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2.
characteristics of a non-stock corp:

- It does not have a capital stock divided into shares
- no part of its income is distributable as dividends to its members
-non-stock corporations must be formed or organized for charitable, religious, educational, professional,
cultural, fraternal, literary, scientific, social, civic service, or similar purposes, like trade, industry,
agricultural and like chambers, or any combination thereof.
-must have members
4. Is there any expansion of a right to vote of a member

-yes, the general rule is that one member is entitled to one vote unless so limited, broadened, or denied
in the articles of incorporation or by-laws, this means that the Articles of incorporation or by-laws of a
NSC may expand the right to vote of a member but it must be expressly provided in such documents.
6. Can membership be assigned?

- General rule is no, membership in a NSC and the rights arising from such membership are not
transferable because in a NSC, the membership has personal elements that require qualification by
social and other ties, meaning that not anyone can just be a member of the NSC. The exception to this is
that when the AOI and the by-laws provide for transferability of the membership, which should also
state the terms and conditions under which transfer of membership may be effected, which must be
strictly complied with. (MUST BE EXPRESSLY PROVIDED IN THE AOI AND BYLAWS)
8. Distribution of assets in a Non-stock corporation

- Under the RCCP distribution of assets to members upon dissolution is allowed if expressly provided for
in the articles of incorporation or by laws. In the absence of any provision, the assets may be distributed
in accordance with the plan of distribution to persons, societies, organizations, or corporations whether
or not organized for profit as specified in the said plan. However, the rule provided on sec 93 should be
followed on the application of assets when a NSC is undergoing dissolution. (PLEASE CHECK SEC. 93 &
94)
10. What cannot be a close corporation? (mention at least 5)

- banks, insurance companies, public utilities, education institutions, stock exchanges, mining or oil
companies, corporations declared to be vested with public interest, Corporation wherein at least 2/3 of
its voting stock or voting rights is owned by another corporation that is not a close corporation
12. Are there actors in a closed corporation that are valid without meetings? YES (sec. 100)
-Before or after such action is taken, a written consent thereto is signed by all the directors
-all the stockholders have actual or implied knowledge of the action and make no prompt objection in
writing
-the directors are accustomed to take informal action with the express or implied acquiescence of all the
stockholders
- all the directors have express or implied knowledge of the action in question and none of them makes
a prompt objection in writing.
14. A provisional director is not?

-a receiver of the corporation and does not have the title and powers of a custodian or receiver.
16. May SEC interfere in the management of a close corporation without violating business judgement
rule? (sec. 103)
-Yes, but only to arbitrate the affairs of the Closed corporation and limited only to what is provided by
law. This power may only be exercised when the following instances occur:
a. the stockholders are so divided on the management of the corporation’s business and affairs that the
votes required for a corporate action cannot be obtained,
b. the inaction would cause consequences to the business and affairs of the corporation can no longer
c. upon written petition by any stockholder of the Closed corporation
18. Corporation sole: (sec 108)

- A corporation sole is formed by the chief archbishop, bishop, priest, minister, rabbi, or other presiding
elder of any religious denomination, sect or church, for the purpose of administering and managing, as
trustee, the affairs, properties, and temporalities of such religious group.
20. One person Corporation: (sec 116)

- A one person corporation is a corporation with a single stockholder: Provided, that only a natural
person, trust, or an estate may form a One Person Corporation.
22. Why people form corporation? (luh)

- for the advantages that a corporation has against other forms of organizations, one is the doctrine o
limited liability, pooling of assets and contributions for a grander scale of business, etc.
24. Can a foreigner establish a one person corporation?

-yes, but it is subject to the applicable capital requirement and constitutional and statutory restrictions
on foreign participation in certain investments areas or activities. sec 116 provides who and what
industries which are not allowed to incorporate as a one person corporation, a foreigner is not included
in those enumerated.
26. Officers of OPC (p. 808)

-the officers of a One Person corporation are the following:
a. President- who is also the sole director
b. the treasurer- appointed by the OPC, who could also be the single stockholder provided that he shall
give a bond to the Commission in such sum as may be required and that the single stockholder shall
undertake in writing to faithfully administer the one-person corporation’s funds to be received as
treasurer, and to disburse and invest the same according to the AOI as approved by the commission.
c. the corporate secretary- appointed by the OPC, but cannot be the single stockholder.
28. Formalities required for OPC to approve a corporate act:

-
30. What is reporting got to do with the limited liability?

- in order for the sole shareholder to claim the doctrine of limited liability, such shareholder has the
burden to show that the corporation was adequately financed. The single stockholder must prove that
the property of the OPC is independent of the stockholder’s personal property, otherwise the principles
of piercing the corporate veil shall be applied.
32. what is a minute book?
-A minute book is a book that contains all the actions, decisions, and resolutions taken by the One
Person Corporation.
34. Reports required by OPC to submit to SEC (sec. 129, p. 813)

-the reports required to be submitted by the OPC to the SEC are the following
a. annual financial statements audited by an independent certified public accountant: provided, that if
the total assets or total liabilities of the corporation are less than 600k, the financial statements shall be
certified under oath by the corporation’s treasurer and president
b. a report containing explanations or comments by the president on every qualification, reservation, or
adverse remark or disclaimer made by the auditor in the latter’s report.
c. a disclosure of all self-dealings and related party transactions entered into between the OPC and the
single stockholder
d. other reports as the commission may require.

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2.

characteristics of a non-stock corp:

4. Is there any expansion of a right to vote of a member

6. Can membership be assigned?

8. Distribution of assets in a Non-stock corporation

10. What cannot be a close corporation? (mention at least 5)

14. A provisional director is not?

18. Corporation sole: (sec 108)

20. One person Corporation: (sec 116)

22. Why people form corporation? (luh)

24. Can a foreigner establish a one person corporation?

26. Officers of OPC (p. 808)

28. Formalities required for OPC to approve a corporate act:

30. What is reporting got to do with the limited liability?

34. Reports required by OPC to submit to SEC (sec. 129, p. 813)

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