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Batas Pambansa Bilang 68

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Hanna Leon

on 26 January 2015

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Transcript of Batas Pambansa Bilang 68

TITLE I – GENERAL PROVISIONS

DEFINITIONS AND CLASSIFICATIONS
Section 1.
Title of the Code.
Section 2.
Corporation defined.
Section 3.
Classes of corporations.
Section 4.
Corporations created by special laws or charters.
Section 5.
Corporators and incorporators, stockholders and members.
Section 6.
Classification of shares.
Section 7.

Founders’ shares.
Section 8.
Redeemable shares.
Section 9.
Treasury shares.
TITLE II

INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS
Section 10.

Number and qualifications of incorporators.
Section 11.

Corporate term.
Section 12.
Minimum capital stock required of stock corporations.
Section 13.

Amount of capital stock to be subscribed and paid for the purposes of incorporation.
Section 14.

Contents of the articles of incorporation.
Section 15.
Forms of Articles of Incorporation.
Section 16.
Amendment of Articles of Incorporation.
Section 17.
Grounds when articles of incorporation or amendment may be rejected or disapproved.
Section 18.
Corporate name.
Section 19.
Commencement of corporate existence.
Section 20.
De facto corporations.
Section 21
. Corporation by estoppel.
Section 22
. Effects on non-use of corporate charter and continuous inoperation of a corporation.
TITLE III

BOARD OF DIRECTORS/TRUSTEES AND OFFICERS
Section 23.
The board of directors or trustees.
Section 24.
Election of directors or trustees.
Section 25.
Corporate officers, quorum.
Section 26.
Report of election of directors, trustees and officers.
Section 27.
Disqualification of directors, trustees or officers.
Section 28.
Removal of directors or trustees.
Section 29.

Vacancies in the office of director or trustee.
Section 30.

Compensation of directors.
Section 31.

Liability of directors, trustees or officers.
Section 32.
Dealings of directors, trustees or officers with the corporation.
Section 33.
Contracts between corporations with interlocking directors.
Section 34.
Disloyalty of a director.
Section 35.
Executive committee.
TITLE IV

POWERS OF CORPORATIONS
Section 36.

Corporate powers and capacity.
Section 37.
Power to extend or shorten corporate term.
Section 38.
Power to increase or decrease capital stock; incur, create or increase bonded indebtedness.
Section 39.
Power to deny pre-emptive right.
Section 40.

Sale or other disposition of assets
Section 41
.
Power to acquire own shares.
Section 42.
Power to invest corporate funds in another corporation or business or for any other purpose.
Section 43.
Power to declare dividends.
Section 44.
Power to enter into management contract.
Section 45.
Ultra vires acts of corporations.
TITLE V

BY LAWS


Section 46.
Adoption of by-laws.
Section 47.
Contents of by-laws.
Section 48.
Amendments to by-laws.

TITLE VI

MEETINGS
Section 49.

Kinds of meetings.
Section 50.

Regular and special meetings of stockholders or members.
Section 51.

Place and time of meetings of stockholders of members.
Section 52.
Quorum in meetings.
Section 53.
Regular and special meetings of directors or trustees.
Section 54.
Who shall preside at meetings.
Section 55.

Right to vote of pledgors, mortgagors, and administrators.
Section 56.
Voting in case of joint ownership of stock.
Section 57.
Voting right for treasury shares.
Section 58.
Proxies.
Section 59.
Voting trusts
DONE!
Batas Pambansa Bilang 68
THE CORPORATION CODE OF THE PHILIPPINES
Section 1. Title of the Code.
– This Code shall be known as “The Corporation Code of the Philippines.”

Section 2. Corporation defined.
– A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.
Section 3. Classes of corporations.
– Corporations formed or organized under this Code may be stock or non-stock corporations.

Section 4. Corporations created by special laws or charters.
– Corporations created by special laws or charters shall be governed primarily by the provisions of the special law or charter creating them or applicable to them
Section 5. Corporators and incorporators, stockholders and members:
Corporators

are those who compose a corporation, whether as stockholders or as members
Incorporators
are those stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation
Section 6. Classification of shares.

Where the articles of incorporation provide for non-voting shares in the cases allowed by this Code, the holders of such shares shall nevertheless be entitled to vote on the following matters:

1. Amendment of the articles of incorporation;

2. Adoption and amendment of by-laws;

3. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of the corporate property;

4. Incurring, creating or increasing bonded indebtedness;

5. Increase or decrease of capital stock;

6. Merger or consolidation of the corporation with another corporation or other corporations;

7. Investment of corporate funds in another corporation or business in accordance with this Code; and

8. Dissolution of the corporation.
Section 7. Founders’ shares.
– Founders’ shares classified as such in the articles of incorporation may be given certain rights and privileges not enjoyed by the owners of other stocks

Section 8. Redeemable shares.
– Redeemable shares may be issued by the corporation when expressly so provided in the articles of incorporation.

Section 9. Treasury shares.
– Treasury shares are shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing corporation by purchase, redemption, donation or through some other lawful means.
Section 10. Number and qualifications of incorporators.
– Any number of natural persons not less than five (5) but not more than fifteen (15), all of legal age and a majority of whom are residents of the Philippines, may form a private corporation for any lawful purpose

Section 11. Corporate term.
– A corporation shall exist for a period not exceeding fifty (50) years from the date of incorporation unless sooner dissolved or unless said period is extended.
Section 12. Minimum capital stock required of stock corporations.


Stock corporations incorporated under this Code shall not be required to have any minimum authorized capital stock except as otherwise specifically provided for by special law, and subject to the provisions of the following section.

Section 13. Amount of capital stock to be subscribed and paid for the purposes of incorporation.
– At least twenty-five percent (25%) of the authorized capital stock as stated in the articles of incorporation must be subscribed at the time of incorporation,
Section 14. Contents of the articles of incorporation.

1. The name of the corporation;

2. The specific purpose or purposes for which the corporation is being incorporated.

3. The place where the principal office of the corporation is to be located, which must be within the Philippines;

4. The term for which the corporation is to exist;

5. The names, nationalities and residences of the incorporators;

6. The number of directors or trustees, which shall not be less than five (5) nor more than fifteen (15);

7. The names, nationalities and residences of persons who shall act as directors or trustees until the first regular directors or trustees are duly elected and qualified in accordance with this Code;

8. If it be a stock corporation, the amount of its authorized capital stock in lawful money of the Philippines.

9. If it be a non-stock corporation, the amount of its capital, the names, nationalities and residences.

10. Such other matters as are not inconsistent with law and which the incorporators may deem necessary and convenient.
Section 15. Forms of Articles of Incorporation. –
Unless otherwise prescribed by special law, articles of incorporation of all domestic corporations shall comply substantially with the following form:

Section 16. Amendment of Articles of Incorporation.-
The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation.

Section 17. Grounds when articles of incorporation or amendment may be rejected or disapproved.

1. That the articles of incorporation or any amendment thereto is not substantially in accordance with the form prescribed herein;

2. That the purpose or purposes of the corporation are patently unconstitutional, illegal, immoral, or contrary to government rules and regulations;

3. That the Treasurer’s Affidavit concerning the amount of capital stock subscribed and/or paid is false;

4. That the percentage of ownership of the capital stock to be owned by citizens of the Philippines has not been complied with as required by existing laws or the Constitution.
Section 18. Corporate name.
– No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws.

Section 19. Commencement of corporate existence.
– A private corporation formed or organized under this Code commences to have corporate existence and juridical personality and is deemed incorporated from the date the Securities and Exchange Commission issues a certificate of incorporation under its official seal
Section 20. De facto corporations.
– The due incorporation of any corporation claiming in good faith to be a corporation under this Code, and its right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such corporation may be a party. Such inquiry may be made by the Solicitor General in a quo warranto proceeding.

Section 21. Corporation by estoppel.
– All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result

Section 22. Effects on non-use of corporate charter and continuous inoperation of a corporation.
– If a corporation does not formally organize and commence the transaction of its business or the construction of its works within two (2) years from the date of its incorporation, its corporate powers cease and the corporation shall be deemed dissolved.
Section 23. The board of directors or trustees.
– Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks.

Section 24. Election of directors or trustees.
– At all elections of directors or trustees, there must be present, either in person or by representative.

Section 25. Corporate officers, quorum.
– The directors or trustees and officers to be elected shall perform the duties enjoined on them by law and the by-laws of the corporation.
Section 26. Report of election of directors, trustees and officers.
– Within thirty (30) days after the election of the directors, trustees and officers of the corporation, the secretary, or any other officer of the corporation, shall submit to the Securities and Exchange Commission, the names, nationalities and residences of the directors, trustees, and officers elected.

Section 27. Disqualification of directors, trustees or officers.
– No person convicted by final judgment of an offense punishable by imprisonment for a period exceeding six (6) years, or a violation of this Code committed within five (5) years prior to the date of his election or appointment, shall qualify as a director, trustee or officer of any corporation.
Section 28. Removal of directors or trustees.
– Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing at least two-thirds (2/3) of the outstanding capital stock, or if the corporation be a non-stock corporation, by a vote of at least two-thirds (2/3) of the members.

Section 29. Vacancies in the office of director or trustee.
– Any vacancy occurring in the board of directors or trustees other than by removal by the stockholders or members or by expiration of term, may be filled by the vote of at least a majority of the remaining directors or trustees
Section 30. Compensation of directors.

– In the absence of any provision in the by-laws fixing their compensation, the directors shall not receive any compensation, as such directors, except for reasonable per diems.

Section 31. Liability of directors, trustees or officers. -
When a director, trustee or officer attempts to acquire or acquires, in violation of his duty.


Section 32. Dealings of directors, trustees or officers with the corporation.

1. That the presence of such director or trustee in the board meeting in which the contract was approved was not necessary to constitute a quorum for such meeting;

2. That the vote of such director or trustee was not necessary for the approval of the contract;

3. That the contract is fair and reasonable under the circumstances; and

4. That in case of an officer, the contract has been previously authorized by the board of directors.
Section 33. Contracts between corporations with interlocking directors.
– Except in cases of fraud, and provided the contract is fair and reasonable under the circumstances, a contract between two or more corporations having interlocking directors.

Section 34. Disloyalty of a director.
– Where a director, by virtue of his office, acquires for himself a business opportunity which should belong to the corporation.

Section 35. Executive committee.
– The by-laws of a corporation may create an executive committee, composed of not less than three members of the board, to be appointed by the board.
Section 36. Corporate powers and capacity.
– Every corporation incorporated under this Code has the power and capacity:

1. To sue and be sued in its corporate name;

2. Of succession by its corporate name for the period of time stated in the articles of incorporation and the certificate of incorporation;

3. To adopt and use a corporate seal;

4. To amend its articles of incorporation in accordance with the provisions of this Code;

5. To adopt by-laws, not contrary to law, morals, or public policy, and to amend or repeal the same in accordance with this Code;
6. In case of stock corporations, to issue or sell stocks to subscribers.

7. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise deal with such real and personal property

8. To enter into merger or consolidation with other corporations as provided in this Code;


9. To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes.

10. To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees.

11. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes
Section 46. Adoption of by-laws. –
Every corporation formed under this Code must, within one (1) month after receipt of official notice of the issuance of its certificate of incorporation by the Securities and Exchange Commission, adopt a code of by-laws for its government not inconsistent with this Code.


Section 47. Contents of by-laws.


1. The time, place and manner of calling and conducting regular or special meetings of the directors or trustees;

2. The time and manner of calling and conducting regular or special meetings of the stockholders or members;

3. The required quorum in meetings of stockholders or members and the manner of voting therein;

4. The form for proxies of stockholders and members and the manner of voting them;

5. The qualifications, duties and compensation of directors or trustees, officers and employees;
6. The time for holding the annual election of directors of trustees and the mode or manner of giving notice thereof;

7. The manner of election or appointment and the term of office of all officers other than directors or trustees;

8. The penalties for violation of the by-laws;

9. In the case of stock corporations, the manner of issuing stock certificates; and

10. Such other matters as may be necessary for the proper or convenient transaction of its corporate business and affairs.

Section 48. Amendments to by-laws.
– The board of directors or trustees, by a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a majority of the members of a non-stock corporation, at a regular or special meeting duly called for the purpose, may amend or repeal any by-laws or adopt new by-laws.
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