Section 45: Adoption of Bylaws

Question 1

What are Bylaws?

Answer 1

these are the rules and regulation of a corp. that direct the affairs & goven the corp.

Question 2

Bylaws VS Articles of Incorporation

Answer 2

AIC
- fundamental law
- condition precedent (BEFORE) of creation of a corp.

Bylaws
- rules and regulation
- condition subsequent (AFTER)

Question 3

Can we view Bylaws as a contract?

Answer 3

Yes, it a contract between the corporation and stockholder

Question 4

What is the function of the bylaws?

Answer 4

It is to DEFINE the rights and duties of the stockholders, members, directors, trustees, and officers.

Question 5

When does a corporation adopt its bylaws?

Answer 5

May be done after incorporation

• stockholders must vote on the approval; atleast majority of the outstanding capital stock or
• atleast majority of the members for nonstock

REQUISITES:
- must be signed by all stockholders/ members
- must be kept in the principal place of business
- must submit bylaws in SEC
- must be certified by majority BOD/BOT & countersigned by corporate secretary

Question 6

Adoption of bylaws before incorporati

Answer 6

Done by submiting together with articles of incorporation

REQUISITES:
- must be signed by ALL incorporators

Question 7

When will the bylaws considered effective?

Answer 7

ONLY when there is a certification of the bylaws from the Securities & Exchange Commission

Question 8

Corporations that need certification from the appropriate agency

Answer 8

1. bank
2. banking institution
3. building and loan association
4. trust company
5. insurance company
6. public utility
7. educational institution
8. other special corp governed by special laws.

Question 9

Section 46: Contents of Bylaws

Answer 9

(a) The time, place and manner of calling and conducting regular or special meetings of the directors
or trustees;

(b) required quorum in meetings of stockholders or members and the manner of voting
therein;

(d) The modes by which a stockholder, member,director, or trustee may attend meetings and cast their votes;

(e) The form for proxies of stockholders and members and the manner of voting them;

(f) The directors’ or trustees’ qualifications, duties and responsibilities, the guidelines for setting the compensation of directors or trustees and officers, and the maximum number of other board representations that an independent director or trustee may have which shall, in no case, be more than the number prescribed by the Commission;

(g) The time for hoiding the annual election of directors or trustees and the mode or manner of giving notice thereof;

(h) The manner of election or appointment and the term of office of all officers other than directors or
trustees;

(i) The penalties for violation of the bylaws;

(j) In the case of stock corporations, the manner of issuing stock certificates;

(k) Such other matters as may be necessary for the proper or convenient transaction of its corporate affairs for the promotion of good governance and antigraft and corruption measures.

An arbitration agreement may be provided in the bylaws pursuant to Section 181 of this Code.

Question 10

Section 47: Amendment to Bylaws

Answer 10

IF STOCKHOLDERS/MEMBER VOTE:

Approval or vote of atleast MAJORITY of the oustanding capital STOCK or vote of the majority of the MEMBERS

Question 11

How to delegate power to amend, repeal or adopt new bylaws to BOD/BOT?

Answer 11

if delegated to boards:
- approval of atleast 2/3 of the outstanding capital stock
- approval of atleast 2/3 of the members

Question 12

How to revoke delegation?

Answer 12

a vote representing MAJORITY of the outstanding capital stock or majority of members (1/2 plus one)