BOD OR TRUSTEES b.

Conducts all business of the corporation

 Periodically elected by the stockholders c. Controls and holds all property of the
 Charged with the management of the corporation
corporation 2. Officers
 Acts of management pertain to them  Execute the policies laid down by the board
 Cannot act alone and must seek approval from 3. Stockholders
the shareholders or members  Has residual power over fundamental
 Periodically elects officers who will carry out corporate changes like amendment of the
the day-to-day functions of the management articles of incorporation
 Governing body of the corporation
 Shall exercise good faith, care, diligence in the REMEDY FOR ABUSE OF POWER
administration of the corporation affairs and to 1. Derivative Suit - the right of a stockholder to
protect not only the interest of majority but use on behalf of a corporation
also that of the minority of the stock. Nominal Party – Suing stockholder
STOCKHOLDERS Party in Interest – corporation
 Owners who has residual powers over
fundamental and major corporate changes PROPERTY OF CORPORATION
 Has the right to vote either personally or proxy  Not the property of shareholders and members
thus cannot be sold without authorization from
THE BUSINESS JUDGEMENT RULE BOD
 Once the BOD are elected the stockholders
give up corporate powers to them. Hence, GENERAL RULE: without the authority from the BOD,
contracts entered with in their scope of no person can validly bind a corporation subject to the
authority are binding with the corporation. articles of incorporation, by-laws or provisions of law.
 Courts will not interfere unless it is
unconscionable and oppressive to destroy the CORPORATE POWERS
rights of the minority.  Can be directly conferred upon corporate
officers or agents by statute, articles of
SEC 22. THE BOD OR TRUSTEES OF A incorporation, the by-laws or by resolution or
CORPORATION; QUALIFICATION AND TERM other act of the BOD
EXPRESS POWERS
Independent Director  Appointment of non directors to other agents
 A person elected by the shareholders as authorized by the by-laws or BOD
who apart from shareholdings and fees SEC 23. ELECTION OF DIRECTORS OR TRUSTEES
received is independent of management
and free from any business or other Requirements for the election
relationship which could reasonably 1. the owners of majority of the outstanding
perceived to materially interfere with the capital stock, or if there be no capital stock, a
exercise of independent judgement in majority of the members must be present,
carrying out the responsibilities as a either in person or through a representative to
director and has the right to vote in act by a written proxy
absentia 2. When so authorized in the bylaws or by a
Qualifications majority of the board of directors, the
1. For stock corporation, owns at least 1 share of stockholders or members may also vote
capital stock in his own name through remote communication or in absentia
2. For nonstock , only members can be elected 3. Election must be by ballot if requested by
3. Must be capacitated any voting stockholder or member
4. Legal age 4. Stockholders entitled to vote shall have the
5. Other qualification as may be prescribed in the right to vote the number of shares of stock
bylaws of the corporations standing in their own names in the stock books
Term of the corporation at the time fixed in the
1. Directors – 1 year from among holders of bylaws or where the bylaws are silent, at the
stock registered in the corporation’s books time of the election.
2. Trustees – not exceeding 3 years from among The said stockholder may:
the members of the corporation (a) vote such number of shares for as many
Three Levels of Control persons as there are directors to be elected; (b)
1. BOD cumulate said shares and give one (1)
 Responsible corporate policies and general candidate as many votes as the number of
management of the business affairs of the directors to be elected multiplied by the
corporation number of the shares owned;
 Understood to be a body which: (c) distribute them on the same principle
a. Exercises powers provided by the among as many candidates as may be seen fit:
Corporation Code
 Provided, That the total number of votes 50 + 1 of the vote present directors for a
cast shall not exceed the number of decision to be valid
shares owned by the stockholders as
shown in the books of the corporation GENERAL RULE: Effect when a decision is made
multiplied by the whole number of of at least the majority: valid as a corporate act
directors to be elected except election of officers where all are required
5. no delinquent stock shall be voted. except when AOincorp or by-laws provided for a
6. members of nonstock corporations may cast as greater majority.
many votes as there are trustees to be elected
but may not cast more than one (1) vote for SEC 25. REPORT OF ELECTION OF DIRECTORS,
one (1) candidate. TRUSTEES AND OFFICERS, NON-HOLDING OF
7. Nominees for directors or trustees receiving ELECTION AND CESSATION FROM OFFICE
the highest number of votes shall be declared
elected and must perform their duties as GENERAL RULE: Within thirty (30) days after the
prescribed by law, rules of good governance election of the directors, trustees and officers of the
and by-laws corporation, the secretary, or any other officer of the
8. If no election is held, such meeting is corporation, shall submit to the Commission, the
adjourned and corporation will proceed in names, nationalities, shareholdings, and residence
accordance with Section 25 of this code addresses of the directors, trustees, and officers
elected.
SEC 24. CORPORATE OFFICERS 
Objective: to give the public information under
Officer: Corporate Officer sanction of oath of responsible officers of the
Requirement: expressly mentioned in the by-laws nature of business, financial condition and
Scope: acts of corporate office is binding operational status of the company together with
the information on its key officers or managers
Officer: Corporate Employee
Requirement: employed by the action of the SEC. 26. DISQUALIFICATION OF DIRECTORS,
managing officer of corporation TRUSTEES OR OFFICERS.

Officer: President A person shall be disqualified from being a director,

Requirement: trustee or officer of any corporation if, within five (5)
a. Must be a directors years prior to the election or appointment as such, the
b. Must be a shareholder on record of at least 2 person was:
share (a) Convicted by final judgment:
Citizenship: need not be a Filipino citizen (1) Of an offense punishable by imprisonment
Residency: need not be a resident of Philippines for a period exceeding six (6) years;
(2) For violating this Code; and
Officer: Secretary (3) For violating Republic Act No. 8799,
Requirement: may or may not be a director otherwise known as “The Securities Regulation
Citizenship: must be a Filipino citizen Code”;
Residency: must be a resident of Philippines (b) Found administratively liable for any offense
involving fraudulent acts; and
Officer: Treasurer (c) By a foreign court or equivalent foreign regulatory
Requirement: may or may not be a director authority for acts, violations or misconduct similar to
Citizenship: must be a Filipino citizen those enumerated in paragraphs (a) and (b) above
Residency: must be a resident of Philippines
SEC. 27. REMOVAL OF DIRECTORS OR TRUSTEES
Officer: Compliance Officer
Requirement: if vested with public interest Power to remove
 Vested among stockholders and members
Officer: Other officers exclusively but the SEC can motu proprio after
Requirement: qualification may be provided for in the due notice and hearing order the removal
by-laws
GENERAL RULE: removal may be with or without
NOTE: A person can have 2 positions provided cause except when it is used to deprive minority
that it is not a president and secretary or of the right of representation
president and treasurer at the same time
Requisites
QUOROM 1. by a vote of the stockholders holding or
 A majority of directors of trustees for a representing at least two-thirds (2/3) of the
meeting to be valid and a majority of which is outstanding capital stock, or in a nonstock
 corporation, by a vote of at least two-thirds  elected to fill vacancy and shall serve only for
(2/3) of the members entitled to vote: the unexpired term of the predecessor in office
2. That such removal shall take place either at a
regular meeting of the corporation or at a  When the vacancy prevents the remaining
special meeting called for the purpose, and in directors from constituting a quorum and
either case, after previous notice to emergency action is required to prevent
stockholders or members of the corporation of grave, substantial, and irreparable loss or
the intention to propose such removal at the damage to the corporation, the vacancy
meeting. may be temporarily filled from among the
3. A special meeting of the stockholders or officers of the corporation by unanimous
members for the purpose of removing any vote of the remaining directors or
director or trustee must be called by the trustees. The action by the designated
secretary on order of the president, or upon director or trustee shall be limited to the
written demand of the stockholders emergency action necessary, and the term
representing or holding at least a majority of shall cease within a reasonable time from the
the outstanding capital stock, or a majority of termination of the emergency or upon election
the members entitled to vote. of the replacement director or trustee,
4. If there is no secretary, or if the secretary, whichever comes earlier. The corporation
despite demand, fails or refuses to call the must notify the Commission within three
special meeting or to give notice thereof, the (3) days from the creation of the
stockholder or member of the corporation emergency board, stating therein the
signing the demand may call for the meeting reason for its creation.
by directly addressing the stockholders or
members. SEC. 29. COMPENSATION OF DIRECTORS OR
5. Notice of the time and place of such meeting, TRUSTEES.
as well as of the intention to propose such
removal, must be given by publication or by GENERAL RULE: shall not receive any compensation
written notice prescribed in this Code except for reasonable per diem except when fixed by
the corporation by-laws or when the stockholders
SEC. 28. VACANCIES IN THE OFFICE OF DIRECTOR representing at least the majority of the outstanding
OR TRUSTEE; EMERGENCY BOARD. capital stock or majority of the members vote to grant
the same or if they receive compensation in a capacity
Causes of Vacancy other than being directors and trustees
1. By the stockholders or members
a. Removal of stockholders or members – Reason for not having salary
election may be held on the same day of  There is a rule that presumes they render their
the meeting authorizing the removal which service gratuitously and there is return on their
must be stated as the agenda of the and shares
notice of the said meeting
b. Expiration of term – election may be held Requisites for the exceptions:
not later than the day of such expiration at 1. Vote at a regular special stockholder’s meeting
a meeting called for that purpose 2. total yearly compensation of directors exceed
c. Increase in number of directors or trustees ten (10%) percent of the net income before
due to amendment of AO Incorp – an income tax of the corporation during the
election at a regular or at a special meeting preceding year.
of stockholders or members duly called for
the purpose, or in the same meeting GENERAL RULE: they shall not participate in the
authorizing the increase of directors or determination of their own per diems or compensation
trustees if so stated in the notice of the
meeting. SEC. 30. LIABILITY OF DIRECTORS, TRUSTEES OR
d. Other than removal and expiration like OFFICERS
death, resignation, abandonment or
disqualification if the remaining directors Doctrine of Corporate Opportunity
does not constitute a quorum. - election  holds personally liable corporate directors
must be held no later than 45 days from found guilty of gross negligence or bad faith in
the time vacancy arose directing the affairs of the corporation which
2. By the members of the BOD or trustees results to damage or injury
 Majority of them are empowered to fill any  an exception to the doctrine of corporate entity
vacancy other than removal or by expiration of
term Bad faith vs Gross Negligence
 Bad faith consciously doing wrong acts while
Replacement Director / Trustee negligence has a slight absence of care.
  Bad faith implies breach of faith and willful case of a contract with a director or trustee, such
failure to respond and well understood contract may be ratified by the vote of the
obligation stockholders representing at least two-thirds
 Gross negligence thoughtless disregard of (2/3) of the outstanding capital stock or of at
consequences without exerting effort ti avoid least two-thirds (2/3) of the members in a
them. meeting called for the purpose: Provided, That full
disclosure of the adverse interest of the
Instances when directors and officers are directors or trustees involved is made at such
solidary liable meeting and the contract is fair and reasonable
1. Directors or trustees who willfully and under the circumstances
knowingly vote for or assent to patently
unlawful acts of the corporation or SEC. 32. CONTRACTS BETWEEN CORPORATIONS
2. guilty of gross negligence or bad faith in WITH INTERLOCKING DIRECTORS
directing the affairs of the corporation
3. acquire any personal or pecuniary interest in Interlocking Directors
conflict with their duty as such directors or  These are members of the BOD in a certain
trustees coporation who are also directors in another
4. director or officer consented to the issuance of coporation
watered down stocks without forthwith file with
the corporate secretary his written objection Substantial Interest
thereto  Stockholdings exceeding twenty percent of the
5. when a director, trustee or officer has outstanding capital stock
contractually agreed to hold himself liable
solidarity with the corporation GENERAL RULE: contracts with this kind of directirs
6. when a director, trustee or officer made by shall not be invalidated on that ground alone provided
specific provision of law personally liable for his that the contract is not fraudulent and it is fair and
corporate action reasonable under circumstances

SEC. 31. DEALINGS OF DIRECTORS, TRUSTEES OR EXCEPTION: That if the interest of the interlocking
OFFICERS WITH THE CORPORATION director in one (1) corporation is substantial and the
interest in the other corporation or corporations is
Self dealing directors or trustees or officers merely nominal, the contract shall be subject to the
 A contract of the corporation with (1) one or provisions of the preceding section insofar as the latter
more of its directors, trustees, officers or their corporation or corporations are concerned.
spouses and
relatives within the fourth civil degree of SEC. 33. DISLOYALTY OF A DIRECTOR
consanguinity or affinity which is as a GENERAL RULE: director, by virtue of such office,
GENERAL RULE is VOIDABLE at the option acquires a business opportunity which should belong to
of the corporation the corporation, thereby obtaining profits to the
prejudice of such corporation, the director must
Except: account for and refund to the latter all such profits,
1. (a) The presence of such director or trustee EXCEPTION: the act has been ratified by a vote of the
in the board meeting in which the contract stockholders owning or representing at least twothirds
was approved was not necessary to (2/3) of the outstanding capital stock. This provision
constitute a quorum for such meeting; shall be applicable, notwithstanding the fact that the
2. (b) The vote of such director or trustee was director risked one’s own funds in the venture.
not necessary for the approval of the
contract; SEC. 34. Executive, Management, and Other
3. (c) The contract is fair and reasonable Special Committees.
under the circumstances;
4. (d) In case of corporations vested with Executive Committee
public interest, material contracts are  Body created by the by-laws and composed of
approved by at least two-thirds (2/3) of the not less than three members of the board
entire membership of the board, with at subject to the statutory limitations has all the
least a majority of the independent authority of the BOD to the extent provided in
directors voting to approve the material the by-laws.
contract;
5. (e) In case of an officer, the contract has Limitations
been previously authorized by the board of 1. (a) approval of any action for which
directors. shareholders’ approval is also required;
NOTE: 2. (b) filling of vacancies in the board;
Where any of the first three (3) conditions set 3. (c) amendment or repeal of bylaws or the
forth in the preceding paragraph is absent, in the adoption of new bylaws;
 4. (d) amendment or repeal of any resolution of accordance with the rules and regulations
the board which by its express terms is not of the Commission on the use of
amendable or repealable; and electronic data messages.
5. (e) distribution of cash dividends to the
shareholders Appraisal Right
 Stockholder who dissented and voted against
NOTE: the proposed corporate action may choose to
The board of directors may create special get out the corporation by demanding payment
committees of temporary or permanent nature and of the FMV of his shares.
determine the members’ term, composition,  Can be exercised in case of extension of term
compensation, powers, and responsibilities
SEC. 37. POWER TO INCREASE OR DECREASE
TITLE 4. POWERS OF CORPORATION CAPITAL STOCK; INCUR, CREATE OR INCREASE
BONDED INDEBTEDNESS
NOTE: A corporation has no power except those
expressly conferred on it by the Corporation Trust Fund Doctrine
Code and those that are implied or incidental to  Provides that subscription to the capital stock
its existence. of a corporation constitute a fund to which the
creditors have a right to look for the
SEC. 35. CORPORATE POWERS AND CAPACITY. satisfaction of their claims
Every corporation incorporated under this Code has the  It allows the distribution of corporate capital
power and capacity: only in these instances
1. Sue and be sued. a. Amendment of the Articles of Incorporation
2. Perpetual existence unless stated otherwise. to reduce the authorized capital stock
3. Adopt and use a corporate seal. b. Purchase of redeemable shares
4. Amend articles of incorporation. c. Dissolution and liquidation oof the
5. Adopt, amend, or repeal bylaws same in corporation
accordance with this Code;
6. Issue stocks (for stock corps), admit members GENERAL RULE: No corporation shall increase or
(for nonstock). decrease its capital stock or incur, create or increase
7. Deal with real and personal property. subject to any bonded indebtedness unless approved by a
the limitations prescribed by law and the majority vote of the board of directors and by two-
Constitution; thirds (2/3) of the outstanding capital stock at a
8. To enter into a partnership, joint venture, stockholders’ meeting duly called for the purpose.
merger, consolidation, or any other commercial
agreement with natural and juridical persons; Requirements for the approval of the BOD
9. Make reasonable donations (except political). - Certificate must be signed by majority of directors,
10. Establish benefit plans for its directors, countersigned by chairperson and secretary, stating:
trustees, officers, and employees; a) Compliance with requirements.
11. Exercise powers to fulfill stated purposes in the b) Amount of capital stock change
articles of incorporation c) Details of increase, including subscribers' info
(names, nationalities and addresses of the
SEC. 36. POWER TO EXTEND OR SHORTEN persons subscribing, the amount of capital
CORPORATE TERM stock or number of no-par stock subscribed by
each, and the amount paid by each on the
Power to extend or shorten Corporate Term subscription in cash or property)
Requisites d) Bonded indebtedness details.
1. when approved by a majority vote of the board e) Amount of stock represented at meeting.
of directors or trustees f) Vote authorizing changes or indebtedness.
2. ratified at a meeting by the stockholders or
members representing at least two-thirds (2/3) Term
of the outstanding capital stock or of its Any increase or decrease in the capital stock or the
members incurring, creating or increasing of any bonded
3. Written notice of the proposed action and indebtedness shall require prior approval of the
the time and place of the meeting shall be Commission, and where appropriate, of the Philippine
sent to stockholders or members at their Competition Commission. The application with the
respective place of residence as shown in Commission shall be made within six (6) months
the books of the corporation, and must from the date of approval of the board of
either be deposited to the addressee in directors and stockholders, which period may be
the post office with postage prepaid, extended for justifiable reasons
served personally, or when allowed in the
bylaws or done with the consent of the Requirements in filing certificate of increase of
stockholder, sent electronically in authorized capital stock.
 1. Financial statements of an independent CPA as retention of his proportionate control in the
of the latest date possible or as of the data of corporation
the meeting when stockholders decide to  this must be exercised within the period stated
increase/ decrease in the articles of incorporation or by-laws
2. When all or part of the newly authorized stock When pre-emptive right is not available
is proposed to be issued, a detailed long form 1. shares issued in compliance with laws requiring
report of the certifying auditor is also required. stock offerings or minimum stock ownership by
the public
Requirements in filing certificate of increase of 2. shares issued in good faith with the approval of
authorized capital stock.
the stockholders representing two-thirds (2/3)
1. Written notice of the time and place of the
of the outstanding capital stock, in exchange
stockholders’ meeting and the purpose for said
for property needed for corporate purposes or
meeting must be sent to the stockholders at
in payment of a previously contracted debt
their places of residence as shown in the books
of the corporation and served on the
SEC. 39. SALE OR OTHER DISPOSITION OF
stockholders personally, or through electronic
ASSETS.
means recognized in the corporation’s bylaws
and/or the Commission’s rules as a valid mode
Allows transfer of all or substantially all the
for service of notices.
properties and assets of a corporation provided
2. No decrease shall be approved if its effect shall
that the transfer will not prejudice the creditors
prejudice the righst of corporate creditors
of assignor.
3. Approval by the majority vote of the BOD
4. ratification by the stockholders holding at least
Requirements:
2/3 of the outstanding capital stock
1. Written notice of the proposed action and of
5. A certificate must be signed by a majority of
the time and place for the meeting shall be
the directors of the corporation and
addressed to stockholders or members at their
countersigned by the chairperson and
places of residence as shown in the books of
secretary of the stockholders’ meeting
the corporation and deposited to the addressee
6. Approval of sec
in the post office with postage prepaid, served
7. sworn statement of the treasurer of the
personally, or when allowed by the bylaws or
corporation lawfully holding office at the time
done with the consent of the stockholder, sent
of the filing of the certificate, showing that at
electronically
least twenty-five percent (25%) of the increase
2. Approval of the majority vote of BOD and
in capital stock has been subscribed and that
trustees
at least twenty-five percent (25%) of the
3. Ratification by the vote of the stockholders
amount subscribed has been paid in actual
representing at least two-thirds (2/3) of the
cash to the corporation or that property, the
outstanding capital stock, or at least two-thirds
valuation of which is equal to twenty-five
(2/3) of the members, in a stockholders’ or
percent (25%) of the subscription, has been
members’ meeting duly called for the purpose.
transferred to the corporation
4. Any dissenting stockholder may exercise his
appraisal right
Bonded Indebtedness
5. SEC approval is not required
 long term indebtedness secured usually by real
6. The determination of whether or not the sale
property
involves all or substantially all of the
corporation’s properties and assets must be
Nonstock corporations may incur, create or increase
computed based on its net asset value, as
bonded indebtedness when approved by a majority of
shown in its latest financial statement
the board of trustees and of at least two-thirds (2/3) of
the members in a meeting duly called for the purpose.
Ratification is not required when:

Bonds issued by a corporation shall be registered with

1. The dispose of any of its property and assets if
the Commission, which shall have the authority to the same is necessary in the usual and regular
determine the sufficiency of the terms thereof course of business of the corporation or
2. if the proceeds of the sale or other disposition
of such property and assets shall be
SEC. 38. POWER TO DENY PREEMPTIVE RIGHT appropriated for the conduct of its remaining
business
Pre-emptive Right
 preferential right to all stockholders of a stock SEC. 40. Power to Acquire Own Shares
subscribe to all issues or disposition of shares Instances when a corporation may acquire its
of any class, in proportion to their respective own shares
shareholdings for the purpose of enabling the
 1. ) To eliminate fractional shares arising out of with the rules and regulations of the
stock dividends; (b) To collect or compromise Commission on the use of electronic data
an indebtedness to the corporation, arising out message, when allowed by the bylaws or done
of unpaid subscription, in a delinquency sale, with the consent of the stockholders.
and to purchase delinquent shares sold during d. Dissenting stockholder has an appraisal right
said sale; and (c) To pay dissenting or Funds
withdrawing stockholders entitled to payment  Corporate property to be used for furtherance
for their shares under the provisions of this of business
Code.
2. To acquire treasury shares SEC. 42. Power to Declare Dividends.
3. Redeemable shares regardless of existences of
retained earnings Retained Earnings
4. To effect decrease of capital stock  Accumulated profits realized out of the
5. In close corporation, when there is a deadlock normal and continuous operations of the
in the management of business, the SEC may business after deducting therefrom
order the purchase at their FV distributions to stockholders and
transfers to capital or other accounts
Fractional Shares
 Shares which are less than one share Unrestricted Retained Earnings
 Retained Earnings which have not been
GENERAL RULE: a corporation may only acquire reserved or set aside by the BOD for
its own stocks in the presence of unrestricted some corporate purpose
earnings except when redeemable shares may
be acquired even without surplus profit for as Dividends
long as it will not result to insolvency and in a  Corporate profits set aside, declared, and
close corporation. ordered to be paid of the BOD for
distribution among stockholders ay a
SEC. 41. POWER TO INVEST CORPORATE FUNDS fixed time
IN ANOTHER CORPORATION OR BUSINESS OR FOR
ANY OTHER PURPOSE. Requirements for the declaration of dividend
1. Existence of unrestricted retained
–a private corporation may invest its funds in any earnings
other corporation, business, or for any purpose 2. Resolution of the BOD
other than the primary purpose for which it was 3. Stock dividend additional requirements
organized, when approved by a majority of the a. Vote representing not less than 2/3 of
board of directors or trustees and ratified by the outstanding capital
stockholders representing at least two-thirds b. A corporation must have a significant
(2/3) of the outstanding capital stock, or by at number of authorized unissued shares
least two thirds (2/3) of the members in the case for distribution to stockholders
of nonstock corporations, at a meeting duly
called for the purpose. Cash Dividends Stock Dividends
Part of the general Part of capital
Requisites fund
1. To accomplish its primary purpose Results in cash outlay Does not result in cash
a. Approval of the majority of BOD and outlay
trustees Not subject to levy by Can be levied by
b. Approval of stakeholder or member is not corporate creditors corporate creditors
necessary Declared by the Declared by the
2. To accomplish other than primary purpose majority of the quorum majority of the quorum
BOD BOD of the
a. approved by a majority of the board of
concurrence of the
directors or trustees
stockholders
b. ratified by the stockholders representing at representing at least
least two-thirds (2/3) of the outstanding capital 2/3 of the outstanding
stock, or by at least two thirds (2/3) of the capital stock
members in the case of nonstock corporations, Does not increase the Corporate capital
at a meeting duly called for the purpose. corporate capital increase
c. Notice of the proposed investment and the Declaration creates a No debt is created by
time and place of the meeting shall be debt from the declaration
addressed to each stockholder or member at corporation to each of
the place of residence as shown in the books of its stockholders
the corporation and deposited to the addressee
in the post office with postage prepaid, served
personally, or sent electronically in accordance
  Payment of dividends a stockholder is not Management Contract
a matter of right but a matter of - agreement whereby corporation delegates the
consensus. management of its affairs to another
 Dividends is dependent upon the corporation for a certain period of time
availability of unrestricted retained - not entered for a period longer than five years
earnings for any one term
 Dividends valued at the amount of the
declared divided Requirements:
1. approval by the majority of the quorum of BOD
Stock Dividends 2. Ratification by the stockholders owning at least
- Amount that the corporation transfer from its the majority of the outstanding capital stock or
surplus profit account to its capital account at least a majority of the members in the case
- Amount that the corporation receives in of a nonstock corporation, of both the
consideration of the original issuance of shares managing and the managed corporation, at a
- Distribution of current or accumulated earnings meeting duly called for the purpose:
to the shareholders of a corporation pro rata 3. must be approved by the stockholders of the
based on the number of shares owned managed corporation owning at least two-
thirds (2/3) of the total outstanding capital
Capital dividends stock entitled to vote, or by at least two-thirds
- Refers to the value of the property or assets of (2/3) of the members in the case of a nonstock
a corporation corporation in cases of
a) Interlocking stockholders where a
Capital Subscribed stockholder or stockholders representing
- Total amount of the capital that persons have the same interest of both the managing
agreed to take and pay for which need not and the managed corporations own or
necessarily by can be more than, the par value control more than one-third (1/3) of the
of the shares. total outstanding capital stock entitled to
vote of the managing corporation;
Limitations on Dividends b) Interlocking directors. where a majority of
1. Based on duly recorded stockholdings the members of the board of directors of
2. Dividends among stockholders of the same the managing corporation also constitute a
class must always be pro rata equal and majority of the members of the board of
without discrimination and regardless of the directors of the managed corporation, then
time when shares were required the management contract
3. The right to dividend accrues even if there is SEC. 44. ULTRA VIRES ACTS OF CORPORATIONS.
no SEC approval
4. Declaration of dividends is discretionary upon No corporation shall possess or exercise
the BOD corporate powers other than those conferred by
5. Dividends cannot be declared out of paid-in this Code or by its articles of incorporation and
surplus and revaluation surplus except as necessary or incidental to the exercise
6. Treasury shares cannot be declared as stock or of the powers conferred.
cash dividends.
Ultra vires acts
GENERAL RULE: Stock corporations are prohibited - Act outside or beyond the corporate powers
from retaining surplus profits in excess of one hundred conferred by the Code or by the Articles of
percent (100%) of their paid-in capital stock, except: Incorporation or beyond what is necessary or
1. when justified by definite corporate expansion incidental to the exercise of powers so
projects or programs approved by the board of conferred,
directors;
2. when the corporation is prohibited under any TITLE V. BY LAWS
loan agreement with financial institutions or
creditors, whether local or foreign, from By-laws
declaring dividends without their consent, and - Signifies the rules and regulations or private
such consent has not yet been secured; laws enacted by the corporation to regulate,
3. when it can be clearly shown that such govern and control its own actions affairs and
retention is necessary under special concerns, its stockholders or member and
circumstances obtaining in the corporation, directors and offices with relation thereto and
such as when there is need for special reserve among themselves in their relation to it.
for probable contingencies - Continuing rules of action adopted by the
corporation with the purpose of regulating the
SEC. 43. POWER TO ENTER INTO MANAGEMENT conduct and define the duties of the members
CONTRACT towards the corporation and among
themselves.
SEC. 45. ADOPTION OF BYLAWS members to the BOD or capital stock or
For the adoption of bylaws by the corporation after trustees members of NSC
incorporation
a. the affirmative vote of the stockholders Effectivity:
representing at least a majority of the In all cases, bylaws shall be effective only upon the
outstanding capital stock, or of at least a issuance by the Commission of a certification that the
majority of the members in case of nonstock bylaws are in accordance with this Code.
corporations, shall be necessary.
b. The bylaws shall be signed by the The Commission shall not accept for filing the bylaws
stockholders or members voting for them and or any amendment thereto of any bank, banking
shall be kept in the principal office of the institution, building and loan association, trust
corporation, subject to the inspection of the company, insurance company, public utility,
stockholders or members during office hours. educational institution, or other special corporations
c. A copy thereof, duly certified by a majority of governed by special laws, unless accompanied by a
the directors or trustees and countersigned by certificate of the appropriate government agency to
the secretary of the corporation, shall be filed the effect that such bylaws or amendments are in
with the Commission and attached to the accordance with law.
original articles of incorporation.
For the adoption of bylaws by the corporation before SEC. 46. Contents of Bylaws.
incorporation
- Notwithstanding the provisions of the A private corporation may provide the following
preceding paragraph, bylaws may be adopted in its bylaws: (Summary:
and filed prior to incorporation; in such case, 1. Meeting logistics for directors/trustees.
such bylaws shall be approved and signed by 2. Meeting logistics and notifications for
all the incorporators and submitted to the stockholders/members.
Commission, together with the articles of 3. Quorum and voting procedures.
incorporation. 4. Attendance and voting methods.
5. Proxy forms and voting procedures.
GENERAL RULE: third persons are not bound by by- 6. Directors'/trustees' qualifications, duties,
laws except they have knowledge of it compensation guidelines, and board
representations limits
GENERAL RULE: in the absence of the provisions to 7. Annual election procedures.\
the contrary, by-laws are only subordinate to the 8. Officer election, appointment, and term.
Articles of Incorporation. They are not necessary either 9. Penalties for bylaw breaches.
to the existence of a corporation or to the valid 10. Stock certificate issuance for stock
exercise of power conferred to it. corporations.
11. Matters for corporate affairs and
NOTES: governance, including anti-corruption
1. By-laws are indispensable to corporation measures.
2. The compliance with by-laws will suffice a
perfect corporate personality. SEC. 47. AMENDMENT TO BYLAWS
General Rule: A majority of the board of directors or
Article of Incorporation By-laws trustees, and the owners of at least a majority of the
Condition precedent in Condition subsequent ; outstanding capital stock, or at least a majority of the
the acquisition of absence only arise a members of a nonstock corporation, at a regular or
corporate existence ground for revocation special meeting duly called for the purpose, may
of the franchise or cert amend or repeal the bylaws or adopt new bylaws.
of registration
Constitutes the charter Rules and regulations Exception: The owners of two-thirds (2/3) of the
or fundamental law of adopted by the outstanding capital stock or two-thirds (2/3) of the
the corporation corporation members in a nonstock corporation may delegate to
Executed before Executed before or
the board of directors or trustees the power to amend
incorporation after incorporation
or repeal the bylaws or adopt new bylaws
Amended by the Amended only by the
majority of BOD and majority vote of BOD
trustees abs and majority vote of Effect of the exception: any power delegated to the
stockholders/members stockholders/ member board of directors or trustees to amend or repeal the
representing 2/3 of the bylaws or adopt new bylaws shall be considered as
outstanding capital revoked whenever stockholders owning or representing
stock/ NSC a majority of the outstanding capital stock or majority
The power to amend or The power to amend or of the members shall so vote at a regular or special
repeal the articles of repeal the by-laws or meeting
incorporation cannot adopt new by-laws may
be delegated by the be delegated by the
stockholders or 2/3 of outsnading
Effectivity: The amended or new bylaws shall only be 6. Difficulty in determining participant speaking
effective upon the issuance by the Commission of a order
certification that the same is in accordance with this 7. Greater participant preparation needed
Code and other relevant laws 8. Informal

Binding effects of the By-laws SEC Memorandum Circular No. 15

1. As to directors or trustees, officers and - Nov 30, 2021
stockholders or members - Guidelines to be complied for conferences
- Bound and must comply they are presumed to
know the provisions SEC Memorandum Circular No. 6
2. Third persons - March 12, 2020
- Not bound unless they have knowledge of it. - Guidelines on the attendance and participation
of directors, trustees, stockholders, members
TITLE 5 – MEETINGS and other person of corporations in regular and
special meeting through teleconferencing
Remote Communication
- Transfer of data between two or more devices SEC. 48. KINDS OF MEETINGS.
not located at the same site
Teleconferencing Meetings of directors, trustees, stockholders, or
- Holding a conference among people remote members may be REGULAR OR SPECIAL.
from one another by means of
telecommunication devices such as telephone SEC. 49. REGULAR AND SPECIAL MEETINGS OF
or computer terminals STOCKHOLDERS OR MEMBERS
- Interactive group communication through
electronic medium WHEN?
3 TYPES OF TELECONFERENCING - annually on a date fixed in the bylaws
Videoconferencing - if not so fixed, on any date after April 15 of
- Television like communication Holding a every year as determined by the board of
conference among people in remote locations directors or trustees:
by means of transmitted audio and video
signals REQUIREMENTS
Computer Conferencing a. Held at a proper place
- Printed communication Teleconferencing b. Held at stated date and appointed time
supported by one or more computers c. Called by a proper person
Audio Conferencing d. Person/s designated in the by-laws can call the
- Verbal communication Conference in which meeting or in absence the directors or trustee
people at different locations speak to each or by an officer entrusted with the
other via telephone or internet connections management of the corporation
e. A petitioning stockholder may make the call on
Advantages of Teleconference order of the SEC whenever for any cause, there
1. People who does not attend distant F2f is no perspma; authrorized to call a meeting or
meeting can participate the person authorized refuses
2. Follow-up to earlier meetings can be done with f. Previous notice
ease and little expense g. Quorum
3. Socializing is minimal hence shorter meetings h. That written notice of regular meetings shall be
and more oriented to the primary purpose of sent to all stockholders or members of record
meetings at least twenty-one (21) days prior to the
4. More effective since one can do it from any meeting, unless a different period is required in
location as long as has equipment the bylaws, law, or regulation:
5. Communication between home office and field i. That written notice of regular meetings may be
staff is maximized sent to all stockholders or members of record
6. Severe climate and unreliable transportation through electronic mail or such other manner
may necessitate teleconferencing as the Commission shall allow under its
7. Participants are better prepared guidelines.

Disadvantages of Teleconferencing At each regular meeting of stockholders or members,

1. Technical failures with equipment the board of directors or trustees shall endeavor to
2. Unsatisfactory for complex interpersonal present to stockholders or members the following:
communication 1. The minutes of the most recent regular
3. Impersonal meeting which shall include, among others:
4. Lack of participant familiarity a. A description of the voting and vote
5. Acoustical problems with teleconferencing tabulation procedures used in the previous
rooms meeting;
 b. A description of the opportunity given to  The right to vote of stockholders or members
stockholders or members to ask questions may be exercised in person, through a proxy,
and a record of the questions asked and or when so authorized in the bylaws, through
answers given; remote communication or in absentia
c. (3) The matters discussed and resolutions
reached WAIVING NOTICE OF MEETING
d. (4) A record of the voting results for each - May be expressly or impliedly, by any
agenda item; stockholder or member
e. (5) A list of the directors or trustees, - Rules:
officers and stockholders or members who a. That general waivers of notice in the
attended the meeting; and articles of incorporation or the bylaws shall
f. (6) Such other items that the Commission not be allowed:
may require in the interest of good b. attendance at a meeting shall constitute a
corporate governance and the protection of waiver of notice of such meeting, except
minority stockholders. when the person attends a meeting for the
2. Members' list (nonstock) or stockholder details express purpose of objecting to the
(stock), including voting rights. transaction of any business because the
3. Performance assessment with business meeting is not lawfully called or convened.
changes and strategies. .
4. Financial report with certified financial POSTPONEMENT OF THE MEETING
statements and audit fees in accordance with a. written notice thereof and the reason therefor
this Code and the rules the Commission may shall be sent to all stockholders or members of
prescribe record at least two (2) weeks prior to the date
5. Dividend policy explanation and payment of the meeting, unless a different period is
status and reasons of nonpayment. required under the bylaws, law or regulation
6. Director/trustee profiles, qualifications, and
experience length of service in the corporation, SEC. 50. PLACE AND TIME OF MEETINGS OF
trainings and continuing education attended, STOCKHOLDERS OR MEMBERS
and their board representations in other
corporations Where does meeting shall take place?
7. Attendance report for directors/trustees. - shall be held in the principal office of the
8. Appraisals and performance reports for the corporation as set forth in the articles of
board and the criteria and procedure for incorporation, or, if not practicable, in the
assessment; city or municipality where the principal
9. A director or trustee compensation report office of the corporation is located:
prepared in accordance with this Code and the Provided, That any city or municipality in Metro
rules the Commission may prescribe; Manila, Metro Cebu, Metro Davao, and other
10. Director disclosures on self-dealings and Metropolitan areas shall, for purposes of this
related party transactions; and/or section, be considered a city or municipality.
11. The profiles of directors nominated or seeking
election or reelection. What kind of notice?
NOTE: - Notice of meetings shall be sent through
 A director, trustee, stockholder, or member the means of communication provided in
may propose any other matter for inclusion in the bylaws, which notice shall state the
the agenda at any regular meeting of time, place and purpose of the meetings.
stockholders or members. - Must contain:
 Special meetings of stockholders or members a. The agenda for the meeting;
shall be held at any time deemed necessary or b. A proxy form which shall be submitted to
as provided in the bylaws: Provided, however, the corporate secretary within a reasonable
That at least one (1) week written notice time prior to the meeting;
shall be sent to all stockholders or c. When attendance, participation, and
members, unless a different period is voting are allowed by remote
provided in the bylaws, law or regulation. communication or in absentia, the
 A stockholder or member may propose the requirements and procedures to be
holding of a special meeting and items to be followed when a stockholder or member
included in the agenda. elects either option;
 Unless the bylaws provide for a longer period, d. When the meeting is for the election of
the stock and transfer book or membership directors or trustees, the requirements and
book shall be closed at least twenty (20) days procedure for nomination and election.
for regular meetings and seven (7) days for
special meetings before the scheduled date of General Rule: All proceedings and any business
the meeting. transacted at a meeting of the stockholders or
members, if within the powers or authority of
the corporation, shall be valid even if the SEC. 52. REGULAR AND SPECIAL MEETINGS OF
meeting is improperly held or called: DIRECTORS OR TRUSTEES; QUORUM
Requisites:
1. That all the stockholders or members of the General Rule: BOD should act in the manner and
corporation are present or duly represented at within the formalities prescribed by its charter and by
the meeting general law. Hence they must act as body in a meeting
2. not one of them expressly states at the any action may be questioned by objecting director or
beginning of the meeting that the purpose of shareholder
their attendance is to object to the transaction General Rule: action of BOD that is illegal for lack of
of any business because the meeting is not notice may be ratifies which may be by an express
lawfully called or convened resolution or vote to that effect or may be implied from
adaptation of the act
SEC. 51. QUORUM IN MEETINGS. – Unless otherwise
provided in this Code or in the bylaws, a quorum shall QUORUM OF DIRECTOR’S OR TRUSTEES MEETING
consist of the stockholders representing a majority of General Rule: majority number of directors or
the outstanding capital stock or a majority of the trustees as states in Articles of Incorporation unless it
members in the case of nonstock corporations. and the by-laws provides a greater majority.

QUORUM IN STOCK CORPORATIONS A majority of directors of trustees for a meeting to be

- ascertained and counted on the basis of the valid and a majority of which is 50 + 1 of the vote
outstanding capital stock present directors for a decision to be valid
Outstanding Capital Stock – total shares of
stocks issued under binding subscription contacts VALID CORPORATE ACT
to subscribers or stockholder whether fully or
partially paid, except treasury shares General Rule: every decision reached by at least the
majority of the directors or trustees constituting the
BASIS OF QUORUM quorum unless the election of officers as it requires
- the stock and transfer book cannot be used the vote of a majority of all members of the board.
solely as the basis for determining the quorum
as it does not reflect the totality of shares WHEN?
which have been subscribed. - Regular meetings of the board of directors or
Stock and Transfer Book – book of which records trustees of every corporation shall be held
the names and addresses of all stockholders monthly, unless the bylaws provide otherwise.
arranged alphabetically, the installment paid and - Special meetings of the board of directors or
unpaid on all stokc for which subscription has trustees may be held at any time upon the
made. It is necessary as measure of precaution, call of the president or as provided in the
expediency and convenience.. bylaws.
WHERE?
QUORUM IN NONSTOCK CORPORATIONS - Meetings of directors or trustees of
- only those who are actual, living member with corporations may be held anywhere in or
voting rights shall be counted; dead members outside of the Philippines, unless the
shall not be counted. bylaws provide otherwise.
- Majority members representing the actual
number of voting rights NOTICE
- Notice of regular or special meetings stating
INTERNAL CONTROLS PROCEDURES the date, time and place of the meeting must
- Corporations can issue their own internal be sent to every director or trustee at least
controls embodying the mechanisms for two (2) days prior to the scheduled
participation in meetings and voting through meeting, unless a longer time is provided
remote communication or in absentia in the bylaws.
a. Mechanism to verify the identity and who has NOTES:
the right to vote - A director or trustee may waive this
b. Measures to ensure that all have the requirement, either expressly or impliedly.
opportunity to participate, read or hear - Directors or trustees who cannot physically
discussion substantially attend or vote at board meetings can
c. Mechanism to enable to vote ensuring integrity participate and vote through remote
and secrecy of votes communication that allow them reasonable
d. Procedures for documenting the meeting opportunities to participate. But must notify
e. Mechanism in making records of meeting either the Presiding Officer and the Corporate
video or audio recording Secretary of his intention to note such fact in
f. Othe matters to address administrative, the minutes of the meeting
technical and logistical issues - Directors or trustees cannot attend or vote by
proxy at board meetings.
 - A director or trustee who has a potential 5. Ensure to safe keep and perpetuate in updates
interest in any related party transaction must data storage equipment or facility the visual
recuse from voting on the approval of the and audio recordings
related party transaction without prejudice to 6. Requires those who attended through remote
compliance with the requirements of Section communicate to sign the minutes whenever act
31 of this Code. of signing is practicable on reasonable time
after the meeting
SEC. 53. WHO SHALL PRESIDE AT MEETINGS. –
SEC. 54. RIGHT TO VOTE OF SECURED CREDITORS
The chairman or, in his absence, the president AND ADMINISTRATORS.
shall preside at all meetings of the directors or
trustees as well as of the stockholders or members, General Rule: the pledgor or mortgagor has the
unless the bylaws provide otherwise. right to attend and vote at meetings of stockholders
unless they authorized the pledgee or mortgagee
which authority must be put into writing and recorded
NOTICE OF THE MEETING in the appropriate corporate books.
1. Date time and place General Rule: THERE IS NO TRANSFER OF
2. Agenda ONWERSHIP
3. All pertinent materials for discussion shall be
numbered and marked for easy follow and Note: Executors, administrators, receivers, and other
participation of directors and trustee legal representatives duly appointed by the court may
4. A director of trustee may participate via remote attend and vote in behalf of the stockholders or
communication members without need of any written proxy.
5. Contact info of the corporate secretary or office
staff whom the director or trustee may SEC. 55. VOTING IN CASE OF JOINT OWNERSHIP
communicate OF STOCK. – General Rule: The consent of all the co-
6. When meeting is for election of officers the owners shall be necessary in voting shares of stock
requirements procedure for nomination and owned jointly by two (2) or more persons
election
7. Fact that there will be visual or audio recording Exceptions:
of the meeting a. there is a written proxy, signed by all the co-
8. Other instructions to facilitate participation owners, authorizing one (1) or some of them or
any other person to vote such share or shares:
ROLL CALL b. That when the shares are owned in an “and/or”
a. Upon the order of the Presiding Officer the capacity by the holders thereof, any one of the
corporate secretary will make a roll call and joint owners can vote said shares or appoint a
every attendee shall state for the record the: proxy therefor.
1. Full name and position’
2. Location SEC. 56. VOTING RIGHT FOR TREASURY SHARES.
3. Confirmation that they can clearly hear or see –
each other General Rule: Treasury shares shall have no
4. Confirmation that they received the notice voting right as long as such shares remain in the
including agenda and materials Treasury.
5. Specify the device used
b. Corporate Secretary will confirm and note the SEC. 57. MANNER OF VOTING; PROXIES
participant and certify the existence of quorum
General Rule: Stockholders and members may
OTHER DUTIES OF CORPORATE SECRETARY vote in person or by proxy in all meetings of
1. Ensure that suitable equipmemy and facilities stockholders or members.
are available for the conduct of meeting
through remote communication General Rule: the stockholders or members of
2. Ensure that attendees are able to see and hear corporations may also vote through remote
the other participants clearly and should be communication or in absentia:
able to communicate and understood other Requisites:
party a. When so authorized in the bylaws or by a
3. Ensure that the visual and audio recording are majority of the board of directors
secured b. That the votes are received before the
4. Ensure that the visual and audio recording are corporation finishes the tally of votes.
current and on going that there is no Effect:
interruption. If interrupted will restart from the a. A stockholder or member who participates
point it was stopped with proper statement of through remote communication or in
points in time absentia, shall be deemed present for
purposes of quorum.
 The corporation shall establish the appropriate 2. Verbal communication
requirements and procedures for voting through 3. Conduct
remote communication and in absentia, taking into Note:
account the company’s scale, number of shareholders 1. when the stockholders attends, the proxy is
or members, structure and other factors consistent deemed revoked despite the stockholders
with the basic right of corporate suffrage. appointment
2. Last proxy given revokes all previous proxies
Voting Trust Agreement Proxy SEC. 58. VOTING TRUSTS
Governed by law on trust Governed by law on Voting trust
agency  Trust created by an agreement between a
Trustee acquires legal title Proxy has no legal title to group of stockholders of a corporation and the
to the shares of the shres trustes or by a group of identical agreements
transferring stockholders between individuals stockholders and a
Trustee votes as owner Proxy vote as agent common trustee where over a period of time
Trustee may vote in Proxy must vote in person the control over the stock owned is to be
person or by proxy lodged in the trustees with or without
Trustee is not limited to Proxy can only act at a reservation
act at particular meeting specified stockholders Voting Trust Agreement
meetings  May create a dichotomy between equitable or
Trustee can vote when the Proxy can only vote in the beneficial ownership of the corporate shares of
stockholder is present absence of the owners of stockholders and the legal title on the other
the stock hand.
Agreement must bot Proxy is usually of shorter  An agreement in writing whereby one or more
exceed 5 years at any one duration shareholders consent to transfer their shares to
time except when it is a vest the voting rights for the purpose of
loan conferring upon a trustee or trustees the right
Irrevocable Revocable to vote and other rights pertaining to the
Has the right to inspect Does not have the right to shares for a period not exceeding five (5) years
the books inspect the books at any time: Provided, That in the case of a
Stock certificate shall be No cancellation of the voting trust specifically required as a condition
cancelled stock certificate in a loan agreement, said voting trust may be
for a period exceeding five (5) years but shall
REQUIREMENTS FOR VALIDITY OF PROXY automatically expire upon full payment of the
1. Proxies shall be in writing, signed and filed, by loan.
the stockholder or member, in any form Nature of VTA
authorized in the bylaws and received by the  Results in separation of rights from his other
rights such as:
corporate secretary within a reasonable time
a. Right to receive dividends
before the scheduled meeting.
b. Right to inspect the books
2. Unless otherwise provided in the proxy form, it c. Right to sell certain interests
shall be valid only for the meeting for which it d. Other rights which a stockholder may
is intended. be entitled at the liquidation
3. No proxy shall be valid and effective for a Three Tests of VTA
period longer than five (5) years at any one 1. Voting of the stock are separated from the
time. other attributes of ownership
2. Voting rights granted are intended to be
PURPOSE OF PROXIES irrevocable for a definite period of time
1. For convenience 3. Principal purpose of the grant of voting rights is
2. Assures the presence of quorum to acquire voting control
3. Enables those who do not wish to attend the
Requirements and Limitations imposed on VTA
meeting to protect their interest
1. Must be in writing and notarized and
4. Secures voting control
specify the terms and conditions
2. a period not exceeding five (5) years at
INSTANCES WHERE RIGHT OF PROXY CAN BE any time except loan agreement, said voting
EXERCISED trust may be for a period exceeding five (5)
1. Election of the BOD or Board of trustees years but shall automatically expire upon full
2. Voting in case of joint ownership of stock payment of the loan.
3. Voting by trustee under voting trust agreement 3. A certified copy of such agreement shall
4. Voting by members in nonstock corporation be filed with the corporation and with the
5. Cased of pledge and mortgage Commission; otherwise, the agreement is
6. All meetings of stockholders or members ineffective and unenforceable.
7. Other matters as may be provided in the by- 4. The certificate or certificates of stock
laws covered by the voting trust agreement
shall be cancelled and new ones shall be
MODE REVOCATION OF PROXIES issued in the name of the trustee or
1. Formal notice
 trustees, stating that they are issued pursuant
to said agreement.
5. The books of the corporation shall state
that the transfer in the name of the
trustee or trustees is made pursuant to the
voting trust agreement.
6. The trustee or trustees shall execute and
deliver to the transferors, voting trust
certificates, which shall be transferable in the
same manner and with the same effect as
certificates of stock.
7. The voting trust agreement filed with the
corporation shall be subject to
examination by any stockholder of the
corporation in the same manner as any
other corporate book or record: Provided,
That both the trustor and the trustee or
trustees may exercise the right of inspection of
all corporate books and records in accordance
with the provisions of this Code.
8. No voting trust agreement shall be
entered into for purposes of
circumventing the laws against anti-
competitive agreements, abuse of dominant
position, anti-competitive mergers and
acquisitions, violation of nationality and capital
requirements, or for the perpetuation of fraud.
9. Unless expressly renewed, all rights
granted in a voting trust agreement shall
automatically expire at the end of the
agreed period.