Revised Corporation Code (RA No. 11232) – Title VI – Meetings

TITLE VI – MEETINGS

Section 48. Kinds of Meetings. – Meetings of directors, trustees, stockholders, or members may be regular or special.

Section 49. Regular and Special Meetings of Stockholders or Members. – Regular meetings of stockholders or members shall be held annually on a date fixed in the bylaws, or if not so fixed, on any date after April 15 of every year as determined by the board of directors or trustees: Provided, That written notice of regular meetings shall be sent to all stockholders or members of record at least twenty-one (21) days prior to the meeting, unless a different period is required in the bylaws, law, or regulation: Provided, further, That written notice of regular meetings may be sent to all stockholders or members of record through electronic mail or such other manner as the Commission shall allow under its guidelines.

At each regular meeting of stockholders or members, the board of directors or trustees shall endeavor to present to stockholders or members the following:

• (a) The minutes of the most recent regular meeting which shall include among others:
  • (1) A description of the voting and vote tabulation procedures used in previous meeting;
  • (2) A description of the opportunity given to stockholders or members to ask questions and a record of the questions asked and answers given;
  • (3) The matters discussed and resolutions reached;
  • (4) A record of the voting results for each agenda item;
  • (5) A list of the directors or trustees, officers and stockholders or members who attended the meeting; and,
  • (6) Such other items that the Commission may require in the interest of good corporate governance and the protection of minority stockholders;
• (b) A member’s list for nonstock corporations and, for stock corporations, material information on the current stockholders, and their voting rights;
• (c) A detailed, descriptive, balanced and comprehensible assessment of the corporation’s performance, which shall include information on any material change in the corporation’s business, strategy or other affairs;
• (d) A financial report for the preceding year, which shall include financial statements duly signed and certified in accordance with this Code and the rules the Commission may prescribe, a statement of the adequacy of the corporation’s internal controls or risk management systems, and statement of all external audit and non-audit fees;
• (e) An explanation of the dividend policy and the fact of payment of dividends or the reasons for nonpayment thereof;
• (f) Director or trustee profiles which shall include, among others, their qualifications and relevant experience, length of service in the corporation, trainings and continuing education attended, and their board representations in other corporations;
• (g) A director or trustee attendance report, indicating the attendance of each director or trustee at each of the meetings of the board and its committees and in regular and special stockholder meetings;
• (h) Appraisals and performance report for the board and the criteria and procedure for assessment;
• (i) A directors or trustee compensation report prepared in accordance with this Code and the rules the Commission may prescribe;
• (j) Director disclosure on self-dealings and related party transactions; and/or
• (k) The profiles of directors nominated or seeing election or reelection.

A director, trustee, stockholder, or members may propose any other matter for inclusion in the agenda at any regular meeting of stockholders or members.

Special meetings of directors or members shall be held at any time deemed necessary or as provided in the bylaws: Provided, however, That at least one (1) week written notice shall be sent to all stockholders or members, unless a different period is provided in the bylaws, law or regulation.

A stockholder or member may propose the holding of a special meeting and items to be included in the agenda.

Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member: Provided, That general waivers of notice in the articles of incorporation or the bylaws shall not be allowed: Provided, further, That attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Whenever for any cause, there is no person authorized or the person authorized unjustly refuses to call a meeting, the Commission, upon petition of a stockholder or member on a showing of good cause therefore, may issue an order, directing the petitioning stockholder or member to call a meeting of the corporation by giving proper notice required by this Code or bylaws. The petitioning stockholder or member shall preside thereat until at least a majority of the stockholders or members present have chosen form among themselves, a presiding officer.

Unless the bylaws provide for a longer period, the stock and transfer book or membership book may be closed at least twenty (20) days for regular meetings and seven (7) days for special meeting before the scheduled date of the meeting.

In case of postponement of stockholder’s or members’ regular meetings, written notice thereof and the reasons therefor shall be sent to all stockholders or members of record at least two (2) weeks prior to the date of meeting, unless a different period is required under the bylaws, law or regulation.

The right to vote of stockholders or members may be exercised in the bylaws, through remote communication or in absentia. The Commission shall issue the rules and regulations governing participation and voting through remote communication or in absentia, taking into account the company’s scale, number of shareholders or members, structure, and other factors, consistent with the protection and promotion of shareholders or members’ meetings.

Section 50. Place and Time of Meetings of Stockholder or Members. –   Stockholder’s or members’ meetings, whether regular or special, shall be held in the principal office of the corporation as set forth in the articles of incorporation, or, if not practicable, in the city or municipality where the principal office of the corporation is located” Provided, That any city or municipality in Metro Manila, Metro Cebu, Metro Davao and other Metropolitan areas shall, for purposes of this section, be considered a city or municipality.

Notice of meetings shall be sent through the means of communication provided in the bylaws, which notice shall state the time, place and purpose of meetings.

Each notice of meeting shall further be accompanied by the following:

• (a) The agenda for the meeting;
• (b) A proxy form which shall be submitted to the corporate secretary within a reasonable time prior to the meeting;
• (c) When attendance, participation, and voting are allowed by remote communication or in absentia, the requirements and procedures to be followed when a stockholder or member elects either option; and,
• (d) When the meeting is for the election of directors or trustees, the requirements and procedure for nomination and election.

All proceedings and any business transacted at a meeting of stockholders or members, if within the powers or authority of the corporation, shall be valid even if the meeting is improperly held or called: Provided, That all the stockholders or members of the corporation are present or duly represented at the meetings and not one of them expressly states at the beginning of the meeting that the purpose of their attendance is to object to the transaction of any business because the meeting is not lawfully called or convened.

Section 51. Quorum in Meetings. – Unless otherwise provided in this Code or in the bylaws, a quorum shall consist of the stockholders representing a majority of the outstanding capital stock or a majority of the members in the case of nonstock corporations.

Section 52. Regular and Special Meetings of Directors or Trustees; Quorum. –  Unless the articles of incorporation or the bylaws provides for a greater majority, a majority of the directors or trustees as stated in the articles and incorporation shall constitute a quorum to transact corporate business, and every decision reached by at least a majority of the directors or trustees constituting a quorum, except for the election of officers which shall require the vote of the majority of all the members of the board shall be a valid corporate act.

Regular meetings of the board of directors or trustees of every corporation shall be held monthly, unless the bylaws provide otherwise.

Special meetings of the board of directors or trustees may be held at any time upon the call of the president or as provided in the bylaws.

Meetings of directors or trustees of corporations may be held anywhere in or outside of the Philippines, unless the bylaws provide otherwise. Notice of regular or special meetings stating the date, time and place of the meeting must be sent to every director or trustee at lease two (2) days prior to the scheduled meeting, unless a longer time is provided in the bylaws. A director or trustee may waive this requirement, either expressly or impliedly.

Directors or trustees who cannot physically attend or vote at board meetings can participate and vote through remote communication such as videoconferencing, teleconferencing, or other alternative modes of communication that allow them reasonable opportunities to participate. Directors or trustees cannot attend or vote by proxy at board meetings.

A directors or trustee who has the potential interest in any related party transaction must recuse from voting on the approval of the related party transaction without prejudice to the compliance with the requirements of Section 31 of this Code.

Section 53. Who shall preside at meetings. – The chairman or, in his absence, the president shall preside at all meetings of the directors or trustees as well as of the stockholders or members, unless the bylaws provide otherwise.

Section 54. Right to Vote of Secured Creditors and Administrators. – In case a stockholder grants security interest in his or her share in stock corporations, the stockholder-grantor shall have the right to attend and vote at meetings of stockholders, unless the secured creditor is expressly given by the stockholder-grantor such right in writing which is recorded in the appropriate corporate books.

Executors, administrators, receivers, and other legal representatives duly appointed by the court may attend and vote in behalf of the stockholder or members without any written proxy.

Section 55. Voting in Case of Joint Ownership of Stock. – The consent of all the co-owners shall be necessary in voting of shares of stock owned jointly by two (2) or more persons, unless there is a written proxy, signed by all the co-owners, authorizing one (1) or some of them or any other person to vote such share or shares: Provided, That when the shares are owned in an and/or capacity by the holders thereof, any one of the joint owners can vote said shares or appoint a proxy therefor.

Section 56. Voting Right of Treasury Shares. – Treasury shares shall have no voting right as long as such shares remain in the Treasury.

Section 57. Manner of Voting; Proxies. – Stockholders and members may vote in person or by proxy in all meetings of stockholders or members.

When so authorized in the bylaws or by a majority of the board of directors, the stockholders or members of corporations may also vote through remote communication or in absentia: Provided, That the votes received before the corporation finishes the tally of votes.

A stockholder or member who participates through remote communication or in absentia shall be deemed present for purposes of quorum.

The corporation shall establish the appropriate requirements and procedures for voting through remote communication and in absentia, taking into account the company’s scale, number of shareholders or members, structure and other factors consistent with the basic right of corporate suffrage.

Proxies shall be in writing, signed and filed, by the stockholder or member, in any form authorized in the bylaws and received by the corporate secretary within a reasonable time before the scheduled meeting. Unless otherwise provided in the proxy form, it shall be valid only for the meeting for which it is intended. No proxy shall be valid an effective for a period longer than five (5) years at any one time.

Section 58. Voting Trusts. – One or more stockholders of a stock corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote and other rights pertaining to shares for a period not exceeding five (5) years at any time: Provided, That in the case of a voting trust specifically required as a condition in a loan agreement, said voting trust may be for a period exceeding five (5) years but shall automatically expire upon full payment of the loan. A voting trust agreement must be in writing and notarized, and shall specify the terms and conditions thereof. A certified true copy of such agreement shall be filed with the corporation and with the Commission; otherwise, the agreement is ineffective and unenforceable. The certificate or certificates of stock covered by the voting trust agreement shall be cancelled and new one shall be issued in the name of the trustee or trustees, stating that they are issued pursuant to said agreement. The books of the corporation shall state that the transfer in the name of the trustee or trustees is made pursuant to the voting trust agreement.

The trustee or trustees shall execute and deliver to the transferors, voting trust certificates, which shall be transferable in the same manner and with the same effect as certificate of stock.

The voting trust agreement filed with the corporation shall be subject to examination by any stockholder of the corporation in the same manner as any other corporate book or record; Provided, That both the trustor and the trustee or trustees may exercise the right of inspection of all corporate books and records in accordance with the provisions of this Code.

Any other stockholder may transfer the shares to the same trustee or trustees upon the terms and conditions stated in the voting trust agreement, and thereupon shall be bound by all the provisions of said agreement.

No voting trust agreement shall be entered into for purposes of circumventing the laws against anti-competitive agreements, abuse of dominant position, anti-competitive mergers and acquisitions, violations of nationality and capital requirements, or for the perpetuation of fraud.

Unless expressly renewed, all rights granted in a voting trust shall automatically expire at the end of the agreed period. The voting trust certificate as well as the certificate of stock in the name of the trustee or trustees shall thereby be deemed cancelled and new certificate of stock shall be reissued in the name of the trustors. The voting trustee or trustees may vote by proxy in any manner authorized under the bylaws unless the agreement provides otherwise.

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