Section 86: Non-Stock Corporation Flashcards
A corporation where no part of its income is distributable as dividends to its members, trustees, or
officers
Non-stock corporation
Non-stock corporations may be formed or organized for what purposes?
A non-stock corporation can be organized
only for the following purposes: (1) charitable, (2) religious, (3)
educational, (4) professional, (5) cultural, (6) fraternal, (7) literary,
(8) scientific, (9) social, (10) civic service, or (11) similar purposes,
like trade, industry, agricultural and like chambers, or (12) any
combination thereof.
A corporation cannot be a non-stock corporation
if it was not organized for any of the purposes mentioned in Section
87 of the RCCP
A non-stock corporation has the following ESSENTIAL REQUISITES:
(1) It does not have a capital stock divided into shares;
(2) No part of its income is distributable as dividends to
its members; and
(3) 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.
If in stock corporation, its components are called STOCKHOLDERS and its BOD is are called DIRECTORS, what is the COMPONENTS and BOD of non stock corporation?
Members & Trustees
Stock or Non-stock corporation
One share, One vote
Stock
In Non-stock, The voting rights can
be modified, limited or broadened.
Stock or Non-stock corporation
Membership is generally non-transferable
Non-Stock
In stock, membership is TRANSFERABLE
Stock or Non-stock corporation
Membership can be terminated
Non-Stock
In stock, ownership CANNOT BE
TERMINATED until the transfer of the shares or upon liquidation
Stock or Non-stock corporation
Shares can be acquired through succession
Stock
In Non-stock, membership is not transferred
Stock or Non-stock corporation
Payment dues can be required
Non-stock
In stock, NO DUES ARE PAID
Stock or Non-stock corporation
There can be more than 15 members or trustees
Non-stock
In stock, it should be NOT MORE THAN 15 Board Members or Directors.
Stock or Non-stock corporation
The term of board members is 1 year
Stock
In Non-stock, the term of board members is 3 years
During liquidation members cannot get the share in the asset unless provided in the articles of incorporation and By Laws
Non-stock
In stock, they can get their shares in the net assets known as LIQUIDATED DIVIDENDS
a non-stock, non-profit
corporation established for the purpose of extending grants and
endowments to support its goals or raising funds to accomplish
charitable,
religious, educational, athletic, cultural, literary,
scientific, social welfare or similar objectives.
Foundation
A Foundation applying for registration with the Commission shall, in addition to the requirements for non-stock, non-profit corporations, submit the following documents:
a. Notarized Certification of Bank Deposit of the
amount of not less than One Million Pesos (Pl,000,000.00); and
b. Statement of willingness to allow the Commission to
conduct an audit.
A law that does not allow foreigners to hold
management or executive positions in a corporation engaged in partly nationalized activity.
Anti-Dummy law
defined as “a gift, to be applied consistently
with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds and hearts under the influence of education or religion, by assisting them to establish themselves in life or [by] otherwise lessening the burden of government.”
Charity
T/F
Its profits or income if there are any, should only be necessary or proper for the furtherance of the purpose or purposes for which the corporation was organized.
T
T/F
A non-stock corporation cannot be
converted into a stock corporation by mere amendment of the Articles of Incorporation.
T
What the non-stock corporation should do is
to dissolve itself and the members may thereafter decide to organize a stock corporation
However, a STOCK corporation CAN BE CONVERTED into
a NON-STOCK corporation by mere amendment of the Articles of Incorporation
The word “_______” includes
all transactions whereby the property of one person becomes that of another, whether by descent and purchase. Hence, the prohibition expressed in Section 89 of the RCCP includes transfer by inheritance.
Transfer
