Registration of Corporations Registration of corporations involves the fellowing procedure: 1, Verification of corporate name with SEC. This is todetermine ifthe corporate name to be adopted has already boon adopted by any other firm whether partnership or corporation duly registered with the SEC. 2, Drafting and execution ofthe articles of incorporation 3. Depesitofcash received for subscribed sharesof stocks in abankinginstitution in the name of the temporary treasurer, in trust for and to the eredit of the corporation 4, Filing of the articles of incorporation together with the following: a), Treasurer's affidavit By, Statement of assets and liabilities of the proposed corporation ©). Authority to verify bank deposits @), Certificate of deposit of cash paid for subscription ©). Personal information sheet of the incorporators 9. Commitment to change corporate name if is found similar to another corporate name Payment of fling and publication fees 3. Issuance by SEC of the certificate of incorporation 5. 6. 7. Registration of the corporate name with the Bureau of Domestic Trade 8, Obtaining municipal licenses from the local government (municipalityor ity) a. Obtaining the VAT or Non-VAT account number from the BIR 10, Registration with BIR of books of accounts end accountable forms Contents of the Articles of Incorporation Section 14 of the Corporation Codes states: All corporations organized under this Code shall ll with the Securities and Exchange Commission articles of incorporction in any of the oficial Tonguages duly signed and acknowledged by all ofthe incorporators, contain- ing oubstantially the following matters, except as otheruiee preoribed by thia Code or by special law: 1. The name of the corporation: 2, The specific purpose or purposes for which the corporation is being ‘incorporated. Where a corporation has more than one sated purpose, the articles of incorporation shall state which is the primary purpose and which is lare the secondary purpose or purposes: Provided, that a noa- stock corporation may not include a purpose which would change or contradict its nature as such; 3 The place where the principal office of the corporation is to be located, which must be within the Philippines; 4, The term for which the corporation is to exist: 5. The names, nationalities and residences ofthe incorporators; 6, The number of directors or trustees, which shall not be less than five (3) ‘aor mare than fifteen (15); 7, The names, nationalities and residences ofthe persons who shall act as directors or trustees until the first regular directors or trustees are duly lected and qualified in azcordance with this Code;8, Ifit bea stk corporation, the amount ofits authorized capital stock in lawful money of the Philippines, the number of shares into which itis divided, and incase the shores are par valve shares, the por value ofeach, the nares, nationalities and residences ofthe original subscribers, and the aniount subscribed and paid by each ox his subscription, and if'some orall of the shares are without par value, such fact must be steted; 9. Ifit be 0 non-stock corporation, the amount of its copital, the names, nationalitiesand residencesofhecontributorsand theamountcotributed by each: and, 10, Such other matters as are not inconsistent with law and which the incorporators may deem necessary and convenient. ‘The Seeuritiesand Exchange Commission shall not accept the articles of incorporation of any stock corporation uniess accompanied by a sworn state- ment of the Treasurer elected by the subscribers showing that at least twenty- five (25) percent of the authorized capital stock of the corporation has been subseribed, and at least twenty-five (25%) of the total subscription has been fully paid to him in actual cash and lorin property the fair valuation of which is equal to at least twenty-five (25%) of the said subscription, such paid-up capital being not less than flve thousands (5,000) pesos. By Laws By-laws may be defined as the rules of action for the internal government of a corporation and for the government of its officers and stockholders or members. All corporations formed under the Corporation Code ofthe Philippinesare required toadopt acode of by-laws within one (1) month after receipt ofits corporate charter from theSEC. ‘By-laws shall be effective only upon issuance by the SEC ofa certification that the by- aws are not inconsistent with the provisionsof the Corporation Code. It may provide for the following: 1. The time, place and manner of calling and conducting regular or special ‘meetings of the directors or trustee 2, ‘Thetime snd menner of calling and conducting regular or special meetings of ‘the stockholders or members 3, Therequired quorum in meetings of stockholders or members andthe manner ‘of voting therein, 4, The form of proxies of stockholders and members and the manner of voting therein, 5. Thequalification, daties and compensation of directors ortrusteesand officers. 6. Thotime for holding tho annual clection of directors or trustees and the medo ‘or manner of giving notice therec 7. Themanner cfclectionor appointment and the term ofoffice ofall officers other than diroctors or trasta 8 In the case of steck corporations, the manner of issuing certificates. 9, ‘The penalties for violation ofthe by-laws. 10. Other matters thatmay be necessary for the properand convenienttransaction ofits corporate business end affairs.SEC Express Registration Services ‘The SBC provides exprossincorporaticn services whereby fora fee, an applicant is tiven a standard set of incorporation papers to be filled up. Rights of Stockholders Stockholders, as owners of corporation, have certain rights expressly recognized by the corporation law. These may be summarized as follows: 1. Right to aitend and vote in person or by proxy at stockholders’ meetings. (See. 50) 2 Right to receive dividends when declared. (Sec. 42) 8. Right to inspect corporate beoks and records and to receive Ginancial report of the corporation's operations. (Soes. 74 and 15) 4. Right to pre-emption in the issue of shares, (See, 39) 5. Right to elect and remove directors. (Secs. 24, 28) 8. Right to approve certain corporate acts. (Sees. 49-54) 1, Right to issuance of certificate ofateck or other evidence of ateck ownership and bo registered as sharcholder. (See. 63) 8. Right to transfer of stock on the corporate books. (Se:. 63) 9. Right to participate in the distribution of eorporate assets upon dissolution, (Goss, 118-119) 10., Right to adopt and amend or repeal the by-laws or adopt new by-laws. (Sec. 46, 48) 11. Right to compel thecalling of meeting of stockhelders when for anycausethere is no person authorized to call a meeting. (Sec. 50.) 12. Right to enter intoa voting trust agreement, (See. 58) 1B. Right to recover stock unlawfully sold for deliquency. (See. 69.) 114. Right to bring individual and representative or derivative suits, 15. Right to demand payment of the value of his shares and withdraw from the corporation in certain cases. (Secs, 41 and 81),) 16. Right to have the corporation voluntarily dissolved. (Secs. 118-119.) Pro ptive Right of Stockholders ‘The pre-emptive right of a stockholder refers to his right to subscribe to all issu or disposition of shares of any class, in proportion to his shareholdings subject tocertain exceptions per Sec. 39 of the Corporation Code. This right aimsto safeguard stockholders against unfairness in the issue of shares to manipulate voting power of some stockhold- ersand dilute the value oftheir proportionate interest, Example: Clemence Santos owns 5,000 shares ofthe 25,000 outstanding shares of capital stock of AB Mfg. Corp. The firm is issuing additional 15,000 shares to rai additional capital. If Clemence Santos is not allowed to subseribe to the new issue in proportion te his sharcheldings, his proportionate interest would go down from 20% to 12.5%, computed se follows: fonate i 5,000 shares owned . Proportonate interest at present: eS pear = 2% 5,000 shares owned 140,000 shares outstanding Proportionate interest after the new issu = 1256