Incorporation

• The Revised Corporation Code of the Philippines provides that any person, partnership, association or corporation, singly or jointly with others but not more than 15 in number may organize a corporation for any lawful purpose or purposes.
• The Incorporation Process is:

  • drafting and execution of articles of incorporation
  • filing of articles of incorporation
  • payment of the filing of publication fees
  • issuance by the SEC certificate of incorporation
• Section 21 of the New Code provides that if a corporation does not formally organize and commence its business within 5 years from the date of its incorporation, its certificate shall be revoked.
• If a corporation has commenced its business but subsequently becomes inoperative for a period of at least 5 consecutive years, the Commission may, after due notice and hearing, place the corporation under delinquent status.
• Section 22 of the New Code provides that the board of directors or trustees shall exercise the corporate powers, conduct all business and control all properties of the corporation
• Section 11 of the New Code states that all corporations shall file with the Commision articles of incorporation.
• Section 122 of the Revised Corporation Code of the Philippines provides that the single stockholder may the be self-appointed treasurer but may never be appointed as the corporate secretary.
• A stock certificate is a document that evidences the ownership of a share or stock. Section 63 states that no certificate of stock shall be issued to a subscriber until the full amount of his subscription, together with interest and expenses , if any is due, has been paid.
• By-laws are the rules of actions adopted by the corporation for its internal government and for the government of its officers, stockholders, and members. Section 46 provides by-laws that a corporation may have.
• Section 38 provides that all stockholders shall enjoy the pre-emptive right to subscribe to all issues or dispositions of shares of any class, in proportion to their respective holdings, unless such right is denied by the articles of incorporation or an amendment thereto.
• Pre-emtive Right is when the new issue must be offered first to existing shareholders before being offered to the general public to preserve their proportionate influence and interest in the company.
• Section 12 provides that Stock Corporations shall not be required to have a minimum capital stock, except as otherwise specifically provided by special law. 


  However, in case of an increase of the authorized capital stock, the 25% subscription & 25% paid-up capital rule is required.

  
  

  The 25% minimum paid-up capital requirements does not apply to subsequent subscription of the unsubscribed shares of the corporation.
• Section 73 requires all private corporations, stock or non-stock, to keep books and records at its principal offices.
• The corporate books & records required by Section 73:

  • Articles of Incorporation & Bylaws
  • Current Ownership Structure & Voting Rights
  • Names & addresses of all members, board of directors or trustees, and executive officers
  • Books of Accounts
  • Minutes Books
  • Stock and Tranfers Book
  • Subscription Book
  • Subscriber's ledger
  • Shareholders' ledger
  • Share certificate book