TITLE X Section 82. Effect of Demand and Termination of Right.

- From the time of demand for

payment of the fair value of a stockholder's shares until either the abandonment of the
APPRAISAL RIGHT corporate action involved or the purchase of the said shares by the corporation, all rights
accruing to such shares, including voting and dividend rights shall immediately be
Section 80. When the Right of Appraisal May Be Exercised. - Any stockholder of a restored.
corporation shall have the right to dissent and demand payment of the fair value of the
shares in the following instances: Section 83. When Right to Payment Ceases. - No demand for payment under this Title
may be withdrawn unless the corporation consents thereto. If, however, such demand for
(a) In case an amendment to the articles of incorporation has the effect of payment is withdrawn with the consent of the corporation, or if the proposed corporate
changing or restricting the rights of any stockholder or class of shares, or of action is abandoned or rescinded by the corporation or disapproved by the Commission
authorizing preferences in any respect superior to those of outstanding shares of where such approval is necessary, or if the Commission where such stockholder is not
any class, or of extending or shortening the term of corporate existence; entitled to the appraisal right, then the right of the stockholder to be paid the fair value of
the shares shall cease, the status as the stockholder shall be restored, and all dividend
distributions which would have accrued on the shares shall be paid to the stockholder.
(b) In case of sale, lease, exchange, transfer, mortgage, pledge or other
disposition of all or substantially all of the corporate property and assets as
provided in this Code; Section 84. Who Bears Costs of Appraisal. - The costs and expenses of appraisal shall
be borne by the corporation, unless the fair value ascertained by appraisers is
approximately the same as the price which the corporation may have offered to pay the
(c) In case of merger or consolidation; and
stockholder, in which the corporation may have offered to pay the stockholder, in which
case they shall be borne by the latter. In the case of an action to recover such fair value,
(d) In case of investment of corporate funds for any purpose other than the all costs and expenses shall be assessed against the corporation, unless the refusal of
primary purpose of the corporation. the stockholder or receive payment was unjustified.

Section 81. How Right is Exercised. - The dissenting stockholder who votes against a Section 85. Notation on Certificates; Rights of Transferee. - Within ten (10) days after
proposed corporate action may exercise the right of appraisal by making a written demanding payment for shares held, a dissenting stockholder shall submit the
demand on the corporation for the payment of the fair value of shares held within thirty certificates of stock representing the shares to the corporation for notation that such
(30) days from the date on which the vote was taken: Provided, That failure to make the representing the shares to the corporation for notation that such shares are dissenting
demand within such perios shall be deemed a waiver of the appraisal right. If the shares. Failure to do so shall, at the option of the corporation, terminate the rights under
proposed corporate action is implemented, the corporation shall pay the stockholder, this Title. If shares represented by the certificates bearing such notation are transferred,
upon surrender of the certificate or certificates of stock representing the stockholder's and the certificates consequently cancelled, the rights of the transferor as a dissenting
shares, the fair value thereof as of the day before the vote was taken excluding any stockholder under this Title shall cease and the transferee shall have all the rights of a
appreciation or depreciation in anticipation of such corporate action. regular stockholder; and all dividend distributions which would have accrued on such
shares shall be paid to the transferee.
If, within sixty (60) days form the approval of the corporate action by the stockholders,
the withdrawing stockholder and the corporation cannot agree on the fair value of the
shares, it shall be determined and appraised by three (3) disinterested persons, one of
whom shall be named by the stockholder, another by the corporation and the third by the
two (2) thus chosen. The findings of the majority of the appraisers shall be final, and their
award shall be paid by the corporation within thirty (30) days after such award is
made: Provided, That no payment shall be made to any dissenting stockholder or unless
the corporation has unrestricted retained earnings in its books to cover such
payment: Provided, further, That upon payment by the corporation of the agreed or
awarded price, the stockholder shall forthwith transfer the shares to the corporation.
 TITLE XI Section 91. Election and Term of Trustees. - The number of trustees shall be fixed in the
NONSTOCK CORPORATION articles of incorporation or bylaw which may or may not be more than fifteen (15). They
shall hold office for not more than three (3) years until their successors are elected and
Section 86. Definition. - For purposes of this Code and subject to its provisions on qualified. Trustees elected to fill vacancies occurring before the expiration of a particular
dissolution, a nonstock corporation is one where no part of its income is distributable as term shall hold office for the unexpired period.
dividends to its members, trustees, or officers: Provided, That any profit which a
nonstock corporation may obtain incidental to its operations shall, whenever necessary Except with respect to independent trustees of nonstock corporation shall be elected as
or proper, be used for the furtherance of the purpose of purposes for which the trustee.
corporation was organized, subject to the provisions of this Title.
Unless otherwise provided in the articles of incorporation or the bylaws, the members
The provisions governing the stock corporations, when pertinent, shall be applicable to may directly elect officers of a nonstock corporation.
nonstock corporations except as may be covered by specific provisions of this Title.
Section 92. List of Members and Proxies, Place of Meetings. - The corporation shall, at
Section 87. Purposes. - Nonstock corporations may be formed or organized for all times, keep a list of its members and their proxies of record twenty (20) days prior to
charitable, religious, educational, professional, cultural, fraternal, literary, scientific, any scheduled election. The bylaws may provide that the members of a nonstock
social, civic service, or similar purposes. like trade industry, agricultural and like corporation may hold their regular or special meetings at any place even outside the
chambers, or any combination thereof, subject to the special provisions of this Title place where the principal office of the corporation is located: Provided, That proper
governing particular classes of nonstock corporations. notice is sent to all members indicating the date, time, and place of meeting: Provided,
further, That the place of meeting shall be within the Philippine territory.
CHAPTER I
MEMBERS CHAPTER III
DISRIBUTION OF ASSETS IN NONSTOCK CORPORATIONS
Section 88. Right to Vote. - The right of the members of any class or classes to vote
may be limited, broadened, or denied to the extent specified in the articles of Section 93. Rules of Distribution. - The assets of a nonstock corporation undergoing the
incorporation or the bylaws. Unless so limited, broadened, or denied, each member, process of dissolution for reasons other than those set forth in Section 139 of this Code
regardless of class, shall be entitled to one (1) vote. shall be applied and distributed as follows:

Unless otherwise provided in the articles of incorporation or the bylaws, a member may (a) All liabilities and obligations of the corporation shall be paid, satisfied and
vote by proxy, in accordance with the provisions of this Code. The bylaws may likewise discharged, or adequate provision shall be made therefor:
authorize voting through remote communication and/or in absentia.
(b) Assets held by the corporation upon a condition requiring return, transfer or
Section 89. Nontransferability of Membership. - Membership in a nonstock corporation conveyed in accordance with such requirements;
and all rights arising therefrom are personal and nontransferable, unless the articles of
incorporation or the bylaws otherwise provide. (c) Assets received and held by the corporation subject to limitations permitting
their use only for charitable religious, benevolent, educational or similar purpose,
Section 90. Termination of Membership. - Membership shall be terminated in the but not held upon a condition requiring return, transfer or conveyance by reason
manner and for the cause provided in the articles of incorporation or the bylaws. of the dissolution, shall be transferred or conveyed to one (1) or more
Termination of membership shall extinguish all rights of a member in the corporation or in corporations, societies or organizations engaged in activities in the Philippines
its property, unless otherwise provided in the articles of incorporation or the bylaws. substantially similar to those of the dissolving corporation according to a plan of
distribution adopted pursuant to this Chapter;
CHAPTER II
TRUSTEES AND OFFICERS (d) Assets other than those mentioned in the preceding paragraphs, if any, shall
be distributed in accordance with the provisions of the articles of incorporation or
 the bylaws, to the extent that the articles of incorporation or the bylaws extent TITLE XII
that the articles of incorporation or the bylaws determine the distributive rights of CLOSE CORPORATIONS
members, or any class or classes of members, or provide for distribution; and
Section 95. Definition and Applicability of Title. - A close corporation, within the meaning
(e) In any other case, assets may be distributed to such person, societies, of this Code, is one whose articles of incorporation provides that: (a) all the corporation's
organizations or corporations, whether or not organized for profit, as may be issued stock of all classes, exclusive of treasury shares, shall be held of record by not
specified in a plan of distribution adopted pursuant to this Chapter. more than a specified number of persons, not exceeding twenty (20); (b) all the issued
stock of all classes shall be subject to one (1) or more specified restrictions on transfer
Section 94. Plan of Distribution of Assets. - A plan providing for the distribution of permitted by this Title; and (c) the corporation shall not list in any stock exchange or
assets, consistent with the provisions of this Title, may be adopted by a nonstock make any public offering of its stocks of any class. Nothwithstanding the foregoing, a
corporation in the process of dissolution in the following manner: corporation shall not be deemed a close corporation when at least two-thirds (2/3) of its
voting stock or voting rights is owned or controlled by another corporation which is not a
(a) The board of trustees shall, by majority vote, adopt a resolution close corporation within the meaning of this Code.
recommending a plan of distribution and directing the submission thereof to a
vote at a regular or special meeting of members having voting rights; Any corporation may be incorporated as a close corporation, except mining or oil
companies, stock exchanges, banks, insurance companies, public utilities, educational
(b) Each member entitled to vote shall be given a written notice setting forth the institutions and corporations declared to be vested with public interest in accordance with
proposed plan of distribution or summary thereof and the date, time and place of the provisions of this Code.
such meeting within the time and in the manner provided in this Code for the
giving of notice of meetings; and The provisions of this Title shall primarily govern close corporations: Provided, That other
Titles shall primarily govern close corporations: Provided, That other Titles in this Code
(c) Such plan of distribution shall be adopted upon approval of at least two-thirds shall apply suppletorily, except as otherwise provided under this Title.
(2/3) of the members having voting rights present or represented by proxy at
such meeting. Section 96. Articles of Incorporation. - The articles of incorporation of a close corporation
may provide for:

(a) A classification of shares or rights, the qualifications for owning or holding the
same, and restictions on their transfers, subject to the provisions of the following
section;

(b) A classification of director into one (1) or more classes, each of whom may be
voted for and elected solely by a particular class of stock; and

(c) Greater quorum or voting requirements in the meetings of stockholders or

directors than those provided in this Code.

The articles of incorporation of a close corporation may provide that the business of the
corporation may provide that the business of the corporation shall be managed by the
stockholders of the corporation rather than by a board of directors. So long as this
provision continues in effect, no meeting of stockholders need be called to elect
directors: Provided, That the stockholders of the corporation shall be deemed to be
directors for the purpose of applying the provisions of this Code, unless the context
clearly requires otherwise: Provided, further, That the stockholders of the corporation (e) The provisions of subsection (d) shall not be applicable if the transfer of stock,
shall be subject to all liabilities of directors. though contrary to subsections (a), (b) or (c), has been consented to by all
stockholders of the close corporation, or if the close corporation has amended its
The articles of incorporation may likewise provide that all officers ro employees or that articles of incorporation in accordance with this Title.
specified officers or employees shall be elected or appointed by the stockholders,
instead of by the board of directors. (f) The term "transfer", as used in this section, is not limited to a transfeer for
value.
Section 97. Validity of Restrictions on Transfer of Shares. - Restrictions on the right to
transfer shares must appear in the articles of incorporation, in the bylaws, as well as in (g) The provisions of this section shall not impair any right which the transferee
the certificate of stock; otherwise, the same shall not be binding on any purchaser in may have to either rescind the transfer or recover the stock under any express or
good faith. Said restrictions shall not more onerous than granting the existing implied warranty.
stockholders or the corporation the option to purchase the shares of the transferring
stockholder may sell their shares to any third person. Section 99. Agreements by Stockholders. -

Section 98. Effects if Issuance or Transfer of Stock in Breach of Qualifying Conditions. - (a) Agreements duly signed and executed by and among all stockholders before
the formation and organization of a close corporation shall survive the
(a) If a stock of a close corporation is issued or transferred to any person who is incorporation and shall continue to be valid and binding between such
not eligible to be a holder thereof under any provision of the articles of stockholders, if such be their intent, to the extent that such agreements are
incorporation, and if the certificate for such stock conspicuously shows the consistent with the articles of incorporation, irrespective of where the provisions
qualifications of the persons entitled to be holders of record thereof, such person of such agreements are contained except those required by this Title to be
is conclusively presumed to have notice of the fact of the ineligibility to be a embodied in said articles of incorporation.
stockholder.
(b) A written agreement signed by two (2) or more stockholders may provide that
(b) If the articles of incorporation of a close corporation states the number of in exercising any voting right, the shares held by them shall be voted as provided
persons, not exceeding twenty (20), who are entitled to be stockholders of or as agreed, or in accordance with a procedure agreed upon by them.
record, and if the certificate for such stock conspicuously states such number,
and the issuance or transfer of stock to any person would cause the stock to be (c) No provision in a written agreement signed by the stockholders, relating to
held by more than such number of persons, the person to whom such stock is any phase of corporate affairs, shall be invalidated between the parties on the
issued of transferred is conclusively presumed to have notice of this fact. ground that its effect is to make them partners among themselves.

(c) If a stock certificate of a close corporation conspicuously shows a restriction (d) A written agreement among some or all the stockholders in a close
on transfer of the corporation has been issued or transferred has or is corporation shall not be invalidated on the ground that it relates to the conduct of
conclusively presumed to have notice of the fact that the stock in violation of such the business and affairs of the corporation as to restrict or interfere with the
restriction, the transferee is conclusively presumed to have notice of the fact that discretion or powers of the board of directors: Provided, That such agreement
the stock was acquired in violation of the restriction. shall impose on the stockholders who are parties thereto the liabilities for
managerial acts imposed on directors by this Code.
(d) Whenever a person to whom stock of a close corporation has been issued or
transferred has or is conclusively presumed under this section to have notice of: (e) Stockholders actively engaged in the management or operation of the
(1) the person's ineligibility to be a stockholder of the corporation; or (2) that the business and affairs of a close corporation shall be held to strict fiduciary duties
transfer of stock would cause the stock of the corporation to be held by more to each other and among themselves. The stockholders shall be personally liable
than the number of persons permitted under its articles of incorporation ; or (3) for corporate torts unless the corporation has obtained reasonably adequate
that the transfer violates a restriction on transfer of stock, the corporation may, at liability insurance.
its option, refuse to register the tansfer in the name of the transferee.
Section 100. When a Board Meeting is Unnecessary or Improperly Held. - Unless the contained in the articles of incorporation, bylaws, ot any stockholders' agreement; (b)
bylaws provide otherwise, any action taken by the directors of a close corporation without cancelling, altering or enjoining a resolution or act of the corporation or its board of
a meeting called properly and with due notice shall nevertheless be deemed valid if: directors, stockholders, officers, or other person party to the action; (d) requiring the
purchase at their fair value of shares of any stockholder, either by the corporation
(a) Before or after such action is taken, a written consent thereto is signed by all regardless of the availability or unrestricted retained earnings in its, books or by the other
the directors; or stockholder; (e) appointing a provisional director; (f) dissolving the corporation; or (g)
granting such other relief as the circumstances may warrant.
(b) All the stockholders have actual or implied knowledge of the action and make
no prompt objection in writing; or A provisional director shall be an impartial person who is neither a stockholder nor a
creditor of the corporation or any of its subsidiaries or affiliates, and whose further
(c) The directors are accustomed to take informal action with the express or qualifications, if any, may be determined by the Commission. A provisional director is not
implied acquiescence of all the stockholders; or a receiver of the corporation and does not have the title and powers of a custodian or
receiver. A provisional director shall have all the rights and powers of a duly elected
director, including the right to be notified of and to vote at meetings of directors until
(d) All the directors have express or implied knowledge of the action in question
removed by order of the Commission pr by all the stockholders. The compensation of the
and none of them makes prompt objection in writing.
provisional director shall be determined by agreement between such provisional director
and the corporation.
An action within the corporate powers taken at a meeting held without proper call or
notice is deemed ratified by a director who failed to attend, unless after having
Section 104. Withdrawal of Stockholder or Dissolution of Corporation. - In addition and
knowledge thereof, the director promptly files his written objection with the secretary of
without prejudice to other rights and remedies available under this Title, any stockholder
the corporation.
of a close corporation may, for any reason, compel the corporation to purchase shares
held at fair value, which shall not be less than the par or issued value, when the
Section 101. Preemptive Right in Close Corporations. - The preemptive right of corporation has sufficient assets in its books to cover its debts and liabilities exclusive of
stockholders in close corporations shall extend to all stock to be issues, including capital stock: Provided, That any stockholder of a close corporation may, by written
reissuance of services, or in payment or corporate debts, unless the article s of petition to the Commission, compel the dissolution of such corporation whenever any
incorporation provide otherwise. acts of the directors, officers or those in control whenever any acts of the directors,
officers, or those in control of the corporation are illegal, fraudulent, dishonest,
Section 102. Amendment of Articles of Incorporation. - Any amendment to the articles of oppressive or unfairly prejudicial to the corporation or any stockholder, or whenever
incorporation which seeks to delete or remove any provision required by this Title or to corporate assets are being misapplied or wasted.
reduce a quorum or voting requirement stated in said articles of incorporation shall
require affirmative vote of at least two-thirds (2/3) of the outstanding capital, whether with
or without voting rights, or of such greater proportion of shares as may be specifically
provided in the articles of incorporation for amending, deleting or removing any of the
aforesaid provisions, at a meeting duly called for this purpose.

Section 103. Deadlocks. Nowithstanding any contrary provision in the close

corporation's articles of incorporation, bylaws, or stockholders' agreement, if the directors
or stockholders are so divided on the management of the corporation's business and
affairs that the votes required for a corporate action canot be obtained, with the
consequence that the business and affairs that the votes required for that the business of
the corporation can lo longer be conducted to the advantage of the stockholders
generally, the Commission, upon written petition by any stockholder, shall have the
power to arbitrate the dispute. In the exercise o such power, the Commission shall have
authority to make appropriate orders, such as: (a) cancelling or altering any provision
 TITLE XIII denomination, sect or church must file with the Commission articles of incorporation
SPECIAL CORPORATIONS setting forth the following:

CHAPTER I (a) That the applicant chief archbishop, bishop, priest. Minister, rabbi, or
EDUCATIONAL CORPORATIONS presiding elder represents the religious denomination, set or church which
desires to become a corporation sole;
Section 105. Incorporation. - Education corporations shall be governed by special laws
and by the general provisions of this Code. (b) That the rules, regulations and discipline of the religious denomination, sect
or church are consistent with becoming a corporation sole and do not forbid it;
Section 106. Board of Trustees. - Trustees of educational institutions organized as
nonstock corporations shall not be less than five (5) nor more than fifteen (c) That such chief archbishop, bishop, priest, minister, rabbi or presiding elder is
(15): Provided, That the number of trustees shall be in multiples of five (5). charged with the administration of the temporalities and the management of the
affairs, estate and properties of the religious denomination, sect or church within
Unless otherwise provided in the articles of incorporation or bylaws, the board of trustees the territorial jurisdiction, so described succinctly in the articles of incorporation;
of incorporated schools, colleges, or other institutions of learning shall, as soon as
organized, so classify themeselves that the term of office of one-fifth (1/5) of their (d) The manner by which vacancy occurring in the office of chief archbishop,
number shall expire every year. Trustees thereafter elected to fill vacancies, occurring bishop, priest, rabbi or presiding elder is required to be filled, according to the
before the expiration of a particular term shall hold office only for the unexpired period. rules, regulations or discipline of the religious denomination, sect or church; and
Trustees elected thereafter to fill vacancies caused by expiration of term shall hold office
for five (5) years. A majority of the trustees shall constitute a quorum for the transaction (e) The place where the principals office of the corporation sole is to be
of business. The powers and authority of trustees shall be defined in the bylaws. established and located, which place must be within the territory of the
Philippines.
For institutions organized as stock corporations, the number and term of directors shall
be governed by the provisions on stock corporations. The articles of incorporation may include any other provisions not contrary to law for the
regulation of the affairs of the corporation.
CHAPTER II
RELIGIOUS CORPORATIONS Section 110. Submission of the Articles of Incorporation. - The articles of the
incorporation must be verified, bu affidavit or affirmation of the chief archbishop, bishop,
Section 107. Classes of Religious Corporations. - Religious corporations may be priest, minister, rabbi, presiding elder, as the case may be, and accompanied by a copy
incorporated by one (1) or more persons. Such corporations may be classified into of the commission, certificate of election or letter of appointment of such chief
corporations sole and religious societies. archbishop, bishop, priest, minister, rabbi or presiding elder, as the case may be, and
accompanied by a copy of the commission, certificate of election or letter of appointment
Religious corporations shall be governed by this Chapter and by the general provisions of such chief archbishop, bishop, priest, minister, rabbi, or presiding elder, duly certified
on nonstock corporations insofar as applicable. to be correct by any notary public.

Section 108. Corporation Sole. - For the purpose of administering and managing, as From and after filing with the Commission of the said articles of incorporation, verified by
trustee, the affairs, property and temporalities of any religious denomination, sect or affidavit or affirmation, and accompanied by the documents mentioned in the preceding
church, a corporation sole may be formed by the chief archbishop, bishop, priest, paragraph, such chief archbishop, bishop, priest, minister, rabbi, or presiding elder shall
minister, rabbi, or other presiding elder of such religious denomination, sect or church. become a corporation sole and all temporalities, estate and properties of the religious
denomination, sect or church theretofore administered or manage as such chief
Section 109. Articles of Incorporation. - In order to become a corporation sole, the chief archbishop, bishop, priest, minister, rabbi, or presiding elder shall be personally held in
archbishop, bishop, priest, minister, rabbi, or presiding elder of any religious trust as a corporation sole, for the use, purpose, exclusive benefit and on behalf of the
religious denomination, sect or church, including hospitals, schools, colleges, orphan (d) The names and addresses of the persons who are to supervise the winding
asylums parsonages, and cemeteries thereof. up of the affairs of the corporation.

Section 111. Acquisition and Alienation of Property. - A corporation sole may purchase Upon approval of such declaration of dissolution by the Commission, the corporation
and hold real estate and personal property for each church, charitable, benevolent, or shall cease to carry on its operations except for the purpose of winding up its affairs.
educational purposes, and may received bequests or gifts for such purposes. Such
corporation may sell or mortgage real property held by it by obtaining an order for that Section 114. Religious Societies. - Unless forbidden by the competent authority, the
purpose from the Regional Trial Court of the province where the property is situated Constitution, pertinent, rules, regulations, or discipline of the religious denomination, sect
upon proof that the notice of the application for leave to sell or mortgage has been made or church of which it is part, any religious society, religious order, diocese, or synod, or
through publication or as directed by the Court, and that it is in the interest of the district organization of any religious denomination, sect or church, may, upon written
corporation that leave to sell or mortgage be granted. The application for leave to sell or consent and/or by an affirmative vote at a meeting called for the purpose of at least two-
mortgage must be made by petition, duly verified, by the chief archbishop, bishop, priest, thirds (2/3) of its membership, incorporate for the administration of its temporalities or for
minister, rabbi, or presiding elder acting as corporation sole, and may be opposed by any the management of its affairs, properties, and estate by filing the management of its
member of the religious denomination, sect or church represented by the corporation affairs, properties, and estate by filing with the Commission, articles of incorporation
sole: Provided, That in cases where the rules, regulations, and discipline of the religious verified by the affidavit of the presiding elder, secretary, or clerk or other member of such
denomination, set or church, religious society, or colder concerned represented by such religious society or religious denomination, sect or church, setting forth the following:
corporation sole regulate the method of acquiring, holding, selling, and mortgaging real
estate and personal property, such rules, regulations and discipline shall govern, and the (a) That the religious society or religious order, or diocese, synod, or district
intervention of the courts shall not be necessary. organization is a religious organization of religious denomination, sect or church;

Section 112. Filling of Vacancies. - The successor in the office of any chief archbishop, (b) That at least two-thirds (2/3) of its membership has given written consent or
bishop, priest, minister, rabbi, or presiding elder in a corporation sole shall become the has voted to incorporate, at a duly convened meeting of the body;
corporation sole on their accession to office and shall be permitted to transact business
as such upon filing a copy of their commission, certificate of election, or letters of
(c) That the incorporation of the religious society or religious order, or diocese,
appointment, duly certified by any notary public with the Commission.
synod, or district organization is not forbidden by competent, authority or by the
Constitution, rules, regulations or discipline of the religious denomination, sect or
During any vacancy in the office of chief archbishop, bishop, priest, minister, rabbi, or church of which it forms part;
presiding elder of any donomination, sect or church incorporated as a corporate sole, the
person or persons authorized by the rules, regulations or discipline of the religious
(d) That the religious society or religious order, or diocese, synod, or district
denomination, sect or church represented by the corporation sole to administer the
organization desires to incorporate for the administration of its affairs, properties
temporalities and manage the affairs, estate, and properties of the corporation sole shall
and estate;
exercise all the powers and authority of the corporation sole during such vacancy.
(e) The place within the Philippines where the principal office of the corporation is
Section 113. Dissolution. - A corporation sole may be dissolve and its affairs settled
to be established and located; and
voluntarily by submitting to the Commission a verified declaration of dissolution, setting
forth:
(f) The names, nationalities, and residence addresses of the trustees, not less
than five (5) no more than fifteen (15), elected by the religious society or religious
(a) The name of the corporation;
order, or the diocese, synod or district organization to serve for the first year or
such other period as may be prescribed by the laws of the religious society or
(b) The reason of dissolution and winding up; religious order, or of the diocese, synod, or district organization.

(c) The authorization for the dissolution of the corporation by the particular CHAPTER III
religious denomination, sect or church; and ONE PERSON CORPORATIONS
Section 115. Applicability of Provisions to One Person Corporations. - The provisions of The single stockholder may not be appointed as the corporate secretary.
this Title shall primarily apply to One Person Corporations. Other provisions of this Code
apply suppletory, except as otherwise provided in this Title. A single stockholder who is likewise the self-appointed treasurer of the corporation shall
give a bond to the Commission in such a sum as may be required: Provided, That the
Section 116. One Person Corporation. - A One Person Corporation is a corporation with said stockholder/treasurer shall undertake in writing to faithfully administer the One
a single stockholder: Provided, That only a natural person, trust, or an estate may form a person Corporation's funds to be received as treasurer, and to disburse and invest the
One Person Corporation. same according to the articles of incorporation as approved by the Commission. The
bond shall be renewed every two (2) years or as often as may be required.
Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies,
and non-chartered government-owned and -controlled corporations may not incorporate Section 123. Special Functions of the Corporate Secretary. - In addition to the functions
as ONe Person Corporations: Provided, further, That a natural person who is licensed to designated by the One Person Corporation, the corporate secretary shall:
exercise a profession may not organize as a One Person Corporation for the purpose of
exercising such profession except as otherwise provided under special laws. (a) Be responsible for maintaining the minutes book and/or records of the
corporation;
Section 117. Minimum Capital Stock Not Required for One Person Corporation. - A One
Person Corporation shall not be required to have a minimum authorized capital stock (b) Notify the nominee or alternate nominee of the death or incapacity of the
except as otherwise provided by special law. single stockholder, which notice shall be given no later than five (5) days from
such occurrence;
Section 118. Articles of Incorporation. A One Person Corporation shall file articles of
incorporation in accordance with the requirements under Section 14 of this Code. It shall (c) Notify the Commission of the death of the single stockholder within five (5)
likewise substantially contain the following: days from such occurrence and stating in such notice he names, residence
addresses, and contact details of all known legal heirs; and
(a) If the single stockholder is a trust or an estate, the name, nationality, and
residence of the trustee, administrator, executor, guardian, conservator, (d) Call the nominee or alternate nominee and the known legal heir to meeting
custodian, or other person exercising fiduciary duties together with the proof of and advise the legal heirs with regard to, among others, the election of a new
such authority to act on behalf of the trust or estate; and director, amendment of the articles of incorporation, and other ancillary and/or
consequential matters.
(b) Name, nationality, residence of the nominee and alternate nominee, and the
extent, coverage and limitation of the authority. Section 124. Nominee and Alternate Nominee. - The single stockholder shall designate
a nominee and an alternate nominee who shall, in the event of the single stockholder's
Section 119. Bylaws. - The One Person Corporation is not required to submit and file death or incapacity, take the place of the single stockholder as director and shall manage
corporate bylaws. the corporation's affairs.

Section 120. Display of Corporate Name. - A One Person Corporation shall indicate the The articles of incorporation shall state the names, residence addresses and contact
letters "OPC" either below or at the end of its corporate name. details of the nominee and alternate nominee, as well as the extent and limitations of
their authority in managing the affairs of the One Person Corporation until the
Section 121. Single Stockholder as Director, President. - The single stockholder shall be stockholder, by self determination, regains the capacity to assume such duties.
the sole director and president of the One Person Corporation.
In case of death or permanent incapacity of the single stockholder, the nominee shall sot
Section 122. Treasurer, Corporate Secretary, and Other Officers. - Within fifteen (15) as director and manage the affairs of the One Person Corporation until the legal heirs of
days from the issuance of its certificate or incorporation, the One Person Corporation the single stockholder have been lawfully determined, and the heors have designated
shall appoint a treasurer, corporate secretary, and other officers as it may deem one of them or have agreed that the estate shall be the single stockholder of the One
necessary, and notify the Commission thereof within five (5) days from appointment. Person Corporation.
The alternate nominee shall sit as director and manage the One Person Corporation in Section 130. Liability of Single Shareholder. - A sole shareholder claiming limited liability
case of the nominee's inability, incapacity, death, or refusal to discharge the functions as has the burden of affirmatively showing that the corporation was adequately financed.
director and manager of the corporation, and only for the same term and under the same
conditions applicable to the nominee. Where the single stockholder cannot prove that the property of the One Person
Corporation is independent of the stockholder's personal property, the stockholder shall
Section 126. Change of Nominee or Alternate Nominee. - The singe stockholder may, at be jointly and severally liable for the debts and other liabilities of the One Person
any time, change its nominee and alternate nominee by submitting to the Commission Corporation.
the names of the new nominees and their corresponding written consent. For this
purpose, the articles of incorporation need not be amended. The principles of piercing the corporate veil applies with equal force to One Person
Corporations as with other corporations.
Section 127. Minute Book. - A One Person Corporation shall maintain a minutes book
which shall contain all actions, decisions, and resolutions taken by the One Person Section 131. Conversion from an Ordinary Corporation to a One Person
Corporation. Corporation. When a single stockholder acquires all the stocks of an ordinary stock
corporation, the later may apply for conversion into a One Person Corporation, subject to
Section 128. Records in Lieu of Meetings. - When action is needed on any matter, it the submission of such documents as the Commission may require. If the application for
shall be sufficient to prepare a written resolution, signed and dated by the single conversion is approved, the Commission shall issue a certificate of filing of amended
stockholder; and recorded in the minutes book of the One Person Corporation. The date articles of incorporation reflecting the conversion. The One Person Corporation
of recording in the minutes for all purposes under this Code. converted from an ordinary stock corporation shall succeed the later and be legally
responsible for all the latter's outstanding liabilities as of the date of conversion.
Section 129. Reportorial Requirements. - The One Person Corporation shall submit the
following within such period as the Commission may prescribe: Section 132. Conversion from One Person Corporation to an Ordinary Stock
Corporation. - A One Person Corporation may be converted into an ordinary stock
(a) Annual financial statements audited by an independent certified public corporation after due notice to the Commission of such fact and of the circumstances
accountant: Provided, That if the total assets or total liabilities of the corporation leading to the conversion, and after compliance with all other requirements for stock
are less than Six hundred thousand pesos (₱600,000.00), the financial corporations under this Code and applicable rules. Such notice shall be filed with the
statements shall be certified under oath by the corporation's treasurer and Commission within sixty (60) days from the occurrence of the circumstances leading to
president; the conversion into an ordinary stock corporation. If all requirement a have been
complied with, the Commission shall issue a certificate of filing or amended articles of
(b) A report containing explanations or comments by the president on every incorporation reflecting the conversion.
qualification, reservation, or adverse remark or disclaimer made by the auditor in
the latter's report; In case of death if the single stockholder, the nominee or alternate nominee shall transfer
the shares to the duly designated legal heir or estate within seven (7) days from receipt
(c) A disclosure of all self-dealings and related party transactions entered into of either an affidavit of heirship or self-adjudication executed by a sole heir, or any other
between the One Person Corporation and the single stockholder; and legal document declaring the legal heirs of the single stockholder and notify the
Commission of the transfer. Within sixty (60) days from the transfer of the shares, the
legal heirs shall notify the Commission of their decision to either wind up and dissolve the
(d) Other reports as the Commission may require.
One Person Corporation or convert it into an ordinary stock corporation.
For the purpose of this provision, the fiscal year of a One Person Corporation shall be
The ordinary stock corporation converted from One Person Corporation shall succeed
that set forth in its articles of incorporation or, in the absence thereof, the calendar year.
the latter and be legally responsible for all the latter's outstanding liabilities as of the date
of conversion.
The Commission may place the corporation fail to submit the reportorial requirements
three (3) times, consecutively or intermittently, within a period of five (5) years.