Law Summary
Capitalization Requirements for Stock Educational Institutions
- Minimum paid-up capital for stock educational institutions:
- Elementary education: at least ₱1,000,000
- Both elementary and secondary education: at least ₱2,500,000
- Offering elementary, secondary, tertiary, and postgraduate courses: at least ₱5,000,000
- Existing stock educational institutions may keep their original capitalization.
- Such institutions can apply to renew their corporate existence automatically upon expiration.
Scope and Limitations on Stock Educational Institutions
- Stock educational institutions are permitted only in capital-intensive courses of study as determined by the Department of Education, Culture and Sports (DECS), Commission on Higher Education (CHED), and Department of Science and Technology (DOST).
- Schools organized as stock corporations are ineligible for government subsidies, incentives, or assistance, except for individual scholarships, student loans, or subsidies for students and teachers mandated by law.
- Government assistance to non-stock schools must be exclusively used for educational programs.
- Donations to educational corporations are exempt from taxes.
Authority to Formulate Implementing Rules and Guidelines
- DECS and CHED are authorized to formulate implementing rules and guidelines within 60 days from the approval of the Act.
- These rules must govern the establishment and operation of stock educational corporations.
- The rules shall emphasize quality education and academic excellence as provided in the Education Act of 1982 (Batas Pambansa Blg. 232).
Repeal and Effectivity
- All laws, rules, and ordinances inconsistent with this Act are repealed or modified accordingly.
- The Act shall take effect 15 days after its publication in at least two national newspapers of general circulation.