Question & AnswerQ&A (Act No. 3518)
Corporators are those who compose the corporation, whether stockholders or members, or both. Incorporators are the members or stockholders originally forming and composing the corporation as stated in the articles of incorporation.
Yes, shares may be divided into classes with rights, voting powers, preferences, and restrictions as provided in the Articles of Incorporation. However, banks, trust companies, insurance companies, and building and loan associations cannot issue no-par value shares.
The articles must include the number of incorporators, their names and residences, the corporation's purpose, the capital stock and number of shares, par or no par value declarations, the amount of stock actually subscribed, and the subscribers' details including amounts paid.
At least 20% of the authorized shares must be subscribed, and at least 25% of the subscription must be paid in cash or property for the articles of incorporation to be filed.
Agricultural corporations may own up to 1,024 hectares. It is unlawful for such corporations or persons to own controlling stock in more than one such corporation, with stock ownership limits of 15% for individuals and corporations in such businesses.
Elections must be by ballot, with stockholders having the right to vote the number of shares they own. They may cumulate shares in voting or distribute votes among candidates, but may not exceed the total number of votes based on shares held times the number of directors to be elected.
Amendments require a majority vote by the board of directors and two-thirds vote of members or stockholders. Shareholders adversely affected may demand payment for shares within 40 days. The value is determined by appraisers if disputed, and payment must be made within 30 days to finalize the transaction.
Such actions must be authorized by a two-thirds affirmative vote of shareholders entitled to vote and called for this purpose. Opposing shareholders may demand payment for their shares. The transaction requires notification to all shareholders.
Violations not otherwise penalized shall be punished by a fine of up to 5,000 pesos and imprisonment for up to five years. Corporations committing violations may be dissolved by quo warranto proceedings upon order of the Attorney-General.