REQUIRED STOCKHOLDERS’ MUST STATE

REQUIRED STOCKHOLDERS MEETING PURPOSE IN ALL STOCKS CAN NEEDS SEC WHEN FILED WITH WHEN APPRAISAL OTHER NEED TO
POWERS LEGAL BASIS
BOARD VOTE VOTE REQUIRED AGENDA? VOTE? APPROVAL? SEC? EFFECTIVE? RIGHT KNOW

Revised Board of director Stockholders or Quorum Yes, Must state No, voting rights Yes, SEC After a Only will be Appraisal rights *Types of
Corporation or trustees Members Requirements, the purpose in depends on the approval is corporation effective only are the rights of amendments
Code of the Approval Secretary’s agenda: class and type required to approves upon approval stockholders of
*Internal
Philippines (R.A. Certificate and of shares held amend the amendments and issuance of demand
Clear Documentation
11232) Filling with the by the Article of tonits Article of a Certificate of payment for the
Description of
Securities and stockholders. Incorporation. Incorporation Amendment by fair value of their *SEC filling
the Amendment,
Exchange The process is through the the SEC. shares if they requirements.
Rationale for the
TO AMEND Commission regulated under board of disagree with
ARTICLES OF Amendment. *Impact of
(SEC) the R.A. 11232, directors and certain
INCORPORATION shareholders
which mandates stockholders or corporate action,
that any members, the including certain rights
amendment to amended amendments to *Legal and
the Articles must articles must be the Article of Regulatory
be filed with the filed with the Incorporation. Compliance
SEC for review SEC for
and approval. approval.

TO ADOPT OR Revised Board of Stockholders or Quorum Yes, must state Yes, all No, the SEC After approval. Immediate Approval right *Compliance with
AMEND BY-LAWS Corporation directors members Requirements, the purpose in stockholders of does not require The amended effectiveness. primarily fhe Revised
Code of the approval. approval agenda. a corporation, formal approval by-laws must be The governed by the Corporation
Voting process,
Philippines (R.A. regardless of to adopt or filed with the Amendments to Revised Code.
Transparency
11232) Documentation the class of amend a SEC withing 30 the by-laws Corporation
and informed *Clarity and
stocks they corporation’s by- days from the become Code (R.A.
Decision-Making Specificity
hold, are entitled laws. date of the immediately 11232).
to vote on the stockholder’s upon ratification *Impact on
adoption or approval. by the Corporate
amendment of shareholders at Governance
by-laws. the meeting.
*Shareholder
Communication
*Legal and
financial advice
*Record keeping.

Revised Required board Required vote Yes, the Yes, it is All stockholders No SEC The application The extension of Board of *Justification for
Corporation vote to extend from shareholder’s essential to have the right to Approval to extend the the corporate Directors’ extension
Code of the the term. stockholders. meetingis state the vote on the needed for corporate term term must first Approval and
*Compliance with
Philippines (R.A. necessary for purpose of the extension of the extention of must be filed be ratified by the Stockholders’
the R.A. 11232
11232) the ratification of shareholder’s corporate term corporate term with the SEC shareholder’s in ratification.
TO EXTEND the board of meeting in the but the within 30 days a formal *SEC
CORPORATE directors’ agenda when corporation afte the meeting. The
TERM
Regulations and
approval to convening to must file the shareholder’s Corporate term Update
extend the extend the appropriate approval. typically
corporate term. corporation documents with effective upon *Periodic Review
term. the SEC. approval by the of Corporate
SEC. activities
 Revised Yes, Required Yes, Required Yes, Yes, must the All can vote on Yes, SEC The document The shortening Legal basis, *Understanding
Corporation board vote to stockholders vite Stockholder’s state of agenda the decision to approval is must be filed of the corporate Condition for Corporate
Code of the shorten the term to shorten the meeting is clear shorten the required in with the SEC term become exercising Structure
Philippines (R.A. and must be term and must required to specification of corporate term shorten the after the effective only appraisal rights,
*Compliance with
11232) majority of the be majority of shorten the purpose, have however corporste term. necessary upon SEC timing and
legal
vote of the the outstanding corporate term. important of preferred approvals have approval and process,
requirements
board of capital stock notice and legal stockholders been obtained. issuance of the Payment of
TO SHORTEN directors’ approved. requirements. may not have Certificate of shares, *Stockholders
CORPORATE approve in voting rights, Filing. importance of
TERM
Communication
shortening the depending on compliance.
term the provision or *Proper
by-laws. communication
*Possible Legal
Changes.

Revised Yes, Required Yes, Required Required in Yes, the All can vote in Yes, SEC After The effectivity of *Triggering *Importance of
Corporation board vote and Stockholders Stockholders purpose of the the decision approval is Stockholder’s the capital stock events timely action
Code of the majority of the vote and meeting: stockholders’ however it required in this approval and change is
*Right to *Fair Market
Philippines (R.A. vote must be majority of the meeting must be depends on the decision. filing should be marked by the
*Formal Meeting demand valuedeterminatio
11232) approved. vote must be clearly stated in by-laws or in done after issuance of the
payment
approved. *Proper notice the agenda. Articles of obtaining the Certificate of *Legal Assistance
incorporation. necessary Filing from the *Procedure to
TO INCREASE/ *Quorum *Limitation on
approvals from SEC. exercise
DECREASE
Requirements the board of Appraisal Rights
CAPITAL STOCK appraisal right
*Voting process directors and *No Guarantee of
shareholders. *Payment
payment
process
*Rights of
dissenting
stockholders

TO INCUR/CREATE Revised Yes, Required Yes, Required Yes, Yes, the All stocks can Yes, SEC The necessary The proposal to *Valuation *Limitation of
BONDED Corporation specific Stockholders stockholders’ purpose must vote but it approval is documents incur or create process appraisal rights
INDEBTEDNESS
Code of the approvals from approval meeting is be explicitly depends on the generally should be filed bonded
*Payment *Procedure for
Philippines. the board of depends on the typically stated in agenda class of shares required. with the SEC indebtedness
dissention
(R.A. 11232) directors, must nature of the required when a and must be held by before the actual become *Implication for
stockholders
pass a transaction and corporation Clarity the stockholders. issuance of the effective only stockholders
resolution to the corporation’s seeks to incur or purpose of the bonds or debt after the SEC *Impact on
authorize the governing create bonded agenda. securities. has granted its Corporste
incurrence of documents. indebtedness. approval. decisions
bonded
indebtedness *Legal
and must be Consultation
majority vote of *Corporate
the directors Governance
present at the
meeting is
required to pass
the resolution.
 Revised Yes, Required Yes, Required Yes, it’s It’s essential for Typically, all Generally, Necessary The resolution *Legal basis *Strategic
Corporation board approval, Stockholders generally the agend of the stockholders, all denying pre- documents with to deny pre- Planning
*Limitations and
Code of the Justification of vote and must required. stockholders’ stockholders, emptive right for the SEC after emptive right
Exclusion *Clear
Philippines (R.A. denial and be majority of meeting clearly regardless of a specific obtaining the becomes
Communication
11232) notification to the vote stated, the class of issuance of required effective *Valuation of
with Stockholders
stockholders approved. Transparent, shares they shares does not approval from immediately shares
and complied hold(common or require prior the stockholders upon its *Shareholder
with the preferred), have approval from to deny pre- approval by the *Practical
Engagement
TO DENY regulations. right to vote on the SEC. emptive rights. stockholders Considerations
PRE-EMPTIVE significant during the *Legal
RIGHT Considerations
corporate meeting,
matter, including provided that *Continuous
resolution that the requisite improvement
affect their vote has been
ownership obtained.
rights, such as
denying pre-
emptive rights.

Revised Yes, but need Yes, but need Yes, generally Yes, the agenda All stockholders Yes, SEC The filing with The transaction *Triggerring *Limitstions
Corporation must be majority must be majority required when must be can vote on the approval is the SEC becomes events
*Timing for
Code of the of the vote is of the vote is proposing to sell transparent, decision but it generally regarding the effective after
*Document demands
Philippines approved by the approved by the or dispose have agenda depends on required for the sale or disposal the board of
Execution
(R.A.11232) board. stockholders. corporation details and several factors, sale or disposal of corporate directors and, if *Notice
assets. compliance with including the of significant assets typically applicable, *Compliance requirements
the regulations. class of shares corporate asset. occur after the stockholders’s with conditions
TO SELL OR
they hold. board of have approved *Payment term
DISPOSE OF
ASSETS directors has it. *SEC
*Dispute
approved the Notification
Resolution
transaction, if *Public
applicable, after disclosure
stockholders
have voted in
favor of it.

Revised Yes, but must be Does not Not typically It is not required No stockholders While the The corporation Once the board *Exercise of *Impact on
Corporation majority of the required a required to explicitly state vote required. acquisition of must file a report of directors appraisal rights Financial
Code of the vote are separate vote specifically for the purpose of Typically, the treasury shares with SEC within approves the statements
*Process for
Philippines (R.A. approved and from the acquisition the acquisition acquisition of does not always 30 days after the acquisition
appraisal rights *Restrictton
11232) quorum. stockholders of a in the agenda. treasury shares require prior acquisition of its through a board
Treasury shares
unless specified corporation’s does not require SEC approval, own shares. resolution, the *Limitations
TO ACQUIRE OWN in the own shares a vote from the corporation acquisition is *By-laws
corporation’s by- unless dictated stockholders. must notify the generally *Basis of
SHARES provisions
laws. by the SEC about the considered appraisal rights
corporation’s by- acquisition effective *Stockholder
*Situations
laws. within specific immediately, Communication
triggering
timeframe. unless stated appraisal rights *Regulatory
otherwise in the Compliance
resolution.
 Revised Yes, but must be No Mandatory Stockholders’ Stating the Not all stocks No approval Disposition of If the board of *Treasury *Regulatory
Corporation majority of the vote. Typically, meeting is purpose in the may have the required for treasury shares directors shares context Compliance
Code of the board vote is the board of generally not agenda is right to vote. ordinary that do not approves the
*Fair value *Corporate
Philippines (R.A. approved. directors has the required for typically not a Typically no disposition. For involve a disposition of
determination Governance
11232) authority to disposition of legal voting routine of significant treasury shares,
decide on the treasury shares. requirements, requirements for treasury shares, change in the the decision is *Legal and *Tax implications
disposition of but it is the disposition SEC approval is company’s typically Regulatory
TO DISPOSE OF treasury shares considered a of treasury typically not financial effective *Valuation of
framework
TREASURY without needing good practice. shares. required. condition or immediately treasury shares
SHARES
to obtain prior stockholder upon the board’s *Impact on
approval from right, there is resolution, stockholders right
the typically no unless the
stockholders. specific SEC resolution
filing specifies a
requirement. different
effective date.

Revised Yes, but must be A stockholders Ordinary It is essential to All stocks can Investment There is The investment *Triggering *Scope of
Corporation majority of the vote is not investment state the vote depends on made by a generally no typically takes event Appraisal Rights
Code of the vote is approved required for made by the purpose in the the types of corporation do need to file any effect
*Legal basis *Dissenting
Philippines (R.A. in the decision. ordinary board of agenda like the shares, the not require prior specific immediately
shareholders
11232) investment directors, a tranparency, corporation’s approval from documents with upon completion *Process of
made by board separate legal bylaws. the SEC. the SEC prior to of the board of Appraisal *Valuation
of directors in stockholders requirements, the investment. directors’ methodology
TO INVEST IN another meeting is specificity and However, the decision to
ANOTHER corporation typically not empowering corporation proceed with the *Appraisal Rights
CORPORATION procedure
required. stockholders should ensure investment.
proper *Legal framework
documentation
within its internal
records and
minutes of board
meetings.

TO ACTIVATE Revised Yes, but must be Depending on Yes, generally Yes, it’s All stocks can The activation of The board of The activation is *Applicability for *Compliance with
SECONDARY Corporation majority of the the significance required to vote Essential to vote depends on the secondary directors must effective upon activating a Regulatory
PURPOSE
Code of the vote is approved of the secondary especially if the state the the specific purpose first approve the the issuance of secondary requirements
Philippines (R.A. purpose and the activation purpose in the voting rights necessitates an activation of the the SEC’s purpose
*Notice to
11232) provision in the involves agenda and the associated with amendment to secondary approval of the
*Procedure to stockholders
Article of significant agenda must be the share issued the Articles of purpose. amended
exercise
Incorporation or changes that tranparency, by the incorporation, Articles of *Tax implications
appraisal rights
bylaws, necessitate required corporation. the corporation incorporation.
shareholders shareholders information, must file this *Impact on
*Consequences
approval may be approval. inclusion in amendment with license and
for the
required. notice and legal the SEC for permits
stockholders
compliance. approval. *Shareholder
*Limitationa of
Communication
appraisal rights
*Post-Approva
*Timing and
payment steps
 *Risks and
Contingencies

Revised Yes, but must be The decision to No stockholders Yes, the All stocks No SEC The call for Effective No Appraisal *Legal framework
Corporation majority of the call for unpaid is required to call purpose must cannot vote due approval unpaid immediately Rights for
*Notice
Code of the vote is generally within for unpaid be stated in the to the matter is required for the subscription upon the unpaid
requirements
Philippines (R.A. approved. the exclusive of subscription. agenda of the typically decided board of does not to be passing of the subscription
11232) the board of board of by the board of directors. filed with the board *Consequences
directors. No directors directors, not SEC. resolution, of Non-payment
vote required the unless
TO CALL FOR stockholders. otherwise *Importance of
UNPAID compliance
SUBSCRIPTIONS specified in the
resolution itself *Documentation
or in the
corporation’s *State Corporate
bylaws. policies
*Financial
Implications

Revised Generally, a Typically the Not required. Yes, important All stocks can SEC approval is Not required. Generally *Applicability of *Definition of
Corporation majority vote of stockholders to state the vote depends on not generally not depends on the Appraisal Rights Delinquent
Code of the the board of vote is not purpose in the the specify required. internal Shares:
*Conditions for
Philippines (R.A. directors is required due to agenda and provisions of the processes of the
appraisal rights -shares which the
11232) required to pass the usual lies to must be Clarity, corporation’s corporation and
stockholders has
a resolution the boads of Transparency, bylaas or the specific *Valuation failed to pay the
authorizing the directors Legal, Articles of conditional process
subscription price
sale of Procedural incorporation. outlined in the
*Legal or any required
delinquent Requirements by-laws or
Framework assessment.
shares. and Inclusion of Articles of
TO SELL Relevant incorporation.
DELINQUENT *Board of
SHARES Details. Discretion
*Fairness and
Reasonableness
*Documentation
*Potential legal
risks
*Impact on
capital structure

Revised Yes, majority Yes, Required Stockholders’ Yes, when All stocks can Yes, especially Atter the Issuance of Appraisal Rights *Limitation of
Corporation vote of the Stockholders’ meeting declaring or vote depends on for the issuance approval of stock dividends for: Dividends
Code of the board of vote. required but jt issuing the types of of stocks stock dividends become
a. Stock *Tax implications
TO Philippines (R.A. directors is depends on the dividends, dividends and dividends. by the Board of effective only
dividends
DECLARE/ISSUE 11232) required to fypes of particularly the corporation’s directors and after receiving *Timing of
DIVIDENDS b. Specific
declare dividends. (Cash stock dividends, capital structure. stockholders, SEC approval. Dividends
corporate
dividends. and property = the purpose the corporation Distribution
actions
not required) must be must file with the
explicitly stated SEC within
 (Stock dividends in the agenda reasonable *Stockholders’ *Appraisal Rights
= Required) for the timeframe to Eligibility. procedure
stockholders’ secure Approval
*Regulatory
meeting. before
Compliance
distributing the
dividends.

TO ENTER INTO Revised Typically Stockholders’ Typically Yes, purpose in All stockholders SEC approval is After board The *Situations *Conflict of
MANAGEMENT Corporation requires to vote depending required when the meeting of a corporation required. approval and, if effectiveness of where appraisal interest
CONTRACT
Code of the formal board on several entering into a must be stated can vote on required, a management rights applied.
*Transparency
Philippines (R.A. vote, as it factors, management in the agenda matters brought stockholders’ contract typically (Section 80)
and Disclosure
11232) involves a including the contract, and must be before them approval of the depends on two
*Process of
significant nature of the especially if the clarify and during. management key factors: *Review of
Appraisal Rights
decision management contract has Transparency , Stockholders’ contract, the Internal contract
Law on contract impacting the contract and the significant meeting, corporation corporate *Fair value
Required *Effect on
corporation’s provisions in the implications for including should file the approval and, if shares
information , Corporate control
operations and corporation’s the corporation entering into a necessary necessary, SEC
governance. bylaws or Article or its management documents with approval. *Key
And Legal *Termination
of Incorporation. stockholders. contract. the SEC as considerations
Compliance Provision
soon as possible
to comply with *Legal and
Regulatory Regulatory
requirements. Compliance

TO EFFECT Revised Required vote Required Yes, Required Yes, the All stocks Yes, SEC After obtaining Effective upon *Appraisal *Creditor’s
MERGER/ Corporation typically a Stockholder’s stockholders’ purpose of the entitled in voting approval is the required the issuance of Rights in merger Rights
CONSOLIDATION
Code of the majority vote of vote to approve meeting. meeting must be righs only. required. from both Board the Certificate of or
*Tax
Philippines (R.A. a board of a merger or clearly stated of directors and Medger or Consolidation.
implications
11232) directors. consolidation. the agenda, stockholders. Consolidation by
A. When
Legal the SEC. *Effect on
Appraisal Rights
requirements, employees
Apply.
Details to *Due Diligence
B. Exercising
include
appraisal rights. *Anti-Trust or
Competition
*Fair value
Concern.
determination
*Conditions and
Limitations
*Consequences
of exercising
appraisal rights.

Revised Required of Required of Yes, a Yes, the All stocks Yes, the The Certificate Effective upon *Circumstances *Notification
Corporation majority of majority of stockholders purpose of the typically have dissolution of a of Dissolution the approval of triggering Period
Code of the board of outstanding meeting is meeting must be the right to vote corporation must be filed the SEC after appraisal rights.
TO DISSOLVE THE *Limitation of
CORPORATION
Philippines (RA. directors vote capital stock required to clearly stated in on the proposed requires SEC with the SEC the filing of the
a. Merger or Rights
11232) and must be must vote favor dissolve a the agenda and dissolution, but approval after after the Certificate of
Consolidation
based on at a corporation. must be the specifics can the stockholders Dissolution.
Corporations by- Transparent, vary based on stockholders’ have voted in
 laws or specific stockholders’ Legal the type of have voted of favor of the b. Sales or *Right to
provisions in the meeting. Compliance and stocks and the dissolution. dissolution and transfer of all or Counsel.
Articles of Stockholders corporation’s by- the necessary substantially all
*Assessment of
incorporation. right. laws. resolution have assets.
Fair Value
been adopted.
C. Amendments
*Judicial Review
to the Articles of
incorporation *Effect of
that effect their Corporation
rights Action
D. Dissolution of *Corporate
the corporation. Governance
*Dissenting *Regulatory
shareholders Compliance
*Fair value *Potential Risks
determination
*Process to
exercise
appraisal rights
*Limitation
*Legal
framework

RFBT 2 Worksheet No. 5: Powers of Corporation