Chapter V.

BYLAWS

Apart from articles of incorporation, the corporation may adopt rules to regulate its internal
affairs and/or protect its legitimate corporate interest.

By laws must be consistent with law, particularly in the promotion of good corporate
governance, the protection of minority investors, and the prevention of fraud and abuses on
the part of the controlling stockholders, members, directors, trustees or officers.

Changes introduced by the Code

The Code does not impose any period after incorporation within which bylaws should be filed
with the Commission. In the absence of such period, the corporation’s failure to file the same is
not anymore, a ground for suspension or revocation of its franchise.

The Code allows its adoption and filing even prior to incorporation or for submission together
with the articles of incorporation. Bylaws are only effective upon the issuance by the
Commission of a certification that they are in accordance with the Code, and a dule certified
copy shall be attached to the articles of incorporation.

It encourages the adoption of rules “for the promotion of good governance and anti-graft and
corruption measures.”

SEC. 45. Adoption of Bylaws. – For the adoption of bylaws by the corporation, the affirmative
vote of the stockholders representing at least a majority of the outstanding capital stock, or of
at least a majority of the members in case of nonstock corporations, shall be necessary. The
bylaws shall be signed by the stockholders or members voting for them and shall be kept in the
principal office of the corporation, subject to the inspection of the stockholders or members
during office hours. A copy thereof, duly certified by a majority of the directors or trustees and
countersigned by the secretary of the corporation, shall be filed with the Commission and
attached to the original articles of incorporation.

Notwithstanding the provisions of the preceding paragraph, bylaws may be adopted and filed
prior to incorporation; in such case, such bylaws shall be approved and signed by all the
incorporators and submitted to the Commission, together with the articles of incorporation.
In all cases, bylaws shall be effective only upon the issuance by the Commission of a certification
that the bylaws are in accordance with this Code.

The Commission shall not accept for filing the bylaws or any amendment thereto of any bank,
banking institution, building and loan association, trust company, insurance company, public
utility, educational institution, or other special corporations governed by special laws, unless
accompanied by a certificate of the appropriate government agency to the effect that such
bylaws or amendments are in accordance with law.
All incorporators must sign the bylaws if adopted prior to incorporation and must be submitted
to the Commission together with the proposed articles of incorporation. The board and the
prescribed number if shareholders or members must approve the same if adopted after the
incorporation. In both cases, the law requires Commission’s approval.

The concerned government agency must favorably endorse to the Commission the bylaws of
the corporation that is subject to its special or primary regulation.

The bylaws must be kept in the principal office of the corporation. It must be open for
inspection by shareholders or members.