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ARTICLES OF INCORPORATION
I.
Nature
of
Charter:
The
charter
is
in
the
nature
of
a
contract
between
the
corporation
and
the
government.
Government
of
P.I.
v.
Manila
Railroad
Co.,
52
Phil.
699
(1929).
II.
Procedure
and
Documentary
Requirements
(Section
14
and
15)
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
and/or
in
property
the
fair
valuation
of
which
is
equal
to
at
least
twenty-five
(25%)
percent
of
the
said
subscription,
such
paid-up
capital
being
not
less
than
five
thousand
(P5,000.00)
pesos.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
fact
of
being
one
of
the
persons
who
originally
composed
the
corporation.
o He
may
cease
to
be
a
stockholder
or
a
member,
he
may
lose
all
his
rights
and
interest
in
the
corporation,
but
he
will
always
be
known
as
the
incorporator.
The
articles
of
incorporation
cannot
therefore
be
amended
to
delete
B.
Corporate
Name
(Sections
18,
14(1)
and
42)
Section
18.
Corporate
name.
No
corporate
name
may
be
allowed
by
the
Securities
and
Exchange
Commission
if
the
proposed
name
is
identical
or
deceptively
or
confusingly
similar
to
that
of
any
existing
corporation
or
to
any
other
Section
42.
Power
to
invest
corporate
funds
in
another
corporation
or
business
or
for
any
other
purpose.
Subject
to
the
provisions
of
this
Code,
a
private
corporation
may
invest
its
funds
in
any
other
corporation
or
business
or
for
any
purpose
other
than
the
primary
purpose
for
which
it
was
organized
when
approved
by
a
majority
of
the
board
of
directors
or
trustees
and
ratified
by
the
stockholders
representing
at
least
two-thirds
(2/3)
of
the
outstanding
capital
stock,
or
by
at
least
two
thirds
(2/3)
of
the
members
in
the
case
of
non-stock
corporations,
at
a
stockholder's
or
member's
meeting
duly
called
for
the
purpose.
Written
notice
of
the
proposed
investment
and
the
time
and
place
of
the
meeting
shall
be
addressed
to
each
stockholder
or
member
at
his
place
of
residence
as
shown
on
the
books
of
the
corporation
and
deposited
to
the
addressee
in
the
post
office
with
postage
prepaid,
or
served
personally:
Provided,
That
any
dissenting
stockholder
shall
have
appraisal
right
as
provided
in
this
Code:
Provided,
however,
That
where
the
investment
by
the
corporation
is
reasonably
necessary
to
accomplish
its
primary
purpose
as
stated
in
the
articles
of
incorporation,
the
approval
of
the
stockholders
or
members
shall
not
be
necessary.
(17
1/2a)
SEC Opinion, 7 January 1974, VIII SEC QUARTERLY BULLETIN 21 ( No. I, Jan. 1974).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
name
is
deceptive.
Where
a
name
is
deceptive
per
se,
it
will
be
disallowed
by
the
SEC.
The
use
of
Inc.
in
required
under
Section
15
The
use
of
a
persons
name
in
the
corporation
name
is
allowed
only
where
the
person
is
a
shareholder
or
he
has
a
significant
position
in
Also Lyceum of the Philippines v. Court of Appeals, 219 SCRA 610, 615 (1993).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
C.
Purpose
Clauses
(Sections
14(2)
and
42)
P.C.
Javier
&
Sons,
Inc.
v.
Court
of
Appeals,
462
SCRA
36
(2005).
Villanueva,
C.
L.,
&
Villanueva-Tiansay,
T.
S.
(2013).
Philippine
Corporate
Law.
(2013
ed.).
Manila,
Philippines:
Rex
Book
Store.
2
The
SEC
has
ruled
that
the
rules
governing
the
construction
of
charters
of
corporations
are,
for
the
most
part,
the
same
as
those
which
govern
the
construction
and
interpretation
of
statutes,
contracts
and
other
written
instruments.3
D.
Corporate
Term
(Section
11)
Section
11.
Corporate
term.
A
corporation
shall
exist
for
a
period
not
exceeding
fifty
(50)
years
from
the
date
of
incorporation
unless
sooner
dissolved
or
unless
said
period
is
extended.
The
corporate
term
as
originally
stated
in
the
articles
of
incorporation
may
be
extended
for
periods
not
exceeding
SEC
Opinion,
26
January
1994,
XXVIII
SEC
QUARTERLY
BULLETIN
46
(No.
2,
June
1994),
citing
7A
FLETCHER,
Section
3640,
and
6
FLETCHER
CYC.
CORP.,
Section
2483.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
fifty
(50)
years
in
any
single
instance
by
an
amendment
of
the
articles
of
incorporation,
in
accordance
with
this
Code;
Provided,
That
no
extension
can
be
made
earlier
than
five
(5)
years
prior
to
the
original
or
subsequent
expiry
date(s)
unless
there
are
justifiable
reasons
for
an
earlier
extension
as
may
be
determined
by
the
Securities
and
Exchange Commission.
Notice
of
meetings
shall
be
in
writing,
and
the
time
and
place
thereof
stated
therein.
All
proceedings
had
and
any
business
transacted
at
any
meeting
of
the
stockholders
or
members,
if
within
the
powers
or
authority
of
the
corporation,
shall
be
valid
even
if
the
meeting
be
improperly
held
or
called,
provided
all
the
stockholders
or
members
of
the
corporation
E.
Principal
Place
of
Business
(Section
51)
Section
51.
Place
and
time
of
meetings
of
stockholders
or
members.
Stockholders'
or
members'
meetings,
whether
regular
or
special,
shall
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
F.
Minimum
Capitalization
(Section
12):
Why
is
maximum
capitalization
required
to
be
indicated?
G.
Subscription
and
Paid-up
Requirements
(Section
13)
Section
13.
Amount
of
capital
stock
to
be
subscribed
and
paid
for
the
purposes
of
incorporation.
At
least
twenty-five
percent
(25%)
of
the
authorized
capital
stock
as
stated
in
the
articles
of
incorporation
must
be
subscribed
at
the
time
of
incorporation,
and
at
least
twenty-five
(25%)
per
cent
of
the
total
subscription
must
be
paid
upon
subscription,
the
balance
to
be
payable
on
a
date
or
dates
fixed
in
the
contract
of
subscription
without
need
of
call,
or
in
the
absence
of
a
fixed
date
or
dates,
upon
call
for
payment
by
the
board
of
directors:
Provided,
however,
That
in
no
case
shall
the
paid-up
capital
be
less
than
five
Thousand
(P5,000.00)
pesos.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
and
transfer
book
in
determining
the
validity
and
issuance
of
such
shares.
Lanuza
v.
Court
of
Appeals,
454
SCRA
54
(2005).
o The
ACS
and
Subscribed
stocks
are
found
in
the
articles
of
incorporation.
o For
Paid-in
Capital,
you
can
look
at
Certificate
of
Deposits,
and
verify
via
bank
accounts.
H.
Steps
and
Documents
Required
in
SEC
1. Certificate
of
Deposit
not
only
the
bank
deposit
but
also
the
corporations
books
of
accounts
and
supporting
records
to
determine
the
existence
and
utilization
of
the
paid-up
capital
stock
must
also
be
submitted.
The
letter
of
authority
shall
be
binding
upon
the
corporation
even
if
there
is
a
change
of
corporate
officers.2
3. Written
Undertaking
to
Change
Corporate
Name
III.
Grounds
for
Disapproval
(Section
17)
Section
17.
Grounds
when
articles
of
incorporation
or
amendment
may
be
rejected
or
disapproved.
The
Securities
and
Exchange
Commission
may
reject
the
articles
of
incorporation
or
disapprove
any
amendment
thereto
if
the
same
is
not
in
compliance
with
the
requirements
of
this
Code:
Provided,
That
the
Commission
shall
give
the
incorporators
a
reasonable
time
within
which
to
correct
or
modify
the
objectionable
portions
of
the
articles
or
amendment.
The
following
are
grounds
for
such
rejection
or
Section
1,
SEC
GUIDELINES
FOR
THE
VERIFICATIONS
OF
THE
PAID-UP
CAPITAL
(CASH)
OF
CORPORATIONS
(1976).
2
Section
2,
ibid.
3
SEC
GUIDELINES
IN
THE
APPROVAL
OF
CORPORATE
AND
PARTNERSHIP
NAMES
(1977).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
benefit
of
the
residents,
the
object
is
unlawful
and
the
articles
can
be
denied
registration.
Asuncion
v.
De
Yriarte,
28
Phil.
67
(1914).
disapproval:
1.
That
the
articles
of
incorporation
or
any
amendment
thereto
is
not
substantially
in
accordance
with
the
form
prescribed
herein;
IV.
Amendments
to
the
Articles
of
Incorporation
(Section
16).
Section
16.
Amendment
of
Articles
of
Incorporation.
Unless
otherwise
prescribed
by
this
Code
or
by
special
law,
and
for
legitimate
purposes,
any
provision
or
matter
stated
in
the
articles
of
incorporation
may
be
amended
by
a
majority
vote
of
the
board
of
directors
or
trustees
and
the
vote
or
written
assent
of
the
stockholders
representing
at
least
two-thirds
(2/3)
of
the
outstanding
capital
stock,
without
prejudice
to
the
appraisal
right
of
dissenting
stockholders
in
accordance
with
the
provisions
of
this
Code,
or
the
vote
or
written
assent
of
at
least
two-thirds
(2/3)
of
the
members
if
it
be
a
non-stock
corporation.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)
The
original
and
amended
articles
together
shall
contain
all
provisions
required
by
law
to
be
set
out
in
the
articles
of
incorporation.
Such
articles,
as
amended
shall
be
indicated
by
underscoring
the
change
or
changes
made,
and
a
copy
thereof
duly
certified
under
oath
by
the
V.
Commencement
of
Corporate
Existence
(Section
19).
Section
19.
Commencement
of
corporate
existence.
A
private
corporation
formed
or
organized
under
this
Code
commences
to
have
corporate
existence
and
juridical
personality
and
is
deemed
incorporated
from
the
date
the
Securities
and
Exchange
Commission
issues
a
certificate
of
incorporation
under
its
official
seal;
and
thereupon
the
incorporators,
stockholders/members
and
their
successors
shall
constitute
a
body
politic
and
corporate
under
the
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED
APRIL
3,
2014)