Sections 49 & 50:

Kinds of Meetings

Meetings of Board of Directors/Board of Trustees, and of the Stockholders/Members of the corporation, may be regular or special.

Meetings of Stockholders or Members

Regular Meetings
Held annually on a fixed date, stated in the by-laws. If no date is fixed, regular meetings are held on any date in the month of April, to be determined by the Board of Directors/Trustees Written notice must be sent at least two weeks prior to the meeting.

Special Meetings
Held whenever necessary, or as provided in the by-laws. Written notice must be sent one week prior to the meeting.

Requisites for a Valid Meeting of Stockholders or Members

1. It must be held at the proper place. 2. It must be held at the stated date and at the appointed time, or at a reasonable time thereafter. 3. It must be called by the proper person. 4. There must be a previous notice. (notice must state the purpose of the meeting) 5. There must be a quorum.

Section 51:

Place and Time of Meetings of Stockholders or Members

Meetings of Stockholders/Members, whether regular or special, shall be held in the principal office of the corporation, or within the city or municipality in which it is located. Metro Manila shall be considered a city or municipality. Notice of meetings shall be in writing.

Proper Person to Call a Meeting

1. 2. The person/s designated in the by-laws. In the absence of such provision in the by-laws, by a director or trustee or by an officer entrusted with the management of the corporation. The stockholder or member upon order of the SEC. In the case of special meetings to remove directors/trustees, the corporations secretary or a stockholder/member.

1. 2.

All proceedings had, and any business transacted at any meeting of stockholders/members (even if improperly called), shall be considered valid, as long as they are within the power or authority of the corporation, and that all stockholders/members are present or represented at the said meeting.

Section 52:

Quorum in Meetings
Quorum: consists of a majority of the registered members, or stockholders representing a majority of the outstanding capital stock. Section 47(2): corporations can determine the required quorum in their by-laws (any number but at least 2). In the absence of a quorum, no action can be taken. Once a quorum is present, a majority vote is sufficient to come to a decision. The result of such vote is binding, and corporate action cannot be prevented by withdrawal of members/stockholders

Matters Which Require Specific Number of Votes

Amending Articles of Incorporation: Majority vote of BOD/BOT + vote/written assent of 2/3 of stockholders or members. Election of Directors/Trustees: Majority of outstanding capital stock (OCS) or members entitled to vote. To call a special meeting for the removal of directors/trustees: 2/3 of OCS or members entitled to vote To ratify a contract of a director/trustee or officer with the corporation: 2/3 of OCS or members To extend/shorten corporate term: Majority vote of BOD/BOT + 2/3 OCS or members

Matters Which Require Specific Number of Votes

Increase or decrease capital stock: Majority BOD + 2/3 OCS To incur, create, or release bonded indebtedness To dispose of all or substantially all of the corporate assets To invest corporate funds in another corporation or business for any purpose other than the primary purpose

Majority vote of the BOD/BOT + 2/3 of OCS or members

Matters Which Require Specific Number of Votes

To issue stock dividends: Majority of the quorum of the BOD + 2/3 OCS To enter into management contract: Majority of the quorum of the BOD/BOT + Majority of OCS or members of both the managing and managed corporations, and in some cases, 2/3 of the total OCS/members entitled to vote, with respect to the managed corporation. To adopt by-laws: Majority of OCS or members To amend or repeal the by-laws or adopt new by-laws: Majority vote of BOD/BOT + OCS/members To delegate to the BOD/BOT the power to amend or repeal the bylaws, or adopt new by-laws: 2/3 OCS or members

Matters Which Require Specific Number of Votes

To revoke preceding power delegated to the BOD/BOT: Majority of the OCS or members To fix the issued price of no par value shares: Majority of the quorum of the BOD if authorized by the articles of incorporation. Otherwise, majority of the OCS To effect/amend a plan of merger or consolidation: Majority vote of BOD/BOT + 2/3 OCS or members To dissolve the Corporation: Majority vote of BOD/BOT + 2/3 OCS or members To adopt a plan of distribution of assets of a non-stock corp: Majority vote of the BOT + 2/3 of members with voting rights.

Section 53:

Regular and Special Meetings of Directors or Trustees

Regular meetings of the BOD or trustees of every company shall be held monthly, unless otherwise stipulated in the by-laws. Special meetings of the BOD or trustees may be held at any time upon the call of the president or as provided in the by-laws. Meetings of the BOD or trustees of a corporation may be held anywhere in or outside of the Philippines, unless the by-laws provide otherwise. A notice of a regular or special meeting stating the date, time, and location of the meeting must be sent to every director or trustee one day prior to the said scheduled meeting. *A director or trustee may waive the requirement of notice of any meeting, expressly or impliedly

Section 54:

Who Shall Preside at Meetings

President/Chairman/Vice-Chairman. The president shall preside at all meetings of the BOD or trustees as well as of the stockholders or members, unless provided otherwise by the bylaws. Thus, the by-laws may provide that the chairman, instead of the president, shall preside at board meetings. Stockholder or member in a temporary capacity Where the officer entitled to preside is not present at time for a meeting to convene it is recognized that a stockholder or members who takes the floor may temporarily preside at the meeting pending the selection of the presiding officer. Unless the contrary is provided by the by-laws, the presiding officer may be selected by viva voce vote of the stockholders or members present.

Section 54:

Who Shall Preside at Meetings

Stockholder or member chosen whenever, for any cause, no person is authorized to call a meeting, the petitioning stockholder or member authorized by the SEC to call a meeting of the corporation shall preside thereat until at least a majority of the stockholders or members present have chosen one of their number as presiding officer

Section 55:

Right to Vote Off Pledgors, Mortgagors , and Administrators

In case of pledged or mortgaged shares in stock corporations, the pledgor or mortgagor shall have the right to attend and vote at meetings of stockholders, unless the pledgee or mortgagee is expressly given the right in writing by the mortgagor or pledgor which is recorded on the appropriate corporate books. Executors, administrators, receivers, and other legal representatives appointed by court may attend and vote on behalf of the stockholders or members without need of any written proxy.

Right to Vote in General

In stock corporations the right to vote is an incident of ownership of stock.
Ordinarily, only legal owners of shares in a stock corporation have the right to be present and vote in any corporation meeting. Except as is provided in section 55, one who does not appear to be a stockholder upon the books of the corporation is not eligible to vote a stock although he may be entitled to the legal title to the stock voted. Non-voting share may vote in cases where the law provides two-thirds or a majority of the outstanding capital stock entitle to vote, holders of stock without voting rights may vote in cases provided in Sec. 6.

Right to Vote in General

In non-stock corporations:
the right of the members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the by-laws.

Manner of Voting

A stockholder or member may vote

Directly, or Indirectly, through a representative
by means of proxy (Secs. 55, 56, 58 and 89 par.2) or by a trustee under a voting trust agreement (Sec. 59) or by court appointed personalities (Sec. 55 par 2)

Voting may be strait or cumulative

Representative Voting
Legal representative of stockholder or member Sec. 55 authorizes executors, administrators, receivers, or other legal representatives duly appointed by court to attend and vote in behalf of stockholders or members without need of written proxy. Pledgee or mortgagee of stockholders shares as to pledees or mortgagees of shares in stock corporations, the shall have the right to attend and vote at meetings only when the said right to participate has been expressly been given by the pledgor or mortgagor. The authorization is required by the Code to appear in the appropriate corporate books of the said pledgor or mortgagor. (Sec. 55 par .1)

Representative Voting
Officers or agent of corporation owning shares shares standing in the name of another corporation, whether domestic or foreign, may be voted by such officer, agent or proxy as the by-laws of such other corporation may prescribe or, in the absence of a provision in the by-laws, it is the BOD that may determine, or they may be voted by the Chairman of the board, president, or vice-president but always under the ultimate direction of the board.

Section 56:

Voting in Case of Joint Ownership of Stock

In case of shares of stock owned by two or more persons, in order to vote the same, the consent of all the co-owners shall be necessary, unless there is a written proxy, signed by all the coowners, authorizing one or some of them, or any other person to vote on their behalf. *when the shares are owned in an and/or capacity any one of the joint owners may vote said shares.

Section 57:

Voting Right for Treasury Shares

Treasury shares shall have no voting right as long as such

shares remain in the Treasury. In case of sale or reissue, Treasury shares regain whatever dividends and voting rights to which they were originally entitled.

Section 58:

Proxies
Stockholders and members may vote in person or by proxy in all meetings of stockholders and members. Proxies shall be in writing, signed by the stockholder or member and filed before the scheduled meeting with the corporate secretary.

Meaning of Proxy
Proxy as the term is used, designates the formal written
authority given by the owner or holder of the stock, who has a right to vote it, or by a member, as principal, to another person, as agent, to exercise the voting rights of the former. It is also used to apply the holder of the authority of person authorized by and absent stockholder or member to vote for him at a stockholders or members meeting. The term is also applied to refer the instrument which evidences the authority of the agent.

Voting by Proxy
The right to vote by proxy is a special form of agency specifically recognized in:
The election of BOD or trustees (Sec. 24) Voting in case of joint ownership of stock (Sec. 56) Voting by trustee under voting trust agreements (Sec. 59, last par) Voting by members in non-stock corporations

Limitations on Proxies
Proxies must be in writing signed by the stockholder or member and filed with before the scheduled meeting with the corporate secretary; Unless otherwise provided in the proxy, it is valid only for the meeting for which it is intended; and A continuing proxy must be for a period not exceeding 5 years at any one time, otherwise, it shall not be valid and effective after such period. *Directors and trustees cannot attend or vote by proxy at board meetings. (Sec. 25, last par)

Revocation of Proxy
Proxies are revocable at anytime unless made
irrevocable by the giver. Revocation may be made by notifying the proxy-holder of the same, or by signing a new proxy in favour of another, or by attending meeting and voting oneself.

A proxy becomes irrevocable when coupled

with interest, meaning the proxy holder has given or promised the stockholder a consideration, for example in the form of money, in return for the irrevocable proxy.

Section 59:

Voting Trusts

One or more stockholders of a stick corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote and other rights pertaining to the shares for a period not exceeding five (5) years at any one time: Provided, that in the case of a voting trust specifically required as a condition in a loan agreement, said voting may exceed five years but shall automatically expire once loan is fully paid.

Section 59:

Voting Trusts
A voting trust agreement must be in writing and notarized, and shall specify the terms and conditions thereof. A certified copy of such agreement shall be filed with the corporation and the SEC; otherwise, said agreement is ineffective and unenforceable. The certificates of stock covered by the voting trust agreement shall be cancelled and new ones shall be issued in the name of the trustees stating that they are issued pursuant to said agreement and shall be noted in the books of the corporation that the transfer in the name of the trustees made pursuant to said voting trust agreement.

Section 59:

Voting Trusts
The trustee or trustees shall execute and deliver to the transferors voting trust certificates, which shall be transferable in the same manner with the same effect as certificates of stock. The voting trust agreement filed with the corporation shall be subject to examination by any stockholder of the corporation in the same manner as any other corporate book or record: Provided, that both the transferor and the trustee may exercise the right of inspection of all corporate books and records in accordance with the provisions of the Code.

Section 59:

Voting Trusts
Any other stockholder may transfer his shares to the same trustee upon the terms and conditions stated in the voting trust agreement, and thereupon shall be bound by all provisions of said agreement. No voting trust agreement shall be entered into for the purpose of circumventing the law against monopolies and illegal combinations in restraint of trade or used for purposes of fraud.

Section 59:

Voting Trusts
Unless expressly renewed, all rights granted in a voting trust agreement shall automatically expire at the end of the trustees shall thereby be deemed cancelled and new certificates of stock shall be reissued in the name of transferor The voting trustee or trustees may vote by proxy unless the agreement provides otherwise. (36a).

Voting Under a Voting Trust Agreement

Sometimes it is desired to place the control of all or part of the stock in the hands of one person or a few persons. This may be done through a voting trust agreement. It may be defined as an agreement in writing whereby one or more stockholders of a stock corporation transfer his or their shares to any person or persons or to a corporation having authority to act as a trustee for the purpose of vesting in such person o persons or corporation as trustee or trustees voting or other rights pertaining to the shares for a certain period not exceeding that fixed by the Code and upon the terms and conditions stated in the agreement. (Sec. 59)

Status of Transferring Stockholder

It should be noted that in a voting trust agreement, a stockholder of a stock corporation parts with the voting power but retains the beneficial ownership of the stock. Consequently, the transferring stockholder, although he has ceased to be the stockholder of record, retains the right of inspection of corporate books which he can exercise concurrently with the voting trustee.

Voting Trust Certificates

Execution and delivery - in return for the certificates of stock, the voting trustee executes and delivers to the stockholders voting trust certificates to show that the latter are in reality, the owners of the shares held by the voting trustee.

Transfer and effect thereof the certificates are intended to be and are transferable in much the same way stock certificates, subject, however to the trust agreement. (Ibid., par. 2.) Cancellation Upon the expiration of the agreed period, the voting trust certificates as well as the certificates of stock in the name of the trustee or trustees shall thereby be deemed cancelled and new certificates of stock shall be reissued in the name of the transferors. (Ibid., par. 6.)

Powers or Rights of Voting Trustees

The trustee or trustees shall posses the right to vote and other rights pertaining to the shares so transferred and registered in his or their names subject to the terms and conditions of and for the period specified in the agreement (par. 1.) They may vote in person or by proxy unless the agreement provides otherwise (last par.); They may exercise, like the transferor, the rights of inspection of all corporate books and records (par. 3); and The trustee is the legal title holder or owner of the shares so transferred under the agreement. (see par. 1.) He is therefore, qualified to be a director.(Sec. 23)

Purpose of Voting Trust Agreement

The ultimate control of the corporation depends upon the votes of the stockholder. Voting trust agreement are devices that may be used with the aim of controlling these votes. Such an agreement makes possible a unified control of the affairs of the corporation and consistent policy by binding the stockholders to vote as a unit.

Limitations on Voting Trust Agreement

No voting trust agreement shall be entered into:
For a period of five (5) years at any one time except in the case of a voting trust specifically requiring a longer period as a condition in a loan agreement. (par 1); For the purpose of circumventing the law against monopolies and legal combinations in restraint of trade. (par 5) The agreement must not be used for purposed of fraud. (Ibid); The agreement must be in writing and notarized and specify the terms and conditions thereof;

Limitations on Voting Trust Agreement

A certified copy of said agreement must be filed with the corporation and the SEC, otherwise, it is ineffective and unenforceable (par 1); The agreement shall be subject to examination by any stockholder of the corporation the same manner as any other corporate book or record (par. 3.); and Unless expressly renewed, all rights granted in the agreement shall automatically expire at the end of the agreed period. (par. 6. )

Proxy and Trust Voting Distinguished

The proxy has no legal title to shares of the stockholder giving the agency, while the trustee acquires legal title to the shares of the transferring stockholder; A proxy, unless couples with interest, is revocable at any time, while a voting trust agreement, if validly executed, is irrevocable; A proxy can only act at the specified stockholders or members meeting, while the trustee is not limited to any particular meeting; A proxy votes only in the absence of the owner of the stock, while a trustee can vote and exercise all the rights of the transferring stockholder even when the latter is present;

Proxy and Trust Voting Distinguished

A proxy is usually of shorter duration than a voting trust agreement, although under the law the maximum duration of both cannot exceed five (5) years at any one time. A proxy need not to be notarized nor a copy filed with the SEC, while a voting trust must be notarized and a certified copy filed with the Commission; and A proxy does not have a right of inspection of corporate books, while a trustee has such right.

STOCKS AND STOCKHOLDERS

SEC. 60. Subscription Contract Any contract for the acquisition of unissued stock in an existing corporation or a corporation still to be formed shall be deemed a subscription within the meaning of this Title, notwithstanding the fact that the parties refer to it as a purchase or some other contract. In a stock corporation, a person may become a shareholder by:
(1) subscription contract with an existing corporation (2) purchase from the corporation of treasury shares (3) transfer from previous stockholder of the outstanding shares or existing subscription to shares

In a non-stock corporation, membership is acquired by contract with the corporation which vary according to the particular corporations charter and by-laws.

STOCKS AND STOCKHOLDERS

SEC. 61. Pre-incorporation subscription A subscription for shares of stock of a corporation still to be formed shall be irrevocable for a period of at least six (6) months from the date of subscription, unless all of the other subscribers consent to revocation, or unless the incorporation of said corporation fails to materialize within said period or within a longer period as may be stipulated in the contract of subscription: Provided, That no pre-incorporation subscription may be revoked after the submission of the articles of incorporation to the Securities and Exchange Commission. Pre-incorporation subscription is mandatory SEC shall not accept the articles of incorporation of any stock corporation unless at least 25% of the authorized capital stock has been subscribed and at least 25% of the total subscription has been fully paid

STOCKS AND STOCKHOLDERS

Reason for irrevocability:
It prevents a subscriber from speculating on the stocks of a proposed corporation It protects the corporation from financially irresponsible subscribers

Effect of filing of articles of incorporation:

Pre-incorporation subscription may no longer be revoked Upon incorporation, both the incorporators and subscribers become shareholders

STOCKS AND STOCKHOLDERS

SEC. 62. Consideration for stocks Stocks shall not be issued for a consideration less than the par or issued price thereof. Consideration for the issuance of stock may be any or a combination of any two or more of the following:
(1) Actual cash paid to the corporation;

(2) Property, tangible or intangible, actually received by the corporation and necessary or convenient for its use and lawful purposes at a fair valuation equal to the par or issued value of the stock issued; (3) Labor performed for or services actually rendered to the corporation; (4) Previously incurred indebtedness of the corporation; (5) Amounts transferred from unrestricted retained earnings to stated capital; and (6) Outstanding shares exchanged for stocks in the event.

STOCKS AND STOCKHOLDERS

Where the consideration is other than actual cash, or consists of intangible property such as patents or copyrights, the valuation thereof shall initially be determined by the incorporators or the board of directors, subject to approval by the Securities and Exchange Commission. Shares of stock shall not be issued in exchange for promissory notes or future services. The same consideration as provided for in this section, insofar as the may be applicable, may be used for the issuance of bonds by the corporation.

The issued price of no-par value shares may be fixed in the articles of incorporation or by the board of directors pursuant to authority conferred upon it by the articles of incorporation or the by-laws, or in the absence thereof, by the stockholders representing at least a majority of the outstanding capital stock at a meeting duly called for the purpose.

STOCKS AND STOCKHOLDERS

Sources of corporate capital:
Funds furnished by shareholders Borrowings Profits and stock dividends

Different modes by which shares may be issued:

By subscription before and after incorporation, to original, unissued stock; By sale of treasury stock By subscription to new stocks By making a stock dividend

STOCKS AND STOCKHOLDERS

Consideration for issue of stocks:
Shall not be issued for a consideration less than the par or issued price thereof Shall not be issued in exchange for promissory notes or future services * If consideration consists of intangible property, the value shall be determined by the incorporators or the BOD but is subject to the approval of SEC. * If the issued price of no par value shares is not fixed in the articles of incorporation, the BOD may fix the same only if authorized by the articles of incorporation or by the by-laws, or in the absence thereof, the stockholders. But they may not be issued for a consideration less than the value of P5.00 per share.

STOCKS AND STOCKHOLDERS

SEC. 63. Certificate of stock and transfer of shares The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates endorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation showing the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number of shares transferred. No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation.

STOCKS AND STOCKHOLDERS

Meaning and nature of certificate stock:
Written instrument signed by the proper officer acknowledging that the person named therein is the owner of a designated number of shares of its stock Indicates the name of the holder, the number, kind and classification of shares represented, and the date of issuance Merely evidence of the holders interest in the corporation Not essential to make one a stockholder in a corporation Every stockholder has a right to have a proper certificate as he has complied with the conditions that entitles him to a stockholder. A corporation cannot issue shares in excess of the maximum authorized in its articles of incorporation therefore an over issued stock is absolutely void.

STOCKS AND STOCKHOLDERS

Stocks are transferable
Modes of stock transfer:
Endorsement and delivery of stock certificate Transfer in a separate instrument Juridical or extra-judicial settlement of the estate

Only absolute transfer need to be registered

Effects of an unregistered transfer of shares:
It is valid and binding between the transferor and the transferee It is invalid insofar as the corporation is concerned except when notice is given to the corporation for purposes of registration It is invalid as against corporate creditors It is invalid against the creditors of the transferor without the notice of transfer

STOCKS AND STOCKHOLDERS

SEC. 64. Issuance of stock certificates No certificate of stock shall be issued to a subscriber until the full amount of his subscription together with interest and expenses (in case of delinquent shares) if any is due, has been paid. Rights and remedies of stockholders in general:
1. 2. 3. 4. 5. Right to attend and vote in person or by proxy at stockholders meetings Right to elect and remove directors Right to approve certain corporate acts Right to adopt and amend or repeal the by-laws or adopt new by-laws Right to compel the calling of meetings and stockholder when for any cause there is no person authorized to call a meeting 6. Right to issuance of certificate of stock 7. Right to receive dividends when declared 8. Right to participate in the distribution of corporate assets upon dissolution

STOCKS AND STOCKHOLDERS

9. Right to transfer of stock on the corporate books 10.Right to pre-emption in the issue of shares 11.Right to inspect corporate books and record and to receive financial report of the corporations expenses 12.Right to be furnished the most recent financial statement upon request and to receive a financial report of the corporations operations 13.Right to bring individual and representative or derivative suits 14.Right to recover stock unlawfully sold for delinquency 15.Right to enter into a voting trust agreement 16.Right to demand payment of the value of his shares and withdraw from the corporation in certain cases 17.Right to have the corporation voluntarily dissolved

STOCKS AND STOCKHOLDERS

SEC. 65. Liability of directors for watered stocks Any director or officer of a corporation consenting to the issuance of stocks for a consideration less than its par or issued value or for a consideration in any form other than cash, valued in excess of its fair value, or who, having knowledge thereof, does not forthwith express his objection in writing and file the same with the corporate secretary, shall be solidary liable with the stockholder concerned to the corporation and its creditors for the difference between the fair value received at the time of issuance of the stock and the par or issued value of the same. The law prohibits the issuance of watered stock or stock issued for no value at all or for a value less than its equivalent either in cash, property, shares, stock dividends, or services.

STOCKS AND STOCKHOLDERS

SEC. 66. Interest on unpaid subscriptions Subscribers for stock shall pay to the corporation interest on all unpaid subscriptions from the date of subscription, if so required by, and at the rate of interest fixed in the by-laws. If no rate of interest is fixed in the by-laws, such rate shall be deemed to be the legal rate. By virtue of Central Bank Circular No. 416, the legal rate is now 12% per annum SEC. 67. Payment of balance of subscription Subject to the provisions of the contract of subscription, the board of directors of any stock corporation may at any time declare due and payable to the corporation unpaid subscriptions to the capital stock and may collect the same or such percentage of said unpaid subscriptions, in either case with interest accrued, if any, as it may deem necessary

STOCKS AND STOCKHOLDERS

Payment of any unpaid subscription or any percentage thereof, together with the interest accrued, if any, shall be made on the date specified in the contract of subscription or on the date stated in the call made by the board. Failure to pay on such date shall render the entire balance due and payable and shall make the stockholder liable for interest at the legal rate on such balance, unless a different rate of interest is provided in the by-laws, computed from such date until full payment. If within thirty (30) days from the said date no payment is made, all stocks covered by said subscription shall thereupon become delinquent and shall be subject to sale as hereinafter provided, unless the board of directors order otherwise.

STOCKS AND STOCKHOLDERS

Remedies to enforce payment of stock subscription:
Extra-judicial sale at public auction Judicial action Collection from cash dividends and withholding of stock dividends

A stock becomes delinquent upon failure of holder to pay the unpaid subscription or balance thereof within 30 days from the date specified in the contract of subscription or from the date stated in the call made by the BOD. A call is a declaration officially made by the BOD expressed in a form of a resolution requiring the payment of all or a certain prescribed portion of a subscribers stock subscription.

STOCKS AND STOCKHOLDERS

SEC. 68. Delinquency sale The board of directors may,
by resolution, order the sale of delinquent stock and shall specifically state the amount due on each subscription plus all accrued interest, and the date, time and place of the sale shall not be less than thirty (30) days nor more than sixty (60) days from the date the stocks become delinquent.

Notice of said sale, with a copy of the resolution, shall be sent to every delinquent stockholder either personally or by registered mail. The same shall furthermore be published once a week for two (2) consecutive weeks in a newspaper of general circulation in the province or city where the principal office of the corporation is located.

STOCKS AND STOCKHOLDERS

Unless the delinquent stockholder pays to the corporation, on or before the date specified for the sale of the delinquent stock, the balance due on his subscription, plus accrued interest, costs of advertisement and expense of sale, or unless the board of directors otherwise orders, said delinquent stock shall be sold at public auction to such bidder who shall offer to pay the full amount of the balance on the subscription together with the accrued interest, costs of advertisement and expenses of sale, for the smallest number of share or fraction of a share. The stock so purchased shall be transferred to such purchaser in the books of the corporation and a certificate for such stock shall be issued in his favor. The remaining shares, if any, shall be credited in favor of the delinquent stockholder who shall likewise be entitled to the issuance of a certificate of stock covering such shares.

STOCKS AND STOCKHOLDERS

Should there be no bidder at the public auction who offers to pay the full amount of the balance on the subscription together with accrued interest, costs of advertisement and expenses of sale, for the smallest number of shares or fraction of a share, the corporation may, subject to the provisions of this Code, bid for the same, and the total amount due shall be credited as paid in full in the books of the corporation. Title to all the shares of stock covered by the subscription shall be vested in the corporation as treasury shares and may be disposed of by said corporation in accordance with the provisions of this Code.

Section 74
Corporate books and records must be kept in the principal office Corporate books and records compose of a record of the ff: 1. Record of all business transactions 2. Minutes of all meetings of stockholders or members, or the BOD or BOT. 3. Time and Place

Section 74
4. How authorized 5. Whether the meeting was regular or special 6. If special, the object of the meeting 7. Attendance 8. Every act done or ordered done 9. The yes and nos must be taken on any motion or proposition 10. Protest of any member

Section 74
Books and records must be open to inspection of any member of the corporation at REASONABLE HOURS on business days. He may demand for a copy of excerpts or parts of the said records or minutes at his expense. Right to inspection not absolute. (Purpose of inspection, Foreign Corporation, Trade Secrets) A stockholder or member cannot take the books from the office unless permitted by the court

Section 74
Any officer or agent of the corporation who refuses to allow any member to examine and copy the records shall be liable to the member asking for a copy under Section 144. Section 144 states that he must pay an amount from 1,000 10,000 Php or put to jail from 30 days to 5 years. If the refusal of an officer or agent was based on a resolution by the board of directors or trustees, the liability will be imposed upon the said directors or trustees.

Section 74
For stock corporations, they must keep a book called STOCK AND TRANSFER BOOK. All stocks in the names of stockholders alphabetically arranged. Installments paid and unpaid from subscriptions along with the date

Every alienation and sale or transfer of stock made (Date, By and To whom made)

Section 74
The Stock and Transfer Book can be kept in the principal office or the office of its stock transfer agent.
A stock transfer agent must be registered and licenced by the SEC and will have to pay a fee fixed by SEC which will have to be renewed annually. (Provided they are allowed to do this)

Section 75
Stockholders or members have the right to ask for recent copies of financial statements (Balance Sheets, Income Statements etc.) They must receive it 10 days after the receipt of the written request made by the stockholder or member.
At regular meetings of stockholders or members, the BOT or BOD must present a financial report of the operations from the preceding year.

Section 75
The financial statements must have supplementary notes to explain and the corporation must state the things activities done in the last year and how it went and their activities they wish to take for the next year.

Financial statements must be signed by independent certified public accountant

Section 75
If total paid-up capital is less than 50,000 the financial statements may be certified under oath by the treasurer or any responsible officer of the corporation.