Sie sind auf Seite 1von 9

The Revised Corporation Code of the Philippines:

Changes and Developments in Corporation Law


by Atty. Nico B. Valderrama, CPA, MPM
Posted on February 22, 2019

The long-anticipated revision and update of the corporation law have now been realized. With the passage of the
Revised Corporation Code of the Philippines (RCC) or RA 11232, the rules governing corporations may now
address the current concerns of corporations and would-be corporations. It aims to further ease the formation of
corporations and filing of applications and reports which have frustrated those who deal with the bureaucracy. It
empowers the SEC to fully enforce the new law. It also introduced new rules that align with developments in
technology and new laws that came after the old Corporation Code or BP 68 like the Philippine Deposit Insurance
Corporation Charter or RA 3591, the New Central Bank Act or RA 7653, the Rules of Court, the Intellectual
Property Code or RA 8293, the Securities Regulation Code or RA 8799, the Data Privacy Act or RA 10173, and
the Philippine Competition Act or RA 10667. Some established rules and practices of the SEC have been
institutionalized by their incorporation in the RCC. The updates on corporation law presented herein are divided
into two categories: (i) Changes and (ii) Innovations. Changes shall refer to those rules already existing under
the old Corporation Code (OCC), but later refined or amended by RCC. Innovations shall refer to those rules not
provided under the OCC which are first introduced by RCC. At the latter portion, items retained by the RCC are
likewise listed. The corresponding sections in the RCC are provided at the end of each item for easy reference.

CHANGES: revision (reference in the RCC; provision in the OCC amended)


1. The terms and conditions for the issuance of 5. Amendment on the corporate term may now be
redeemable shares must not only be stated in the made within 3 years prior to the expiration of the
articles of incorporation but in the certificate of corporate term. (Section 11; Section 11)
stock as well. (Section 7 of the RCC; Section 8 6. The number of trustees indicated in the articles
of the OCC) of incorporation may now be more than 15.
2. Juridical persons such as partnerships, (Section 13; Section 14)
associations, and corporation may now 7. Filing of the articles of incorporation and
incorporate a corporation. There is no more amendments thereto may now be filed
minimum number of incorporators, but the electronically. (Section 13; Section 14)
maximum number remains at 15. (Section 10;
Section 10) 8. The authorized capital stock no longer needs to
be at least 25% subscribed. (Section 14;
3. A corporation with a single stockholder may Sections 13 and 15)
now be formed and shall be considered a One
Person Corporation (OPC). (Section 10; Section 9. The Treasurer’s Affidavit is no longer
10) required since the certification concerning the
amount of capital subscribed and/or paid is
4. As a general rule, corporations shall have already included in the articles of incorporation.
perpetual existence, unless its articles of (Section 14; Section 14)
incorporation provide for a specific term.
Corporations formed prior to RCC shall 10. There is no more minimum paid-up capital.
automatically have perpetual existence without (Section 14; Section 14)
prejudice to its right to elect to retain its specific 11. False certification concerning the amount of
corporate term through a majority vote of its capital subscribed and/or paid is a new ground
stockholders. (Section 11; Section 11) to disapprove articles of incorporation or
amendments thereto. (Section 16; Section 17)

THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |1
12. Failure of a corporation to formally organize and now be given to the stockholders and members
commence its business within 5 years from the electronically. (Section 36; Section 37)
date of its incorporation shall be render the 22. Notice about the meeting on the proposed
certificate of incorporation deemed revoked as increase or decrease of capital stock or increase
of the day following the end of the 5-year of bonded indebtedness may now be given to the
period. (Section 21; Section 22) stockholders electronically. (Section 37;
13. Trustees elected shall have a term not exceeding Section 38)
3 years. (Section 22; Section 23) 23. The certificate executed in case of increase or
14. A treasurer to be elected must be a resident of decrease of capital stock or increase of bonded
the Philippines. (Section 24; Section 25) indebtedness need not set forth the actual
15. The duties of elected officers may be provided indebtedness of the corporation on the day of
not only in the bylaws, but also as resolved by the meeting. (Section 37; Section 38)
the board of directors. (Section 24; Section 25) 24. The application for increase or decrease of
16. The death, resignation, or cessation to hold office capital stock or increase of bonded
of any director, trustee, or officer shall be indebtedness shall be filed with the SEC within
reported in writing to the SEC within 7 days from 6 months from the date of approval of the board
knowledge thereof. (Section 25; Section 26) of directors and stockholders, which may be
extended for justifiable reasons. (Section 37;
17. Disqualification of directors, trustees, or officers Section 38)
for violations of the RCC and Securities
Regulation Code or RA 8799, now clearly 25. The treasurer’s sworn statement accompanying
requires conviction by final judgment. It also the application for increase of capital stock now
adds two additional disqualifications: finding clearly provides that the required 25%
of administrative liability for any offense involving subscription is of the “increase in capital
fraudulent acts and judgment or finding of a stock” instead of “increased capital stock”. The
foreign court or equivalent foreign regulatory for new rule is consistent with the current policy of
acts similar to the aforementioned grounds. The the SEC. (Section 37; Section 38)
SEC and the Philippine Competition Commission 26. Notice about the meeting on the proposed sale
or PCC may impose additional qualifications or or other disposition of all or substantially all of the
other disqualifications. (Section 26; Section 27) corporate assets may now be given to the
18. Elections to fill vacancies in directorships and stockholders electronically. (Section 39;
trusteeships due to term expiration must be held Section 40)
no later than the day of such expiration. In 27. Notice about the meeting on the proposed
case of removal, vacancy may be filled during the investment of corporate funds in another
same meeting. In all other cases, it must be filled corporation may now be given to the
no later than 45 days from the time the stockholders electronically. (Section 41;
vacancy arose. (Section 28; Section 29) Section 42)
19. Dealings of directors, trustees, or officers now 28. Bylaws must now be filed together with the
include their spouses and relatives within the articles of incorporation. It can no longer be filed
4th civil degree of consanguinity or affinity. within one month from notice of issuance of the
(Section 31; Section 32) certificate of incorporation. (Section 45; Section
20. The prohibition on domestic corporations 46)
against giving donations for political 29. Bylaws may provide other matters for the proper
purposes has been removed. Now, only foreign or convenient transaction of its corporate affairs
corporations are prohibited to give such for the promotion of good governance and anti-
donations. (Article 35; Section 36) graft and corruption measures. (Section 46;
21. Notice about the meeting on the proposed Section 47)
extension or shortening of corporate term may 30. If the date of regular meeting of stockholders is
not fixed in the bylaws, it shall be held on any

THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |2
date after April 15 of every year as determined 38. Pledgors and mortgagors are now identified as
by the board provided that a written notice shall secured creditors to include other persons
be sent to all stockholders or members at least granted with security interest over the shares.
21 days prior to the meeting, unless a different (Section 54; Section 55)
period is required. Notice of regular meetings 39. No voting trust agreement shall be entered into
may now be sent electronically. (Section 49; which are anti-competitive and violative of
Section 50) nationality and capital requirements in
31. There is an exhaustive list of matters (which addition to for purposes for the perpetuation of
may be expanded through proposal) required to fraud. (Section 58; Section 59)
be presented at each regular meeting of 40. Additional consideration for stocks: shares of
stockholders or members. (Section 49; Section stock in another corporation and other generally
50) accepted form of consideration. (Section 61;
32. General waivers of notice in the articles of Section 62)
incorporation or the bylaws shall not be allowed. 41. Notice of the sale of delinquent stocks may be
Attendance at a meeting shall not constitute a sent through other means provided in the
waiver of notice of such meeting when the bylaws. (Section 67; Section 68)
express purpose of attendance is to object to the
transaction of any business because the meeting 42. There is an exhaustive list of corporate books
is not lawfully called or convened. (Section 49; and records that must be preserved at the
Section 50) principal office and made available to the
stockholders or members. (Section 73; Section
33. Metro Cebu, Metro Davao, and other 74)
Metropolitan areas (in addition to Metro Manila)
are now considered a city or municipality for 43. The financial statements furnished to the
purposes of places where stockholders’ or requesting stockholder or member shall be in
members’ meetings may be held. (Section 50) the form and substance of the financial
reporting required by the SEC. (Section 74;
34. Notices of stockholders’ or members’ meetings Section 75)
now require certain information and
accompanying proxy forms. (Section 50; 44. If the total assets or total liabilities of the
Section 51) corporation are less than P600,000 or such
other amount as may be determined by the
35. All proceedings and any business transacted at Department of Finance, the financial statements
the stockholders’ or members’ meetings shall be required to be presented to the stockholders or
valid even if improperly held or called, provided members may be certified under oath by the
that no one of the present stockholders or treasurer and the president. (Section 74; Section
members expressly states at the beginning of the 75)
meeting that the express purpose of
attendance is to object to the transaction of 45. The notice required for meetings to approve
any business because the meeting is not merger or consolidation shall be given in the
lawfully called or convened. (Section 50; Section same manner as giving notice of regular or
51) special meetings. (Section 76; Section 77)

36. Notice of board meetings must be sent to every 46. There are four additional items that must be set
director or trustee at least 2 days prior to the forth in the articles of merger or consolidation.
scheduled meeting, unless a longer period is (Section 77; Section 78)
provided in the bylaws. (Section 52; Section 53) 47. There is appraisal right in case of investment of
37. It is now expressly provided that directors or corporate funds for any purpose other than the
trustees who cannot physically attend or vote at primary purpose of the corporation. (Section 80;
board meetings can participate and vote through Section 81)
remote communication that allow them 48. The first trustees elected in a non-stock
reasonable opportunities to participate. (Section corporation does not have to serve their initial
52; Section 53) terms partially (1 year for 1/3 of the board, 2
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |3
years for the other 1/3, and 3 years for the rest). 57. In case of expiration of corporate term,
(Section 91; Section 92) dissolution shall automatically take effect on the
49. Incorporation of educational institutions no day following the last day of the corporate
longer require the favourable term stated in the articles of incorporation
recommendation of the Department of without need for the issuance of the certificate of
Education, Culture, and Sports. (Section 107 of dissolution. (Section 136; Section 120)
OCC was not reproduced in RCC) 58. The grounds for involuntary dissolution are
50. The voting requirement in case of voluntary now listed down. (Section 138; Section 121)
dissolution where no creditors are affected now 59. Banks are excluded from the provision on
only requires majority vote of the board and corporate liquidation. (Section 139, Section 122)
affirmative vote of stockholders owning at least 60. Upon the winding up of corporate affairs, any
majority of the outstanding capital stock or asset distributable to any creditor or stockholder
majority of the members. (Section 134; Section or member who is unknown or cannot be found
118) shall be escheated in favour of the national
51. Notice on the meeting to vote on the voluntary government. (Section 139; Section 122)
dissolution must be given to each stockholder or 61. The threshold for bonds or securities required
member at least 20 days prior to the meeting. for foreign corporations applying for license to
Notice may now be given electronically. do business in the Philippines has been adjusted
(Section 134; Section 118) P100,000 to P500,000 (as initial bond or
52. A verified request for voluntary dissolution shall security) and P5,000,000 to P10,000,000
be filed with the SEC containing required (licensee’s gross income for the fiscal year that
information and accompanied by required will require additional securities). (Section 143;
documents. (Section 134; Section 118) Section 126)
53. The SEC must approve the request for 62. If a domestic corporation is appointed as a
dissolution within 15 days from receipt and resident agent of a foreign corporation, it must
issue the certificate of dissolution. (Section 134; be of sound financial standing and must show
Section 118) proof that it in good standing as certified by the
54. For corporations regulated by government SEC. (Section 144; Section 127)
agencies, applications for dissolution must be 63. Administrative sanctions such as fines for the
favourably recommended by the appropriate violations of the RCC or of a rule, regulation, or
government agency. (Section 134; Section order of the SEC have been increased. Aside
118) from fines, the SEC may issue permanent cease
55. In case of voluntary dissolutions where creditors and desist orders, or suspend or revoke
are affected, the petition must contain certain certificates of incorporation, or dissolve
information and accompanied by required corporations and forfeit its assets. (Section 158;
documents. (Section 135; Section 119) Sections 143 and 144)

56. It is now clearly provided that voluntary 64. Reportorial requirements for every corporation
dissolution shall take effect only upon the are now listed down, with a right to redact
issuance by the SEC of a certificate of confidential information. (Section 177; Section
dissolution. (Sections 134 and 135; Sections 141)
118 and 119) 65. The powers, functions, and jurisdiction of the
SEC are now listed down. (Section 179; Section
143)

THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |4
INNOVATIONS:
1. Revival of corporations whose terms have authorized in the bylaws or by a majority of the
expired is now allowed subject to all of its duties, board. Such modes are available to corporations
debts, and liabilities existing prior to its revival. vested with public interest, even in the absence
(Section 11 of the RCC) of a provision in the bylaws. Stockholders or
2. An arbitration agreement may now be provided members who participate through remote
in the articles of incorporation. (Section 13) communication or in absentia shall be deemed
present for purposes of quorum. (Section 23)
3. One Person Corporations must bear “OPC” at
end of its corporate name. (Section 14) 12. Directors and trustees elected are now required
to observe the rules of good corporate
4. The form of articles of incorporation now governance. (Section 23)
includes the undertaking to change the name
of the corporation when there exists a prior right 13. Corporations vested with public interest are
or if it is contrary to law, public morals, good required to elect a compliance officer. (Section
customs, or public policy. (Section 14) 24)

5. Rules on distinguishability of corporate 14. Non-holding of elections and the reasons


names are provided. (Section 17) therefor shall be reported to the SEC within 30
days from date of the scheduled election. The
6. SEC now has the authority to cause the new date of the election must not be later than
removal of all visible signages, marks, 60 days from the scheduled date. If no new date
advertisements, labels, prints, and other effects has been designed or if the rescheduled date is
bearing a disallowed corporate name. (Section not held, the SEC may summarily order the
17) holding of an election upon application of a
7. Failure to comply with SEC’s order related to stockholder, member, director, or trustee.
disallowed corporate name may hold the (Section 25)
corporation and its responsible directors or 15. The SEC has now the authority to order the
officers in contempt and/or hold them removal of a disqualified director or trustee
administratively, civilly, and/or criminally liable motu proprio or upon verified complaint, without
and/or revoke the registration of the corporation. prejudice to the sanctions that the SEC may
(Section 17) impose on directors or trustees who knew of the
8. Verification of intended corporate name prior disqualification but failed to remove such
to registration is now expressly provided. director or trustee. (Section 27)
(Section 18) 16. “Emergency board”: When a vacancy prevents
9. After commencing its business, failure of the the remaining directors from constituting a
corporation to operate for at least 5 consecutive quorum and emergency action is required to
years may be placed under delinquent status prevent grave, substantial, and irreparable loss
by SEC after due notice and hearing. A or damage to the corporation, the vacancy may
delinquent corporation shall have 2 years to be temporarily filled among the officers of the
resume operations and comply with all SEC- corporation by unanimous vote of the remaining
prescribed requirements. Failure to comply shall directors or trustees. The action by the
be a cause for revocation of the certificate of designated director or trustee shall be limited to
incorporation. (Section 21) the emergency action necessary, and the term
10. Corporations vested with public interest shall shall cease within a reasonable time from the
have independent directors constituting 20% termination of the emergency or upon election of
of such board. They must be elected by the the replacement director. The creation of the
shareholders present or entitled to vote in emergency board shall be reported to the SEC
absentia during the election of directors. within 3 days from creation stating the reason for
(Section 22) its creation. (Section 28)

11. Stockholders and members may vote through


remote communication or in absentia, if
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |5
17. Directors or trustees shall not participate in the 28. An arbitration agreement may now be provided
determination of their own per diems or in the bylaws. (Article 46)
compensation. (Section 29) 29. A stockholder or member may now propose the
18. Corporations vested with public interest shall holding of a special meeting and items to be
submit to their shareholders and the SEC an included in the agenda. (Section 46)
annual report of the total compensation of 30. The stock and transfer book or membership
each of the directors or trustees. (Section 29) book shall be closed at least 20 days for
19. Validity of dealings of directors, trustees, or regular meetings and 7 days for special
officers with corporations vested with public meetings before the scheduled date of the
interest require approval by at least 2/3 of the meeting, unless the bylaws provide for a longer
entire membership of the board, with at least a period. (Section 49)
majority of the independent directors voting to 31. In case of postponement of stockholders’ or
approve the material contract. (Section 31) members’ regular meetings, written notice
20. The board is now empowered to create special shall be sent 2 weeks prior to the date of the
committees of temporary or permanent meeting, unless a different period is required.
nature and determine the members’ term, (Section 49)
composition, compensation, powers, and 32. The right to vote of stockholders and members
responsibilities. (Section 34) may now be exercised through remote
21. Corporations have now the express power to communication or in absentia when so
enter into a partnership or joint venture with authorized in the bylaws. The SEC shall issue
any person. (Section 35) rules governing such participation. (Sections 49,
22. The sale or other disposition of assets of a 57, and 88)
corporation is now subject to the Philippine 33. The articles of incorporation or bylaws may
Competition Act or RA 10667. (Section 39) provide for a greater majority to determine the
23. In non-stock corporations where there are no quorum during board meetings. (Section 52)
members with voting rights, the vote of at least 34. A director or trustee who has a potential
a majority of the trustees in office will be interest in any related party transaction must
sufficient authorization for the corporation to recuse from voting on the approval of the related
enter into any transaction involving sale or other party transaction. (Section 52)
disposition of corporate assets. (Section 39) 35. The SEC may require corporation whose
24. The determination of whether or not the sale securities are traded in trading markets and
involves all or substantially all of the which can reasonably demonstrate their
corporation’s properties and assets must be capability to do so to issue their securities or
computed based on its net asset value, as shares of stocks in uncertificated or scripless
shown in its latest financial statements. (Section form. (Section 62)
39) 36. The inspecting or reproducing party of corporate
25. Management contracts shall be entered into for books or records shall remain bound by
a period not longer than 5 years for any one confidentiality rules. (Section 73)
term. (Section 43) 37. A requesting party who is not a stockholder or
26. The modes by which a stockholder, member, member of record, or is a competitor, director,
director, or trustee may attend meetings and officer, controlling stockholder or otherwise
cast their votes must now be provided in the represents the interests of a competitor shall
bylaws. (Section 46) have no right to inspect or demand reproduction
27. The maximum number of other board of corporate records. (Section 73)
representations that an independent director or 38. Abuse of the right of inspection shall be
trustee may have which shall, in no case, be penalized without prejudice to liabilities under
more than the number prescribed by the SEC. the Intellectual Property Code and Data Privacy
(Section 46) Act. (Section 73)
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |6
39. If the corporation denies or does not act on a h. The treasurer, corporate secretary, and other
demand for inspection and/or reproduction of officers shall be appointed within 15 days
corporate records, the aggrieved party may from issuance of the certificate of
report such denial or inaction to the SEC. The incorporation. The single stockholder may
SEC may issue an order directing the inspection not be appointed as the corporate secretary.
or reproduction of the requested records after a The single stockholder may be appointed as
summary investigation conducted within 5 days treasurer but must give a bond to the SEC.
from receipt of such report. (Section 73) (Section 122)
40. The SEC may require stock corporations which i. The corporate secretary of an OPC has
transfer and/or trade stocks in secondary special functions. (Section 123)
markets to have an independent transfer j. The single stockholder is required to
agent. (Section 73) designate a nominee and an alternate
41. Independent trustees of non-stock nominee who shall take the place of the
corporations vested with public interest need not single stockholder in case of death or
be a member of the non-stock corporation. incapacity. (Section 124)
(Section 91) k. The term of the nominee and alternate
42. A non-stock corporation shall, at all times, keep nominee shall only be temporary until the
a list of its members and their proxies in the heirs have been lawfully determined or the
form the SEC may require. The list shall be estate becomes the single stockholder.
updated to reflect the members and proxies of (Section 125)
record 20 days prior to any scheduled election. l. The nominee or alternate nominee may be
(Section 92) changed by submitting the names of the new
43. Allowing One Person Corporations (OPCs): nominees and their corresponding consent
a. OPCs may be formed by a natural person, to the SEC without need of amending the
trust, or an estate. (Section 116) OPC’s articles of incorporation. (Section
126)
b. Banks, quasi-banks, pre-need, trust,
insurance, public and publicly-listed m. All actions, decisions, and resolutions taken
companies, non-chartered GOCCs, and by the OPC shall be contained in a minutes
natural persons licensed to exercise a book. (Section 127)
profession, except when allowed under n. Actions of the OPC may be recorded in the
special laws, may not incorporate as OPCs. minutes book in lieu of meetings. (Section
(Section 116) 128)
c. There is no minimum authorized capital stock o. OPCs are required to submit reportorial
for OPCs except when provided by special requirements to the SEC, subject to penalties
laws. (Section 117) in case of non-compliance. (Section 129)
d. OPCs are required to file articles of p. OPCs shall have limited liability, and the
incorporation similar to ordinary corporations principles of piercing the corporate veil
with additional contents. (Section 118) applies with equal force to OPCs. (Section
e. OPCs are not required to submit and file 130)
bylaws. (Section 119) q. An OPC may be converted into an ordinary
f. OPCs are required to indicate the letters stock corporation and vice versa. (Sections
“OPC” either below or at the end of its 131 and 132)
corporate name. (Section 120) 44. A request for dissolution may now be withdrawn
g. The single stockholder shall be the sole through a motion duly verified by any
director and president of the OPC. (Section incorporator, director, trustee, shareholder, or
121) member. (Section 137)
45. The SEC has regulatory jurisdiction to
investigate an alleged violation of the RCC, or of
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |7
a rule, regulation, or order of the SEC. (Section i. Engaging intermediaries for graft and corrupt
154) practices
46. The SEC, through its designated officer, has j. Tolerating graft and corrupt practices
subpoena powers. (Section 155) k. Retaliation against whistleblowers
47. The SEC may issue cease and desist orders 50. There exists a liability for all directors,
(even ex parte) to persons reasonable believed trustees, officers, and other employees,
to have violated or about to violate the RCC, or a including aiders and abettors who commits
rule, regulation, or order of the SEC. (Section any violation of the RCC, any rule, regulation, or
156) order of the SEC. (Sections 171 and 172)
48. The SEC has contempt powers subject to due 51. The amount collected by the SEC shall be
notice and hearing. (Section 157) deposited and maintained in a separate
49. Specific acts are punishable with a account to fund its modernization and to
corresponding fine: (Sections 159 to 169) augment its operational expenses. (Section 175)
a. Unauthorized use of corporate name 52. The SEC shall exercise visitorial powers over
b. Violation of disqualification provision all corporations. (Section 178)

c. Violation of duty to maintain records and to 53. The SEC shall develop and implement an
allow their inspection or reproduction electronic filing and monitoring system.
(Section 180)
d. Willful certification of incomplete, inaccurate,
false, or misleading statements or reports 54. An arbitration procedure is laid down to govern
arbitration agreements provided in the articles of
e. Independent auditor collusion incorporation or bylaws. (Section 181)
f. Obtaining corporate registration through 55. Jurisdiction over party-list organizations are
fraud transferred to the Commission on Elections or
g. Fraudulent conduct of business COMELEC. (Section 182)
h. Acting as intermediaries for graft and corrupt 56. Corporations affected by the new
practices requirements are given 2 years from the
effectivity of the RCC within which to comply.

RETENTIONS:
1. Definition and classes of corporations, 8. Rules on quorum in stockholders’ and members’
corporations created by special laws, meetings and who shall preside (Sections 51 and
corporators, incorporators, stockholders, and 53)
members (Sections 2 to 5 of the RCC) 9. Rules on voting in case of joint ownership of
2. Rules governing redeemable, preferred, and stocks and for treasury shares (Sections 56 and
treasury shares (Sections 6, 8, and 9) 57)
3. Rules on de facto corporations and corporations 10. Rules on subscription contract, pre-
by estoppel (Sections 19 and 20) incorporation subscription, issuance of stock
4. Rule on disloyalty of a director (Section 33) certificates, liability for watered stocks, interest
on unpaid subscription, payment of balance of
5. Rules on powers to deny pre-emptive right, subscription, questioning delinquency sales,
acquire own shares and declare dividends court action to recover unpaid subscriptions,
(Sections 38, 40, and 42) effect of delinquency, right of unpaid and non-
6. Rule on ultra vires acts (Section 44) delinquent shares, lost or destroyed certificates
7. Rules on amendment to bylaws (Section 47) (Sections 59 to 60, 63 to 66, and 68 to 72)
11. Procedure in the exercise of appraisal right
(Sections 81 to 84)

THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |8
12. Definition and purposes of non-stock 17. Rule on application for a license to do business
corporations and non-transferability and by foreign corporations (Section 142)
termination of membership (Sections 86 to 87 18. Rules on applicable laws to foreign corporations,
and 89 to 90) amendments to its articles of incorporation and
13. Rules in distribution of assets in non-stock bylaws, amendment of license, merger or
corporations (Sections 93 and 94) consolidation, doing business without a license,
14. Rules governing close corporations (Sections 95 revocation of license, issuance of certificate of
to 104) revocation, and withdrawal (Sections 146 to 153)

15. Rules governing religious corporations (Sections 19. Definition of outstanding capital stock (Section
107 to 114) 173)

16. Definition and rights of foreign corporation 20. Rule on designation of governing boards
(Section 140) (Section 174)

The RCC becomes effective upon complete publication in the Official Gazette or in at least 2 newspapers of
general circulation. The official copy of RCC is now available for download in the website of the Official Gazette.

DISCLAIMER: This is for general information only. This shall not serve as a substitute for professional advice
which depends on specific facts and circumstances. If this would be used for academic or other informational
purposes, securing the author’s express permission is required. All rights reserved.

ABOUT THE AUTHOR: Atty. Nico B. Valderrama, CPA, MPM is a corporate legal counsel for a group of
companies engaged in manufacturing, transportation, and real estate development. He also provides legal
counselling to various clients engaged in hospital business, real estate brokerage, and commercial leasing. He
is a junior reviewer in the Review School of Accountancy (ReSA) and teaches Regulatory Framework for Business
Transactions (RFBT) which covers several civil and commercial laws. He also teaches civil and commercial laws
in the Arellano University School of Law (AUSL). He is likewise licensed to practice law in the State of New York,
USA.

THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA |9