The law regulates and places everything it covers in order. This is also true in the business and corporate world. If you are a proprietor or a partner who is planning to incorporate your business, you have to learn the corresponding laws that govern and regulate corporations. Likewise, if you are already a stockholder, shareholder, trustee, member or a person who has interest in a corporation, you have to be familiarized with the corporate laws in the country.
The Corporation Code of the Philippines (Batas Pambansa Bilang 68), which was approved and became effective on May 1, 1980, is the law that governs the rules and regulations in the establishment and operation of stock and non-stock corporations in the Philippines. The code consists of 149 sections that are grouped into 16 titles.
The code gives the legal definition of a corporation. It also clarifies the basic classifications of corporations, which can be a stock or a non-stock corporation. The code also discusses the classifications of shares in a stock corporation, like common stocks and preferred stocks.
In title 2 of the code, labeled “Incorporation and Organization of private corporations”, we can read the requirements for incorporation, such as the number and qualifications of incorporators, minimum capital stock required for stock corporations, amount of capital stock to be subscribed and paid during incorporation, and the contents of the articles of incorporation. The title also includes a sample standard form of articles of incorporation, which can be used by any corporation unless required to use other format prescribed by a special law.
In title 3, the code discusses the regulation of the board of directors, trustees or officers of the corporation. It also tackles the creation of an executive committee inside the corporation.
The Corporation Code of the Philippines also covers the basic powers and capacity of corporations. It also discusses the powers of the corporation to extend or shorten corporate term, to increase or decrease capital stock, to declare dividends, and other powers given by the code. This can be read in the Title 4 part of the code.
The code also discusses the regulation on the adoption of by-laws, its contents, and its amendment. It also tackles the rules on meetings of directors, trustees, stockholders, or members in the corporation, which may be regular or special. The code also covers the rules on voting and quorum.
Every person or entity that has interest in a corporation, whether they are corporate owners, members, investors, officers or directors, have to look and learn the content of the Corporation Code of the Philippines so that they may know their rights and privileges of being part of the corporation.
Remember that knowledge is power, and if you have more knowledge about the law, you will have more power to grow or protect your interest in a corporation. And although you can hire a corporate lawyer or legal adviser to be in charge of your legal actions, it is still wise to read and understand the basic laws pertaining to our business. Besides, if we know the law, we can be more effective when listening and communicating with our lawyers.
The following is the basic outline of the Corporation Code of the Philippines:
Title I – General Provisions
Title II – Incorporation and Organization of Private Corporations
Title III – Board of Directors/Trustees/Officers
Title IV – Powers of Corporations
Title V – By-Laws
Title VI – Meetings
TITLE VII – Stocks and Stockholders
Title VIII – Corporate Books and Records
Title IX – Merger and Consolidation
Title X – Appraisal Right
Title XI – Non-Stock Corporations
Title XII – Close Corporations
Title XIII – Special Corporations
Title XIV – Dissolution
Title XV – Foreign Corporations
Title XVI – Miscellaneous Provisions
To download a PDF file copy and read the full text of the Corporation Code, please get it here.