REVISED CORPORATION CODE OF THE PHILIPPINES
Title III. Board of Directors/Trustees and Officers
BOARD OF DIRECTORS/TRUSTEES STOCKHOLDERS/MEMBERS
Acts of management Acts of ownership
Control and supervise the conduct of Choose or elect board of directors
corporate business
May appoint or discharge (incident to
power of appointment) officers and
agents
Section 22.
Governing body of a stock corporation is its board of directors.
- Reason: stockholders are too numerous, scattered and unfamiliar with business
management
The board of directors shall exercise good faith, care and diligence in the
administration of
the affairs of the corporation and protect not only the interest of the majority but also
that of the minority of the stock.
- Otherwise, a stockholder (nominal party) may exercise his right to file a derivative
suit against the corporation (party in interest)
Three Levels of Control
BOARD OF STOCKHOLDERS/
OFFICERS
DIRECTORS/TRUSTEES MEMBERS
Responsible for corporate Residual powers over Carry out management
policies and the general fundamental and major functions on daily basis
management, unless more corporate changes Execute the policies laid
extensive power is expressly down by the board
conferred
Implied Powers -
Express Powers – it when an officer who is not a director may also appoint other agents
when so authorized by the by-laws or BOD
Special-Facts Rule: This is a rule that says if someone who is in charge of a company (like
a director or officer) knows important information about the company, they have to tell
someone who wants to buy or sell stock in the company if certain special circumstances
apply.
is a corporation an artificial being or natural person?
- A corporation is an artificial being, therefore it cannot perform any physical act by
itself
- It acts through its duly elected BOD and duly authorized officers
who can represent the corporation?
What are the qualifications and disqualifications of a BOD/Trustee?
-
can the individual directors bind the corporation?
Individually and generally, the acts of BOD do not bind the corporation, unless expressly
authorized a board resolution
BOD must act wholly (not agents of the crop individually)
- Must vote in a meeting (may be regular or special), which under the law is held
monthly, unless otherwise stated in the by-laws
- President can call for the special meeting
can all the stockholders, if they are acting as one, bind the corporation?
Based on the general rule, the absence of the authority from the BOD, no person nor
officers, can validly bind the corporation
How does the board acts?
- It meets and votes under sec 52, every decision reached by at least a majority of
BOD/T constituting a quorum shall be valid as a corporate act, except for the
election of officers which shall require the vote of a majority of all the members of
the board
- General Rule: normal corporate act majority of a quorum but election of officers
that requires majority of all the members
differentiate executive committee VS board of directors Exception to the rule that the
board exercises all the powers of a corporation:
o This power may be impliedly or expressly delegated to other officers or
agents of the corporation or executive committee
o Executive committee is composed of at least 3 directors
Purpose: to expedite important matters without the need for a board
meeting (esp when that meeting cannot be readily held)
May act by majority vote of all its members on such specific matters
within the competence of the board
Their decision is binding as long as they act within the scope of their
powers, otherwise, the board may choose to ratify or the act is simply
not valid
They cannot vote on:
Found on pg. 294
ExeCom
- Directly manages the operations of the corporation between meetings of the board
- They reduce the workload of the board
- They act the duties of the board, in effect is acting for the board itself, provided it
is within their scope of powers
what is a board resolution
- a document that formalises important decisions made by the board of directors
and the actions relating to them.
Board resolution how many signees?
What is a quorum?
- The number of persons who must be present in order to take action (majority =
50% + 1)
- Will still be the same even if there is vacancy
how will the stockholders control the corporation if they cannot act in behalf of the
corporation?
What are the corporate officers required?
Can directors/trustees receive compensation?
Per diem meaning
Can the stockholders sue the board of directors if nakacause silag dako na loss?
Election
Majority of quorum
