BY-LAWS

BY-LAWS are rules made by a corporation for its own government; to regulate the conduct and
define the duties of the stockholders or members towards the corporation and among
themselves. They are the rules and regulations or private laws enacted by the corporation to
regulate, govern and control its own actions, affairs and concerns and its stockholder or members
and directors and officers with relation thereto and among themselves in their relation to it.
Effectivity: After approval by the SEC
Adoption of by-laws: may be made:
1. Prior to incorporation- it must be signed by all the incorporators without need of the majority
vote of outstanding stocks or members as long as it is submitted together with the AOI
2. After incorporation- must be submitted within 1 month after receipt of the notice of issuance
of certificate of registration or incorporation and must be approved by majority of the
outstanding capital stock or members. Failure to file within the 1-month period may be a ground
for suspension or revocation of the corporate franchise.
AMENDMENT: Section 45 (amending Section 46) of the RCC removed the one-month (from
receipt of the notice issuance of the certificate of incorporation) requirement to submit the by-
laws.
Amendment of by-laws; two modes.
1 By a majority vote of the directors or trustees and the majority vote of the outstanding capital
stock or members at a regular or special meeting called for that purpose or
2 By the board of directors alone when delegated by stockholders owning 2/3 of the outstanding
capital stock or 2/3 of the members. This power, however, is considered revoked, when so voted
by a majority of the outstanding capital stock of members in a regular or special meeting.
AMENDMENTS: Section 46(d) of the RCC now includes "The modes by which a stockholder,
member, director, or trustee may attend meetings and cast their vote."
It likewise includes that an arbitration agreement may be provided in the bylaws.
The submission of the amended by-laws no longer requires that it be filed with the SEC attached
to the original articles of incorporation and original bylaws.

MEETINGS
DIRECTORS STOCKHOLDERS
Quorum Majority Majority of the Outstanding Capital
Stock
 Date of Regular Monthly as fixed in the by-laws Annual as fixed in the by-laws. If no
Meeting such date is fixed, any date after April
15.
Date of Special At any time deemed necessary At any time deemed necessary or as
Meeting or as provided for in the by- provided for in the by-laws.
laws.
Notice Regular/ Special Meetings- 2 Regular meeting- 21 days (from 2
days prior to the meeting weeks)
(previously one day prior to the Special Meetings – 1 week
meeting)
Place Anywhere (even outside the The meeting shall be at the principal
Philippines) office itself, unless it is not
practicable, in the city or municipality
where the principal office is located.

Moreover, Metro Cebu and Metro

Davao, as well as other metropolitan
areas are now considered a city or
municipality
Proxy Voting Not allowed for a director or Generally Allowed
trustee, since he was
supposedly elected because of
his personal qualification and
thus must personally attend
and vote on matters brought
before the meeting.
Voting General Rule: Majority of those Refer to the voting requirements
Requirements present shall be valid as a under Rights of Stockholders.
corporate act.

Exceptions:
a. Election of a corporate
officers: majority of all the
members of the board.
b. When the by-laws provide
for higher voting requirement.

Validity of Stockholder’s Meetings despite defect: if the voting requirement is met, any resolution
passed in the meeting even if Improperly held or called will be valid if ALL the stockholders or
members are present or duly represented thereat as provided under the last paragraph of Sec.
51 "All proceedings had and any business transacted at any meeting of the stockholders or
members, if within the powers of authority of the corporation, shall be valid even if the meeting
be improperly held or called, provided all the stockholders or members of the corporation are
present or duly represented at the meeting.”
AMENDMENT: The meeting is still considered valid even if improperly held as long as ALL the
stockholders or members are present or duly represented, EXCEPT if the purpose of their
attendance is only object to the transaction of any business because the meeting is not lawfully
called or convened.
Notice: Notice of any meeting may be waived, expressly or impliedly, by any stockholder or
member.
However, under the revised Section 49 of the RCC, general waivers of notice in the articles of
incorporation or the bylaws shall not be allowed.
The 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.
Attending the meeting in absentia: In the stockholders' meeting for the election of
directors/trustees, Section 23 of the RCC now specifically allows the stockholders or members to
vote through remote communication or in absentia, in case the by-laws or majority of the BOD
authorizes the same, or even without such authorization in case of corporations vested with
public interest
Directors/trustees are also now allowed to attend the meeting through remote communication
such as videoconferencing teleconferencing, or other alternative modes of communication that
allow them reasonable opportunities to participate.
A stockholder or member who participates through remote communication or in absentia, shall
be deemed present for purposes of quorum.
STOCK AND TRANSFER BOOK OR MEMBERSHIP BOOK: The stock and transfer book contains a
record of:
1. All stocks in the names of the stockholders alphabetically arranged:
2. The installments paid and unpaid on all stocks for which subscriptions has been made, the date
of payment of any installment,
3. A statement of every alienation, sale or transfer of stock made, the date thereof, by and to
whome made;
4. Such other entries as the bylaws may prescribe
Unless the bylaws provide for a longer period, the stock and transfer book or membership book
shall be closed at least 20 days for regular meetings and 7 days for special meetings before the
scheduled date of the meeting
 REORGANIZATION; MERGER AND CONSOLIDATION
REORGANIZATION: is generally entered into to put the company upon a sound financial basis
and to enable it to take care of its obligations thereby avoiding liquidation or bankruptcy. But in
some cases, a reorganization is effected notwithstanding the fact that the corporation is solvent.
The provisions governing stock corporation, when pertinent, shall be applicable to non-stock
corporations, except as may be covered by specific provisions pertaining to non-stock
corporations.
Differences:
STOCK CORPORATION NON-STOCK CORPORATION
Purpose Generally, for profit Primarily organized for
charitable, religious,
educational, professional,
cultural, scientific, social civic
service, or similar purposes,
like trade, industry,
agricultural and like chambers
or any combination thereof.
Distribution of dividend Authorized Not Authorized
Term of office of the directors 1 year until their successor is 3 years
/trustees elected and qualified
Voting Cumulative Straight voting unless
cumulative voting is
authorized under the by-laws
or AOI
Manner of Voting Either in person or by proxy By mail or other similar
means as may be authorized
by the by-laws
Transferability of interest Transferable Membership is personal and
non-transferable, unless the
AOI or by-laws provide
otherwise
Ownership of Director At least 1 share Member

Independent trustees are not

required to be a member.