The Corporation Code

Cabinet Bill No. 3:

“The Corporation Code of the Philippines”

Title I – General Provisions

* Corporation – An artificial being created by operation of law, having the right to succession and the power, attributes and properties expressly authorized by law or incident to its existence.

Classes of Corporation:

1. Stock Corporation – corporations, which have capital stock, divided into shares and are authorized to distribute to the holders of such shares dividends or allotments of the surplus profit on the basis of the shares held.

2. Non-stock Corporation – all other corporations that does not have owners represented by shares of stock.

Definition of Terms:

* Corporators – those who compose a corporation, whether as stockholders or members.

* Incorporates – those stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof.

* Shareholders – corporators in a stock corporation.

* Members – corporators in a stock corporation.

Classification of Shares:

1. Founders’ Shares

2. Redeemable Shares

3. Treasury Shares – shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing entity by purchases, redemption, donation or through some other lawful means.

Title II – Incorporation and Organization of Private Corporations

* The incorporators must be not less than five (5) but not more than fifteen (15), all of legal age and a majority of who are residents of the Philippines.

* Each of the incorporators of a stock corporation must own at least one share of the capital stock of the corporation.

* A Corporation shall exist for a period not exceeding fifty (50) years.

* At least twenty-five (25%) percent of the total subscription must be paid upon subscription.

* In no case shall the paid-up capital be less than five thousand (5,000) pesos.

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