Non-Stock Corporations Flashcards
What is a non-stock corporation?
A nonstock corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers: provided, that any profit which a nonstock corporation may obtain incidental to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized, subject to the provisions of the Revised Corporation Code.
What are the purposes for a nonstock corporation?
Nonstock corporations may 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, subject to the special provisions of this Title governing particular classes of nonstock corporations.
What is the rule with regards to the right to vote of the members in a nonstock corporation?
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 bylaws. Unless so limited, broadened, or denied, each member, regardless of class, shall be entitled to one (1) vote.
Unless otherwise provided in the articles of incorporation or the bylaws, a member may vote by proxy, in accordance with the provisions of this Code. The bylaws may likewise authorize voting through remote communication and/or in absentia.
What is the non-transferability of membership in a non-stock corporation?
Membership in a nonstock corporation and all rights arising therefrom are personal and nontransferable, unless the articles of incorporation or the bylaws otherwise provide.
What is the rule regarding the termination of membership in a nonstock corporation?
Membership shall be terminated in the manner and for the causes provided in the articles of incorporation or the bylaws. Termination of membership shall extinguish all rights of a member in the corporation or in its property, unless otherwise provided in the articles of
incorporation or the bylaws.
How many trustees are there in a nonstock corporation? How long is there term of office?
The number of trustees shall be fixed in the articles of incorporation or bylaws which may or may not be more than fifteen (15).
They shall hold office for not more than three (3) years until their successors are elected and qualified. Trustees elected to fill vacancies occurring before the expiration of a particular term shall hold office only for the unexpired period.
What is the rules of distribution of the assets of a nonstock corporation undergoing the process of dissolution?
The assets of a nonstock corporation undergoing the process of dissolution shall be applied and distributed as follows:
(1) All liabilities and obligations of the corporation shall be paid, satisfied and discharged, or adequate provision shall be made therefor
(2) Assets held by the corporation upon a condition requiring return, transfer or conveyance, and which condition occurs by reason of the dissolution, shall be returned, transferred or conveyed in accordance with such requirements
(3) Assets received and held by the corporation subject to limitations permitting their use only for charitable, religious, benevolent, educational or similar purposes, but not held upon a condition requiring return, transfer or conveyance by reason of the dissolution, shall be transferred or conveyed to one (1) or more corporations, societies or organizations engaged in activities in the Philippines substantially similar to those of the dissolving corporation according to a plan of distribution adopted
(4) Assets other than those mentioned in the preceding paragraphs, if any, shall be distributed in accordance with the provisions of the articles of incorporation or the bylaws, to the extent that the articles of incorporation or the bylaws determine the distributive rights of members, or any class or classes of members, or provide for distribution
(5) In any other case, assets may be distributed to such persons, societies, organizations or corporations, whether or not organized for profit, as may be specified in a plan of distribution adopted
