Amendments to Corporation Law on Stock and Banking

The Act governs requirements for stock corporations under Act No. 1459 by modifying Section 7 and Section 9.
The Act governs restrictions on banking representations and advertisements under Act No. 1459 by modifying Section 130.
The Act addresses treasurer-related sworn statements for incorporation and banking advertising/holding out by corporations and related persons.

Section 1 amends Section 7 of Act No. 1459 by prescribing the treasurer’s oath form to be used in the articles of incorporation of a stock corporation.
The treasurer must be identified with the city or municipality and province where the oath is sworn.
The treasurer must state that on a specified day, in the year anno Domini nineteen hundred and ___, he was duly elected by the subscribers as treasurer to act until his successor is duly elected and qualified under the corporation’s by-laws.
The treasurer must affirm authorization from the subscribers to receive for the corporation all subscriptions paid in for the capital stock.
The treasurer’s oath must state that:
- at least twenty per centum of the entire capital stock has been actually subscribed; and
- at least twenty-five per centum of the subscription has been:
  - actually paid to him in actual cash for the benefit and credit of the corporation; or
  - transferred to him in trust and received by him for the benefit and credit of the corporation, with a described property valuation scheme where the fair valuation of the property equals twenty-five per centum of the subscription.
The treasurer must conclude with the sworn attestation before the proper officer, with the blank day and month and the anno Domini nineteen hundred and ___ date.

Section 2 amends Section 9 of Act No. 1459 by requiring a treasurer’s sworn statement as a condition for filing articles of incorporation of a stock corporation.
The chief of the division of archives, patents, copyright, and trade-marks must not file the articles of incorporation of any stock corporation unless accompanied by the sworn statement.
The sworn statement must show that at least twenty per centum of the entire capital stock has been subscribed.
The sworn statement must also show that at least twenty-five per centum of the subscription has been either:
- paid to the treasurer in actual cash for the benefit and credit of the corporation; or
- transferred to the treasurer in trust and received by him for the benefit and credit of the corporation, where the property’s fair valuation equals twenty-five per centum of the subscription.

Section 3 amends Section 130 of Act No. 1459 to govern how banking corporations advertise their capital stock and to regulate banking representations.
A banking corporation, when advertising the amount of capital stock, must state in the advertisement the specific amount of capital stock that has actually been paid in cash.
After July first, nineteen hundred and eight, no person, association, or corporation not conducting a general banking business in the Philippine Islands within the meaning of sections one hundred and sixteen and one hundred and seventeen may:
- advertise or hold itself out as engaged in a banking business; or
- use in its business title the word(s) “bank,” “banking,” “banker,” “trust company,” or words of similar import; or
- solicit or receive deposits of money for deposit, disbursement, keeping, or otherwise; or
- transact any kind of banking business.
The restriction on conduct and representations is tied to compliance with Act No. 1459 provisions “in so far as it relates to”:
- savings and mortgage banks, banking corporations, or trust corporations, as the case may be.

For any violation of Section 130 (as amended), the officers and directors of the corporation are jointly and severally liable.
Any violation of Section 130 is punished by a fine of five hundred pesos for each day during which the violation is permitted or repeated.
In default of payment, subsidiary imprisonment is imposed as prescribed by law.

The treasurer oath and sworn statement requirements operate as conditions tied to incorporation filing by the chief of the division of archives, patents, copyright, and trade-marks under Act No. 1459, as amended by Sections 1 and 2.
The banking restrictions in Section 130 operate beginning after July first, nineteen hundred and eight, as stated in Section 3.
The Act affects banking advertising and banking business conduct through the amended Section 130, and it references the general banking business concept in sections one hundred and sixteen and one hundred and seventeen of Act No. 1459 as the benchmark for who may engage in banking business under the exception framework described.