These very long provision under the law is very significant in so

far as disposition or the property. Remember this letter G

presupposed says disposition of the properties or property or
properties of the corporation. That are in the regular course of
business.

So this would be limited only to disposition of properties of the

corporation. Again, in the ordinary course of business. The
moment, the question has been tweaked to the, to reflect that,
that disposition of the property of the corporation. Is to the point
that it is already selling all or substantially all of its properties.
This won't be applicable. This is only in so far as the regular
disposition or sale rental or mortgage of certain properties of the
corporation. The moment it is already the bordering on
properties, which constitute all or substantially all of the assets
of the corporation. Then that particular provision will not apply.

Letter G refers only to disposition of properties in the regular

course of business.

9. Next to enter into partnership, joint venture, or merger

consolidation, or any other commercial agreement with natural
OR JURIDICAL PERSON , legal, personal, this is a major
revision on the powers of the corporation. Probably you will not
notice it upon first reading, but take note that this is a major
amendment under the RCC in BP 68 there is nothing there that
allows the corporation to enter into a joint venture agreement
with another corporation or within natural person, or even with a
partnership.
Now the RCC made business easier by allowing the corporation
to enter into partnership, joint venture, or merger consolidate
merger and consolidation.

But this time into commericsil transactions or agreement with

natural or juridical person. So what's the implication. Let us
assume San Miguel corporation is going to engage they're
already engaged in government infrastructure projects.They
contract with with the government for infrastructure projects.
So San Miguel is a corporation under the RCC. They are under
the old law. PPCC. Corporations like San Miguel , cannot enter
into a joint venture agreement within natural person.

Okay. Now, if this expressly provided for under the RCC that a
corporation can enter into a joint venture agreement. So if the
say if the if San Miguel would Like to build a, a building, not a
a commercial building beside the expressway that they are
constructing. And that property, for example, we have the
buildings we'll be constructed is owned by a natural person, the
corporations and Miguel can enter into a joint venture agreement
with that owner of the real property and establish the structure
there. Okay.

To make reasonable donations, including the public welfare or

hospital charitable cultural or scientific, or similar purposes. I
just cut out a one item there. A corporation under law can can
make a reasonable contribution to a political campaign or a
political activity.
The note that under the old. Of course go to probation are not
supposed to engage in parties and political activities, but under
the RCC, the framers of the law made a very clever insert shown
in the provision of the law. The portion that was cut. There was
the foreign corporations are not allowed to make contributions
for political for political purposes.

The framers limited the prohibition to foreign corporations.

What's the implication of that. Domestic corporations are now
allowed to make contributions in a political campaign or any
political activity.

X is a candidate solicited the campaign contribution from W

Coporations.

A, the opponent X question, the can question the political

contribution or co political donation made by W corporation.
Arguing that it is prohibited under the Law. W corporation is a
domestic corporation. No problem. If w corporation is a foreign
corporation, the prohibition is very clear, but since w
corporation as stated is one example in the question is a
domestic corporation is w corporation prohibited under the
revise corporation code from giving or contributing to a
politicalactivity.

Well, the law did not prohibit domestic corporations from

making reasonable donations contributions in a partisan Political
activity, the claim of the opponent of X that X is should not
have asked for and w corporation should not have granted the
request of X to provide contribution for political activity is not
prohibitive and the RCC.
On the establishment of pension, retirement and other plans for
the benefit of directors trustees officer and employees.

And to exercise such powers as may be essential or necessary to

carry out its purpose or purposes as is stated in the articles of
incorporation.

This last portion letter K of section 34. It's the actual provision
so that if there is some area where there is an issue on whether
or not the corporation could have done it or has committed an
ultra vires. Well, that left her key will answer for that is if it is
essential and necessary for the carrying out of the purpose of the
corporation, then that is Covered by the general powers of the
corporation.

On the matter of the act of a corporation and nonstopck

corporation at that, which was not expressly provided for in by
laws of the non-stock corporation and also not expressly aware it
is not provided in the corporation code.

Supreme court said no, it is necessary and essential for the

carrying out of the purpose of the corporation.

Some of you may ask, well, let's wait for a section 36, a private
corporation may extend or shorten his term as stated in D AOI
when approved by a majority of the board of directors or
trustees and ratified other meeting by the stakeholders
representing at least two thirds of the outstanding capital or its
members.
So this power to extend or shorten corporate term is not limited
only to start corporations. That's the first lesson you need to
remember.

Second, this is that the power is both extend and too shorten .
Now you might ask the question. Wait, do we need to extend
under the law that existence is already perpetual.

Why is section 36 worded there in such a way that the

corporation may still extend? If the there is already a grant of
perpetual existence, why is there a need then?

That incorporation, although given the default provision that it

will have a parapetual corporate existence is not prevented from
adapting a limited existence. So if the corporation opted to retain
their corporate existence as appearing in their articles of
incorporation, which was of course shorter than 50 years. Okay.
So they opted to retain that, but closer to the 50 years, they, they
decided no, let's try to extend it.

Because there are still matters that the corporation has to do.
And so we need to extend it. Is the corporation authorized to do
that?
Yes. The corporation can still extend its corporate there,
although it initially opted to be bound by the term provided in its
articles of incorporation. How about shorten?

Well, of course that is without saying that if the corporation

through the owners of the corporation opted to discontinue the
business they can do so by way of shortening the corporate
terms so that when the term when the The shorten term
existence , then the corporate corporations existence can be the
EMBA cart already have discontinued.

The power to increase or decrease capital stock incur create

increased, bonded indebtedness.

This power presuppose says two powers that were combined

under letter B.
1. the power to increase or decrease capital stock.
2. Power to increase or decrease capital stock or incur create,
increase bond indebtedness unless approved by a majority
of the board of directors.

In the no.1 It refers only to increase or decrease of capital stock.

The second line pertains to the issuance of bonded indebtedness.
They are going to create bonded in that business.

What is the bonded indebtedness?

Is actually creating an obligation covered by a bond For
example, a corporation has a huge project requiring caviar but
the corporation doesn't want to borrow from the bank. Because
they do not want to put up their own collateral for the loan to be
obtained from the bank.

So that bank loan is already removed from the options and yet
the corporation needs money. So another option would be to
issue new shares. So that the existing stockholders and the
would be stock holders can put in the capital needed. So that's
what you call capital raising activity, but then the, the owners,
the directors thought, no, I don't think that is a proper option
because that means to say, we will need to issue new shares.

That will be new investors coming in. We do not want that.

What is the third option?
The third option is to raise a capital directly from the public by
way of issuance of bonds . So certain corporations, especially
those big names in the industry. San Miguel corporation will
have a new project and they need capitalization.

But they do not want to borrow money from the bank. They do
not want to issue new shares of stock. So they will issue bonds.
So that is bonded indebtedness . They will borrow money
directly from the investors.

When the corporation would like to increase or decrease their

capital, or would like to incur a bonded indebtedness
they would need to observe this requirement, majority vote of
the board of directors, two thirds votes of the outstanding
Capital or vote of the members as the case may be.

The reason why I am making a distinction between increase or

decrease in capital vis a vi the increase or creation abandoned
indebtedness is because of its application.

The power to increase or decrease capital stock will be

applicable only for stock corporation. Obviously we're talking
about stocks in non-stock corporation cannot increase or
decrease its capital stock because there's no stock.
So it is only limited to stock corporations. How about eating
bonded indebtedness?