
THE 
COMPENSATION 
THEY 
SHALL 
BE 
24 
ENTITLED TO 
RECEIVE, 
AS 
WELL AS THE 
EXTENT OF 
AND 
25 
LIMITATIONS ON THEIR AUTHORITY IN MANAGING THE AFFAIRS OF 
26 
THE ONE PERSON CORPORATION. 
27 
THE WRITTEN CONSENT OF THE NOMINEE AND ALTERNATE 
28 
NOMINEE SHALL BE SUBMITTED TO THE COMMISSION TOGETHER 
29 
WITH THE FILING OF THE ONE PERSON CORPORATION'S ARTICLES 
30 
OF INCORPORATION. 
SUCH CONSENT MAY BE WITHDRAWN IN 
31 
WRITING BY FURNISHING COPIES THEREOF TO THE SINGLE 
32 
STOCKHOLDER AND THE COMMISSION ANYTIME BE:FORE THE DEATH 
33 
OR INCAPACITY OF THE SINGLE STOCKHOLDER. 
34 
THE 
NOMINEE SHALL, IN THE 
EVENT 
OF 
THE 
SINGLE 
35 
STOCKHOLDER'S DEATH OR INCAPACITY AND AFTER RECEIVING 
36 
DUE NOTICE THEREOF FROM THE CORPORATE SECRETARY, TAKE 
37 
THE PLACE OF THE SINGLE STOCKHOLDER AS DIRECTOR AND 
38 
MANAGE THE AFFAIRS OF THE ONE PERSON CORPORATION. 
Page 53 01'85 


SEC. 128. TERM OF NOMINEE AND AL TERIV'A TE NOMINEE. -
2 
WHEN 
THE 
INCAPACITY OF 
THE 
SINGLE 
STOCKHOLDER IS 
3 
TEMPORARY, THE NOMINEE SHALL SIT AS DIREClI"OR AND MANAGE 
4 
THE AFFAIRS OF THE ONE PERSON CORPORATION ONLY UNTIL THE 
5 
SINGLE STOCKHOLDER, BY HIS OWN DETERMINATION, REGAINS 
6 
HIS CAPACITY. IN CASE OF DEATH OR PERMANENT INCAPACITY OF 
7 
THE SINGLE STOCKHOLDER, THE NOMINEE SHALL SIT AS DIRECTOR 
8 
AND MANAGE THE AFFAIRS OF THE ONE' PERSON CORPORATION 
9 
ONLY UNTIL THE LEGAL HEIRS OF THE SINGLE STOCKHOLDER HAVE 
10 
BEEN LAWFULLY DETERMINED, THE SHARES ARE TRANSFERRED IN 
11 
THEIR NAME, AND/OR THEY HAVE DESIGNATED lONE OF THEM TO 
12 
ACT ON THEIR BEHALF AS THE SINGLE STOCKHOLDER OF THE ONE 
13 
PERSON CORPORATION. 
14 
THE ALTERNATE NOMINEE SHALL SIT AS DIRECTOR AND 
15 
MANAGE THE ONE PERSON CORPORATION IN CASE 
OF THE 
16 
NOMINEE'S INABILITY, INCAPACITY OR DEATH AND ONLY FOR THE 
17 
SAME TERM AND UNDER THE SAME CONDITIONS APPLICABLE TO 
18 
THE NOMINEE. 
19 
SEC. 129. CHANGE OF NOMINEE OR ALTER'NATE NOMINEE.-
20 
THE SINGLE STOCKHOLDER MAY, AT ANY TIME, CliANGE THE NAME 
21 
OF THE NOMINEE OR ALTERNATE NOMINEE BY SUBMITTING NEW 
22 
NAMES AND NEW WRITTEN CONSENTS TO THE COMMISSION, 
23 
WHICH SHALL BE APPENDED TO THE ONE PERSON CORPORATION'S 
24 
ARTICLES OF INCORPORATION. THE ARTICLES OF INCORPORATION 
25 
NEED NOT BE AMENDED FOR SUCH CHANGE J[N NOMINEE OR 
26 
ALTERNATE NOMINEE. 
27 
SEC. 
130.RECORDS IN 
LIEU 
OF 
MEETINGS. 
NO 
28 
STOCKHOLDERS MEETING NEED BE HelD IN A ONE PERSON 
29 
CORPORATION. WHEN ACTION IS NEEDED ON ANY MATTER, IT 
30 
SHALL BE SUFFICIENT, FOR PURPOSES OF 
v,tl~lIDITY, IF THE 
31 
RESOLUTION THEREON IS MADE IN WRITING, SI(iNED AND DATED 
32 
BY THE SINGLE STOCKHOLDER/DIRECTOR, AND RECORDED IN THE 
33 
MINUTES-BOOK OF THE ONE PERSON CORPORATION. 
THE DATE 
34 
RECORDED IN THE MINUTES-BOOK SHALL BE DEEMED TO BE THE 
35 
DATE OF THE MEETING FOR ALL PURPOSES UNDER THIS CODE. 
36 
SEC. 
131. 
MINUTES-BOOK. 
EACH 
ONE 
PERSON 
37 
CORPORATION SHALL MAINTAIN A MINUTES-BOOK IN WHICH 
38 
SHALL BE 
ENTERED IN WRITING ALL ACTIONS, 
DECISIONS, 
Page 54 ofB5 


RESOLUTIONS TAKEN BY THE ONE PERSON CORPORATION, SIGNED 
2 
AND DATED BY THE SINGLE STOCKHOLDER/DIRECTOR, AT THE TIME 
3 
THE ACTION, DECISION OR RESOLUTION IS MADE. 
4 
SEC. 132. CO-MINGLING OF PROPERTY. -
WHERE 
THE 
5 
SINGLE STOCKHOLDER CANNOT PROVE THAT THE PROPERTY OF THE 
6 
ONE PERSON 
CORPORATION IS INDEPENDENT OF 
HIS OWN 
7 
PROPERTY, HE SHALL ASSUME THE JOINT AND SEVERAL LIABILITY 
8 
FOR THE DEBTS AND OTHER LIABII.ITIES OF THE ONE PERSON 
9 
CORPORATION. 
10 
SEC. 133. REPORTORIAL SUI;JMISSIONS. -- THE ONE PERSON 
11 
CORPORATION 
SHALL 
SUBMIT 
THE 
FOLLOWING 
TO 
THE 
12 
COMMISSION ANNUALLY AND WITHIN SUCH PERIODS AS THE 
13 
COMMISSION MAY PRESCRIBE: 
14 
1. FINANCIAL 
STATEMENTS 
CERTIFIED 
BY 
THE 
CHIEF 
15 
EXECUTIVE OFFICER AND CORPORATE SECRETARY AND 
16 
DULY AUDITED BY AN INDEPENDENT CERTIFIED PUBLIC 
17 
ACCOUNTANT 
ACCREDITED 
BY 
THE 
BOARD 
OF 
18 
ACCOUNTANCY; 
19 . 
2. A REPORT CONTAINING EXPLANATIONS OR COMMENTS BY 
20 
THE 
CHIEF 
EXECUTIVE 
DIRECTOR 
ON 
EVERY 
21 
QUALIFICATION, RESERVATION OR ADVERSE REMARK OR 
22 
DISCLAIMER MADE BY THE AUDITOR IN HJ[S REPORT; AND 
23 
3. A DISCLOSURE OF ALL SELF-DEALINGS AND RELATED 
24 
PARTY TRANSACTIONS ENTERED INTO BETWEEN THE ONE 
2S 
PERSON CORPORATION AND THE SINGLE STOCKHOLDER. 
26 
FOR PURPOSES OF THIS PROVISION, THE FISCAL YEAR OF A 
27 
ONE PERSON CORPORATION SHALL BE THAT SET FORTH IN ITS 
28 
ARTICLES OF INCORPORATION OR, IN THE ABSENCE THEREOF, THE 
29 
CALENDAR YEAR. 
30 
SEC. 134. 
CHANGE OF STATUS FROM A REGULAR STOCK 
31 
CORPORATION TOA ONE PERSON CORPORATION. -- WHEN A SINGLE 
32 
STOCKHOLDER, AS DEFINED UNDER THIS TITLE, ACQUIRES ALL THE 
33 
STOCKS OF A REGULAR STOCK CORPORATION, THE LATTER MAY 
34 
APPLY FOR CONVERSION INTO A ONE PERSOI\I CORPORATION, 
35 
SUBJECT TO THE SUBMISSION OF SUCH DOCUMENTS THE SEC MAY 
36 
REQUIRE. 
IF THE APPLICATION FOR CONVERSION IS APPROVED, 
Page 55 of85 


2 
3 
4 
5 
6 
7 
8 . 
9 
10 
II 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
THE SEC SHALL FORTHWITH ISSUE AN AMENDEDI CERTIFICATE OF 
INCORPORATION REFLECTING THE CONVERSION. THE ONE PERSON 
CORPORATION CONVERTED FROM A REGULAR STOCK CORPORATION 
SHALL SUCCEED TO AND BE LEGALLY RESPONSIIBLE FOR ALL THE 
LATTER'S 
OUTSTANDING 
LIABILITIES 
AS 
OF 
THE 
DATE 
OF 
CONVERSION. 
SEC. 
135. 
CHANGE IN STATUS OF A 
ONE PERSON 
CORPORATION. 
-
A 
ONE 
PERSON 
CORPORATION 
MAY 
BE 
CONVERTED INTO A REGULAR STOCK CORPORATION AFTER DUE 
NOTICE TO THE SEC OF SUCH FACT, OF THE CIRCUMSTANCES 
LEADING TO THE CONVERSION, AND OF COMPLIANCE WITH ALL 
OTHER REQUIREMENTS FOR STOCK CORPORATIONS UNDER THIS 
CODE AND APPLICABLE RULES. SUCH NOTICE SHALL BE FILED WITH 
THE SEC WITHIN SIXTY (60) DAYS FROM THE OCCURRENCE OF THE 
CIRCUMSTANCES LEADING TO THE CONVERSION INTO A REGULAR 
STOCK CORPORATION. 
IF ALL REQUIREMENTS IHAVE BEEN DULY 
COMPLIED WITH, THE SEC SHALL FORTHWITH ISSUE AN AMENDED 
CERTIFICATE OF INCORPORATION REFLECTING THE CONVERSION. 
IN CASE OF DEATH OF THE SINGLE STOCKHOLDER, THE 
NOMINEE OR ALTERNATE NOMINEE, AS THE CASE MAY BE, SHALL 
TRANSFER 
THE 
SHARES 
IN 
THE 
NAME 
OF 
THE 
SINGLE 
STOCKHOLDERS' LEGAL HEIRS WITHIN SEVEN (7) DAYS FROM 
RECEIPT OF EITHER AN AFFIDAVIT OF HEIRSHIP OR OF SElF-
ADJUDICATION BY A SOLE HEIR, OR ANY OTHER l.EGAL DOCUMENT 
DECLARING THE LEGAL HEIRS OF THE SINGLE STOCKHOLDER AND, 
WITHIN THE SAME PERIOD, NOTIFY THE SEC 01: THE TRANSFER. 
WITHIN SIXTY (60) DAYS FROM THE TRANSFER OF THE SHARES IN 
THEIR NAME, THE LEGAL HEIRS SHALL NOTIFY THE SEC IF THEY 
DECIDE 
TO 
WIND 
UP 
AND 
DISSOLVE 
THE 
ONE 
PERSON 
CORPORATION 
OR 
CONVERT 
IT 
INTO 
A 
REGULAR 
STOCK 
CORPORATION. 
THE REGULAR STOCK CORPORATION CONVERTED FROM A ONE 
PERSON CORPORATION SHALL SUCCEED TO AND BE LEGALLY 
RESPONSIBLE FOR ALL THE LATTER'S OUTSTANDING LIABILITIES AS 
OF THE DATE OF CONVERSION. 
SECTION 60. 
Section 117 of the Code is hereby renumbered as Section 136 and 
amended to read as follows: 
Page 56 01'85 


"TITLE XIV - DISSQLUTIQN" 
2 
"Sec. [117]136. Methods of dissolution; EFFECTIVE DATE OF 
3 
DISSOLUTION. - A corporation formed or organized under the provisions of 
4 
this 
Code 
may 
be 
dissolved 
IN 
ANY 
OF 
THE 
fQLLOWING 
5 
WAYS:[voluntarily or involuntarily.] 
6 
1. 
AUTOMATICALLY BY EXPIRATION OF THE CQRPORATE 
7 
TERM 
STATED 
IN 
THE 
ARTICLES 
Of 
INCORPORATION, 
AS 
8 
QRIGINALLY STATED, QR AS LENGTHENED QR SHQRTENED IN 
9 
ACCQRDANCE WITH THE PRQVISIQNS QF THIS CQDE. 
10 
2. 
BY ACTIQN Oil" A MAJQRITY Oil" THE INCQRPQRATQRS QR 
11 
A 
MAJQRITY QF 
THE 
DIRECTQRS QR TRUSTEES 
WHEN THE 
12 
CQRPQRATIQN: 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
a. 
HAS NQT CQMMENCED BUSINESS, 
b. 
BEING A STQCK CQRPQRATIQN, HAS NQT ISSUED 
SHARES, 
c. 
HAS NQ DEBTS QR OTHER LIABILITIES, AND 
d. 
HAS RECEIVED NQ PAYMENTS Oil'll SUBSCRIPTIONS 
FQR SHARES IN THE CASE Oil" STQCK CQRPQRATIQNS, QR 
CQNTRIBUTIQNS 
IN 
THE 
CASE 
OF 
NQN-STQCK 
CQRPQRATIQNS, 
QR, 
HAVING 
RECEIVED 
THEM, 
HAS 
RETURNED 
THEM 
TO 
THQSE 
ENTITLED 
THERETO, 
LESS 
AMQUNTS DISBURSED FQR LAWFUL EXPENSES. 
3. 
BY ACTIQN 
QF 
THE 
BQARD 
Oil" 
IDIRECTQRS 
AND 
24 
STQCKHQLDERS, QR THE BQARD Oil" TRUSTEES AND MEMBERS AS 
25 
THE CASE MAY BE, WHEN: 
26 
a. 
NQT QUALIFYING UNDER SECTION 136 (2) ABQVE, 
27 
THE CQRPQRATIQN FAILS TQ CQMMENCE OR CQNTINUE ITS 
28 
BUSINESS OR THE CONSTRUCTION OF ITS WORKS AND ITS 
29 
CERTIFICATE 
QF 
INCQRPQRATIQN 
HAS 
NQT YET 
BEEN 
30 
REVQKED IN ACCQRDANCE WITH SECTIQN 22 QF THIS CQDE, 
31 
QR 
Page 57 or85 


2 
3 
4 
b. 
FOR ANY OTHER REASON PROPOSED AND VOTED 
UPON BY THEM AT A MEETING CALLED SPECIFICALLY FOR 
THAT PURPOSE. 
4. 
BY 
ORDER 
Of 
THE 
COMMISSION 
WHEN 
THE 
5 
CORPORATION: 
6 
a. 
FAILED 
TO 
COMMENCE 
OR 
CONTINUE 
ITS 
7 
BUSINESS OR THE CONSTRUCTION OF ITS WORKS AND THE 
8 
REVOCATION OF ITS CERTIFICATE OF INCORPORATION HAS 
9 
ATTAINED FINALITY IN ACCORDANCE WITH SECTION 22 Of 
10 
THIS CODE; 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
b. 
HAS 
BEEN 
FOUND TO 
HAVE 
PROCURED 
ITS 
ORGANIZATION THROUGH FRAUD; 
c. 
HAS BEEN FOUND TO HAVE BEEN CREATED FOR 
THE PURPOSE OF COMMITTING OR CONCEALING, OR AIDING 
IN THE COMMISSION OR CONCEALMENT Of, SECURITIES 
VIOLATIONS, 
SMUGGLING, 
TAX 
EVASION, 
MONEY 
LAUNDERING, OR GRAFT AND CORRUPT PRACTICES; 
d. 
HAS BEEN FOUND TO HAVE COMMITTED OR AIDED 
IN 
THE 
COMMISSION 
OF 
SECURITIIES 
VIOLATIONS, 
SMUGGLING, TAX EVASION, MONEY LAUNDI:RING, OR GRAFT 
AND CORRUPT PRACTICES, AND ITS STOCKHOLDERS KNEW OR 
WERE IN A POSITION TO KNOW ABOUT SUCH ILLEGAL ACTS; 
e. 
FOR THE PURPOSE OF SHIELDING ITSELF FROM 
LIABILITY FOR GRAFT AND CORRUPT PRACTICES, HAS BEEN 
FOUND 
TO 
HAVE 
ENGAGED 
THE 
SERVICES 
OF 
AN 
INTERMEDIARY 
WHO 
COMMITS 
GRAFT 
AND 
CORRUPT 
PRACTICES FOR THE CORPORATION'S BENIEFIT OR IN ITS 
INTEREST, AND ITS STOCKHOLDERS KNEW OR WERE IN A 
POSITION TO KNOW ABOUT THE ENGAGEMENlT; 
f. 
HAS BEEN FOUND TO HAVE REPEATEDLY AND 
KNOWINGLY TOLERATED THE COMMISSIOIII OF GRAFT AND 
CORRUPT PRACTICES OR OTHER FRAUDULENT OR ILLEGAL 
ACTS 
BY 
ITS 
DIRECTORS, 
TRUSTEES, 
OFFICERS, 
OR 
EMPLOYEES, FAILING TO SANCTION THEM, REPORT THEIR 
Page 58 or85 


ACTIONS TO THE PROPER AGENCIES, AND/OR FILE THE 
2 
APPROPRIATE ACTION AGAINST THEM; 
3 
g. 
HAS BEEN FOUND TO HAVE REPEATEDLY AND 
4 
WILLFULLY EXCEEDED THE AUTHORITY CONFERRED UPON IT 
5 
BY LAW; 
6 
h. 
HAS BEEN FOUND TO HAVE REPEATEDLY AND 
7 
WILLFULLY 
FALSIFIED, 
MISSTATED 
OR 
OTHERWISE 
8 
MISREPRESENTED 
INFORMATION 
CONTil\INED 
IN 
ITS 
9 
REPORTORIAL REQUIREMENTS; 
10 
i. 
HAS BEEN FOUND TO HAVE REPEATEDLY AND 
II 
WILLFULLY CONDUCTED ITS BUSINESS IN A. FRAUDULENT OR 
12 
OTHERWISE UNLAWFUL MANNER; OR 
13 
j. 
HAS BEEN FOUND TO HAVE OTHE'RWISE VIOLATED 
14 
THE PROVISIONS OF THIS CODE. 
15 
5. 
BY ORDER OF THE COMMISSION WHEN, BY FINAL 
16 
JUDGMENT,A 
COURT 
ORDERS· THE 
DISSOLUTION 
OF 
THE 
17 
CORPORATION. 
18 
IN THE CASE OF EXPIRATION OF CORPORATE TERM UNDER SECTION 
19 
136 (1) ABOVE, DISSOLUTION SHALL AUTOMATICALLY TAKE EFFECT 
20 
ON THE DAY FOLLOWING THE LAST DAY OF THE CORPORATE TERM 
21 
STATED IN THE ARTICLES OF INCORPORATION, WITHOUT NEED FOR 
22 
THE ISSUANCE BY THE COMMISSION OF A CERTIFICATE OF 
23 
DISSOLUTION. 
IN ALL OTHER CASES, THE DISSOLUTION SHALL 
24 
TAKE EFFECT ONLY UPON AND AS OF THE ISSUANCE BY THE 
25 . 
COMMISSION OF A CERTIFICATE OF DISSOLUTION, AND SHALL BE 
26 
WITHOUT PREJUDICE TO SECTION 141 OF THIS CODE." 
27 
SECTION 61. 
Section 118 of the Code is hereby renumbered as Section 137 and 
28 
amended to read as follows: 
29 
"Sec. [118]137. [Voluntary dissolution] DISSOLUTION where no 
30 
creditors are affecte~· PROCEDURE. -
DISSOLUTION PURSUANT TO 
31 
SECTION 136 (2) OF THIS CODE MAY BE MADE BY FILING A 
32 
VERIFIED REQUEST FOR DISSOLUTION WITH THE COMMISSION: 
Page 59 of85 


a. 
STATING THE NAME Of THE CORPORATION AND 
2 
3 
THE NAMES AND ADDRESSES OF THE INCORPORATORS AND 
DIRECTORS OR TRUSTEES; 
4 
b. 
STATING THE REASON FOR THE DISSOLUTION OF 
5 
THE CORPORATION; 
6 
c. 
ATTESTING 
TO 
THE 
EXISTENCE 
AND 
7 
CONCURRENCE OF ALL THE CONDITIONS SET FORTH IN 
8 
SECTION 136 (2) (A) TO (D) OF THIS CODE; 
9 
d. 
STATING THE NAMES OF THE INCORPORATORS, OR 
10 
OF 
THE 
DIRECTORS 
OR 
TRUSTEES, 
CONSTITUTING 
A 
11 
MAJORITY, WHO APPROVED THE DISSOLUTION AND THE 
12 
DATE, PLACE, AND TIME OF THE MEETING IN WHICH THE VOTE 
13 
WAS MADE, WHICH REQUIREMENT MAY BE DISPENSED WITH 
14 
IF THE 
REQUEST ITSELF IS DULY VERIFIED 
BY SUCH 
15 . 
MAJORITY; AND 
16 
e. 
WHEN APPLICABLE, ATTACHING: (i) A LIST OF THE 
17 
NAMES AND ADDRESSES OF THE PERSONS ENTITLED TO A 
18 
RETURN OF PAID SUBSCRIPTIONS OR CONTRIBUTIONS AS SET 
19 
FORTH IN SECTION 136 (2) (D), (ii) A SUMMARY OF THE 
20 
AMOUNTS 
OF 
THEIR 
PAID 
SUBSCRIPTIONS 
OR 
21 
CONTRIBUTIONS, 
(iii) 
A 
SUMMARY 
OF 
THE 
AMOUNTS 
22 
DISBURSED FOR LAWFUL EXPENSES WITH COPIES OF THE 
23 
OFFICIAL RECEIPTS THEREFOR, AND (iv) A SUMMARY OF THE 
24 
AMOUNTS RETURNED WITH PROOF THAT THEY WERE DULY 
25 
RECEIVED BY THOSE ENTITLED THERETO. 
26 
Ifdissolution of a corporation PURSUANT TO SECTION 136 (3) OF 
27 
THIS CODE does not prejudice the rights of any creditor having a claim 
28 
against it, the dissolution maybe effected by majority vote of the board of 
29 
directors or trustees, and by a resolution duly adopted by the affirmative vote 
30 
of the stockholders owning at least two-thirds (2/3) of the outstanding capital 
31 
stock or of at least two-thirds (2/3) of the members of a meeting to be held 
32 
upon call of the directors or trustees. 
33 
AT LEAST THIRTY (30) DAYS PRIOR TO THE MEETING, NOTICE SHALL 
34 
BE GIVEN TO EACH SHAREHOLDER OR MEMB,ER OF RECORD, 
35 
WHETHER OR NOT ENTITLED TO VOTE AT THE 'Ir1EETING, IN THE 
36 
MANNER PROVIDED IN SECTION 50 OF THIS CODE AND SHALL STATE 
Page 60 of85 


THAT THE PURPOSE OF THE MEETING IS TO VOTE ON THE 
2 
DISSOLUTION OF THE CORPORATION. 
[after publication of the notice] 
3 
NOTICE of THE time, place and object of the meeting SHALL LIKEWISE BE 
4 . 
MADE BY PUBLICATION for three (3) consecutive weeks PRIOR TO THE 
5 
DATE OF THE MEETING in a newspaper published in the place where the 
6 
principal office of said corporation is located; and if no newspaper is published 
7 
in such place, then in a newspaper of general circulation in the Philippines. 
8 
[, after sending such notice to each stockholder or member [either] by 
9 
registered mail or by personal delivery at least thirty (30) days prior to said 
10 
meeting.] 
11 
ONCE THE REQUIRED VOTES OF THE BOARD AND SIHAREHOLDERS OR 
12 
MEMBERS ARE ACHIEVED, A VERIFIED REQUEST FOR DISSOLUTION 
13 
SHALL BE FILED WITH THE COMMISSION 
14 
a. 
STATING THE NAME OF THE CORPORATION AND 
15 
THE 
NAMES 
AND ADDRESSES 
OF 
THE 
DIRECTORS OR 
16 
TRUSTEES; 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
b. 
STATING THE REASON FOR THE DISSOLUTION OF 
THE CORPORATION; 
c. 
CERTIFYING 
THAT 
NO 
CRED)[TOR 
SHALL 
BE 
PREJUDICED BY THE DISSOLUTION AND SUBSTANTIATING 
THE 
SAME 
WITH 
FINANCIAL STATEMENTS 
AND 
OTHER 
RECORDS; 
d. 
STATING THE NAMES OF THE DIRECTORS OR 
TRUSTEES, CONSTITUTING A MAJORITY, WHO APPROVED THE 
DISSOLUTION AND THE DATE, PLACE, ANiD TIME OF THE 
MEETING IN WHICH THE VOTE WAS MADE; 
e. 
STATING WHEN THE NOTICES TO SHAREHOLDERS 
OR MEMBERS WERE GIVEN, THE MANNER AND FORM IN 
WHICH THEY WERE GIVEN, THE DETAILS OF PUBLICATION 
AND ATTACHING PROOF THEREOF, AND THE IDATE, PLACE, AND 
TIME OF THE MEETING IN WHICH THE VOTE WAS MADE; AND 
f. 
ATTACHING 
THERETOa 
copy 
of 
the 
resolution 
authorizing the dissolution WHICH shall HAVE BEEN certified by a 
Page 61 of85 


majority of the board of directors or trustees and countersigned by the 
2 
secretary of the corporation. 
3 
4 
WITHIN FIFTEEN (15) DAYS FROM RECEIPT OF THE VERIFIED 
5 
REQUEST FOR DISSOLUTION, AND IN THE ABSENCE OF ANY 
6 
WITHDRAWAL WITHIN SAID PERIOD, [The Securities and Exchange] 
7 
THE Commission shaliAPPROVE THE REQUEST AND thereupon issue the 
8 
certificate of dissolution." 
9 
SECTION 62. 
Section 119 of the Code is hereby renumbered as Section 138 and 
10 
amended to read as follows: 
II 
"Sec. [119]138. [Voluntary dissolutionjDISSOlU7TON where creditors 
12 
are affected; PROCEDURE AND CONTENTS OF PETl'TION. - Where the 
13 
dissolution of a corporation may prejudice the rights of any creditor, [the 
14 
petition] A VERIFIED PETITION for dissolution shall be filed with the 
15 
[Securities and Exchange] Commission. The petition shall be signed by a 
16 
majority of [its] THE CORPORATION'S board of directors or trustees or 
17 
other officers having the management of its affairs, verified by its president or 
18 
secretary or one of its directors or trustees, and shall set forth all claims and 
19 
demands against it, and that its dissolution was resolved upon by the 
20 
affirmative vote of the stockholders representing at least two-thirds (2/3) of 
21 
the outstanding capital stock or by at least two-thirds (2/3) of the members at 
22 
a meeting of its stockholders or members called for that purpose. 
THE 
23 
PETITION SHAll LIKEWISE STATE: (a) THE REASON FOR THE 
24 
DISSOLUTION; (b) THE FORM, MANNER AND TIME WHEN THE 
25 
NOTICES WERE GIVEN; AND (c) THE DATE, PLACE, .AND TIME OF THE 
26 
MEETING IN WHICH THE VOTE WAS MADE. THE PETITION SHAll 
27 
HAVE AS ANNEXES (a) A COPY OF THE RESOLUTION AUTHORIZING 
28 
THE DISSOLUTION, WHICH SHAll HAVE BEEN CERTIFIED BY A 
29 
MAJORITY OF THE BOARD OF DIRECTORS OR TRUSTEES AND 
30 
COUNTERSIGNEDBY THE SECRETARY OF THE CORPORATIONj AND 
31 
(b) A LIST OF All ITS CREDITORS. 
32 
If the petition is sufficient in form and substance, Ule Commission shall, 
33 
by an order reciting the purpose of the petition, fix a date on or before which 
34 
objections thereto may be filed by any person, which date shall not be less 
35 
than thirty (30) days nor more than sixty (60) days after the entry of the order. 
36 
Before such date, a copy of the order shall be published at least once a week 
37 
for three (3) consecutive weeks in a newspaper of general circulation published 
38 
in the municipality or city where the principal office of the corporation is 
39 
Situated, or if there be no such newspaper, then in a newspaper of general 
Page 62 01'85 


circulation in the Philippines, and a similar copy shall be posted for three (3) 
2 
consecutive weeks in three (3) public places in such municipality or city. 
3 
Upon five (5) day's notice, given after the date on which the right to file 
4 
objections as fixed in the order has expired, the Commission shall proceed to 
5 
hear the petition and try any issue made by the objections filed; and if no such 
6 
objection is suffiCient, and the material allegations of the petition are true, it 
7 
shall render judgment dissolving the corporation and directing such disposition 
8 ' 
of its assets as justice requires, and may appoint a receiver to collect such 
9 
assets and pay the debts of the corporation." 
1 0 
SECTION 63. 
Section 120 of the Code is hereby renumbered as Section 139 and 
11 
amended to read as follows: 
12 
"Sec. [120]139. WITHDRAWAL OF REQUEST FORDissolution [by 
13 
shortening corporate term] AND WITHDRAWAL OF PETITION FOR 
14 
DISSOLUTION. - [A voluntary dissolution may be effected by amending the 
15 
articles of incorporation to shorten the corporate term pursuant to the 
16 
provisions of this Code. A copy of the amended articles of incorporation shall 
17 
be submitted to the Securities and Exchange Commission in accordance with 
18 
this Code. Upon approval of the amended articles of incorporation of the 
19 
expiration of the shortened term, as the case may be, the corporation shall be 
20 
deemed dissolved without any further proceedings, subject to the provisions of 
21 
this Code on liquidation.] 
22 
A WITHDRAWAL OF THE REQUEST FOR DISSOLUTION SHALL: 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
a. 
BE MADE IN WRITING; 
b. 
BE 
DULY VERIFIED BY 
ANY 
INCORPORATOR, 
DIRECTOR, SHAREHOLDER OR MEMBER; 
c. 
HAVE THE SIGNATURES OF THE SAME NUMBER OF 
INCORPORATORS, DIRECTORS, SHAREHOLDI:RS OR MEMBERS 
NECESSARY TO REQUEST FOR A DISSOLUTION AS SET FORTH 
IN THE FOREGOING SECTIONS; AND 
d. 
BE SUBMITTED WITHIN FIFTEEN (15) DAYS FROM 
THE RECEIPT BY THE COMMISSION OF TtiE REQUEST FOR 
DISSOLUTION, 
Page 63 of 85 


UPON RECEIPT OF A DULY SUBMITTED WITHDRAWAL OF 
2 
REQUEST FOR DISSOLUTION, THE COMMISSION SHALL WITHHOLD 
3 
ACTION ON THE REQUEST FOR DISSOLUTION AND SHALL, AFTER 
4 
INVESTIGATION, ISSUE AN ORDER: 
5 
a. 
WITHHOLDING 
THE 
ISSUANCE 
OF 
THE 
6 
CERTIFICATE OF DISSOLUTION AND DEEMING THE REQUEST 
7 
FOR DISSOLUTION WITHDRAWN; OR 
8 
b. 
DIRECTING THAT A JOINT MEHliNG OF THE BOARD 
9 
AND OF THE STOCKHOLDERS BE HELD FOR THE PURPOSE OF 
10 
ASCERTAINING 
WHETHER 
OR 
NOT TO 
PROCEED 
WITH 
II 
DISSOLUTION. 
12 
THE COMMISSION SHALL HAVE THE POWER TO ISSUE SUCH 
13 
ORDERS 
AS 
MAY 
BE 
APPROPRIATE, 
INCLUDING, 
WITHOUT 
14 
LIMITATION, ORDERS DESIGNATING THE TIME AND PLACE OF THE 
15 
JOINT MEETING, DIRECTING THE SENDING OIF NOTICES, AND 
16 
SPECIFYING THE FORM OF SUCH NOTICE. 
THE CONDUCT OF THE 
17 
JOINT MEETING SHALL BE SUPERVISED BY THE COMMISSION 
18 
THROUGH A DULY AUTHORIZED REPRESENTATJ[VE WHO SHALL, 
19 
IMMEDIATELY AFTER THE JOINT MEETING, CERTIFY ITS OUTCOME 
20 
WITH A RECOMMENDATION AS TO WHETHER THE: CERTIFICATE OF 
21 
DISSOLUTION 
SHOULD 
BE 
ISSUED 
OR 
THE 
REQUEST 
FOR 
22 
DISSOLUTION 
BE 
DEEMED 
ABANDONED. 
THEREAFTER, 
THE 
23 
COMMISSION SHALL ISSUE AN ORDER EITHER APPROVING THE 
24 . 
WITHDRAWAL 
OF 
THE 
REQUEST 
OR 
A 
CERTIFICATE 
OF 
25 
DISSOLUTION OR PROCEEDING TO ACT ON SUCH REQUEST. 
26 
A MOTION FOR THE WITHDRAWAL OF THE PETITION FOR 
27 
DISSOLUTION 
SHALL 
BE 
SIMILAR 
IN 
SUI3STANCE 
AS 
A 
28 
WITHDRAWAL OF REQUEST FOR DISSOLUTION BUT SHALL BE 
29 
VERIFIED AND FILED PRIOR TO PUBLICATION OF THE ORDER 
30 
SETTING THE DATE FOR OBJECTIONS TO THE: PETITION. THE 
3 I 
COMMISSION SHALL RESOLVE THE MOTION Wl[THIN THE SAME 
32 
PROCEEDINGS AS THE PETITION AND ISSUE AN ORDER DEEMING 
33 . 
THE PETITION WITHDRAWN OR DENYING THE WITHDRAWAL AND 
34 
PROCEEDING TO HEAR OBJECTIONS ON THE PETITION." 
35 
SECTION 64. 
Section 121 of the Code is hereby renumbered as Section 140 and 
36 
amended to read as follows: 
Page 64 01'85 


"Sec. 
[121]140. 
[Involuntary 
dissolution] 
,DISSOLUTION 
BYTHE 
2 
COMMISSION. -
[A corporation may be dissolved by the Securities and 
3 
Exchange]DISSOLUTION PROCEEDINGS PURSUANT TO THE GROUNDS 
4 
SET FORTH IN SECTION 136 (4) AND (S), SECTION 173, OR WHEN 
5 
PROVIDED IN OTHER LAWS, RULES AND REGUL.ATIONS, MAY BE 
6 
COMMENCED BY THE Commission MOTU PROPRIO ORupon filing of a 
7 
verified complaintBY ANY INTERESTED PARTY, [ and after] 
8 
AFTER 
proper notice and 
hearing, THE 
COMMISSION MAY 
9 
DISSOLVE THE CORPORATION OR ISSUE SUCH OTHER ORDER AS IT 
10 
MAY DEEM APPROPRIATE IN ACCORDANCE WITH THE PROVISIONS 
11 
OF THIS CODE OR THE 
RULES AND REGULATIONS OF THE 
12 
COMMISSION. 
13 
IF THE CORPORATION IS DISSOLVED BY THE COMMISSION 
14 
PURSUANT TO ANY OF THE GROUNDS SET FORTH IN SECTION 136 
15 
(4) (B) TO (I), ITS ASSETS, AFTER PAYMENT OF ITS OUTSTANDING 
16 
LIABILITIES, SHALL BE FORFEITED IN FAVOR OF THE COMMISSION. 
17 
SUCH FORFEITURE SHALL BE WITHOUT PREJUDICE TO ANY OTHER 
18 
PENALTY OR SANCTION FOR THOSE LIABLE UNDER THIS CODE OR 
19 
OTHER LAWS.[on the grounds provided by existing laws, rules and 
20 
regulations]," 
21 
SECTION 6S. 
Section 122 of the Code is hereby renumbered as Section 141 and 
22 
amended to read as follows: 
23 
"Sec. [122]141, Corporate /iquidation.-
Every corporation whose 
24 
charter expires by its own limitation or is annulled by forfeiture or otherwise, or 
25 
whose corporate existence for other purposes is terminated in any other 
26 
manner, shall nevertheless be continued as a body corporate for three (3) 
27 
years after the [time when it would have been so dissolved] EFFECTIVE 
28 
DATE OF DISSOLUTION AS PROVIDED IN SECTION 136 OF THIS 
29 
CODE, for the purpose of prosecuting and defending suits by or against it and 
30 
enabling it to settle and close its affairs, to dispose of anci convey its property 
31 
and to distribute its assets, but not for the purpose of continuing the business 
32 
for which it was established. 
33 
xxx 
xxxxxx 
34 
EXCEPT AS OTHERWISE PROVIDED FOR IN SECTIONS 9SAND 
35 
960F THIS CODE, upon the winding up of corporate affairs, any asset 
36 
distributable to any creditor or stockholder or member who is unknown or 
Page 65 of85 


1 
cannot be found shall be escheated[to the city or municipality where such 
2 
assets are 10cated]IN FAVOR OF THE NATIONAL GOVERNMENT. 
3 
xxx 
xxx 
xxx" 
4 
SECTION 66. 
Section 125 is amended to delete "Securities and Exchange" from 
5 
"Securities and Exchange Commission" in each instance. Further, Sections 123, 124 and 125 
6 
of the Code are hereby renumbered as Sections 142, 143 and 144, respectively. 
7 
SECTION 67. 
Section 126 of the Code is hereby renumbered as Section 145 and 
8 
amended to read as follows: 
9 
"Sec. [126]145. Issuance of a license.- If the [Securities and Exchange] 
10 
Commission is satisfied that the applicant has complied with all the 
11 
requirements of this Code and other special laws, rules and regulations, the 
12 
Commission shall issue a license to the applicant to transact business in the 
13 
Philippines for the purpose or purposes specified in such license. Upon issuance 
14 
of the license, such foreign corporation may commence to transact business in 
15 
the Philippines and continue to do so for as long as it retains its authority to act 
16 
as a corporation under the laws of the country or state of its incorporation, 
17 
unless such license is sooner surrendered, revoked, suspended or annulled in 
18 
accordance with this Code or other special laws. 
19 
Within sixty (60) days after the issuance of the license to transact 
20 
business in the Philippines, the licensee, except foreign banking or insurance 
21 
corporations, shall deposit with the [Securities and Exchange] Commission for 
22 
the benefit of present and future creditors of the licensee in the Philippines, 
23 
securities satisfactory to the [Securities and Exchange] Commission, consisting 
24 
of bonds or other evidence of indebtedness of the Government of the 
25 
Philippines, its political subdivisions and instrumentalities, or of government-
26 
owned or controlled corporations and entities, shares of stock OR DEBT 
27 
SECURITIES THAT 
ARE 
REGISTERED 
UNDER THE 
SECURITIES 
28 
REGULATION CODE [in "registered enterprises" as this term is defined in 
29 
Republic Act No. 5186], shares of stock in domestic corporations [registered] 
30 
LISTED in the stock exchange, [or] shares of stock in domestiC insurance 
31 
companies and banks, OR ANY FINANCIAL INSTRUMENT DETERMINED 
32 
SUITABLE BY THE COMMISSION, or any combination THEREOF [of these 
33 
kinds of securities,] in the actual market value of at least [one] FIVE hundred 
34 
thousand [(Pl0D,DDD.)] (P500,OOO) pesosOR SUCH qnlER AMOUNT THAT 
35 
MAY BE SET BY THE COMMISSION; Provided, however, That within six (6) 
36 
months after each fiscal year of the licensee, the [Securities and Exchange] 
37 
Commission shall require the licensee to deposit additional securities OR 
Page 66 01'85 


FINANCIAL INSTRUMENTS equivalent in actual market value to two (2%) 
2 
percent of the amount by which the licensee's gross income for that fiscal year 
3 
exceeds [five] TEN million [(PS,OOO,OOO.OO)] (Pl0,OOO,OOO.OO) pesos. The 
4 
[Securities and Exchange] Commission shall also require THE deposit of 
5 
additional securities OR FINANCIAL INSTRUMENTS if the actual market 
6 
value of the securities OR FINANCIAL INSTRUMENTS on deposit has 
7 
decreased by at least ten (10%) percent of their actual market value at the 
8 
time they were deposited. The [Securities and Exchange] Commission may at 
9 
its discretion release part of the additional [securities] deposit[ed with it] if the 
10 
gross income of the licensee has decreased, or if the actuill market value of the 
11 
total [securities on] deposit has increased, by more than ten (10%) percent of 
12 
theIR actual market value [of the securities] at the time they were deposited. 
13 
The [Securities and Exchange] Commission may, from time to time, allow the 
14 
licensee to MAKE substitute DEPOSITS[other securities] for those already on 
15 
deposit as long as the licensee is solvent. Such licensee shall be entitled to 
16 
collect the interest or dividends on [the] SUCH[securities]depositS[ed]. In the 
17 
event the licensee ceases to do business in the Philippines, ITS [the 
18 . 
securities]depositS[ed as aforesaid] shall be returned, upon the licensee's 
19 
application therefor and upon proof to the satisfaction of the [Securities and 
20 
Exchange] Commission that the licensee has no liability to Philippine residents, 
21 
including the Government of the Republic of the Philippines. FOR PURPOSES 
22 
OF COMPUTING THE SECURITIES DEPOSIT, THE COMPOSITION OF 
23 
GROSS INCOME AND ALLOWABLE DEDUCTIONS THEREFROM SHAll 
24 
BE IN ACCORDANCE WITH THE RULES OF THE COMIIilISSION." 
25 
SECTION 68. 
Sections 128, 130, 131, 132, 134, 135, and 136 of the Code are 
26 
hereby amended to delete "Securities and Exchange" from "Securities and Exchange 
27 
Commission" in each instance. Further, Sections 127 to 136 are hereby renumbered as 
28 
Sections 146 to 155 accordingly. 
29 
30 
thus: 
31 
32 
33 
34 
35 
36 
37 
38 
SECTION 69. A new title is inserted in the Code contclining Sections 156 to 175, 
TITlE XVI - INVESTIGATIONS, OFFENSES 
AND PENALTIES 
"Sec. 156.INVESTIGATION AND PROSECUTION OF OFFENSES. -
THE COMMISSION MAY, UPON COMPLAINT OR MOm PROPRIO, MAKE 
SUCH INVESTIGATIONS AS IT DEEMS NECESSARY TO DETERMINE 
WHETHER ANY PERSON HAS VIOLATED OR IS ABOUT TO VIOLATE 
ANY PROVISION OF THIS CODE, ANY RULE, REGUI.ATION OR ORDER 
THEREUNDER, AND MAY REQUIRE OR PERMIT ANY PERSON TO FILE 
Page 67 01'85 


1 
WITH IT A STATEMENT IN WRITING, UNDER OATH OR OTHERWISE, 
2 
AS THE COMMISSION SHALL DETERMINE, AS TO ALL FACTS AND 
3 
CIRCUMSTANCES CONCERNING THE MATTER TO BE INVESTIGATED. 
4 
THE COMMISSION MAY PUBLISH INFORMATION CONCERNING 
5 
ANY 
SUCH 
VIOLATIONS, 
AND 
TO 
INVESTIGATE 
ANY 
FACT, 
6 
CONDITION, PRACTICE OR MATTER WHICH IT MAY DEEM NECESSARY 
7 
OR PROPER TO AID IN THE ENFORCEMENT OF THE PROVISIONS OF 
8 
THIS CODE, IN THE PRESCRIBING OF RULES AND REGULATIONS 
9 
THEREUNDER, OR IN SECURING INFORMATION TO SERVE AS A BASIS 
10 
FOR RECOMMENDING FURTHER LEGISLATION CONCERNING THE 
11 
MATTERS TO WHICH THIS CODE RELATES: PROVIDED, HOWEVER, 
12 
THAT ANY PERSON REQUESTED OR SUBPOENA.ED TO PRODUCE 
13 
DOCUMENTS 
OR 
TESTIFY 
IN 
ANY 
INVESTIGATION 
SHALL 
14 
SIMULTANEOUSLY BE NOTIFIED IN WRITING OF THE PURPOSE OF 
15 
SUCH INVESTIGATION: PROVIDED, FURTHER, THAT ALL CRIMINAL 
16 
COMPLAINTS 
FOR 
VIOLATION 
OF 
THIS 
CODE, 
AND 
THE 
17 
IMPLEMENTING 
RULES 
AND 
REGULATIONS 
ENFORCED 
OR 
18 
ADMINISTERED BY THE COMMISSION SHALL BE REFERRED TO THE 
19 
DEPARTMENT OF JUSTICE FOR PRELIMINARY INVESTIGATION AND 
20 
PROSECUTION 
BEFORE 
THE 
PROPER 
COURT: 
PROVIDED, 
21 
FURTHERMORE, THAT IN INSTANCES WHERE THE LAW ALLOWS 
22 
INDEPENDENT CIVIL OR CRIMINAL PROCEEDINGS OF VIOLATIONS 
23 
ARISING FROM THE SAME ACT, THE COMMISSION SHALL TAKE 
24 
APPROPRIATE ACTION TO IMPLEMENT THE SAME. 
25 
SEC. 157. 
ADMINISTRATION OF OATH5,AND SUBPOENA OF 
26 
WITNESSES AND DOCUMENTS. -
FOR THE PURPOSE OF THE 
27 
INVESTIGATIONS IN THE PRECEDING SECTION, OR ANY OTHER 
28 
PROCEEDING UNDER THIS CODE, THE COMMISSION OR ANY OFFICER 
29 
DESIGNATED BY IT IS EMPOWERED TO ADMINISTER OATHS AND 
30 
AFFIRMATIONS, SUBPOENA WITNESSES, COMPEl ATTENDANCE, TAKE 
31 
EVIDENCE, REQUIRE THE PRODUCTION OF ANY BOOK, PAPER, 
32 
CORRESPONDENCE, MEMORANDUM, OR OTHER RECORD WHICH THE 
33 
COMMISSION DEEMS RELEVANT OR MATERIAL TO THE INQUIRY, AND 
34 . 
TO PERFORM SUCH OTHER ACTS NECESSARY IN THE CONDUCT OF 
35 
SUCH INVESTIGATION OR PROCEEDINGS. 
36 
SECTION 158. CEASE AND DESIST ORDERS, -
WHENEVER IT 
37 
SHAll APPEAR TO THE COMMISSION THAT ANY PERSON HAS 
38 
ENGAGED OR IS ABOUT TO ENGAGE IN ANY ACT OR PRACTICE 
39 
CONSTITUTING A VIOLATION OF ANY PROVISION OF THIS CODE, 
Page 68 of85 


ANY RULE, REGULATION OR ORDER THEREUNDER, IT MAY ISSUE AN 
2 
ORDER FOR SUCH PERSON TO DESIST FROM COMfoilITTING SUCH ACT 
3 
OR PRACTICE. AFTER FINDING THAT SUCH PERSON HAS ENGAGED 
4 
IN ANY SUCH ACT OR PRACTICE AND THAT THERE IS A REASONABLE 
5 
LIKELIHOOD OF SUCH PERSON CONTINUING FURTHER OR FUTURE 
6 
VIOLATIONS, THE COMMISSION MAY ISSUE, EX P)IRTE A CEASE AND 
7 
DESIST ORDER ENJOINING SUCH PERSON FROM FURTHER OR 
8 
FUTURE VIOLATIONS FOR A MAXIMUM PERIOD OF TWENTY (20) 
9 
DAYS. 
10 
THEREAFTER,THE 
COMMISSION 
MAY 
PROCEED 
11 
ADMINISTRATIVELY AGAINST SUCH PERSON IN ACCORDANCE WITH 
12 
SECTION 160, AND/OR TRANSMIT SUCH EVIDE:NCE AS MAY BE 
13 
AVAILABLE CONCERNING ANY VIOLATION OF AI'IIY PROVISION OF 
14 
THIS CODE, OR ANY RULE, REGULATION OR ORDER THEREUNDER, TO 
15 
THE 
DEPARTMENT OF 
JUSTICE, WHICH 
MAY INSTITUTE THE 
16 
APPROPRIATE CRIMINAL PROCEEDINGS UNDER THIS CODE, AND/OR 
17 
TO THE PROPER COURT, TRIBUNAL, OR QUASI-JUDICIAL AGENCY IN 
18 
INSTANCES WHERE THE LAW ALLOWS INDEPENDENT CIVIL OR 
19 
CRIMINAL PROCEEDINGS OF VIOLATIONS ARISING FROM THE SAME 
20 
ACT. 
21 
SEC. 159. 
CONTEMPT. -
ANY PERSON WHO, WITHIN HIS 
22 
POWER BUT WITHOUT JUSTIFIABLE OR LAWFUL CAUSE, FAILS OR 
23 
REFUSES TO COMPLY WITH ANY LAWFUL ORDER, DECISION OR 
24 
SUBPOENA ISSUED BY THE COMMISSION SHALL, J\.FTER DUE NOTICE 
25 
AND HEARING, BE GUILTY OF CONTEMPT OF THE COMMISSION. 
26 
SUCH 
PERSON 
SHALL 
BE 
FINED IN SUCH 
t~MOUNT AS 
THE 
27 
COMMISSION MAY DETERMINE. WHEN THE FAILURE OR REFUSAL IS 
28 
A CLEAR AND OPEN DEFIANCE OF THE COMMISSION'S ORDER, 
29 
DECISION OR SUBPOENA, THE PERSON SHALL BE !'INED ON A DAILY 
30 
BASIS IN AN AMOUNT THE COMMISSION MAY DETERMINE AND 
31 
DETAINED UNDER AN ARREST ORDER ISSUED BY THE COMMISSION 
32 
UNTIL SUCH ORDER, DECISION OR SUBPOENA IS COMPLIED WITH. 
33 
SEC. 160. 
ADMINISTRATIVE SANCTIONS. -
IF, AFTER DUE 
34 
NOTICE AND HEARING INITIATED EITHER BY COIltIPLAINT OR MOTU 
35 
PROPRIO, THE COMMISSION FINDS THAT ANY PROVISION OF THIS 
36 
CODE, OR ANY OF THE COMMISSION'S RULES OR ORDERS HAS BEEN 
37 
VIOLATED, THE COMMISSION MAY IMPOSE ANY OR ALL OF THE 
38 
FOLLOWING SANCTIONS ON THOSE FOUND RESPONSIBLE FOR THE 
39 
VIOLATION: 
Page 69 0[85 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
(A) 
A FINE RANGING FROM FIVE THOUSAND PESOS 
(PHP5,OOO.OO) TO TWO MILLION PESOS (PHP2,OOO,OOO.OO) 
PLUS NOT MORE THAN ONE THOUSAND PESOS (PHP1,OOO.OO) 
FOR EACH DAY OF CONTINUING VIOLATIONI, IN NO CASE TO 
EXCEED TWO MILLION PESOS (PHP2,OOO,OOO.QO); 
(6) 
ARREST AND DETENTION IN CONNECTION WITH 
ITS CONTEMPT POWER UNDER SECTION 159; 
(C) 
SUSPENSION 
OR 
REVOCATION 
OF 
THE 
CERTIFICATE OF INCORPORATION; 
(D) 
DISSOLUTION 
OF 
THE 
CORPORATION 
AND 
11 
FORFEITURE OF ITS ASSETS UNDER THE CONDITIONS IN TITLE 
12 
XV OF THIS CODE; AND 
13 
(E) 
OTHER PENALTIES WITHIN THE POWER OF THE 
14 
COMMISSION TO IMPOSE OR AS PRESCRIBED IN ITS RULES 
15 
AND REGULATIONS. 
16 
THE 
IMPOSITION 
OF 
THE 
FOREGOING 
ADMINISTRATIVE 
17 
SANCTIONS SHALL BE WITHOUT PREJUDICE TO THE FILING OF CIVIL 
18 
COMPLAINTS AND/OR CRIMINAL CHARGES UNDER THIS CODE AND 
19 
OTHER 
LAWS 
AGAINST 
THE 
CORPORATION 
AND/OR 
THOSE 
20 
RESPONSIBLE FOR THE VIOLATION, IN INSTANCES WHERE THE LAW 
21 
ALLOWS INDEPENDENT CIVIL OR CRIMINAL PROCEEDINGS OF 
22 
VIOLATIONS ARISING FROM THE SAME ACT. 
23 
SEC. 161. 
CONTINUED AND UNJUSTIFIED USE OF FORMER 
24 
CORPORATE NAME; 
PENALTIES .. -
A 
CORPORATION 
THAT 
25 
CONTINUES TO USE A CORPORATE NAME ALREADY PREVIOUSLY 
26 
REMOVED 
FROM 
REGISTRATION 
OR 
RESERVATION 
SHALL 
BE 
27 
PUNISHED WITH A FINE RANGING FROM FIFTY THOUSAND PESOS 
28 
(PHP50,OOO.OO) 
TO 
TWO 
HUNDRED 
THOUSAND 
PESOS 
29 
(PHP200,OOO.OO) AND/OR IMPRISONMENT OF SIX (6) MONTHS TO 
30 
TWO (2) YEARS AT THE DISCRETION OF THE COURlr; PROVIDED THAT 
31 
THE CORPORATION MAY CLAIM THE DEFENSE THAT IT, OR ANY OF 
32 
ITS STOCKHOLDERS OR OTHER DIRECTORS/m:FICERS EXERTED 
33 
REASONABLE EFFORTS AGAINST THE CONTINUED AND UNJUSTIFIED 
34 . 
USE OF THE FORMER CORPORATE NAME, IN WHICH CASE ONLY THE 
35 
RESPONSIBLE DIRECTORS/OFFICERS SHALL BE HELD CRIMINALLY 
36 
LIABLE UNDER THIS PROVISION. 
Page 70 of8S 


1 
Sec. 162. CONCEALMENT OF DISQUALIFICA HON; PENAL TIES. -
2 
EACH WILLFUL OR DELIBERATE CONCEALMENT BY A DIRECTOR OR 
3 
TRUSTEE OF ANY DISQUALIFICATION UNDER SECTION 27 ALREADY 
4 
EXISTING AT THE TIME HE ACCEPTED THE POST, StiAlL BE PUNISHED 
5 
BY A FINE RANGING FROM FIFTY THOUSAND PESOS (PHPSO,OOO.OO) 
6 
TO TWO HUNDRED THOUSAND PESOS (PHP200,OOO.OO) AND/OR 
7 
IMPRISONMENT OF SIX (6) MONTHS TO TWO (2) YEARS AT THE 
8 
DISCRETION 
OF 
THE 
COURT, 
AND 
BY 
A 
PERMANENT 
9 
DISQUALIFICATION FROM FURTHER ACTING AS DIRECTOR OF ANY 
10 
CORPORATION. 
FOR PURPOSES OF THIS SECTION, CONCEALMENT 
11 
SHALL BE WILLFUL OR DELIBERATE WHEN, DESPITE HAVING 
12 
KNOWLEDGE OF THE EXISTENCE OF THE DISQUALIFICATION, THE 
13 
DIRECTOR OR TRUSTEE ACCEPTS THE POST. 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 . 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
Sec. 163. 
VIOLATION OF DUTY TO KEl:P OR MAINTAIN 
RECORDS AND/OR ALLOW THEIR INSPECTION OR REPRODUCTION; 
PENALTIES, -
THE UNJUSTIFIED 'FAILURE OR REFUSAL BY THE 
CORPORATION, OR BY THOSE RESPONSIBLE FOR KEEPING AND 
MAINTAINING THE CORPORATION'S RECORDS, lrO COMPLY WITH 
SECTIONS 46, 74, 93, 180 AND OTHER PROVISIONS OF THIS CODE 
AND THE RULES OF THE COMMISSION WITH RESPECT TO THE 
RETENTION, MAINTENANCE AND 
KEEPING OF RECORDS AND 
ALLOWING THEIR INSPECTION OR REPRODUCTION, AS THE CASE 
MAY BE, SHALL BE PUNISHED WITH A FINE RANGING FROM FIFTY 
THOUSAND PESOS (PHP50,OOO.OO) TO FIVE HUI\IDRED THOUSAND 
PESOS (PHP500,000.OO) AND IMPRISONMENT OF THIRTY (30) DAYS 
TO TWO (2) YEARS AT THE DISCRETION OF THE COURT. 
THE PENALTIES IMPOSED UNDER THIS SECTION SHALL BE IN 
ADDITION TO THE SANCTIONS IMPOSED BY THE COMMISSION IN 
THE EXERCISE OF ITS CONTEMPT POWERS UNDER SECTION 159 TO 
COMPEL COMPLIANCE WITH THE DUTIES UNDER THE MENTIONED 
PROVISIONS. 
SEC. 
164. 
KNOWING OR WILLFUL 
Cl'!RTIFICATION OF 
INCOMPLET~ INACCURAT~ FALSE OR MISLEADINt; STATEMENTS OR 
REPORTS; PENALTIES. -
ANY PERSON WHO CERTIFIES ANY REPORT 
OR MATTER AS SET FORTH IN THISCODE KNOWING, OR BEING IN A 
POSITION TO KNOW, THAT THE SAME IS INCOMPLETE, INACCURATE, 
OR 
CONTAINS 
FALSE 
OR 
MISLEADING 
INFORMATION 
OR 
STATEMENTS SHALL BE PUNISHED WITH A FIN I: RANGING FROM 
TWO 
HUNDRED 
THOUSAND 
PESOS 
(PHP200,OOO.OO) 
TO 
TWO 
Page 71 of85 


MILLION PESOS (PHP2,OOO,OOO.OO) AND/OR IMPRISONMENT OF 
2 
TWO (2) TO TEN (10) YEARS. WHEN THE VIOLATIOIN IS WILLFUL, THE 
3 
PENALTY SHALL BE A FINE RANGING FROM 
FOUR HUNDRED 
4 
THOUSAND PESOS (PHP400,OOO.00) 
TO FOUR MILLION PESOS 
5 
(PHP4,000,OOO.00) AND/OR IMPRISONMENT Of FOUR (4) TO 
6 
TWENTY (20) YEARS. 
7 
SEC. 165. 
INDEPENDENTAUDITORCOLLVSION; PENAL TIES. -
8 
WHEN AN INDEPENDENT AUDITOR COLLUDES WITIfI A CORPORATION 
9 
OR ITS REPRESENTATIVES AND CERTIFIES THE: CORPORATION'S 
10 
FINANCIAL STATEMENTS 
WHICH 
ARE EITHER INCOMPLETE OR 
11 
WHICH CONTAIN INACCURATE, FALSE OR MISLEADING STATEMENTS 
12 . 
OR REPORTS, OR WHICH DO NOT GIVE A FAIR AND ACCURATE 
13 
PRESENTATION 
OF 
THE 
CORPORATION'S 
CONDITION, 
SUCH 
14 
AUDITOR SHALL BE PUNISHED WITH A fINE RANGING FROM fOUR 
15 
HUNDRED THOUSAND PESOS (PHP400,000.00) 
TO FOUR MILLION 
16 
PESOS (PHP4,000,000.00) AND/OR IMPRISONMENT Of fOUR (4) TO 
17 
TWENTY (20) YEARS. 
18 
SEC. 
166. 
PROCURING 
THE 
ORGANIZA TION 
OF A 
19 
CORPORATION 
THROUGH 
FRAUD; 
PENALTIES. 
THOSE 
20 
RESPONSIBLE 
FOR 
PROCURING 
THE 
ORGANIZATION 
OF 
A 
21 
CORPORATION THROUGH FRAUD, OR ASSISTING DIRECTLY OR 
22 
INDIRECTLY THEREIN, SHALL BE PUNISHED WITHI A FINE RANGING 
23 
fROM FIVE HUNDRED THOUSAND PESOS (PHP500,OOO.00) TO TWO 
24 
MILLION PESOS (PHP2,000,000.00) AND/OR II'1PRISONMENT OF 
25 
TWO (2) TO TEN (10) YEARS AT THE DISCRETION OF THE COURT. 
26 
Sec. 
167. 
FRAUDULENT OR UNLAWFUL 
CONDUCT OF 
27 
BUSINESS; PENALTIES. -
A 
CORPORATION 
THAT 
WILLFULLY 
28 
CONDUCTS ITS BUSINESS IN A fRAUDULENT OR OTHERWISE 
29 
UNLAWFUL MANNER SHALL BE PUNISHED WITH A FINE RANGING 
30 
FROM fIVE HUNDRED THOUSAND PESOS (PHP500,OOO.00) TO TWO 
31 
MILLION PESOS (PHP2,OOO,000.00) AND/OR II'1PRISONMENT Of 
32 
FIVE (5) TO TEN (10) YEARS AT THE·DISCRETION OF THE COURT. 
33 
Sec. 
168. 
THEFT 
OF 
IDENTITY; 
PENALTIES. 
-
ANY 
34 
CORPORATION 
WHO 
WILLfULLY 
OBTAINS 
ANY 
IDENTIFYING 
35 
INfORMATION OF A PERSON, WHETHER NATURt\L OR JURIDICAL, 
36 
AND 
USES 
THAT 
INFORMATION 
FOR 
ANY 
UNLAWFUL 
37 
PURPOSE,INCLUDING 
BUT 
NOT 
LIMITED TO 
OBTAINING, 
OR 
38 
ATTEMPTING TO OBTAIN, CREDIT, GOODS, SERVICES, 
OR REAL 
Page 72 of8S 


PROPERTY WITHOUT THE CONSENT OF THAT PIERSON, SHALL BE 
2 
PUNISHED WITH A FINE RANGING FROM ONE MILLION PESOS 
3 
(PHP1,OOO,OOO.00) TO FIVE MILLION PESOS (PHPS,OOO,OOO.OO) AND 
4 
IMPRISONMENT OF TEN (10) YEARS. THE SAME PENALTY SHALL BE 
5 
IMPOSED WHEN THE OFFENDER IS A NATURAL PERSON,OR A GROUP 
6 
THEREOF, AND THE IDENTITY STOLEN IS THAT OF ;, CORPORATION. 
7 
Sec. 169. 
ACTING AS INTERMEDIARIES FOR GRAFT AND 
8 
CORRUPT PRACTICES; PENALTIES. _. A CORPORATION CREATED FOR 
9 
THE PURPOSE OF COMMITTING, OR AIDING IN THE: COMMISSION OF, 
10 
GRAFT AND CORRUPT PRACTICES OR IN THE CONCEALMENT 
11 
THEREOF SHALL BE PUNISHED BY A FINE RANIGING FROM ONE 
12 
MILLION (PHP1,OOO,OOO.00) TO FIVE MILLION (PHP5,OOO,OOO.00) 
13 
PESOS AND IMPRISONMENT OF TEN (10) YEARS. 
14 
THE 
CORPORATION'S FAILURE TO SHOW THAT IT HAS 
15 
INSTALLED SAFEGUARDS TO ENSURE THAT IT IS CARRYING OUT ITS 
16 
SERVICES IN A TRANSPARENT AND LAWFUL MANNER, AND THAT IT 
17 
HAS INSTALLED POLICIES, CODES OF ETHICS t~ND PROCEDURES 
18 
AGAINST GRAFT AND CORRUPTION, WHEN COUPLED WITH A 
19 
FINDING OF GRAFT AND CORRUPT PRACTICES AGAINST ANY OF 
20 
THEIR 
DIRECTORS, 
OFFICER, 
EMPLOYEES, 
AGENTS, 
OR 
21 
REPRESENTATIVES, SHALL BE PRIMA FACIE EVIDENCE OF LIABILITY 
22 
UNDER THIS SECTION. 
23 
Sec. 170. 
ENGAGING INTERMEDIARIES FOR GRAFT AND 
24 
CORRUPT PRACTICES; PENALTIES. -A CORPORATION THAT, FOR THE 
25 
PURPOSE OF SHIELDING ITSELF FROM LIABILITY FOR GRAFT AND 
26 
CORRUPT 
PRACTICES, 
ENGAGES 
THE 
SERVICES 
OF 
AN 
27 
INTERMEDIARY WHO COMMITS GRAFT AND CORRUPT PRACTICES 
28 
FOR THE CORPORATION'S BENEFIT OR IN ITS INTEREST, SHALL BE 
29 
PUNISHED BY A FINE OF ONE MILLION PESOS (PHP1,OOO,OOO.00) 
30 
AND IMPRISONMENT OF TEN (10) YEARS. 
31 
THE CORPORATION'S FAILURE TO SHOW TIHAT IT HAS USED 
32 
THE HIGHEST DEGREE OF DILIGENCE AND CARE WHEN ACQUIRING 
33 
THE SERVICES OF AN INTERMEDIARY, THAT IT HAS SUFFICIENT 
34 
KNOWLEDGE AND HAS INSTALLED SAFEGUARDS TO ENSURE THAT 
35 
THE INTERMEDIARY IS CARRYING OUT THE CONTRACTED SERVICES 
36 
IN A TRANSPARENT AND LAWFUL MANNER, AliIlD THAT IT HAS 
37 
INSTALLED 
POLICIES, 
CODES 
OF 
ETHICS 
AND 
PROCEDURES 
38 
DESIGNED TO PREVENT GRAFT AND CORRUPTION, WHEN COUPLED 
Page 73 of85 


1 
WITH A FINDING OF GRAFT AND CORRUPT PRACTJ[CES AGAINST THE 
2 
INTERMEDIARY, SHALL BE PRIMA FACIE EVIDENCE OF LIABILITY 
3 
UNDER THIS SECTION. 
4 
Sec. 171. 
TOLERATING GRAFT AND CORRUPT PRACTICES; 
5 
PENALTIES. 
-A 
DIRECTOR, 
TRUSTEE, 
OR 
OFFICER 
OF 
THE 
6 
CORPORATION WHO KNOWINGLY ALLOWS OR TOLERATES THE 
7 
COMMISSION OF GRAFT AND CORRUPT PRACTICES OR OTHER 
8 
FRAUDULENT ACTS BY ITS DIRECTORS, TRUSTEIES, OFFICERS, OR 
9 
EMPLOYEES, FAILING TO SANCTION THEM, REPORT THEIR ACTIONS 
10 
TO THE PROPER AGENCIES, AND/OR FILE THE APPROPRIATE ACTION 
11 
AGAINST THEM, SHALL BE PUNISHED BY A FINE OF ONE MILLION 
12 
PESOS (PHP1,000,000.00) AND IMPRISONMENT TEN (10) YEARS. 
13 
SEC. 172. 
RETALIATION AGAINST WHISTLEBLOWERS. -ANY 
14 
PERSON WHO, KNOWINGLY AND WITH THE INTENT TO RETALIATE, 
15 
TAKES ANY ACTION HARMFUL TO ANOTHER PERSON, INCLUDING 
16 . 
BUT 
NOT 
LIMITED 
TO 
INTERFERENCE 
WITH 
THE 
LAWFUL 
17 
EMPLOYMENT OR LIVELIHOOD OF ANY PERSON, FOR PROVIDING 
18 
ANY TRUTHFUL INFORMATION RELATING TO THE COMMISSION OR 
19 
POSSIBLE COMMISSION OF ANY OFFENSE OR VIOLATION UNDER 
20 
THIS CODE, SHALL BE PUNISHED WITH A FINE RANGING FROM FIVE 
21 
HUNDRED THOUSAND PESOS (PHP500,OOO.OO) TO ONE MILLION 
22 
PESOS (PHP1,OOO,000.OO) AND/OR IMPRISONMENT OF FIVE (5) TO 
23 
TEN (10) YEARS, AT THE DISCRETION OF THE COURT. 
24 
"Sec.[141]173.0THER 
Violations 
of 
the 
Code/ 
SEPARATE 
25 
LIABILITY. -
Violations of any of the other provisions of this Code or its 
26 
amendments not otherwise specifically penalized herein shall be punished by a 
27 
fine of not less than [one] FIFTY thousand [Pi,OOO.OO] (P50,OOO.OO) pesos 
28 
but not more than ONE MILLION (Pl,OOO,OOO.OO) 
[ten thousand 
29 
(PlO,OOO.OO)] pesos AND/or by imprisonment [for] OF not less than thirty (30) 
30 
days but not more than five (5) years, or both, [in] AT the discretion of the 
31 
court. If the violation is committed by a corporation, the same may, after notice 
32 
and hearing, be dissolved in appropriate proceedings before the [Securities and 
33 
Exchange] Commission: Provided, That such dissolution shall not preclude the 
34 
institution of appropriate action against the director, trustee or officer of the 
35 
corporation responsible for said violation: Provided, further, That nothing in this 
36 
section shall be construed to repeal the other causes for dissolution of a 
37 
corporation provided in this Code. 
Page 74 of85 


1 
2 
3 
4. 
5 
6 
7 
8 
9 
10 
I 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
XVII. 
LIABILITY FOR ANY OF THE FOREGOING OFFENSES SHALL BE 
SEPARATE 
FROM 
AND 
WITHOUT 
PREJUDICE TO 
ANY 
OTHER 
ADMINISTRATIVE CIVIL, CRIMINAL LIABILITY UNDER THIS CODE 
AND OTHER LAWS. 
SEC. 174. LIABILITY OF DIRECTOR§, TRUSTEE§, OFFICERS OR 
OTHER EMPLOYEES, -
IF THE OFFENDER IS A CORPORATION THE 
PENALTY MAY, AT THE DISCRETION OF THE COURT, BE IMPOSED 
UPON 
SUCH 
CORPORATION 
AND/OR 
UPON 
ITS 
DIRECTORS, 
TRUSTEES, STOCKHOLDERS, MEMBERS, OFFICERS OR EMPLOYEES 
RESPONSIBLE FOR THE VIOLATION OR INDISPENSABLE TO ITS 
COMMISSION. 
SEC. 175. LIABILITY OF AIDERS AND AB£770RS AND OTHER 
SECONDARY LIABILITY. - ANYONE WHO SHALL Am, ABET, COUNSEL, 
COMMAND, INDUCE OR PROCURE ANY VIOLATION OF THIS CODE, OR 
ANY RULE, REGULATION OR ORDER OF THE COMMISSION OR WHO 
SHALL ASSIST THE ACT OR OMISSION OF ANY PERSON PRIMARILY 
LIABLE FOR THE VIOLATION, WITH KNOWLEDGE OR IN RECKLESS 
DISREGARD THAT SUCH ACT OR OMISSION IS WRONGFUL SHALL BE 
PUNISHED WITH A FINE AND/OR IMPRISONMENT NOT EXCEEDING 
THAT IMPOSED ON THE PRINCIPAL OFFENDERS, AT THE DISCRETION 
OF THE COURT AFTER TAKING INTO ACCOUNT THEIR PARTICIPATION 
IN THE OFFENSE. 
SECTION 70. 
Title XVI on Miscellaneous Provisions is hereby renumbered as Title 
25 
SECTION 71. 
Sections 137 and 138 of the Code are renumbered as Sections 176 
26 
and 177, respectively. 
27 
SECTION 72. 
Section 140 of the Code is hereby renumbered as Section 179 and 
28 
amended to read as follows: 
29 
"Sec. [140]179. NATIONALITYAND Stock ownership OF [in certain1 
30 . 
corporations. -THE NATIONALITY OFA CORPORA.TION SHALL BE 
31 
DETERMINED BY COMPUTING THE REQUIRED PERCENTAGE OF 
32 
FILIPINO 
OWNERSHIP 
BASED 
ON 
BOTH .uu 
THE 
ENTIRE 
33 
OUTSTANDING CAPITAL STOCK. AND (2) THE VOTING STOCKS, 
34 
TAKING INTO CONSIDERATION THE FULL BENEFICIAL OWNERSHIP 
35 
OF THE STOCKS. 
Page 75 oI8S 


1 
EXCEPT 
WHEN 
THE 
CORPORATION 
IS 
REqUIRED 
BY 
THE 
2 
CONSTITUTION OR BY STATUTE TO BE WHOllY NATIONALIZED, OR 
3 
WHEN THE CORPORATION 
HAS A CORPORATE STOCKHOLDER 
4 
OWNING lESS THAN 60% OF BOTH ITS OUTSTANDING CAPITAL 
5 
STOCK AND VOTING STOCKS, THE CONTROL TEST ~;HALL BE APPLIED 
6 
WHEN DETERMINING ITS NATIONALITY. 
7 
8 
EXCEPT WHEN 8 MORE STRINGENT MEASURE IS JtEQUIRED IN THE 
9 
CONSTITUTION OR OTHER LAWS, 8 
CORPORJ~TION SHALL BE 
10 
DEEMED A PHILIPPINE NATIONAL WHEN: 
1 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
(A) 
IT 
IS 
ORGANIZED 
UNDER 
THE 
LAWS 
OF 
THE 
PHILIPPINES AND AT LEAST SIXTY PE:RCENT (60%) OF 
THE CAPITAL STOCK OUTSTANDING tllND ENTITLED TO 
VOTE IS OWNED AND HElD BY CITIZENS OF THE 
PHILIPPINES, PROVIDED, THAT WHERE; 8 CORPORATION 
AND ITS NON-FILIPINO STOCKHOLDERS OWN STOCKS 
IN ANOTHER CORPORATION, AT LEAST SIXTY PERCENT 
(60%) OF THE CAPITAL STOCKS OUiTSTANDING AND 
ENTITLED TO VOTE OF BOTH CORPORATIONS MUST BE 
OWNED AND HElD BY CITIZENS OF THE PHILIPPINES 
AND AT LEAST SIXTY PERCENT (60%) OF THE MEMBERS 
OF THE BOARD OF DIRECTORS OF BOTt!. CORPORATIONS 
MUST BE CITIZENS OF THE PHILIPPINEfu OR 
(B) 
ALTHOUGH ORGANIZED ABROAD, IT I!~ REGISTERED AS 
DOING BUSINESS IN THE PHILIPPINES UNDER THIS 
CODE AND ONE HUNDRED PERCENT (100%) OF THE 
CAPITAL STOCK OUTSTANDING AND ENTITLED TO VOTE 
IS WHOLLY OWNED BY FILIPINOS. 
31 
[Pursuant to the duties specified by Article XIV of the Constitution, the] THE 
32 
National Economic and Development Authority shall, from time to time, UPON 
33 
FINDING OR RECOMMENDATION FROM THE COMMISSION OR FROM 
34 
OTHER APPROPRIATE GOVERNMENT AGENCIES, make a determination 
35 
of whether the corporate vehicle has been used by any corporation or by 
36 
business or industry to frustrate the provisions thereof or of applicable laws, 
37 
and shall submit to the [Batasang Pambansa] CONGRESS, whenever deemed 
38 
necessary, a report of its findings, including recommendations for their 
39 
prevention or correction. 
40 
41 
Maximum limits may be set by the [Batasang Pambansa] CONGRESS for 
42 
stockholdings in corporations declared by it to be vested with a public interest 
43 
pursuant to the provisions of this section, belonging to individuals or groups of 
44 
individuals related to each other by consanguinity or affinity or by close 
45 
business interests, or whenever it is necessary to achieve national objectives, 
46 
prevent illegal monopolies or combinations in restraint or trade, or to 
47 
implement national economic policies declared in laws, rules and regulations 
48 
designed to promote the general welfare and foster economic development. 
Page 76 of' 85 


1 
2 
In recommending to the [Batasang Pambansa] CONGRESS corporations, 
3 
businesses or industries to be declared vested with a public interest and in 
4 
formulating proposals for l"imitations on stock ownership, the National 
5 
Economic and Development Authority shall consider the type and nature of the 
6 
industry, the size of the enterprise, the economies of scale, the geographic 
7 
location, the extent of Filipino ownership, the labor intensity of the activity, the 
8 
export potential, as well as other factors which are germane to the realization 
9 
and promotion of business and industry." 
10 
SECTION 73. 
Section 141 of the Code is hereby renumbered as Section 180and 
11 
amended to read as follows: 
12 
"Sec. [141J180. [Annualreporfj REPORTORIAL llEQUIREMENTS of 
13 
corporations. -
EXCEPT AS OTHERWISE PROVIDED IN THIS CODE, 
14 
every corporation, domestic or foreign, [lawfully] doing business in the 
15 
Philippines shall submit to the [Securities and Exchange] CommiSSion, IN THE 
16 
FORM AND SUBSTANCE PRESCRIBED BY IT: 
17 
[an annual report of its operations, together with a financial statement 
18 
of its assets and liabilities, certified by any independent certified public 
19 
accountant in appropriate cases, covering the preceding Fiscal year and such 
20 
other reqUirements as theSecurities and Exchange Commission may require.] 
21 
1. 
ANNUAL FINANCIAL STATEMENTS DULY AUDITED BY THE 
22 
CORPORATION'S INTERNAL AUDITOR AND BY AN INDEPENDENT 
23 
CERTIFIED PUBLIC ACCOUNTANT WHO IS ACCREDITED BY THE 
24 
BOARD OF ACCOUNTANCY AND WHO POSSESSIES SUCH OTHER 
25 
ACCREDITATION AS THE COMMISSION MAY REQUIRE; 
26 
2. 
A GENERAL INFORMATION SHEET; 
27 
3. 
A DIRECTOR OR TRUSTEE COMPENSATION 
REPORT 
28 
WHICH SHALL CONTAIN, AMONG OTHERS, THE FOLLOWING: 
29 
a. 
THE CORPORATION'S POLICY ON DIRECTOR OR 
30 
TRUSTEE REMUNERATION, INCLUDING THE FRAMEWORK FOR 
31 
DETERMINING THE REMUNERATION LEVelS FOR INDIVIDUAL 
32 
DIRECTORS OR TRUSTEES; 
33 
b. 
A CLEAR, CONCISE AND EASILY UNDERSTANDABLE 
34 
STATEMENT OF ALL FIXED AND VARIABLE COMPENSATION 
35 
PAID AND ALL 
INCENTIVES, AWARDS, AND/OR OPTIONS 
Page 77 of 85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1 
GIVEN, 
DIRECTLY OR 
INDIRECTL Y, 
TO 
DIRECTORS OR 
TRUSTEES DURING THE PRECEDING FISCAL YEAR; AND 
c. 
A 
STATEMENT 
OF 
OTHER 
FORMS 
OF 
REMUNERATION AND/OR COMPENSATION ARRANGEMENTS 
NOT COVERED UNDER THE PRECEDING SUB-PARAGRAPHS; 
4. 
A DIRECTOR OR TRUSTEE APPRAISAL OR PERFORMANCE 
REPORT AND THE STANDARDS OR CRITERIA USED' TO ASSESS EACH 
DIRECTOR OR TRUSTEE; 
5. 
A 
DIRECTOROR 
TRUSTEE 
ATTENDANCE 
REPORT, 
INDICATING THE ATTENDANCE OF EACH DIRECTOR OR TRUSTEE AT 
EACH OF THE MEETINGS OF THE BOARD AND ITS COMMITTEES; 
12 
6. 
A STATEMENT OF ALL EXTERNAL AUDIT AND NON-AUDIT 
13 
FEES; 
14 
7. 
SUCH OTHER REPORTS THAT THE COMMISSION MAY 
. 
15 
REQUIRE BY RULE. 
16 
THE FOREGOING REPORTORIAL REQUIREI'1ENTS SHALL BE 
17 
ACCOMPANIED BY A CERTIFICATION FROM THE CHAIRMAN OF THE 
18 
BOARD, THE PRESIDENT, THE TREASURER AND THE CORPORATE 
19 
SECRETARY (OR THEIR EQUIVALENT) TO WIT: 
20 
1. AS TO THE ANNUAL FINANCIAL STATEMENTS, 
21 
THAT 
THE 
INFORMATION 
CONTAINED 
THEREIN 
IS 
22 
COMPLETE, FAIRLY AND ACCURATElY PRESENTS, IN ALL 
23 
MATERIAL RESPECTS, THE FINANCIAL CONDITION OF THE 
24 
CORPORATION AND DOES NOT CONTAIIII ANY FALSE OR 
2S 
MISLEADING STATEMENT OR MISREPRESENTATION; 
26 
2. AS TO THE GENERAL INFORMATION SHEET, THAT 
27 
THE INFORMATION CONTAINED THEREIN IS COMPLETE, 
28 
ACCURATE AND DOES NOT CONTAIN ANY FALSE OR 
29 
MISLEADINGSTATEMENT OR MISREPRESEINTATIONi AND 
}O 
3. AS 
TO 
THE 
DIRECTOR 
OR 
TRUSTEE 
31 
COMPENSATION 
REPORT, 
THAT 
THE 
INFORMATION 
32 
CONTAINED 
THEREIN 
IS 
COMPLETE, 
FAIRLY 
AND 
33 
ACCURATelY PRESENTS, IN ALL MATERIAL RESPECTS, THE 
Page 78 of85 


CORPORATION'S 
POLICY ON 
DIRECTOR OR TRUSTEE 
2 
REMUNERATION, THE ACTUAL REMUNERATIONS OF SUCH 
3 
DIRECTORS OR TRUSTEES, AND DOES NOT CONTAIN ANY 
4 
FALSE 
OR 
MISLEADING 
STATEMENT 
OR 
5 
MISREPRESENTATION. 
6 
Such [report]REPORTORIAL REQUIREMENTS shall be submitted 
7 
ANNUALLY ANDwithin such period as may be prescribed by the [Securities 
8 
and Exchange] Commission. 
9 
IF A CORPORATION FAILS TO SUBMIT ANY 01: THE FOREGOING 
10 
REPORTORIAL 
REQUIREMENTS 
THREE 
TIMES, 
WHETHER 
11 
INTERMITTENTlY OR CONSECUTIVEl V, WITHIN A PERIOD OF FIVE 
12 
YEARS, THE COMMISSION MAY, AFTER DUE NOTICE AND HEARING, 
13 
PUT THE CORPORATION ON DelINQUENCY STATUS OR REVOKE ITS 
14 
CERTIFICATE OF INCORPORATION IN ACCORDANCE WITH SECTION 
15 
22." 
16 
SECTION 74. 
Section 142 of the Code is hereby renumbered as Section 1Sland 
17 
amended to read as follows: 
18 
"Sec. [142J181. VISITORIAL POWER AND Confidential nature of 
19 
examination results. - THE COMMISSION SHALL EXERCISE VISITORIAL 
20 
POWERS OVER ALL CORPORATIONS REGISTERED WITH IT. THESE 
21 
VISITORIAL POWERS SHALL INCLUDE, BUT NOT BE LIMITED TO 
22 
EXAMINATION, 
INVESTIGATION, 
INSPECTION 
OF 
RECORDS 
23 
REGARDLESS OF THE FORM IN WHICH THE INFORMATION IS 
24 
25 
26 
27 
CONTAINED, 
REGULATION AND SUPERVISION 
ENFORCING 
COMPLIANCE 
AND 
IMPOSING 
ACCORDANCE WITH THIS CODE. 
OF ACTIVITIES, 
SANCTIONS 
IN 
ANY 
UNJUSTIFIED 
REFUSAL 
OR 
OBSTRUCTION 
BY 
A 
28 
CORPORATION, 
OR 
ANYONE 
UNDER 
ITS 
EMPLOY, 
IN 
THE 
29 
COMMISSION'S EXERCISE OF THE FOREGOING AUTHORITY SHALL, 
30 
IN ADDITION TO THE IMPOSITION OF PENALTIES AND SANCTIONS 
31 
UNDER THIS CODE, CONSTITUTE A JUSTIFIABLE GROUND FOR THE 
32 
REVOCATION OF ITS CERTIFICATE OF INCORPORATION." 
33 
All interrogatories propounded by the [Securities and Exchange] 
34 
Commission and the answers thereto, as well as the results of any examination 
35 
made by the Commission or by any other' official authorized by law to make an 
36 
examination of the operations, books and records of any corporation, shall be 
Page 79 01'85 


2 
3 
4 
5 
6 
7 
R 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
kept strictly confidential, except insofar as the law may require the same to be 
made public, WHEN NECESSARY FOR THE COMMISSION TO TAKE 
ACTION OR ISSUE ORDERS IN THE EXERCISE OF ITS POWERS 
UNDER THIS CODE,or where such interrogatories, answers or results are 
necessary to be presented as evidence before any court. 
SECTION 75. 
Section 143 of Code is hereby renumbered as Section 182and 
amended to read as follows: 
"Sec. [143]182" [Rule-making power} POWERS AND FUNCTIONS of 
the [Securities and Exchange] Commission AND JURISDICTION OVER 
ACTIONS. - CONSISTENT WITH AND IN ADDITION TO THE POWERS 
AND FUNCTIONS PROVIDED IN PRESIDENTIAL DECREE NO. 902-A, 
THE SECURITIES REGULATION CODE, THE INVESTMENT HOUSES 
LAW, THE FINANCING COMPANY ACT AND OTHER LAWS, [The 
Securities and Exchange] Commission shall have [the power and authority], 
AMONG OTHI:RS, THE FOLLOWING POWERS AND FUNCTIONS: 
1. 
HAVE JURISDICTION AND SUPERVISION OVER ALL 
CORPORATIONS, 
REGISTERED 
WITH 
IT, 
EXCEPT 
AS 
OTHERWISE PROVIDED UNDER THIS CODE; 
2. 
FORMULATE POLICIES AND .RECOMMENDATIONS 
ON 
ISSUES 
PERTAINING 
TO 
THE 
RE'GULATION 
AND 
SUPERVISION 
OF 
CORPORATIONS, 
AND 
PROPOSE 
LEGISLATION AND AMENDMENTS THERETO; 
3. 
APPROVE OR REJECT APPLICATIONS, ISSUE OR 
REVOKE 
OTHER 
CERTIFICATIONS, 
REQUIRE 
ADDITIONALSUBMISSIONS OR AMENDMENTS THERETO; 
4. 
REGULATE, 
INVESTIGATE, 
SUPERVISE 
THE 
ACTIVITIES OF PERSONS TO ENSURE COMPL][ANCE WITH THIS 
CODE; 
5. 
IMPOSE SANCTIONS FOR THE VIOLATIONS OF 
THIS CODE AND ITS RULES, REGULATIONS AND ORDERS OF 
THE COMMISSION ISSUED PURSUANT THERETO; 
6. 
PROMOTE 
CORPORATE 
GOVERNANCE 
AND, IN 
FURTHERANCE 
THEREOF, 
EXPAND 
OR 
ADD 
TO 
THE 
REQUIREMENTS WITH RESPECT TO, AMONG OTHERS, THE 
Page 80 01'85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
CONTENTS OF THE BY-LAWS, THE QUALIFICATIONS AND 
DISQUALIFICATIONS OF DIRECTORS, AND HIE RECORDS THAT 
MUST BE ON HAND AT THE CORPORATION'S ADDRESS OF 
RECORD 
AND 
THE 
ANNUAL 
REPORTS 
THAT 
MUST 
BE 
SUBMITTED TO THE COMMISSION; 
7. 
PREPARE, APPROVE, AMEND OR REPEAL RULES, 
REGULATIONS AND ORDERS, AND ISSUE OPINIONS AND 
PROVIDE GUIDANCE ON AND SUPERVISE COMPLIANCE WITH 
SUCH RULES, REGULATIONS AND ORDERS 
8. 
[to implement the provisions of this Code, and to 
promulgate rules and regulations reasonably necessary to enable it to 
perform its duties hereunder, particularly in the prevention of fraud and 
abuses on the part of the controlling stockholders, members, directors, 
trustees 
or 
officers.] 
ISSUE 
CEASE 
AND 
DESIST ORDERS 
WITHOUT THE NECESSITY OF A HEARING, TO PREVENT FRAUD 
OR INJURY TO THE PUBLIC[.]; 
9. 
PUNISH FOR CONTEMPT OF HIE COMMISSION, 
BOTH DIRECT AND INDIRECT; 
10. 
COMPEL THE 
OFFICERS OF 
A,NY 
REGISTERED 
CORPORATION TO CALL MEETINGS OF STOCKHOLDERS OR 
MEMBERS UNDER ITS SUPERVISION AND TO ISSUE SUCH 
ORDERS AS MAY BE APPROPRIATE, INCLUDING, WITHOUT 
LIMITATION, ORDERS DESIGNATING THE TIME AND PLACE OF 
THE 
ELECTION, 
THE 
RECORD 
DATE 
OR 
DATES 
FOR 
DETERMINATION OF STOCKHOLDERS ENTITLED TO NOTICE OF 
THE ELECTION AND TO VOTE THEREAT, AI\ID THE FORM OF 
NOTICE OF SUCH ELECTION; 
11. 
ISSUE SUBPOENA DUCES TECUIVI AND SUMMON 
WITNESSES TO 
APPEAR IN 
PROCEEDIN(iS 
BEFORE THE 
COMMISSION AND IN APPROPRIATE CASES ORDER THE 
EXAMINATION, SEARCH AND SEIZURE OF i\LL DOCUMENTS, 
PAPERS, FILES AND RECORDS, TAX RETURNS, AND BOOKS OF 
ACCOUNTS 
OF 
ANY 
ENTITY 
OR 
PERSON 
UNDER 
INVESTIGATION AS MAY BE NECESSARY FOR THE PROPER 
DISPOSITION OF THE CASES BEFORE IT, SUBJECT TO THE 
PROVISIONS OF EXISTING LAWS; 
Page 81 of85 


2 
3 
4 
5 
6 
7 
8 
9 
10 
[ [ 
12 
13 
14 
15 
12. 
SUSPEND OR REVOKE, AFTER PROPER NOTICE AND 
HEARING, 
THE 
CERTIFICATE 
OF 
INCORPORATION 
OF 
CORPORATIONS UPON ANY OF THE GROUNDS PROVIDED 
UNDER THIS CODE OR WHEN DIRECTED BY FINAL JUDGMENT 
OF A COURT OF COMPETENT JURISDICTION; 
13. 
DISSOLVE 
OR 
OTHERWISE 
SANCTION 
CORPORATIONS CREATED FOR, COMMITTING, AIDING IN THE 
COMMISSION 
OF, 
OR 
IN 
ANY 
MANNER 
FURTHERING 
SECURITIES VIOLATIONS, SMUGGLING, TAX EVASION, MONEY 
LAUNDERING,GRAFT AND CORRUPT PRACTICES OR OTHER 
FRAUDULENT OR ILLEGAL ACTS; 
14. 
ISSUE WRITS OF EXECUTION ANI) OF ATTACHMENT 
TO ENFORCE PAYMENT OF THE FEES, ADMINISTRATIVE FINES 
AND OTHER DUES COLLECTIBLE UNDER THIS CODE; 
15. 
EXERCISE SUCH OTHER POWERS AS 
MAY BE 
16 
PROVIDED BY LAW AS WELL AS THOSE WHICH MAY BE 
17 
IMPLIED FROM, OR WHICH ARE NECESSARY OR INCIDENTAL 
18 
TO CARRYING OUT THE EXPRESS POWERS GRANTED TO THE 
19 
COMMISSION TO ACHIEVE THE OBJECTIVES AND PURPOSES OF 
20 
THIS CODE AND SUCH OTHER LAWS. 
21 
NO 
COURT 
BElOW 
THE 
COURT 
OF 
APPEAL.S 
SHALL 
HAVE 
22 
JURISDICTION TO ISSUE ANY RESTRAINING ORDER, PRELIMINARY 
23 
INJUNCTION OR PRELIMINARY MANDATORY INJUNCTION IN ANY 
24 
CASE, DISPUTE OR CONTROVERSY THAT, DIRECTLY OR INDIRECTLY, 
25 
INTERFERES WITH THE PERFORMANCE BY THE COIIIIMISSION OF ITS 
26 
DUTIES AND RESPONSIBILITIES UNDER THIS CODE:." 
27 
SECTION 76. 
Section 144 of the Code is hereby deleted, amended and transferred 
28 
to Section 173. 
2') 
SECTION 77. 
A new provision IS inserted in the Code as Section 184: 
30 
SECTION 184. 
DEVELOPMENT OF OTHER SYSTEMS. 
-
THE 
31 
COMMISSION SHALL, CONSIDERING ADVANCES IN TECHNOLOGY, 
32 
DEVElOP SUCH SYSTEMS AS IT MAY DEEM NECESSARY TO FACILITATE 
33 
AND EXPEDITE, AMONG OTHERS, CORPORATE NA~1E RESERVATION 
34 
AND REGISTRATION, INCORPORATION, AND THE SUBMISSION OF 
3S 
REPORTS, NOTICES, DOCUMENTS AND OTHER PA,PERS REQUIRED 
Page 82 01'85 


UNDER THIS CODE, AND PRESCRIBE THE CORRESPONDING RULES 
2 
AND REGULATIONS THEREFOR. THE COMMISSION SHALL HAVE FULL 
3 
DISCRETION TO DETERMINE WHICH SYSTEM OR SYSTEMS ALLOW 
4 
THE MOST EFFECTIVE IMPLEMENTATION AND ENFORCEMENT OF THE 
5 
PROVISIONS OF THIS CODE 
6 
SECTION 78. 
A new provision is inserted in the Code as Section 185: 
7 . 
"SEC. 
185. 
ARBITRATION. 
-
WHEN 
THE 
ARTICLES 
OF 
8 
INCORPORATION 
OR 
BY-LAWS 
OF 
A 
DOMESTIC 
UNLISTED 
9 
CORPORATION SO PROVIDE, ANY OR ALL DISPUTES BETWEEN OR 
10 
AMONG THE CORPORATION, ITS STOCKHOLDERS OR MEMBERS, AND 
11 
DIRECTORS ARISING OUT OF THE IMPLEMENTA,TION OF THEIR 
12 
ARTICLES OF INCORPORATION OR BY-LAWS, AS WELL AS OTHER 
13 
CONTROVERSIES 
ARISING 
OUT 
OF 
THEIR 
INTRACORPORATE 
14 
RELATIONS, INCLUDING BUT NOT LIMITED TO CONTROVERSIES IN 
15 
THE 
ELECTION 
OR 
APPOINTMENT 
OF 
THE 
CORPORATION'S 
16 
DIRECTORS, 
TRUSTEES, 
OFFICERS 
OR 
MANAGERS, 
SHALL 
BE 
17 
REFERRED TO ARBITRATION. HOWEVER, ADISPUTE SHALL NOT BE 
18 
SUBMITTED TO ARBITRATION WHEN SUCH WILL lII\HT OR PRECLUDE 
19 
ANY RIGHT, ACTION OR DETERMINATION BY THE COMMISSION THAT 
20 
IT WOULD OTHERWISE BE AUTHORIZED TO ADOPT, ADMINISTER OR 
21 
ENFORCE UNDER THIS CODE AND EXISTING LAWS. SUCH DISPUTE 
22 
SHALL BE DEEMED EXCLUDED FROM THE AGREEMENT TO ARBITRATE, 
23 
WHICH SHALL OTHERWISE REMAIN VALID AND BIN[)ING. 
24 
THE ARBITRATION AGREEMENT SHALL BE BINDING AGAINST 
25 
THE 
CORPORATION'S 
DIRECTORSr 
TRUSTEESr 
OFFICERS 
OR 
26 
MANAGERS, UPON ACCEPTANCE OF THEIR POST. 
27 
TO BE VALID, THE AGREEMENT to ARBITRATE IN THE ARTICLES 
28 
OF INCORPORATION OR THE BY-LAWS SHOUlI) INDICATE THE 
29 
NUMBER AND PROCEDURE FOR THE APPOINTMENT OF ARBITRATORS 
30 
AND GRANT TO A DESIGNATED THIRD, INDEPENDENT, AND EXTERNAL 
31 
PARTY OR BODY THE POWER TO APPOINT THE ARBITRATORS. IF THE 
32 
THIRD PARTY OR BODY FAILS TO APPOINT THE ARBHRATORS IN THE 
33 
MANNER AND WITHIN THE PERIOD SPECIFIED IN THE AGREEMENT 
34 
TO ARBITRATEr EACH PARTY TO THE ARBITRATION MAY REQUEST 
35 
THAT THE APPOINTMENT OF THE ARBITRATORS E'E MADE BY THE 
36 
COMMISSION. ARBITRATORS SHALL BE THOSE WHO ARE EITHER 
37 
DULY 
ACCREDITED 
BY 
THE 
COMMISSION 
OR 
MEMBERS 
OF 
38 
ORGANIZATIONS DULY-ACCREDITED BY THE COMMISSION. 
Page 83 01'85 


THE ARBITRAL TRIBUNAL SHALL HAVE FULL AUTHORITY TO 
2 
RESOLVE ALL ISSUES RELATING TO ITS JURISDICTION AND/OR THE 
3 
VALIDITY OR EFFECTIVITY OF THE ARBITRATION AGREEMENT. 
A 
4 
REGIONAL TRIAL COURT BEFORE WHICH AN INTRACORPORATE 
5 
DISPUTE IS FILED SHALL, BEFORE THE TERMINATION OF THE 
6 
PRETRIAL CONFERENCE, DISMISS THE CASE UPON DETERMINING THE 
7 
EXISTENCE OF AN AGREEMENT TO ARBITRATE IN THE ARTICLES OF 
8 
INCORPORATION 
OR 
BY-LAWS 
OF 
THE 
CORPORATION, 
ANY 
9 
AMENDMENT THEREOF, OR IN A SEPARATE AGREEMENT. 
10 
THE ARBITRAL TRIBUNAL SHALL HAVE THE POWER TO GRANT 
11 
INTERIM MEASURES NECESSARY TO ENSURE ENFORCEMENT OF THE 
12 
AWARD, 
TO 
PREVENT 
A 
MISCARRIAGE 
OF 
JUSTICE, 
OR 
TO 
13 
OTHERWISE PROTECT THE RIGHTS OF THE PARTIES. 
14 
A FINAL ARBITRAL AWARD UNDER THIS SECTION SHALL BE 
15 
EXECUTORY UPON THE LAPSE OF FIFTEEN (15) DAYS FROM RECEIPT 
16 
THEREOF BY THE PARTIES AND SHALL BE STAYED ONLY BY THE 
17 
FILING OF A BOND OR THE ISSUANCE BY THE APPHLATE COURT OF 
18 
AN INJUNCTIVE WRIT. 
19 
THE 
COMMISSION 
SHALL 
FORMULATE 
T1-1E 
RULES 
AND 
20 
REGULATIONS WHICH SHALL GOVERN ARBITRATION UNDER THIS 
21 
SECTION." 
22 
SECTION 79. 
A new provision is inserted in the Code as Section 186 and the 
23 . succeeding provisions are re-numbered accordingly and amended as follows: 
24 
"SEC.iS6. JURISDICTION OVER CORPORATIONS OF SPECIAL 
25 
CHARACTER. -
THE POWERS, AUTHORITIES AND RIESPONSIBILITIES 
26 
THAT ARE VESTED IN THE COMMISSION UNDER THIS CODE AND 
27 
PRESIDENTIAL DECREE 902-A INVOLVING CORPORATIONS OF A 
28 
SPECIAL CHARACTER ARE TRANSFERRED TO THE COMMISSION ON 
29 
ELECTIONS 
(COMELEC) 
WITH 
RESPECT 
TO 
PARTY-LIST 
30 
ORGANIZATIONS, TO THE HOUSING AND LAND USE REGULATORY 
31 
BOARD (HLURB) WITH RESPECT TO NEIGHBORHOOD ASSOCIATIONS 
32 
AND HOMEOWNERS' ASSOCIATIONS, AND TO THE DEPARTMENT OF 
33 
TRANSPORTATION AND COMMUNICATIONS (DOTC) WITH RESPECT TO 
34 
THE ASSOCIATIONS OF OPERATORS AND DRIVERS OF PUBLIC 
35 
TRANSPORT. 
36 
THE 
MONITORING, 
SUPERVISION 
AND 
REGULATION. OF 
Page 84 01'85 


I 
CORPORATIONS 
OF 
SUCH 
CHARACTER 
ABOVE-DESCRIBED 
2 
PREVIOUSLY REGISTERED WITH THE COMMISSION SHALL LIKEWISE 
3 
BE TRANSFERRED TO THE SAID PERTINENT GOVERNMENT AGENCIES, 
4 
RESPECTIVELY. 
5 
FOR THIS PURPOSE, THE COMELEC, HLURB, AND DOTC, IN 
6 
COORDINATION WITH THE COMMISSION, SHALL PROMULGATE THE 
7 
CORRESPONDING 
IMPLEMENTING 
RULES AND/OR ENTER INTO 
8 
INTER-AGENCY AGREEMENTS." 
9 
SECTION 80. 
Implementing Rules and Regulations. -
The Commission shall 
10 
promulgate and/or amend the necessary rules and 
regulations for the effective 
II 
implementation of this Act. 
12 
SECTION 81. 
Separability Clause. - If any provision of this Act is declared invalid 
13 
or unconstitutional, other provisions hereof which are not affected thereby shall continue to . 
14 
be in full force and effect. 
15 
SECTION 82. 
Repealing Clause. -
Any law, presidential decree or 'Issuance, 
16 
executive order, letter of instruction, administrative order, rule or regulation contrary to or 
17 
inconsistent with any provision of this Act is hereby repealed or modified accordingly. 
18 
SECTION 83. 
Effectivity Clause. - This Act shall take effect fifteen (15) days after 
19 
its publication in the Official Gazette or in at least two (2) newspapers of general circulation, 
20 
whichever date comes earlier. 
Page 85 01'85