Section 86: Non-Stock Corporation

Question 1

A corporation where no part of its income is distributable as dividends to its members, trustees, or
officers

Answer 1

Non-stock corporation

Question 2

Non-stock corporations may be formed or organized for what purposes?

Answer 2

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

Question 3

A non-stock corporation has the following ESSENTIAL REQUISITES:

Answer 3

(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.

Question 4

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?

Answer 4

Members & Trustees

Question 5

Stock or Non-stock corporation

One share, One vote

Answer 5

Stock

In Non-stock, The voting rights can
be modified, limited or broadened.

Question 6

Stock or Non-stock corporation

Membership is generally non-transferable

Answer 6

Non-Stock

In stock, membership is TRANSFERABLE

Question 7

Stock or Non-stock corporation

Membership can be terminated

Answer 7

Non-Stock

In stock, ownership CANNOT BE
TERMINATED until the transfer of the shares or upon liquidation

Question 8

Stock or Non-stock corporation

Shares can be acquired through succession

Answer 8

Stock

In Non-stock, membership is not transferred

Question 9

Stock or Non-stock corporation

Payment dues can be required

Answer 9

Non-stock

In stock, NO DUES ARE PAID

Question 10

Stock or Non-stock corporation

There can be more than 15 members or trustees

Answer 10

Non-stock

In stock, it should be NOT MORE THAN 15 Board Members or Directors.

Question 11

Stock or Non-stock corporation

The term of board members is 1 year

Answer 11

Stock

In Non-stock, the term of board members is 3 years

Question 12

During liquidation members cannot get the share in the asset unless provided in the articles of incorporation and By Laws

Answer 12

Non-stock

In stock, they can get their shares in the net assets known as LIQUIDATED DIVIDENDS

Question 13

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.

Answer 13

Foundation

Question 14

A Foundation applying for registration with the Commission shall, in addition to the requirements for non-stock, non-profit corporations, submit the following documents:

Answer 14

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.

Question 15

A law that does not allow foreigners to hold
management or executive positions in a corporation engaged in partly nationalized activity.

Answer 15

Anti-Dummy law

Question 16

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.”

Answer 16

Charity

Question 17

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.

Answer 17

T

Question 18

T/F

A non-stock corporation cannot be
converted into a stock corporation by mere amendment of the Articles of Incorporation.

Answer 18

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

Question 19

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.

Answer 19

Transfer