chapter 4 ehe

ARTICLE VII: AMENDMENTS

  • Amendments to the by-laws can be made by:

    • Affirmative vote of a majority of the Board of Directors.

    • Affirmative vote of stockholders representing a majority of the outstanding capital stock at a stockholders' meeting.

  • Power to amend, modify, or adopt new by-laws may also be delegated to the Board of Directors if approved by stockholders representing at least two-thirds of the outstanding capital stock.

  • Any delegation can only be revoked by a majority vote of stockholders at a regular or special meeting.

ARTICLE VIII: SEAL

  • The form of the corporate seal shall be determined by the Board of Directors.

ARTICLE IX: ADOPTION CLAUSE

  • By-laws adopted by all stockholders present at the meeting in the principal office of the corporation.

    • Acknowledgment through signatures of all incorporators.

LIABILITY OF THE BOARD OF DIRECTORS

Concept

  • A corporation acts through its board of directors, who exercise corporate powers and manage affairs according to law.

  • The board is responsible for management efficacy (Sec. 23 of the Corporation Code).

Remedies in Case of Mismanagement

  • Stockholders may seek remedies such as:

    • Receivership

    • Injunction (if act not yet executed)

    • Dissolution (if abuse grounds for quo warranto but Solicitor General refuses action)

    • Derivative suit (filed in Regional Trial Court).

Solidary Liability

  • Directors or trustees may be held solidarily liable for damages incurred by the corporation or its stakeholders when:

    • Engaging in actions causing harm to the corporation.

TRANSFER OF STOCKS

  • Stock transfer restrictions ensure that ownership of Filipino citizens does not fall below the legal required percentage of capital stock.

  • Restrictions to be indicated on all stock certificates by the corporation.

ADOPTION OF CORPORATE NAME

  • Corporation must change its name if another has acquired prior rights to a similar name.

TREASURER'S AFFIDAVIT

  • The treasurer certifies that:

    • At least 25% of authorized capital stock is subscribed.

    • At least 25% of subscriptions are paid in cash.

ELEMENTS OF A PARTNERSHIP

Definition

  • A partnership is formed when two or more persons contribute to a common fund for profit sharing.

Essential Requisites:

  • Agreement to contribute and intent to share profits among partners.

Advantages:

  • Easy to form, potential for growth, less bureaucracy.

Disadvantages:

  • Instability and difficulties in securing capital.

  • Firm reliant on actions of individual partners.

CLASSIFICATION OF PARTNERSHIPS

  1. Subject Matter

    • Universal Partnership: Common property of all partners.

    • Particular Partnership: Specific undertaking.

  2. Liability

    • General Partnership: Partners liable for debts.

    • Limited Partnership: Limited partners only liable up to their capital contribution.

  3. Duration

    • Fixed term or at will.

LIABILITY AND DISSOLUTION IN PARTNERSHIPS

Dissolution Rules

  • Partners can dissolve based on agreement or legal hindrance. Immediate dissolution if conditions like death or insolvency occur.

Liquidation Order (Article 1839):

  1. Creditors other than partners.

  2. Debts to partners (unless specific agreement).

  3. Capital payouts to partners.