REVISED CORPORATION COD

E
OF THE PHILIPPINES

SECTION 45-69

April 4, 2020
TITLE V. By- Laws
SECTION 45
Adoption of by-laws
 For the adoption of bylaws by the corporation, the affirmative vote of the s
tockholders representing at least a majority of the outstanding capital stock
, or of at least a majority of the members in case of non-stock corporations,
shall be necessary.

The by-laws shall be signed by the stockholders or members voting for them a
nd shall be kept in the principal office of the corporation, subject to the i
nspection of the stockholders or members during office hours.

A copy thereof, duly certified by a majority of the directors or trustees an

d countersigned by the secretary of the corporation, shall be filed with the
Commission and attached to the original articles of incorporation.
In all cases, bylaws shall be effective only upon the issuance by the Commis
sion of a certification that the bylaws are in accordance with this Code.

The Commission shall not accept for filing the bylaws or any amendment ther
eto of any bank, banking institution, building and loan association, trust c
ompany, insurance company, public utility, educational institution, or other
special corporations governed by special laws, unless accompanied by a certi
ficate of the appropriate government agency to the effect that such bylaws o
r amendments are in accordance with law.
SECTION 46.
Contents of by-laws
 A private corporation may provide the following in its bylaws:

(a)The time, place and manner of calling and conducting regular or special me
etings of the directors or trustees;

(b) The time and manner of calling and conducting regular or special meetings
and mode of notifying the stockholders or members thereof;

(c) The required quorum in meetings of stockholders or members and the manner
of voting therein;

(d) The modes by which a stockholder, member, director, or trustee may attend
meetings and cast their votes;
(e)The form for proxies of stockholders and members and the manner of voting
them;

(f) The directors’ or trustees’ qualifications, duties and responsibilities,

the guidelines for setting the compensation of directors or trustees and offi
cers, and the maximum number of other board representations that an independe
nt director or trustee may have which shall, in no case, be more than the num
ber prescribed by the Commission;

(g) The time for holding the annual election of directors or trustees and the
mode or manner of giving notice thereof;

(h) The manner of election or appointment and the term of office of all offic
ers other than directors or trustees;
(i) The penalties for violation of the bylaws;

(j) In the case of stock corporations, the manner of issuing stock certificate
s; and

(k) Such other matters as may be necessary for the proper or convenient transa
ction of its corporate affairs for the promotion of good governance and anti-g
raft and corruption measures.
 SECTION 47.

Amendment to by-laws
 A majority of the board of directors or trustees, and the owners of at le
ast a majority of the outstanding capital stock, or at least a majority of
the members of a non-stock corporation, at a regular or special meeting du
ly called for the purpose, may amend or repeal the bylaws or adopt new byl
aws.

The owners of two-thirds (2/3) of the outstanding capital stock or two-thi

rds (2/3) of the members in a non-stock corporation may delegate to the bo
ard of directors or trustees the power to amend or repeal the bylaws or ad
opt new bylaws
Whenever the bylaws are amended or new bylaws are adopted, the corporation s
hall file with the Commission such amended or new bylaws and, if applicable,
the stockholders’ or members’ resolution authorizing the delegation of the
power to amend and/or adopt new bylaws, duly certified under oath by the cor
porate secretary and a majority of the directors or trustees.

The amended or new bylaws shall only be effective upon the issuance by the C
ommission of a certification that the same is in accordance with this Code a
nd other relevant laws.
TITLE V Meetings
I.
SECTION 48Kinds of meeting
.

Meetings of directors, trustees, stockholders, or

members may be regular or special.
SECTION 49.

Regular and Special Meet

ings of Stockholders or
Members.
Regular meetings of stockholders or members shall be held annually on a date fi
xed in the bylaws, or if not so fixed, on any date after April 15 of every year
as determined by the board of directors or trustees: Provided, That written not
ice of regular meetings shall be sent to all stockholders or members of record
at least twenty-one (21) days prior to the meeting, unless a different period i
s required in the bylaws, law, or regulation: Provided, further, That written n
otice of regular meetings may be sent to all stockholders or members of record
through electronic mail or such other manner as the Commission shall allow unde
r its guidelines.
At each regular meeting of stockholders or members, the board of directors or trustees s
hall endeavor to present to stockholders or members the following:

(a) The minutes of the most recent regular meeting which shall include, among others:

• A description of the voting and vote tabulation procedures used in the previous meeti
ng;

• A description of the opportunity given to stockholders or members to ask questions an

d a record of the questions asked and answers given;

• The matters discussed and resolutions reached;

• A record of the voting results for each agenda item;

• A list of the directors or trustees, officers and stockholders or members who attende
d the meeting; and
• Such other items that the Commission may require in the interest of good corporate go
vernance and the protection of minority stockholders;

(b) A member's list for non-stock corporations and for stock corporations, material info
rmation on the current stockholders and their voting lines.

(c) A detailed, descriptive, balanced and comprehensible assessment of the corporation’

s performance, which shall include information on any material change in the corporatio
n’s business, strategy, and other affairs;

(d) A financial report for the preceding year, which shall include financial statements
duly signed and certified in accordance with this Code and the rules the Commission may
prescribe, a statement on the adequacy of the corporation’s internal controls or risk m
anagement systems, and a statement of all external audit and non-audit fees;

(e) An explanation of the dividend policy and the fact of payment of dividends or the re
asons for nonpayment thereof;
(f) Director or trustee profiles which shall include, among others, their qualifications
and relevant experience, length of service in the corporation, trainings and continuing
education attended, and their board representations in other corporations;

(g) A director or trustee attendance report, indicating the attendance of each director
or trustee at each of the meetings of the board and its committees and in regular or spe
cial stockholder meetings;

(h) Appraisals and performance reports for the board and the criteria and procedure for
assessment;

(i) A director or trustee compensation report prepared in accordance with this Code and
the rules the Commission may prescribe;

(j) Director disclosures on self-dealings and related party transactions; and/or

(k) The profiles of directors nominated or seeking election or reelection.

Whenever for any cause, there is no person authorized or the person authorized unjustly refuses to ca
ll a meeting, the Commission, upon petition of a stockholder or member on a showing of good cause t
h e r e f o r , m a y i s s u e a n or d e r , d i r e c t i n g t h e p e t i t i o n i n g s t o c k h o l d e r o r m e m b e r t o c a l l a m e e t i n g o f t h e
corporation by giving proper notice required by this Code or the bylaws. The petitioning stockholder
or member shall preside thereat until at least a majority of the stockholders or members present have
chosen from among themselves, a presiding officer.

Unless the bylaws provide for a longer period, the stock and transfer book or membership book shall
be closed at least twenty (20) days for regular meetings and seven (7) days for special meetings befor
e t h e s c h e d u l e d d a t e of t h e m e e t i n g .

I n c a s e of p o s t p o n e m e n t o f s t o c k h o l d e r s ’ o r m e m b e r s ’ r e g u l a r m e e t i n g s , w r i t t e n n o t i c e t h e r e o f a n d
the reason therefor shall be sent to all stockholders or members of record at least two (2) weeks prior
to the date of the meeting, unless a different period is required under the bylaws, law or regulation.
 Place and Time of Meetings of
Stockholders or Members.
SECTION 50.
Stockholders’ or members’ meetings, whether regular or special, shall be held in the p
rincipal office of the corporation as set forth in the articles of incorporation, or, if
not practicable, in the city or municipality where the principal office of the corporatio
n i s l o c a t e d : P r o vi d e d , T h a t a n y c i t y o r m u n i c i p a l i t y i n M e t r o M a n i l a , M e t r o C e b u , M e t r o
Davao, and other Metropolitan areas shall, for purposes of this section, be considered a
city or municipality.

Notice of meetings shall be sent through the means of communication provided in the bylaw
s, which notice shall state the time, place and purpose of the meetings.
Each notice of meeting shall further be accompanied by the following:

(a) The agenda for the meeting;

(b) A proxy form which shall be submitted to the corporate secretary within a
reasonable time prior to the meeting;

(c) When attendance, participation, and voting are allowed by remote communic
ation or in absentia, the requirements and procedures to be followed when a s
tockholder or member elects either option; and

(d) When the meeting is for the election of directors or trustees, the requir
ements and procedure for nomination and election.
SECTION 51.
Quorum in meetings

Unless otherwise provided in this Code or in the bylaws, a quorum shall c

onsist of the stockholders representing a majority of the outstanding cap
ital stock or a majority of the members in the case of non-stock corporat
ions.
 Regular and Special Meetings
SECTION 52.
of Directors or Trustees;
Quorum.
Unless the articles of incorporation or the bylaws provides for a greater
majority, a majority of the directors or trustees as stated in the articl
es of incorporation shall constitute a quorum to transact corporate busin
ess, and every decision reached by at least a majority of the directors o
r trustees constituting a quorum, except for the election of officers whi
ch shall require the vote of a majority of all the members of the board,
shall be valid as a corporate act.
Directors o r t r u st e e s wh o c an n o t ph y s ic a l l y at t e n d o r v ot e a t b o a r d m e
etings can p a r t i ci p a t e a n d vo t e t hr o u gh r e m o te c o m mu n i c at i o n su c h a s v
ideoconfere n c i n g , t e l e co n f e re n c i n g, o r o t h e r a l t e r na t i v e m o d e s o f c om m
unication t h a t a ll o w t he m r ea s o n a bl e op p o r t u ni t i e s t o p ar t i c i pa t e . Di r
ectors or t r u s t e es c a n no t a tt e n d or v ot e b y pr o x y at b o ar d m e et i n g s .

A director o r t r us t e e wh o h as a p ot e n ti a l i n te r e s t i n a ny r e l at e d p ar t
y transacti o n m u st r e f us e f ro m v o ti n g o n t h e a p p r o va l o f t h e re l a t e d p
arty transa c t i o n w i t h o ut p r ej u d i c e t o c o m p l i an c e w it h t he r e q ui r e m e nt s
of Section 3 1 o f t h i s Co d e .
SECTION 53. Who shall preside at meetings?

The chairman or, in his absence, the president shall preside at all meet
ings of the directors or trustees as well as of the stockholders or membe
rs, unless the bylaws provide otherwise.
SECTION 54. Right to Vote of Secured Creditors and
Administrators.

In case a stockholder grants security interest in his or her shares in st

ock corporations, the stockholder-grantor shall have the right to attend
and vote at meetings of stockholders, unless the secured creditor is expr
essly given by the stockholder-grantor such right in writing which is rec
orded in the appropriate corporate books.
SECTION 55.Voting in Case of Joint Ownership of Stock.

The consent of all the co-owners shall be necessary in voting shares o

f stock owned jointly by two (2) or more persons, unless there is a wr
itten proxy, signed by all the co-owners, authorizing one (1) or some
of them or any other person to vote such share or shares: Provided, Th
at when the shares are owned in an “and/or” capacity by the holders
thereof, any one of the joint owners can vote said shares or appoint a
proxy therefor.
 SEC. 57. Manner of Voting; Proxie
s.
SECTION 56. Voting Right for Stockholders and members may vote in person or

Treasury Shares. by proxy in all meetings of stockholders or mem

bers.
Treasury shares shall have no voting right
as long as such shares remain in the Trea
sury. When so authorized in the bylaws or by a majori
ty of the board of directors, the stockholders
or members of corporations may also vote throug
h remote communication or in absentia: Provided
, That the votes are received before the corpor
ation finishes the tally of votes.
SECTION 58. Voting Trust

One or more stockholders of a stock corporation may create a voting trust for
the purpose of conferring upon a trustee or trustees the right to vote and oth
er rights pertaining to the shares for a period not exceeding five (5) years a
t any time:

A voting trust agreement must be in writing and notarized, and shall specify t
he terms and conditions thereof. A certified copy of such agreement shall be f
iled with the corporation and with the Commission; otherwise, the agreement is
ineffective and unenforceable. The certificate or certificates of stock covere
d by the voting trust agreement shall be cancelled and new ones shall be issue
d in the name of the trustee or trustees, stating that they are issued pursuan
t to said agreement. The books of the corporation shall state that the transfe
r in the name of the trustee or trustees is made pursuant to the voting trust
agreement.
TITLE VII:
STOCKS AND STOCKHOLDERS
SEC. 59. Subscription Contract.
Any contract for the acquisition of unissued stock in an existing corporation
or a corporation still to be formed shall be deemed a subscription within the
meaning of this Title, notwithstanding the fact that the parties refer to it a
s a purchase or some other contract.

SEC. 60. Pre-incorporation Subscription.

A subscription of shares in a corporation still to be formed shall be irrevoc
able for a period of at least six (6) months from the date of subscription, un
less all of the other subscribers consent to the revocation, or the corporatio
n fails to incorporate within the same period or within a longer period stipul
ated in the contract of subscription.

No pre-incorporation subscription may be revoked after the articles of incorpo

ration is submitted to the Commission.
SEC. 61. Consideration for Stocks.
Stocks shall not be issued for a consideration less than the par or issued price
thereof. Consideration for the issuance of stock may be:

(a) Actual cash paid to the corporation;

(b) Property, tangible or intangible, actually received by the corporation and nec
essary or convenient for its use and lawful purposes at a fair valuation equal to
the par or issued value of the stock issued;

(c) Labor performed for or services actually rendered to the corporation;

(d) Previously incurred indebtedness of the corporation;

.
(e) Amounts transferred from unrestricted retained earnings to stated capital;

(f) Outstanding shares exchanged for stocks in the event of reclassification or co

nversion;

(g) Shares of stock in another corporation; and/or

(h) Other generally accepted form of consideration

Where the consideration is other than actual cash, or consists of intangible prope
rty such as patents or copyrights, the valuation thereof shall initially be determ
ined by the stockholders or the board of directors, subject to the approval of the
Commission.

Shares of stock shall not be issued in exchange for promissory notes or future ser
vice. The same considerations provided in this section, insofar as applicable, may
be used for the issuance of bonds by the corporation.
SEC. 62. Certificate of Stock and Transfer of Shares.
The capital stock of corporations shall be divided into shares for which certifica
tes signed by the president or vice president, countersigned by the secretary or a
ssistant secretary, and sealed with the seal of the corporation shall be issued in
accordance with the bylaws.

Shares of stock so issued are personal property and may be transferred by delivery
of the certificate or certificates indorsed by the owner, his attorney-in-fact, or
any other person legally authorized to make the transfer.

SEC. 63. Issuance of Stock Certificates.

No certificate of stock shall be issued to a subscriber until the full amount of t
he subscription together with interest and expenses (in case of delinquent shares)
, if any is due, has been paid.
SEC. 64. Liability of Directors for Watered Stocks.
A director or officer of a corporation who:

(a) consents to the issuance of stocks for a consideration less than its par or is
sued value;

(b) consents to the issuance of stocks for a consideration other than cash, valued
in excess of its fair value; or

(c) having knowledge of the insufficient consideration, does not file a written ob
jection with the corporate secretary,

shall be liable to the corporation or its creditors, solidarily with the stockhold
er concerned for the difference between the value received at the time of issuance
of the stock and the par or issued value of the same.
SEC. 65. Interest on Unpaid Subscriptions.
Subscribers to stocks shall be liable to the corporation for interest on all unpaid subs
criptions from the date of subscription, if so required by and at the rate of interest f
ixed in the subscription contract. If no rate of interest is fixed in the subscription c
ontract, the prevailing legal rate shall apply.

SEC. 66. Payment of Balance Subscription.

Subject to the provisions of the subscription contract, the board of directors may, at a
ny time, declare due and payable to the corporation unpaid subscriptions and may collect
the same or such percentage thereof, in either case, with accrued interest, if any, as i
t may deem necessary.
SEC. 67. Delinquency Sale .
The board of directors may, by resolution, order the sale of delinquent stock and shall
specifically state the amount due on each subscription plus all accrued interest, and th
e date, time and place of the sale which shall not be less than thirty (30) days nor mor
e than sixty (60) days from the date the stocks become delinquent.

Notice of the sale, with a copy of the resolution, shall be sent to every delinquent sto
ckholder either personally, by registered mail, or through other means provided in the b
ylaws. The same shall be published once a week for two (2) consecutive weeks in a newspa
per of general circulation in the province or city where the principal office of the cor
poration is located.
SEC. 68. When Sale may be Questioned.
No action to recover delinquent stock sold can be sustained upon the ground of i
rregularity or defect in the notice of sale, or in the sale itself of the delinq
uent stock, unless the party seeking to maintain such action first pays or tende
rs to the party holding the stock the sum for which the same was sold, with inte
rest from the date of sale at the legal rate. No such action shall be maintaine
d unless a complaint is filed within six (6) months from the date of sale.

SEC. 69. Court Action to Recover Unpaid Subscription .

Nothing in this Code shall prevent the corporation from collecting through court
action, the amount due on any unpaid subscription, with accrued interest, costs
and expenses.