Topic 11: Bylaws
1. ADOPTION OF BYLAWS
Section 45. Adoption of Bylaws. - For the adoption
of bylaws by the corporation, the affirmative vote of the
stockholders representing at least a majority of the
outstanding capital stock, or of at least a majority of the
members in case on nonstock corporations, shall be
necessary. The bylaws shall be signed by the
stockholders or members voting for them and shall be
kept in the principal office of the corporation, subject to
the inspection of the stockholders or members during
office hours. A copy thereof, duly certified by a majority
of the directors or trustees and countersigned by the
secretary of the corporation, shall be filed with the
Commission and attached to the original articles of
incorporation.
Notwithstanding the provisions of the preceding paragraph,
bylaws maybe adopted and filed prior to incorporation; in such case,
such bylaws shall be approved and signed by all incorporators and
submitted to the Commission, together with the articles of
incorporation.
In all cases, bylaws shall be effective only upon the issuance
by the Commission of a certification that the bylaws are in
accordance with this Code.
The Commission shall not accept for filing the bylaws or any
amendment thereto of any bank, banking institution, building and
loan association, trust company, insurance company, public utility,
educational institution, or any other corporations governed by
special laws, unless accompanied by a certificate of the appropriate
government agency to the effect that such by laws or amendments
are in accordance with law.
2. CONTENT OF BYLAWS
Section 46. Contents of Bylaws. - A private corporation may provide the
following in its bylaws;
(a) The time, place and manner of calling and conducting regular or special
meetings 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 trustees 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 officers,
and the maximum number of other board representations that an
independent director or trustee may have which shall, in no case, be more
than the number 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 officers
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
certificates; and
(k) Such other matters as may be necessary for the proper or
convenient transaction of its corporate affairs for the promotion of
good governance and anti-graft and corruption measures.
An arbitration agreement maybe provided in the bylaws pursuant to
Section 181 of this Code .
3. AMENDMENT TO BYLAWS
Section 47. Amendment to Bylaws. - A majority of the board of
directors or trustees, and the owners of at least a majority of
the outstanding capital stock, or at least a majority of the
members of a nonstock corporation, at a regular or special
meeting duly called for the purpose, may amend or repeal the
bylaws or adopt new bylaws. The owner of two-thirds (2/3) of
the outstanding capital stock or two-third (2/3) of the
members in a nonstock corporation mat delegate to the board
of directors or trustees the power to amend or repeal the
bylaws or adopt new bylaws: Provided, That any power
delegated to the board of directors or trustee to amend or
repeal the bylaws or adopt new bylaws shall be considered as
revoke whenever stockholders owning or representing a
majority of the outstanding capital stock or majority of the
members shall so vote at a regular or special meeting.
Whenever the bylaws are amended or new
bylaws are adopted, the corporation shall 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 corporate
secretary and majority of the directors or
trustees.
The amended or new bylaws shall only be
effective upon the issuance by the Commission
of certification that the same is in accordance
with this Code and other relevant laws.
BY-LAWS – refers to the rules of action adopted by a
corporation for its internal government and for the
regulation of conduct, and it prescribes the rights and
duties of its stockholders or members towards itself and
among themselves in reference to the management.
Effectivity: After approval by the SEC
Adoption of bylaws: By-laws maybe adopted and filed
prior to incorporation; in such case, such bylaws shall be
approved and signed by all incorporators and submitted
to the Commission, together with the articles of
incorporation.
Amendment of by-laws; two modes:
1) By a majority of the board of directors or
trustees, and the owners of at least a majority of the
outstanding capital stock, or at least a majority of the
members of a nonstock corporation, at a regular or
special meeting duly called for the purpose,
2) By the BOD/Trustees alone when delegated by
the owner of two-thirds (2/3) of the outstanding capital
stock or two-third (2/3) of the members in a nonstock
corporation. This power, however, is considered revoked
when so voted by a majority of the outstanding capital
stock or majority of the members in a regular or special
meeting.
4. BYLAWS V. ARTICLES OF INCORPORATION
BYLAWS ARTICLES OF INCORPORATION
It is a condition subsequent. Its absence It is a condition precedent in the
merely furnishes a ground for the acquisition of corporate existence.
revocation of the franchise or certificate
of registration.
It is the rules and regulations adopted by It constitute the charter or fundamental
the corporation law of the corporation
It is executed before or after It is executed before incorporation
incorporation
It may be amended by a majority vote of It is amended by a majority of the board
the board of directors and majority vote of directors or trustees and stockholders
of outstanding capital stock or a majority representing 2/3 of the outstanding
of the members in non-stock corporation. capital stock, or 2/3 of the members in
case of non-stock corporation.
The power to amend or repeal bylaws or The power to amend or repeal the articles
adopt new bylaws maybe delegated by of incorporation cannot be delegated by
the 2/3 of the outstanding capital stock or the stockholders or members to the board
2/3 of the members in the case of non of directors or trustees.
stock corporation
End of Topic 11
