Establish Bulihan National High School

Law Summary

Incorporators, Stockholders, and Members

Corporators are those composing the corporation; incorporators are initial corporators named in the articles of incorporation.
Owners of shares in stock corporations are shareholders or stockholders.
Corporators in non-stock corporations are called members.

Formation of Private Corporations

Requires five or more persons (majority residents of the Philippines) to file articles of incorporation.
Articles must include: corporate name, purpose, principal office location (within the Philippines), term (not exceeding 50 years), incorporators' names, number of directors (5-15), capital stock details for stock corporations.
Special provisions apply to railroads, tramways, wagon roads, telegraph, and telephone companies including route, length, construction details.

Articles of Incorporation Requirements

Specified form with detailed information on corporate purposes, capital, incorporators, directors, and stock subscriptions.
Must be notarized; treasurer elected to receive subscriptions.
Stock corporations must show minimum subscription and payment percentages before filing.

Filing and Certification

Filing fee for articles of incorporation is 25 pesos.
Articles of incorporation serve as prima facie evidence in courts.
Upon filing, the filing officer issues a certificate confirming legal incorporation.

Use of Property by Corporations

Corporations must obtain owner consent or condemnation proceedings before using private property.
Public property usage requires government franchise.
Exceptions: Certain franchises (street railways, telephones) may secure franchises via prescribed legislation.

General Corporate Powers

Succession, legal capacity to sue and be sued.
To transact lawful business and perform necessary acts.
Acquire, hold, and deal in property necessary for corporate purposes.
Make by-laws, appoint officers, issue stock, contract obligations.
Restrictions on real estate business and agricultural land ownership.

Restrictions and Penalties

Corporations cannot circulate bills, notes as money, or declare dividends except from surplus profits.
Prohibits involuntary servitude labor; violation leads to forfeiture of charters and fines.
Capital stock adjustments require majority approval of stockholders/members and proper notice.

Amendments and Corporate Existence

Articles of incorporation may be amended by board vote and two-thirds stockholders' approval.
Corporations must organize and commence business within two years or lose corporate powers.

By-Laws

Corporations must adopt by-laws within one month after filing articles.
By-laws detail procedures for meetings, elections, voting, officers’ duties and penalties.
Amendments to by-laws need majority or two-thirds approval; filings with government and fees apply.

Meetings

Stockholders' meetings at principal office; directors’ meetings per by-laws.
Meetings are valid if stockholders/members are present, even if improper.
Courts may order meetings if none are called or officers refuse.
Voting rights include persons in a representative capacity (e.g., guardians).

Directors: Powers, Election, Organization

Board size: 5 to 11 directors, elected from stockholders or members.
Directors serve one year unless otherwise specified; elections require notice.
Directors must own at least one share or be members; at least two directors must be Philippine residents.
Directors organize immediately after election, choose officers, and conduct business.
Directors may be removed by two-thirds vote of members or stockholders with prior notice.

Stocks and Stockholders

Capital stock divided into shares with certificates signed and sealed.
Transfer valid only when entered into corporation books.
Delinquent shares with unpaid claims are non-transferable.

Calls and Assessments on Unpaid Subscriptions

Boards may declare unpaid subscriptions payable with interest.
Notice of calls and sales of delinquent stock requires personal service, publication, and posting.
Sales conducted by public auction; corporation may bid in purchases.
Legal title vests in purchaser; resale subject to corporate law and by-laws.
Actions to recover sold stock require payment of sale price plus interest and must be timely.

Corporate Books, Records, and Reports

Corporations must keep minutes and detailed records open to inspection.
Stock and transfer books catalog ownership and transfers.
Public service corporations must file annual audited reports verified by officers.
Government may order examinations of corporate affairs; non-disclosure of such examinations is punishable.

Forced Sale of Franchises

Franchises for use of public property may be sold under execution with court confirmation.
Certificate of purchase issued; purchaser acquires rights and liabilities of the franchise.
Sale conducted at corporation’s principal office; mortgagees’ rights preserved.

Voluntary Dissolution

May be initiated by majority of members or two-thirds stockholders.
Application must list claims, be verified, and notice published and posted.
Objections heard by court; if none or unfounded, dissolution declared and receivers appointed.

Foreign Corporations

Cannot transact business without license from government officials.
License requires a sworn solvency statement and designation of Philippine agent.
Unlicensed foreign corporations face penalties including imprisonment and fines.
License subject to revocation for insolvency.
Service of process on the designated agent is valid; if none, service on government secretary effective.

Miscellaneous Provisions

Corporate misnomers in instruments do not invalidate contracts if identity is clear.
Existing corporations may continue under old laws or reorganize under this Act.
Amendments or repeal by legislature does not impair accrued rights.
Dissolved corporations continue for 3 years to wind up affairs; can convey property to trustees.
Condemnation required for taking private property; franchises subject to government regulation and annual fees.

Special Provisions for Railroad Corporations

May mortgage property upon stockholders’ consent.
Must file plans before construction and provide public safety accommodations.
Responsible for operation standards, telegraph lines, mail transportation, and schedule publication.
Must construct minimum mileage within prescribed times or forfeit extension rights.
Annual detailed reports required.
Passenger rights and conduct regulated.

Special Provisions for Savings and Mortgage Banks

Capital stock minimum of 200,000 pesos, fully subscribed and paid.
Loans secured by real estate, precious metals, or government bonds with specific limits.
Priority of depositors over other creditors.
Restrictions on real estate holdings; real estate must be sold within five years.
Regulations on dividends, loan periods, and director/officer conduct with penalties for violation.

Special Provisions for Banking Corporations

Defined as corporations dealing with deposits, loans, note circulation.
Minimum capital stock of 200,000 pesos with subscription and payment requirements.
Restrictions on loans to directors and self-holdings of capital stock shares.
Required reserve fund: 20% of deposits must be in lawful money.
Branch banks allowed with responsibilities.
Penalties prescribed for violation of insolvency and handling of funds.

Trust Corporations

Formed to act as trustees, administrators, and holders of trusts.
Capital stock requirements including minimum subscriptions and payments.
Powers include acting under court appointments, executing trusts, accepting deposits.
No bond required unless court orders; required reporting and separate accounting.
Regulation of loans secured by real estate and bullion; penalties for unauthorized loans.
Reserve fund requirements and restrictions on loans to officers/directors with penalties.

Domestic Insurance Corporations

Corporations indemnifying against losses or guaranteeing obligations.
Capital stock minimum 500,000 pesos, subscription, and paid-in requirements.
Loans permitted only on specific securities with conditions applying; real estate sales rules.
Dividend declarations limited to profits after reserves.
Risk coverage limits and reinsurance requirements for fire/marine insurance.

Religious Corporations

Bishops or chief priests may become corporation sole for temporalities administration.
Articles of incorporation include office location, office vacancy procedures, and certified appointments.
May purchase and hold property; court approval needed for mortgages or sales.
Religious societies may incorporate with proper consent and file articles with required information.
Power to adopt by-laws and hold property for religious and charitable purposes.

Colleges and Institutions of Learning

Persons establishing educational institutions may form corporations with prescribed articles.
Societies may incorporate with membership consent.
May adopt by-laws and elect trustees.
Only authorized institutions may confer degrees upon Secretary of Public Instruction’s approval.
Trustees hold office with staggered terms; quorum defined.
Rights to hold, mortgage, and sell real estate for educational purposes.

Building and Loan Corporations

Corporations accumulating savings and making loans secured by real estate and stock.
Capital stock paid in regular installments; shares mature with payments.
Certificates issued; fees for membership and transfers allowed.
Provisions for fines on delinquent payments; payments may be advanced.
Loans made publicly secured with mortgage and pledged stock.
Forfeiture rules for nonpayment; withdrawal rights upon maturity.
Property purchase and sale rules; loans to members and repayment conditions.
Subject to banking examination laws.

Repealing Provisions

Repeals conflicting laws except specific banking and franchise laws.
Sociedades colectivos and related associations remain under prior laws.
Existing corporations may continue under old