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Transcript of FINANCE
OF THE ARTICLES
OF INCORPORATION Section 14 of the Corporation Codes states:
All corporations organized under this Code shall file with the Securities and Exchange Commission articles of incorporation in any of the official languages duly signed and acknowledged by all of the incorporators, containing substantially the following matters, except as otherwise prescribed by this Code or by special law: REGISTRATION
CORPORATIONS BY LAWS Based on nature of its capital: a. Stock Corporation
-capital is in the form of capital stock divided into shares.
b. Non-Stock Corporation
-no part of its income is distributable as dividends to its members, trustees, or officers. Based on whether they are for public or private purposes: a. Public Corporation
-formed or organized for the government of a portion of the State.
b. Private Corporation
-formed for some private purposes, benefit or end. a. Parent Corporation
-owns controlling interest (more than 50%) in another corporation
b. Subsidiary Corporation
-investee corporation in which the parent corporation has controlling interest. As to their relation to another corporation: As to their state or country under or by whose laws they have
been created: a. Domestic Corporation
-corporation created under Philippine Laws.
b. Foreign Corporation
-formed, organized or existing under laws other than those of the Philippines. As to whether they are open to the public or not: a. Close Corporation
-limited to selected persons or members of a family.
b. Open Corporation
-open to any persons who may wish to become a stockholder or member thereof. WATERED
-refers to all the persons composing a corporation whether they are stockholders (in the case of stock corporation) or members (in the case of non-stock corporation).
-refers to corporators mentioned in the articles of incorporation as originally forming and composing the corporation and who executed and signed the articles of incorporation.
-any natural or juridical person owning at least one share of capital stock of a corporation is a stockholders. MEMBER
-the corporators in a non-stock corporation.
BOARD OF DIRECTORS OR TRUSTEES
-the governing body in a corporation. With the exception only of some power reserved by law to stockholders (or members), the board of directors has the sole authority to determine policy and conduct the ordinary business of the corporation within the scope of its charter.
-requires all the activities that must be undertaken in promoting a business and in complying with all the legal requirements for the entity to have its legal personality as a corporation. The promoters sell the idea of forming a corporation to other people who may agree to become incorporators and/or provide capital, rights and property necessary to achieve the corporate
purpose or purposes. 1.Verification of corporate name with SEC.
2.Drafting and execution of the articles of incorporation.
3.Deposit of cash received for subscribed shares of stocks in a banking institution in the
name of the temporary treasurer, in trust for and to the credit of the corporation.
4.Filling of the articles of incorporation together with the following:
b)Statement of assets and liabilities of the proposed corporation
c)Authority to verify bank deposits
d)Certificate of deposit of cash paid for subscription
e)Personal information sheet for the incorporators
f)Commitment to change corporate name if it is found similar to another corporate
5.Payment of filling and publication fees
6.Issuance by SEC of the certificate of incorporation
7.Registration of the corporate name with the Bureau of Domestic Trade
8.Obtaining municipal licenses from the local government (municipality or city)
9.Obtaining the VAT or Non-VAT account number from the BIR
10.Registration with BIR of books of accounts and accountable forms. 1.The name of the corporation:
2.The specific purpose or the purposes for which the
corporation is being incorporated. Where a corporation has
more than one stated purpose, the articles of the corporation
shall state which is the primary purpose and which is/are the
secondary purpose or purposes: Provided, that a non-stock
corporation may not include a purpose which would change or
contradict its nature as such;
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 5 nor more than 15;
7.The names, nationalities and residences of the 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, the number of the shares into which it is divided, and in case the shares are par value
shares, the par value of each, the names, nationalities and residences of the original subscription,
and if some or all of the shares are without par value, such fact must be stated;
9. If it be a non-stock corporation, the amount of its capital, the names, nationalities and residences
of the contributors and amount contributed by each; and,
10. Such other matters as are not inconsistent with law and which the incorporators may deem
necessary and convenient.
The Securities and Exchange Commission shall not accept the articles of incorporation of any stock corporation unless accompanied by a sworn statement of the Treasurer elected by the subscribers showing that at least 25% of the authorized capital stock of the corporation has been subscribed, and at least 25 of the total subscription has been fully paid to him in actual cash and/or in property the valuation of which is equal to at least 25% of the said subscription, such paid-up capital being not less than five thousands (5,000) pesos. -be defined as the rules of action for the internal government of a corporation and for the government of its officers and stockholders or members. 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
4. The form of proxies of stockholders and members and the manner of voting therein.
5. The qualification, duties and compensation of directors or trustees and officers.
6. The time for holding the annual election of directors or 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. In case of stock corporations, the manner of issuing certificates.
9. The penalties for violation of the by-laws.
10. Other matters that may be necessary for the proper and the convenient transaction
of its corporate business and affairs.
The Corporation Code prohibits the original issuance of stocks for a consideration less than par or issued price thereof. Stocks issued for a consideration less than par or issued value are called Watered Stock.
Any director or officer of the corporation who approves the issuance of stocks at less than par or issued value is solidarily liable with the stockholder concerned for the difference between the fair value of the consideration at the time of issuance and the par or issued value of the stock. END... THANK YOU!