The Revised Corporation Code of the Philippines:
Changes and Developments in Corporation Law
by Atty. Nico B. Valderrama, CPA, MPM
Posted on February 22, 2019; Updated on July 12, 2019
The long-anticipated revision and update of the corporation law have now been realized. With the passage of the
Revised Corporation Code of the Philippines (RCC) or RA 11232, the rules governing corporations may now
address the current concerns of corporations and would-be corporations. It aims to further ease the formation of
corporations and filing of applications and reports which have frustrated those who deal with the bureaucracy. It
empowers the SEC to fully enforce the new law. It also introduced new rules that align with developments in
technology and new laws that came after the old Corporation Code or BP 68 like the Philippine Deposit Insurance
Corporation Charter or RA 3591, the New Central Bank Act or RA 7653, the Rules of Court, the Intellectual
Property Code or RA 8293, the Securities Regulation Code or RA 8799, the Data Privacy Act or RA 10173, and
the Philippine Competition Act or RA 10667. Some established rules and practices of the SEC have been
institutionalized by their incorporation in the RCC. The updates on corporation law presented herein are divided
into two categories: (i) Changes and (ii) Innovations. Changes shall refer to those rules already existing under
the old Corporation Code (OCC), but later refined or amended by RCC. Innovations shall refer to those rules not
provided under the OCC which are first introduced by RCC. At the latter portion, items retained by the RCC are
likewise listed. The corresponding sections in the RCC are provided at the end of each item for easy reference.
CHANGES: revision (reference in the RCC; provision in the OCC amended)
1.
Corporations prohibited from issuing no-par
value shares now includes other corporations
authorized to obtain or access funds from the
public, whether publicly listed or not. (Section 6
of the RCC; Section 6 of the OCC)
2.
Exclusive right of holders of founder shares to
vote and be voted for in the election of directors
shall not exceed 5 years from date of
incorporation. (Section 7; Section 7)
3.
The terms and conditions for the issuance of
redeemable shares must not only be stated in the
articles of incorporation but in the certificate of
stock as well. (Section 8; Section 8)
Person Corporation (OPC). (Section 10; Section
10)
7.
As a general rule, corporations shall have
perpetual existence, unless its articles of
incorporation provide for a specific term.
Corporations formed prior to RCC shall
automatically have perpetual existence without
prejudice to its right to elect to retain its specific
corporate term through a majority vote of its
stockholders. (Section 11; Section 11)
8.
Amendment on the corporate term may now be
made within 3 years prior to the expiration of the
corporate term. (Section 11; Section 11)
4.
Majority of the incorporators need not be
residents of the Philippines. (Section 10;
Section 10)
9.
The number of trustees indicated in the articles
of incorporation may now be more than 15.
(Section 13; Section 14)
5.
Juridical persons such as partnerships,
associations, and corporation may now
incorporate a corporation. There is no more
minimum number of incorporators, but the
maximum number remains at 15. (Section 10;
Section 10)
10.
The authorized capital stock no longer needs to
be at least 25% subscribed. (Section 14;
Sections 13 and 15)
11.
The Treasurer’s Affidavit is no longer
required since the certification concerning the
amount of capital subscribed and/or paid is
already included in the articles of incorporation.
(Section 14; Section 14)
6.
A corporation with a single stockholder may
now be formed and shall be considered a One
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12.
There is no more minimum paid-up capital.
(Section 14; Section 14)
13.
False certification concerning the amount of
capital subscribed and/or paid is a new ground
to disapprove articles of incorporation or
amendments thereto. (Section 16; Section 17)
14.
15.
Failure of a corporation to formally organize and
commence its business within 5 years from the
date of its incorporation shall be render the
certificate of incorporation deemed revoked as
of the day following the end of the 5-year
period. (Section 21; Section 22)
After commencing its business, failure of the
corporation to operate for at least 5 consecutive
years may be placed under delinquent status
by SEC after due notice and hearing. A
delinquent corporation shall have 2 years to
resume operations and comply with all SECprescribed requirements. Failure to comply shall
be a cause for revocation of the certificate of
incorporation. (Section 21)
16.
Majority of the directors or trustees need not be
residents of the Philippines. (Section 22;
Section 23)
17.
Trustees elected shall have a term not exceeding
3 years. (Section 22; Section 23)
18.
A treasurer to be elected must be a resident of
the Philippines. (Section 24; Section 25)
19.
The election of an officer no longer expressly
requires absolute majority of the number of
directors/trustees fixed in the articles of
incorporation. (Section 24; Section 25)
20.
The duties of elected officers may be provided
not only in the bylaws, but also as resolved by
the board of directors. (Section 24; Section 25)
21.
The death, resignation, or cessation to hold office
of any director, trustee, or officer shall be
reported in writing to the SEC within 7 days from
knowledge thereof. (Section 25; Section 26)
22.
Disqualification of directors, trustees, or officers
for violations of the RCC and Securities
Regulation Code or RA 8799, now clearly
requires conviction by final judgment. It also
adds two additional disqualifications: finding
of administrative liability for any offense involving
fraudulent acts and judgment or finding of a
foreign court or equivalent foreign regulatory for
acts similar to the aforementioned grounds. The
SEC and the Philippine Competition Commission
or PCC may impose additional qualifications or
other disqualifications. (Section 26; Section 27)
23.
Elections to fill vacancies in directorships and
trusteeships due to term expiration must be held
no later than the day of such expiration. In
case of removal, vacancy may be filled during the
same meeting. In all other cases, it must be filled
no later than 45 days from the time the
vacancy arose. (Section 28; Section 29)
24.
Dealings of directors, trustees, or officers now
include their spouses and relatives within the
4th civil degree of consanguinity or affinity.
(Section 31; Section 32)
25.
The prohibition on domestic corporations
against giving donations for political
purposes has been removed. Now, only foreign
corporations are prohibited to give such
donations. (Article 35; Section 36)
26.
Notice about the meeting on the proposed
extension or shortening of corporate term may
now be given to the stockholders and members
electronically. (Section 36; Section 37)
27.
Notice about the meeting on the proposed
increase or decrease of capital stock or increase
of bonded indebtedness may now be given to the
stockholders electronically. (Section 37;
Section 38)
28.
The certificate executed in case of increase or
decrease of capital stock or increase of bonded
indebtedness need not set forth the actual
indebtedness of the corporation on the day of
the meeting. (Section 37; Section 38)
29.
The application for increase or decrease of
capital stock or increase of bonded
indebtedness shall require prior approval of SEC
and where appropriate, of the Philippine
Competition Commission (PCC). (Section 37;
Section 38)
30.
The application for increase or decrease of
capital stock or increase of bonded
indebtedness shall be filed with the SEC within
6 months from the date of approval of the board
of directors and stockholders, which may be
extended for justifiable reasons. (Section 37;
Section 38)
31.
The treasurer’s sworn statement accompanying
the application for increase of capital stock now
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clearly provides that the required 25%
subscription is of the “increase in capital
stock” instead of “increased capital stock”. The
new rule is consistent with the current policy of
the SEC. (Section 37; Section 38)
32.
33.
Notice about the meeting on the proposed sale
or other disposition of all or substantially all of the
corporate assets may now be given to the
stockholders electronically. (Section 39;
Section 40)
Notice about the meeting on the proposed
investment of corporate funds in another
corporation may now be given to the
stockholders electronically. (Section 41;
Section 42)
34.
Bylaws must now be filed together with the
articles of incorporation. It can no longer be filed
within one month from notice of issuance of the
certificate of incorporation. (Section 45; Section
46)
35.
Bylaws may provide for the maximum number of
other board representations that an
independent director or trustee may have.
(Section 46; Section 47)
36.
37.
38.
39.
Bylaws may provide other matters for the proper
or convenient transaction of its corporate affairs
for the promotion of good governance and antigraft and corruption measures. (Section 46;
Section 47)
If the date of regular meeting of stockholders is
not fixed in the bylaws, it shall be held on any
date after April 15 of every year as determined
by the board provided that a written notice shall
be sent to all stockholders or members at least
21 days prior to the meeting, unless a different
period is required. Notice of regular meetings
may now be sent electronically. (Section 49;
Section 50)
There is an exhaustive list of matters (which
may be expanded through proposal) required to
be presented at each regular meeting of
stockholders or members. (Section 49; Section
50)
General waivers of notice in the articles of
incorporation or the bylaws shall not be allowed.
Attendance at a meeting shall not constitute a
waiver of notice of such meeting when the
express purpose of attendance is to object to the
transaction of any business because the meeting
is not lawfully called or convened. (Section 49;
Section 50)
40.
Metro Cebu, Metro Davao, and other
Metropolitan areas (in addition to Metro Manila)
are now considered a city or municipality for
purposes of places where stockholders’ or
members’ meetings may be held. (Section 50;
Section 51)
41.
Notices of stockholders’ or members’ meetings
now require certain information and
accompanying proxy forms. (Section 50;
Section 51)
42.
All proceedings and any business transacted at
the stockholders’ or members’ meetings shall be
valid even if improperly held or called, provided
that no one of the present stockholders or
members expressly states at the beginning of the
meeting that the express purpose of
attendance is to object to the transaction of
any business because the meeting is not
lawfully called or convened. (Section 50; Section
51)
43.
Notice of board meetings must be sent to every
director or trustee at least 2 days prior to the
scheduled meeting, unless a longer period is
provided in the bylaws. (Section 52; Section 53)
44.
It is now expressly provided that directors or
trustees who cannot physically attend or vote at
board meetings can participate and vote through
remote communication that allow them
reasonable opportunities to participate. (Section
52; Section 53)
45.
Pledgors and mortgagors are now identified as
secured creditors to include other persons
granted with security interest over the shares.
(Section 54; Section 55)
46.
No voting trust agreement shall be entered into
which are anti-competitive and violative of
nationality and capital requirements in
addition to for purposes for the perpetuation of
fraud. (Section 58; Section 59)
47.
Additional consideration for stocks: shares of
stock in another corporation and other generally
accepted form of consideration. (Section 61;
Section 62)
48.
Notice of the sale of delinquent stocks may be
sent through other means provided in the
bylaws. (Section 67; Section 68)
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49.
There is an exhaustive list of corporate books
and records that must be preserved at the
principal office and made available to the
stockholders or members. (Section 73; Section
74)
50.
The financial statements furnished to the
requesting stockholder or member shall be in
the form and substance of the financial
reporting required by the SEC. (Section 74;
Section 75)
51.
If the total assets or total liabilities of the
corporation are less than P600,000 or such
other amount as may be determined by the
Department of Finance, the financial statements
required to be presented to the stockholders or
members may be certified under oath by the
treasurer and the president. (Section 74;
Section 75)
52.
The notice required for meetings to approve
merger or consolidation shall be given in the
same manner as giving notice of regular or
special meetings. (Section 76; Section 77)
53.
There are four additional items that must be set
forth in the articles of merger or consolidation.
(Section 77; Section 78)
54.
There is appraisal right in case of investment of
corporate funds for any purpose other than the
primary purpose of the corporation. (Section 80;
Section 81)
55.
56.
57.
58.
The first trustees elected in a non-stock
corporation does not have to serve their initial
terms partially (1 year for 1/3 of the board, 2
years for the other 1/3, and 3 years for the rest).
(Section 91; Section 92)
Incorporation of educational institutions no
longer
require
the
favourable
recommendation of the Department of
Education. (Section 107 of OCC was not
reproduced in RCC)
The voting requirement in case of voluntary
dissolution where no creditors are affected now
only requires majority vote of the board and
affirmative vote of stockholders owning at least
majority of the outstanding capital stock or
majority of the members. (Section 134; Section
118)
Notice on the meeting to vote on the voluntary
dissolution must be given to each stockholder or
member at least 20 days prior to the meeting
and must be published once prior to the
meeting in a newspaper. Notice may now be
given electronically. (Section 134; Section 118)
59.
A verified request for voluntary dissolution shall
be filed with the SEC containing required
information and accompanied by required
documents. (Section 134; Section 118)
60.
The SEC must approve the request for
dissolution within 15 days from receipt and
issue the certificate of dissolution. (Section 134;
Section 118)
61.
For corporations regulated by government
agencies, applications for dissolution must be
favourably recommended by the appropriate
government agency. (Section 134; Section
118)
62.
In case of voluntary dissolutions where creditors
are affected, the petition must contain certain
information and accompanied by required
documents. (Section 135; Section 119)
63.
It is now clearly provided that voluntary
dissolution shall take effect only upon the
issuance by the SEC of a certificate of
dissolution. (Sections 134 and 135; Sections
118 and 119)
64.
In case of expiration of corporate term,
dissolution shall automatically take effect on the
day following the last day of the corporate
term stated in the articles of incorporation
without need for the issuance of the certificate of
dissolution. (Section 136; Section 120)
65.
The grounds for involuntary dissolution are
now listed down. (Section 138; Section 121)
66.
Banks are excluded from the provision on
corporate liquidation. (Section 139, Section 122)
67.
Upon the winding up of corporate affairs, any
asset distributable to any creditor or stockholder
or member who is unknown or cannot be found
shall be escheated in favour of the national
government. (Section 139; Section 122)
68.
The threshold for bonds or securities required
for foreign corporations applying for license to
do business in the Philippines has been adjusted
P100,000 to P500,000 (as initial bond or
security) and P5,000,000 to P10,000,000
(licensee’s gross income for the fiscal year that
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA
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will require additional securities). (Section 143;
Section 126)
69.
70.
If a domestic corporation is appointed as a
resident agent of a foreign corporation, it must
be of sound financial standing and must show
proof that it in good standing as certified by the
SEC. (Section 144; Section 127)
Administrative sanctions such as fines for the
violations of the RCC or of a rule, regulation, or
order of the SEC have been increased. Aside
from fines, the SEC may issue permanent cease
and desist orders, or suspend or revoke
certificates of incorporation, or dissolve
corporations and forfeit its assets. (Section 158;
Sections 143 and 144)
71.
Reportorial requirements for every corporation
are now listed down, with a right to redact
confidential information. (Section 177; Section
141)
72.
The powers, functions, and jurisdiction of the
SEC are now listed down. (Section 179; Section
143)
10.
Corporations vested with public interest shall
have independent directors constituting 20%
of such board. They must be elected by the
shareholders present or entitled to vote in
absentia during the election of directors.
(Section 22)
11.
Stockholders and members may vote through
remote communication or in absentia, if
authorized in the bylaws or by a majority of the
board. Such modes are available to corporations
vested with public interest, even in the absence
of a provision in the bylaws. Stockholders or
members who participate through remote
communication or in absentia shall be deemed
present for purposes of quorum. (Section 23)
12.
Directors and trustees elected are now required
to observe the rules of good corporate
governance. (Section 23)
13.
Corporations vested with public interest are
required to elect a compliance officer. (Section
24)
14.
Non-holding of elections and the reasons
therefor shall be reported to the SEC within 30
days from date of the scheduled election. The
new date of the election must not be later than
60 days from the scheduled date. If no new date
has been designed or if the rescheduled date is
not held, the SEC may summarily order the
holding of an election upon application of a
stockholder, member, director, or trustee.
(Section 25)
15.
The SEC has now the authority to order the
removal of a disqualified director or trustee
motu proprio or upon verified complaint, without
prejudice to the sanctions that the SEC may
INNOVATIONS:
1.
Revival of corporations whose terms have
expired is now allowed subject to all of its duties,
debts, and liabilities existing prior to its revival.
(Section 11 of the RCC)
2.
An arbitration agreement may now be provided
in the articles of incorporation. (Section 13)
3.
Filing of the articles of incorporation and
amendments thereto may now be filed
electronically. (Section 13)
4.
One Person Corporations must bear “OPC” at
end of its corporate name. (Section 14)
5.
The form of articles of incorporation now
includes the undertaking to change the name
of the corporation when there exists a prior right
or if it is contrary to law, public morals, good
customs, or public policy. (Section 14)
6.
Rules on distinguishability of corporate
names are provided. (Section 17)
7.
SEC now has the authority to cause the
removal of all visible signages, marks,
advertisements, labels, prints, and other effects
bearing a disallowed corporate name. (Section
17)
8.
Failure to comply with SEC’s order related to
disallowed corporate name may hold the
corporation and its responsible directors or
officers in contempt and/or hold them
administratively, civilly, and/or criminally liable
and/or revoke the registration of the corporation.
(Section 17)
9.
Verification of intended corporate name prior
to registration is now expressly provided.
(Section 18)
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impose on directors or trustees who knew of the
disqualification but failed to remove such
director or trustee. (Section 27)
16.
17.
18.
19.
20.
“Emergency board”: When a vacancy prevents
the remaining directors from constituting a
quorum and emergency action is required to
prevent grave, substantial, and irreparable loss
or damage to the corporation, the vacancy may
be temporarily filled among the officers of the
corporation by unanimous vote of the remaining
directors or trustees. The action by the
designated director or trustee shall be limited to
the emergency action necessary, and the term
shall cease within a reasonable time from the
termination of the emergency or upon election of
the replacement director. The creation of the
emergency board shall be reported to the SEC
within 3 days from creation stating the reason for
its creation. (Section 28)
Directors or trustees shall not participate in the
determination of their own per diems or
compensation. (Section 29)
Corporations vested with public interest shall
submit to their shareholders and the SEC an
annual report of the total compensation of
each of the directors or trustees. (Section 29)
Validity of dealings of directors, trustees, or
officers with corporations vested with public
interest require approval by at least 2/3 of the
entire membership of the board, with at least a
majority of the independent directors voting to
approve the material contract. (Section 31)
The board is now empowered to create special
committees of temporary or permanent
nature and determine the members’ term,
composition, compensation, powers, and
responsibilities. (Section 34)
21.
Corporations have now the express power to
enter into a partnership or joint venture with
any person. (Section 35)
22.
The sale or other disposition of assets of a
corporation is now subject to the Philippine
Competition Act or RA 10667. (Section 39)
23.
In non-stock corporations where there are no
members with voting rights, the vote of at least
a majority of the trustees in office will be
sufficient authorization for the corporation to
enter into any transaction involving sale or other
disposition of corporate assets. (Section 39)
24.
The determination of whether or not the sale
involves all or substantially all of the
corporation’s properties and assets must be
computed based on its net asset value, as
shown in its latest financial statements. (Section
39)
25.
Management contracts shall be entered into for
a period not longer than 5 years for any one
term. (Section 43)
26.
The modes by which a stockholder, member,
director, or trustee may attend meetings and
cast their votes must now be provided in the
bylaws. (Section 46)
27.
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 SEC.
(Section 46)
28.
An arbitration agreement may now be provided
in the bylaws. (Article 46)
29.
A stockholder or member may now propose the
holding of a special meeting and items to be
included in the agenda. (Section 46)
30.
The stock and transfer book or membership
book shall be closed at least 20 days for
regular meetings and 7 days for special
meetings before the scheduled date of the
meeting, unless the bylaws provide for a longer
period. (Section 49)
31.
In case of postponement of stockholders’ or
members’ regular meetings, written notice
shall be sent 2 weeks prior to the date of the
meeting, unless a different period is required.
(Section 49)
32.
The right to vote of stockholders and members
may now be exercised through remote
communication or in absentia when so
authorized in the bylaws. The SEC shall issue
rules governing such participation. (Sections 49,
57, and 88)
33.
The articles of incorporation or bylaws may
provide for a greater majority to determine the
quorum during board meetings. (Section 52)
34.
A director or trustee who has a potential
interest in any related party transaction must
recuse from voting on the approval of the related
party transaction. (Section 52)
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35.
The SEC may require corporation whose
securities are traded in trading markets and
which can reasonably demonstrate their
capability to do so to issue their securities or
shares of stocks in uncertificated or scripless
form. (Section 62)
36.
The inspecting or reproducing party of corporate
books or records shall remain bound by
confidentiality rules. (Section 73)
37.
A requesting party who is not a stockholder or
member of record, or is a competitor, director,
officer, controlling stockholder or otherwise
represents the interests of a competitor shall
have no right to inspect or demand reproduction
of corporate records. (Section 73)
38.
39.
40.
41.
42.
43.
Abuse of the right of inspection shall be
penalized without prejudice to liabilities under
the Intellectual Property Code and Data Privacy
Act. (Section 73)
If the corporation denies or does not act on a
demand for inspection and/or reproduction of
corporate records, the aggrieved party may
report such denial or inaction to the SEC. The
SEC may issue an order directing the inspection
or reproduction of the requested records after a
summary investigation conducted within 5 days
from receipt of such report. (Section 73)
The SEC may require stock corporations which
transfer and/or trade stocks in secondary
markets to have an independent transfer
agent. (Section 73)
Independent
trustees
of
non-stock
corporations vested with public interest need not
be a member of the non-stock corporation.
(Section 91)
A non-stock corporation shall, at all times, keep
a list of its members and their proxies in the
form the SEC may require. The list shall be
updated to reflect the members and proxies of
record 20 days prior to any scheduled election.
(Section 92)
profession, except when allowed under
special laws, may not incorporate as OPCs.
(Section 116)
c.
There is no minimum authorized capital stock
for OPCs except when provided by special
laws. (Section 117)
d.
OPCs are required to file articles of
incorporation similar to ordinary corporations
with additional contents. (Section 118)
e.
OPCs are not required to submit and file
bylaws. (Section 119)
f.
OPCs are required to indicate the letters
“OPC” either below or at the end of its
corporate name. (Section 120)
g.
The single stockholder shall be the sole
director and president of the OPC. (Section
121)
h.
The treasurer, corporate secretary, and other
officers shall be appointed within 15 days
from issuance of the certificate of
incorporation. The single stockholder may
not be appointed as the corporate secretary.
The single stockholder may be appointed as
treasurer but must give a bond to the SEC.
(Section 122)
i.
The corporate secretary of an OPC has
special functions. (Section 123)
j.
The single stockholder is
designate a nominee and
nominee who shall take the
single stockholder in case
incapacity. (Section 124)
k.
The term of the nominee and alternate
nominee shall only be temporary until the
heirs have been lawfully determined or the
estate becomes the single stockholder.
(Section 125)
l.
The nominee or alternate nominee may be
changed by submitting the names of the new
nominees and their corresponding consent
to the SEC without need of amending the
OPC’s articles of incorporation. (Section
126)
m.
All actions, decisions, and resolutions taken
by the OPC shall be contained in a minutes
book. (Section 127)
Allowing One Person Corporations (OPCs):
a.
OPCs may be formed by a natural person,
trust, or an estate. (Section 116)
b.
Banks,
quasi-banks,
pre-need,
trust,
insurance,
public
and
publicly-listed
companies, non-chartered GOCCs, and
natural persons licensed to exercise a
required to
an alternate
place of the
of death or
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA
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n.
o.
p.
q.
44.
45.
46.
Actions of the OPC may be recorded in the
minutes book in lieu of meetings. (Section
128)
OPCs are required to submit reportorial
requirements to the SEC, subject to penalties
in case of non-compliance. (Section 129)
OPCs shall have limited liability, and the
principles of piercing the corporate veil
applies with equal force to OPCs. (Section
130)
An OPC may be converted into an ordinary
stock corporation and vice versa. (Sections
131 and 132)
A request for dissolution may now be withdrawn
through a motion duly verified by any
incorporator, director, trustee, shareholder, or
member. (Section 137)
If the corporation is ordered dissolved by final
judgment under Section 138(3), its net assets
shall be forfeited in favor of the national
government without prejudice to the rights of
innocent stockholders and employees for
services rendered. (Section 138)
The SEC has regulatory jurisdiction to
investigate an alleged violation of the RCC, or of
a rule, regulation, or order of the SEC. (Section
154)
47.
The SEC, through its designated officer, has
subpoena powers. (Section 155)
48.
The SEC may issue cease and desist orders
(even ex parte) to persons reasonable believed
to have violated or about to violate the RCC, or a
rule, regulation, or order of the SEC. (Section
156)
49.
The SEC has contempt powers subject to due
notice and hearing. (Section 157)
50.
Specific acts are punishable with
corresponding fine: (Sections 159 to 169)
a.
Unauthorized use of corporate name
b.
Violation of disqualification provision
a
c.
Violation of duty to maintain records and to
allow their inspection or reproduction
d.
Willful certification of incomplete, inaccurate,
false, or misleading statements or reports
e.
Independent auditor collusion
f.
Obtaining corporate registration through
fraud
g.
Fraudulent conduct of business
h.
Acting as intermediaries for graft and corrupt
practices
i.
Engaging intermediaries for graft and corrupt
practices
j.
Tolerating graft and corrupt practices
k.
Retaliation against whistleblowers
51.
There exists a liability for all directors,
trustees, officers, and other employees,
including aiders and abettors who commits
any violation of the RCC, any rule, regulation, or
order of the SEC. (Sections 171 and 172)
52.
The amount collected by the SEC shall be
deposited and maintained in a separate
account to fund its modernization and to
augment its operational expenses. (Section 175)
53.
The SEC shall exercise visitorial powers over
all corporations. (Section 178)
54.
The SEC shall develop and implement an
electronic filing and monitoring system.
(Section 180)
55.
An arbitration procedure is laid down to govern
arbitration agreements provided in the articles of
incorporation or bylaws. (Section 181)
56.
Jurisdiction over party-list organizations are
transferred to the Commission on Elections or
COMELEC. (Section 182)
57.
Corporations
affected
by
the
new
requirements are given 2 years from the
effectivity of the RCC within which to comply.
(Section 185)
2.
Rules governing redeemable, preferred, and
treasury shares (Sections 6, 8, and 9)
3.
Rules on de facto corporations and corporations
by estoppel (Sections 19 and 20)
RETENTIONS:
1.
Definition and classes of corporations,
corporations created by special laws,
corporators, incorporators, stockholders, and
members (Sections 2 to 5 of the RCC)
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA
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4.
Rule on disloyalty of a director (Section 33)
5.
Rules on powers to deny pre-emptive right,
acquire own shares and declare dividends
(Sections 38, 40, and 42)
6.
Rule on ultra vires acts (Section 44)
7.
Rules on amendment to bylaws (Section 47)
8.
Rules on quorum in stockholders’ and members’
meetings and who shall preside (Sections 51 and
53)
9.
Rules on voting in case of joint ownership of
stocks and for treasury shares (Sections 56 and
57)
10.
Rules
on
subscription
contract,
preincorporation subscription, issuance of stock
certificates, liability for watered stocks, interest
on unpaid subscription, payment of balance of
subscription, questioning delinquency sales,
court action to recover unpaid subscriptions,
effect of delinquency, right of unpaid and nondelinquent shares, lost or destroyed certificates
(Sections 59 to 60, 63 to 66, and 68 to 72)
11.
Procedure in the exercise of appraisal right
(Sections 81 to 84)
12.
Definition
and
purposes
of
non-stock
corporations and non-transferability and
termination of membership (Sections 86 to 87
and 89 to 90)
13.
Rules in distribution of assets in non-stock
corporations (Sections 93 and 94)
14.
Rules governing close corporations (Sections 95
to 104)
15.
Rules governing religious corporations (Sections
107 to 114)
16.
Definition and rights of foreign corporation
(Section 140)
17.
Rule on application for a license to do business
by foreign corporations (Section 142)
18.
Rules on applicable laws to foreign corporations,
amendments to its articles of incorporation and
bylaws, amendment of license, merger or
consolidation, doing business without a license,
revocation of license, issuance of certificate of
revocation, and withdrawal (Sections 146 to 153)
19.
Definition of outstanding capital stock (Section
173)
20.
Rule on designation of governing boards
(Section 174)
The RCC took effect on February 23, 2019, upon complete publication in Manila Bulletin and the Business Mirror
on Saturday, February 23, 2019. The official copy of RCC is now available for download in the website of the
Official Gazette.
DISCLAIMER: This is for general information only. This shall not serve as a substitute for professional advice
which depends on specific facts and circumstances. If this would be used for academic or other informational
purposes, securing the author’s express permission is required. All rights reserved.
ABOUT THE AUTHOR: Atty. Nico B. Valderrama, CPA, MPM is a corporate legal counsel for a group of
companies engaged in manufacturing, transportation, and real estate development. He also provides legal
counselling to various clients engaged in hospital business, real estate brokerage, and commercial leasing. He
was a junior reviewer in the Review School of Accountancy (ReSA) and taught Regulatory Framework for
Business Transactions (RFBT) which covers several civil and commercial laws. He also teaches civil and
commercial laws in the Arellano University School of Law (AUSL). He is likewise licensed to practice law in the
State of New York, USA.
THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA
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THE REVISED CORPORATION CODE: CHANGES AND DEVELOPMENTS IN CORPORATION LAW by NICO B. VALDERRAMA
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