Reflection Paper : Contents of the Articles of Incorporation and By-laws
By: Rik Andrei Morite
It is my first time seeing the contents of the Articles of Incorporation and the by-law adopted by
a real corporation. Before, I expected that these documents are so hard to understand that they
require utmost experience and knowledge for it to be understood. However, I felt relieved after
knowing that I was, somehow, able to understand the contents of these documents. I find these
documents’ formats very neat and somehow understandable by the common people.
First, The Articles of Incorporation are one of the most important things a corporation should
have. These documents provide essential information regarding the corporation being formed
such as its name, contact information, and information about its share (Stock Corporation). This
means that you have made a careful decision to create a legal business which can help you
separate yourself from your business. It is important to separate yourself from your business by
making it a legal corporation so that you can protect your personal assets from the corporation’s
debts. I find it satisfying to think that a one must have a purpose for having a corporation in
filing the Articles of Incorporation. Since it is my first time looking at real Articles of
incorporation, I find it as an achievement because I felt like I was able to understand it. It even
stated the amount invested by certain people and how many shares they have subscribed. I find
these data/information helpful to potential investors because the investors can estimate how
much they are going to invest after seeing the paid in capital of the corporation, the number of
authorized shares and its par value.
I learnt in the book that there should be no more than 15 incorporators and it was true, the
incorporators in the Cebu Landmasters Incorporation did not exceed 15. I also saw that the
Articles of Incorporation were verified by Securities and Exchange Commissions, just like what
we learned. After learning the lessons in the book, I figured out that Cebu LandMasters
Incorporation is a domestic stock corporation after seeing that it was incorporated by Filipinos
and there were details regarding their shares of stocks. The corporation was able to authorize
shares worth Two Billion Five Hundred Million Pesos (P2, 500,000,000.00) divided into a.) Two
Billion Four Hundred Million (2,400,000,000) common shares with a par value of One Peso
(P1.00) per share and b.) One Billion (1,000,000,000) voting preferred shares with a par value of
Ten Centavo (P0.10) per share. I learned in the discussions of the book that there are shares
issued with the right to vote while there are those shares issued without the right to vote. I found
it satisfying to understand what the Cebu LandMasters Incorporation’s Articles of Incorporation
meant when it stated that the preferred shares shall have the following features, rights and
privileges such as full voting rights (one vote for each share in the holder’s name on the books of
the Corporation) and Non-cumulative cash dividends based on the rate of its par value.
What caught my attention the most while looking at the Cebu Landmasters Incorporation’s
Articles of Incorporation is that the investors’ names are written in the documents. This gives the
viewers, such as myself, a sense of inspiration. After watching this, I got inspired, wanting to
invest in corporations so that I, too, may have my name written in stock certificates as well.
Secondly, I find the by-laws adopted by the corporation important because these by-laws are
legal documents for a corporation to have in place as they specify the corporation’s management
structure and makes sure that the operations run smoothly. Basically, these are rules that will
guide your business so that everyone in the corporation is on the same page.
I learned in the book that these by-laws are the set of rules and regulations adopted by a
corporation for its internal governance which usually contains provisions relating to its
shareholders, directors/trustees, officers and general corporate business. I’ve seen that the reason
why the by-laws are longer than the articles of incorporation is that every detail of these
provisions of the corporation is clearly stated in the by-laws. Cebu LandMaster Incorporation’s
by-laws have 27 pages consisting of 10 articles. These articles go into details regarding the
provisions of Offices, Shares of Stock and Their Transfer, Meeting of Stockholder, Board of
Directors, Committees, Officers, Indemnification of Directors and Officers, Dividends and
Finance, Corporation Seal, and Amendments, which I would have a hard time understanding
were it not for the discussions offered to us in the Partnership and Corporation Book. I realized
that upon seeing thy by-laws of a corporation, potential investors are able to understand the
business more. Overall, having a set of by-laws can save operation time and really help make the
corporation more reliable and trustworthy.