Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-04-30
NEW CORPORATION LAW
suPPLANTs sPANIsH CODE M
THE PHILIPPINES.
Regulating by the Commission Of the
the investment Of Capital
in the Archipelago.

The Philippine commission has just en-
acted corporation law patterned after the
corporation acts generally in force In the
United States. Up to the present time the
only Law under which capital could incorpo-
rate in the Philippine Islands was the old
Spanish code of commerce The provisions
of this code. in 50 far as they relate to the
Organization of business corporations, are
archaic and iil-adapted to the needs of mod
ern commerce as conducted by English
speaking people. They are repealed by the
new law. and persons wishing to invest CAPT.
tai In the Philippines can now do so under
legal provisions framed in accordance with
common-iaw principles. The act was pre-
pared by Commissioner James r. Smith,
who will succeed Gov. Ide as governor gen.
is of this year. Its provisions are well d.
gested and skilifully drafted, and bear every
indication of having been enacted into law
only after full debate and careful delibera-
tion
Salient Features Of the Law.
The salient features of the law are the fol-
lowing: Five more persons, not exceeding
fifteen. a majority being residents of the
islands, may incorporate by filing articles of
incorporation with the proper officer of the
insular government. the principal office of
the company to be in the islands, The life
of the corporation may be for any period up
to fifty years. The directors may number
from five to fifteen. Before Incorporation
only 20 per cent of the capital stock need
be subscribed and % per cent of the sub
scription paid in. The Incorporation fee is
only $3.50 gold. Stocks or bonds may be
issued for cash or for property received at
a fair valuation.
The capital stock may be Increased or
decreased by two-thfrds vote OF the cap
al 51Ai,t
incurred by a majority vote of the sub
scribed capital stock. The articles of in
corporation may be amended by majority
vote of the directors and a two-thirds vote
OF the capital stock. Meetings of the stock
holders are required to be held where the
corporation is established; but directors
meetings may be held any where. Only
two of the directors need he residents of
the Philippines. Voting in the election of
directors may be cumulative and by proxy.
Annual Reports Required.
All public-utility or public-service cor
porations, whether domestic or foreign, are
required to file annual reports with the in
sular auditor. showing capital stock, in
debtedness dividends declared. etc, which
reports are confidential. The books of all
corporations doing business in the islands
are subject to government inspection. The
provisions of the act are subject to amend
ment, but rights and remedies acquired
hereunder are safeguarded There is no
maximum or minimum limit fixed to the
amount of the capital stock allowed; and
corporations may hold stock in other cor
porations. subject TO certain restrictions
The act contains special provisions re-
garding railroad companies banking and
trust corporations, insurance and religious
corporations, building and loan corpora
tons and colleges and other institutions of
learning.
Obtaining License.
American and other foreign corpora lions
may qualify to do business in the Philippine
Islands by obtaining a license from the
proper officer of the insular government
To secure license corporation need
only show that it IS financially sound and
file statement setting forth the nature
Of its business. the amount of it's capital
stock, Its assets and liabilities, etc, and
the name of its responsible local agent
The license fee is $25 gold. without this
license foreign corporations have no stand
ing whatever in the islands Foreign cor
porations are bound by the laws, rules and
regultions applicable to domestic cor
porations, except such provisions as relate
to corporate organization and dissolution,
or which fix the responsibilities and liabiii-
ties interest of the stockholders and Of
hcers of the corporation.