Distinguished from its “franchise”. Primary franchise is the 3.

3. Domestic air carrier, the directing head or 2/3 of the board

right to exist as an entity for the purpose of doing the things of directors and other managing officers shall be citizens of
embraced within its powers and from its secondary franchise. the Philippines.
Secondary franchise is the right granted to an existing
4. Registered investments companies, the directors thereof
corporation to use public property for a public use, with
must be Filipino citizen.
private profit
5. Private development banks, all the members of the board
Sec. 23. The board of directors or trustees. – Unless
of directors shall be citizen of the Philippines.
otherwise provided in this Code, the corporate powers of all
corporation formed under this Code shall be exercised , all 6. In case of financing corporation, at least 2/3 of all members
business conducted and all property of such corporations of the board of directors shall be citizen of the Philippines.
controlled and held by the board of directors or trustees to
be elected from among the holders of stock, or where there Sec. 24. Election of directors or trustees. – At all elections of
is no stock, from among the members of the corporation, directors or trustees, there must be present, either in person
who shall hold office for one (1) year and until their or by representative authorized to act by written proxy, the
successors are elected and qualified. owners of the majority of the outstanding capital stock, or if
there be no capital stock, a majority of the members entitled
Every director must own at least one (1) share of the capital to vote. The election must be by ballot if requested by any
stock of the corporation of which he is a director, which share voting stockholder or member. In stock corporations, every
shall stand in his name on the books of the corporation. Any stockholder entitled to vote shall have the right to vote in
director who ceases to be the owner of at least one (1) share person or by proxy the number of shares of stock standing, at
of the capital stock of the corporation of which he is the the time fixed in the by-laws, in his own name on the stock
director shall thereby cease to be a director. Trustees of non- books of the corporation, or where the by-laws are silent, at
stock corporations must be members thereof. A majority of the time of the election; and said shareholder may vote such
the directors or trustees of all corporations organized under number of shares for as many persons as there are directors
this Code must be residents of the Philippines. to be elected or he may cumulate said shares and give one
candidate as many votes as the number of directors to be
Qualifications of directors
elected multiplied by the number of his shares shall equal, or
1. He must own at least one (1) share of the capital stock of he may distribute them on the same principle among as many
the corporation in his name. candidate as he shall see fit; Provided, That the total number
of votes cast by him shall not exceed the numbers of shares
2. Majority of the directors must be a resident citizen of the
owned by him as shown in the books of the corporation
Philippines.
multiplied by the whole number of directors to be elected:
3. A director must not have been convicted by final Provided, however, that no delinquent stocks shall be voted.
judgement of an offense punishable by imprisonment Unless otherwise provided in the articles of incorporation, or
exceeding six (6) years or a violation of the provisions of the in the by- laws, members of corporation which have no
Corporation Code committed within five (5) years prior to the capital stock may cast as many votes as there are trustees to
date of election or appointment. be elected but may not cast more than one vote for one
candidate. Candidates receiving the highest number of votes
The directors, once elected, become the representatives of shall be declared elected. Any meeting of the stockholders or
the corporation itself, not its stockholders. The directors of a members called for an election may adjourn from day to day
nonstock corporation are required to be members thereof or from time to time but not sine die or definitely if, for any
and like stock corporations “majority of the directors and reason, no election is held, or if there are not present or
trustees of all corporations organized under the Corporation represented by proxy, at the meeting, the owners of the
Code must be residents citizen of the Philippines”. majority of the outstanding capital stock, or if there be no
capital stock, a majority of the members entitled to vote.
There are some special corporation not organized with the
Corporation Code where directors are required to be citizens Methods of voting
of the Philippines. They are as follows:
The voting methods which may be resorted to by a voting
1. Bank and banking institution, at least 2/3 of the members stockholder are as follows:
of the board of directors shall be citizen of the Philippines.
1. Straight voting.
2. Rural banks, every member of the board of directors shall
be citizens of the Philippines. 2. Cumulative voting for one candidate.

3. Cumulative voting by distribution.

 Example of Straight Voting A owns 100 shares of stock in X 1. President. He must be a director.
corporation.
2. Treasurer. He may or may not be a director.
During the meeting for the purpose of electing five directors,
3. Secretary. He must be a resident and citizen of the
he may cast his vote by giving each of the five candidates 100
Philippines
votes, hence, he distribute equally his vote without
preference or discrimination. 4. Other officers provided for in the bylaws.
Example of Cumulative voting for one candidate Three levels of corporate control
In the preceding illustration, if A owns 100 voting shares and 1. The board of director which is responsible for the
there are five directors to be elected, A is entitled to 500 corporate policies and the general management of the
votes which he may “cumulate” by giving it to candidate Z business affairs of the corporation.
alone.
2. The officers, who in theory execute the policies lay down
Example of Cumulative voting by distribution by the board, but in practice often have wide latitude in
determining the course of business operations.
As in the same example above, if A owns 100 voting shares,
and there are five directors to be elected, A is entitled to 500 3. Stockholders who like amendments of the articles of
votes which he may distribute to candidate Y and Z giving the incorporation.
former 300 and the latter 200 provided that the total number
of votes cast by him does not exceed 500 votes. Directors and officers distinguished

Voting of sequestered shares of stock It has been held that The officers of a corporation, unlike the directors, are true
the “Presidential Commission on Good Government may agent of the corporation. Each officer may bind the
properly exercise the prerogative to vote sequestered stock corporation by his individual acts within the actual or
of corporation, granted to it by the President of the apparent scope of authority. On the other hand, a director
Philippines xxx pending the outcome of proceeding to has no authority to act for the corporation.
determine the ownership of sequestered shares of stock. xxx
Chairman of the Board
Substitution of directors is not be done without reason or
rhyme, and undertaken only when essential to prevent A chairman of the board of directors must himself director be
disappearance or wastage of corporate property, and always a director of the corporation. His duty as presiding officer is
under such circumstance as assure that replacements are not an executive one. It has been suggested that he well be
truly processed of competence, experience and probity. given advisory duties in determining executive salaries, bonus
plans and pensions, determining dividend policy, selecting
Sec. 25. Corporate officers, quorum. – Immediately after
auditors, and dealing questions with labor and company
their election, the directors of a corporation must formally
policy.
organized by the election of a president, who shall be a
director, a treasurer who may or may not be a director, a President
secretary who shall be a resident citizen of the Philippines,
and such other officers as may be provided for in the by-laws. The president must be a director of the corporation. The
Any two (2) or more positions may be held concurrently by powers of the president of a corporation are vested in him by
the same person, except that no one shall act as president law or the by-laws; otherwise, he has no power over the
and secretary or as president and treasurer at the same time. corporate property and business than has any other director.
However, he may be given actual authority to make particular
The directors or trustees and officers to be elected shall contracts, or to execute conveyances, borrow money,
perform the duties enjoined on them by law and by the by- execute mortgages, and do other acts, by the charter, the by-
laws of the corporation. Unless the articles of incorporation laws, resolutions of directors or their informal acquiescence.
or the by-laws provide form a greater majority, a majority of
the number of directors or trustees as fixed in the articles of Vice- President
incorporation shall constitute a quorum for the transaction of In the absence of the president, or if the office of the
corporate business, and every decision of at least a majority president becomes vacant, as a rule, the vice president
of the directors or trustees present at a meeting at which elected and appointed by the shareholders or directors has
there is a quorum shall be valid as a corporate act , except for authority to act in his stead, and to perform the duties of the
the election of the officers which shall require the vote of a office.
majority of all the members of the board.
Secretary
Qualification of corporate officer
A secretary must be a resident citizen of the Philippines. It is A director of a cooperative who is subsequently elected as
generally its duty to make and keep corporate records; to member of the Sangguniang Panglungsod (City Council)
make proper entries of the votes, resolution and proceedings becomes automatically disqualified from continuing as such
of the shareholders and directors in the management of the director by virtue of the clear mandate of PD No. 269
corporation, and of all other matters required to be entered providing that except for “barrio captains and councillors”
in the records. The secretary is the ministerial officer who elective officials are ineligible to become officers and/or
cannot bind the corporation unless he is authorized to do so. directors of any cooperative.

Treasurer The SEC ruled that firms engage in wholly or partially

nationalized activities, aliens are banned from being
The treasurer of the corporation “may or may not be a
appointed to management position such as president, vice-
director”. He is the proper officer and the only proper officer
president, treasurer, auditor, secretary, etc. of said
in the absence of express provision to the contrary, to receive
companies. However, they can be elected directors in
and keep the money of the corporation and to disburse them
preparation to their allowable participation or share in the
as he may be authorized.
capital of such activities, in accordance with the
Other officers Commonwealth Act No. 108, as amended by PD 715,
otherwise known as the Anti- Dummy Law.
The by-laws of the corporation may provide for such other
officers and agent as may be necessary and convenient
considering the nature and needs of the business. Their
Sec. 28. Removal of director or trustees. – Any director or
compensation is provided for by the by-laws and the board of
trustee of the corporation may be removed from office by a
directors in a suitable manner.
vote of the stockholders holding or representing at least two-
Quorum- signifies the number of persons belonging to a thirds (2/3) of the outstanding capital stock, or if the
corporation required to transact business. corporation be a nonstock corporation , by a vote of at least
two- thirds (2/3) of the members entitled to vote: Provided,
Section 25 of the Corporation Code requires more people That such removal shall take place either at a regular meeting
than a simple majority to form a quorum. If no such defining of the corporation or at the special meeting called for the
number is determined, a quorum is a simple majority. purpose, and in either case, after previous notice to
Directors cannot vote by proxy stockholders or members of the corporation of the intention
to propose such removal at the meeting. A special meeting of
The directors cannot vote by proxy but must personally the stockholders or members of the corporation for the
present, and act by themselves. purpose of removal of directors or trustees, or any of them,
must be called by the secretary on order of the president or
Sec. 26. Report of election of directors, trustees and officers.
on the written demand of the stockholders representing or
– Within thirty (30) days after the election of the officers,
holding at least a majority of the outstanding capital stock, or,
trustees and directors of the corporation, the secretary, or
if it be a non-stock corporation, on the written demand of a
any other officer of the corporation shall submit to the
majority of the members entitled to vote. Should the
Securities and Exchange Commission, the names, nationalities
secretary failed to refuse to call the special meeting upon
and residences of the directors, trustees and officers elected.
such demand, or fail or refuse to give the notice, or if there is
Should a director, trustee or officer die, resign or in any no secretary, the call for the meeting may be addressed
manner cease to hold office, his heirs in case of his death, the directly to the stockholders or members of any by any
secretary or any other officer of the corporation, or the stockholder or member of the corporation signing the
director, trustee or officer himself, shall immediately report demand. Notice of the time and place of such meeting, as
such fact to the Securities and Exchange Commission. well as the intention to propose such removal, must be given
by publication or by written notice as prescribed in this Code.
Sec. 27. Disqualification of directors, trustees or officers. – The vacancy resulting from removal pursuant to this section
No person convicted by final judgement of an offense may be filled by election at the same meeting without further
punishable by imprisonment for a period exceeding six (6) notice, or at any regular or at any special meeting called for
years, or a violation of this Code, committed within five (5) the purpose after giving notice as prescribed in this Code.
years prior to the date of his election or appointment, shall Removal may be with or without cause: Provided, That
qualify as a director, trustee or officer of any corporation. removal without cause may not be used to deprived minority
Sec. 27 of the Corporation Code is an additional safeguard stockholders or members of the right of representation to
that only upright and honest individuals be entrusted with which they may be entitled under Section 24 of this Code.
management of the corporate affairs. Directors or trustee may be removed even without cause
The legislative policy is that the shareholders shall be the diems) may be granted to directors by the vote of the
ultimate masters, not the directors. The shareholders should stockholders representing at least a majority of the
be clothed with the power of judging the competency and outstanding capital stock at a regular or special stockholders’
fitness of the directors and of choosing a board that will carry meeting. In no case shall the total yearly compensation of
out of their business policy. directors, as such directors, exceed ten percent (10%) of the
net income before income tax of the corporation during the
Directors representing minority may not be removed
preceding year.
without cause
Sec. 31. Liability of directors, trustees or officers. – Directors
The power to removed director or trustee even without cause
or trustees who willfully and knowingly vote for or assent to
given to shareholders or members may not be used to
patently unlawful acts of the corporation or who are guilty of
deprived minority shareholders or members of the right of
gross negligence or bad faith in directing the affairs of the
representation to which they may be entitled under Section
corporation or acquire any personal or pecuniary interest in
24 of the Corporation Code.
conflict with their duty as such directors, or trustees shall be
Cumulative voting of directors in a stock corporation is liable jointly and severally for all damages resulting therefrom
mandatory and cannot be dispensed with in the by-laws. suffered by the corporation, its stockholders or members and
Being a statutory right, the stockholders cannot be deprived other persons.
of the use of cumulative voting.
When a director, trustee or officer attempts to acquire or
May the result of the duly held election of directors be acquires, in violation of his duty, any interest adverse to the
altered by mere agreement of the directors? The Securities corporation in respect of any matter which has been reposed
and Exchange Commission ruled that: “An agreement by in him in confidence, as to which equity imposes a disability
which director is reposed in anybody except majority of upon him to deal in his own behalf, he shall be liable as a
stockholders is in violation of ‘public policy’ and ‘enforceable’ trustee for the corporation and must account for the profits
”. which otherwise would have accrued to the corporation.

The Securities and Exchange Commission has jurisdiction or Directors are trustees
authority to “hear and decide cases” involving controversies
It is well-stated rule in corporate law that directors of
in the election or appointments of directors, trustees, officers
corporations are trustees and are required to act in the
or managers of such corporations, partnerships or
utmost good faith.
associations. Controversy concerning removal of directors or
trustees may also be heard by the SEC. Liability of corporate directors and officers for illegal
dismissal of employees
Sec. 29. Vacancies in the office of director or trustee. – Any
vacancy occurring in the board of directors or trustees other In cases of illegal dismissal, corporate directors and officers
than by removal by the stockholders or members or by are solidarily liable with the corporation, where terminations
expiration of term, may be filled by the vote of at least a of employment are done with malice or in bad faith. (Acesite
majority of the remaining directors or trustees, if still Corp. vs. NLRC, G.R. No. 152308, January 26, 2005, 449 SCRA
constituting a quorum; otherwise, said vacancies must be 360)
filled by the stockholders in a regular or special meeting
Sec. 32. Dealings of directors, trustees or officers with the
called for that purpose. A director or trustee so elected to fill
corporation. – A contract of the corporation with one or
the vacancy shall be elected only for the unexpired term of
more of its directors or trustees or officers is voidable, at the
his predecessor in office.
option of such corporation, unless all the conditions are
Any directorship or trusteeship to be filled by reason of an present:
increase in the number of directors or trustees shall be filled
1. That the presence of such director or trustee in the board
only by an election at a regular or at a special meeting of
meeting in which the contract was approved was not
stockholders or members duly called for the purpose, or in
necessary to constitute a quorum for such meeting.
the same meeting authorizing the increase of directors or
trustees if so stated in the notice of the meeting. 2. That the vote of such director or trustee was not necessary
for the approval of the contract.
Sec. 30. Compensation of directors. – In the absence of any
provision in the by-laws fixing their compensation, the 3. That the contract is fair and reasonable under the
directors shall not receive any compensation, as such circumstances.
directors, except for reasonable per diems: Provided,
however, That any such compensation (other than pier 4. That in the case of an officer, the contract with the officer
has been previously authorized by the Board of Directors.
 Where any of the first two conditions set forth in the director in one corporation or corporations is merely nominal,
preceding paragraph is absent, in the case of a contract with a he shall be subject to the provisions of the preceding section
director or trustee, such contract may be ratified by the vote insofar as the latter corporation or corporations are
of the stockholders representing at least two-thirds (2/3) of concerned. Stockholdings exceeding twenty percent (20%) of
the outstanding capital stock or of two-thirds (2/3) of the the outstanding capital stock shall be considered substantial
members in a meeting called for the purpose: Provided, That for purposes of interlocking directors.
full disclosure of the adverse interest of the directors or
Interlocking directors – Interlocking directors are persons
trustees involved is made at such meeting: Provided,
who serve as member of the board of directors of two or
however, That the contract is fair and reasonable under the
more competing corporations or corporations engaged in
circumstances.
practically the same kind of business.
Director disqualified to vote if he has personal interest
Effect of Corporate contracts with interlocking directors
A director is disqualified to vote at a meeting of the board if Interlocking directors of corporations does not make a
he has any personal interest in a matter before the board; in contract between or among the corporations void and of no
such case, his vote cannot be counted in making up a effect provided there in no fraud and reasonable under the
quorum. circumstances.

Disclosure of adverse interest by director Sec. 34. Disloyalty of a director. – Where a director, by
virtue of his office, acquires for himself a business
It has been held that in dealing with their corporation the
opportunity which should belong to the corporation, thereby
directors must make full disclosure of all relevant facts or the
obtaining profits to the prejudice of such corporation, he
transaction is voidable. The failure of a director to inform his
must account to the latter for all such profits by refunding the
fellow directors of his adverse bargaining position and other
same, unless his act has been ratified by a vote of the
material circumstances should be seriously considered and
stockholders owning or representing at least two-thirds (2/3)
inspected by the courts as manner on the fairness and good
of the outstanding capital stock. This provision shall be
faith of the transaction and whether it is just and reasonable
applicable notwithstanding the fact that the director risked
as to the corporation.
his own funds in the venture.
Exceptions in signing contract without authority of Board of
Duties of directors
Directors is void
Directors owe a three-fold duty to the corporation. First, they
If a private corporation intentionally or negligently clothed its
must be obedient; they owe a duty to keep within the powers
officers or agents with apparent power to perform acts of it,
of the corporation as well as within those of the board of
the corporation will be estopped to deny that such apparent
directors. Second, they must be diligent; they owe a duty to
authority is real, as to innocent third persons dealing in good
exercise reasonable care and prudence. The third duty owing
faith with such officers or agents. (Yao Ka Sin Trading vs.
by directors is that of individual loyalty.
Court of Appeals, G.R. No. 53820, June 15, 1992, citing
Francisco vs. GSIS, 7 SCRA 577) Concept of “corporate or business opportunity.”

Corporate president presumed to have authority The doctrine of “corporate opportunity” is but one phase of
the cardinal rule of undivided loyalty on the part of the
As a strict rule, the corporate president has no inherent
fiduciaries. If there is a presented to a corporate officer or
power to act for the corporation, slowly giving way to
director a business opportunity which the corporation is
realization that such officer has certain limited powers in the
financially able to undertake, is from its nature, in the line of
transaction of the usual and ordinary business of the
the corporation’s business and is of practical advantage to it,
corporation. In the absence of agreement or by law provision
is one in which the corporation will be brought into conflict
to the contrary, the president is presumed to have the
with that of his corporation, the law will not permit him to
authority to act within the domain of the general of his or her
seize the opportunity for himself.
usual duties. (People’s Aircargo, and Warehousing Co., Inc. vs.
Court of Appeals, G.R. No. 117847, Oct. 7, 1998) Director is a fiduciary.

Sec. 33. Contracts between corporations with interlocking He who is in such fiduciary position cannot serve himself first
directors. – Except in cases of fraud, and provided the and his cestuis (beneficiary) second. He cannot manipulate
contract is fair and reasonable under the circumstances, a the affairs of his corporation to their disadvantage and in
contract between two or more corporations having disregard of the standards of common decency. He cannot by
interlocking directors shall not be invalidated on that ground the intervention of a corporate entity violate the ancient
alone; Provided, That if the interest of the interlocking principle against serving two masters.
 Sec. 35. Executive Committee. – The bylaws of a corporation 11. To exercise such other powers as may be essential or
may create an executive committee, composed of not less necessary to carry out its purpose or purposes as stated in its
than three members of the board, to be appointed by the articles of incorporation.
board. Said committee may act, by majority vote of all its
Powers of a corporation
members, on such specific matters within the competence of
the board, as may be delegated to it in the by-laws or on a A corporation has such powers, and such powers only, as are
majority vote of the board, except with respect to: (1) conferred upon it by law or by its agreement. Powers may be
approval of any action for which shareholders’ approval is conferred upon a corporation:
also required; (2) the filling of vacancies in the board; (3) the
amendment or repeal of bylaws or the adoption of new by- 1. Expressly.
laws; (4) the amendment or repeal of any resolution of the
2. Impliedly, because they are incidental to corporate
board which by it express terms is not so amenable or
existence.
repealable; and (5) a distribution of cash dividends to the
shareholders. 3. Impliedly, because they are necessary or proper in order to
exercise the powers expressly conferred.
Sec. 36. Corporate powers and capacity. – Every corporation
incorporated under this Code has the power and capacity: General express powers

1. To sue and be sued in its corporation name. Section 36 of the Corporation Code enumerates the general
and express powers of corporations.
2. Of succession by its corporate name for the period of time
stated in the articles of incorporation and the certificate of Implied Powers
incorporation.
1. Acts in the usual course of business.
3. To adopt and use a corporate seal. 2. Acts to protect debts due to the corporation
3. Acts which involve embarking on different line of
4. To amend its articles of incorporation in accordance with
business
the provisions of this code.
4. Acts designed in part or wholly to protect or aid
5. To adopt by-laws, not contrary to law, morals, or public employees
policy, and to amend or repeal the same in accordance with 5. Acts to increase the business of the corporation
this Code.
Incidental Powers
6. In case of stock corporations, to issue or sell stocks to
1. Power of Succession
subscribers and to sell treasury stocks in accordance with the
2. Power to have a corporate name
provisions of this code; and to admit members to the
3. Power to adopt a corporate seal
corporation if it be a non-stock corporation.
4. Power to acquire, hold or dispose property as its
7. To purchase, receive, take or grant, hold, convey, sell, business may reasonably require
lease, pledge, mortgage and otherwise deal with such real 5. Power to adopt and amend by-laws
and personal property, including securities and bonds of
Specific Express Powers
other corporations, as the transaction of the lawful business
of the corporation may be reasonably and necessarily require, The Corporation Code enumerates other express powers of
subject to the limitations prescribed by law and the corporations as follows:
Constitution.
1. Power to extend or shorten corporate term (Sec. 37).
8. To enter into with other corporations merger or
consolidation as provided in this code. 2. Power to increase or decrease capital stock;

9. To make reasonable donations, including those for the 3. Power to incur, create or increase bonded indebtedness
public welfare or for hospital, charitable, cultural, scientific, (Sec. 38).
civic, or similar purposes: Provided, That no corporation, 4. Power to deny pre-emptive right (Sec. 39).
domestic or foreign, shall give donations in aid of any political
party or candidate or for purposes of partisan political 5. Power to sell or dispose assets (Sec. 40).
activity.
6. Power to acquire own shares (Sec. 41).
10. To establish pension, retirement, and other plans for the
7. Power to invest corporate funds in another corporation or
benefit of its directors, trustees, officers and employees.
business or for any other purpose (Sec. 42).
8. Power to declare dividends (Sec. 43). A corporation cannot extend its life by amendment of its
articles of incorporation effected during the three-year
9. Power to enter into management contracts (Sec. 44).
statutory period for liquidation when its original term of
Sec. 37. Power to extend or shorten corporate term. – A existence had already expired.
private corporation may extend or shorten its terms as stated
Sec. 38. Power to increase or decrease capital stock; incur,
in the articles of incorporation when:
create or increase bonded indebtedness. – No corporation
-approved by a majority vote of the board of directors or shall increase or decrease its capital stock or incur, create or
trustees increase any bonded indebtedness unless approved by a
majority vote of the board of directors and, at a stockholders’
-and ratified at a meeting by the stockholders representing at meeting duly called for the purpose, two-thirds (2/3) of the
least two thirds (2/3) of the outstanding capital stock or by at outstanding capital stock shall favor the increase or
least two-thirds (2/3) of the members in case of non-stock diminution of the capital stock, or the incurring, creating or
corporations. increasing of and bonded indebtedness.
-requires the amendment of the articles of incorporation Written notice of the proposed increase or diminution of the
capital stock or of the incurring, creating, or increasing of any
Written notice of proposed action and of the time and place
bonded indebtedness and of the time and place of the
of the meeting shall be addressed to each stockholder or
stockholders’ meeting at which the proposed increase or
member at his place of residence as shown on the books of
diminution of the capital stock or the incurring or increasing
the corporation and deposited to the addressee in the post
of any bonded indebtedness is to be considered, must be
office with postage prepaid, or served personally: Provided,
addressed to each stockholder at his place of residence as
That in case of extension of corporate term, any dissenting
shown on the books of the corporation and deposited to the
stockholder may exercise his appraisal right under the
addressee in the post office with postage prepaid, or served
conditions provided in this Code.
personally.
Appraisal right- The right of a stockholder to demand
A certificate in duplicate must be signed by a majority of the
payment of the fair value of his shares when he dissents
directors of the corporation and countersigned by the
from certain corporate acts.
chairman and secretary of the stockholders’ meeting, setting
Sec. 81. Instances of appraisal right forth:

Any stockholder of a corporation shall have the right to 1. That the requirements of this section have been complied
dissent and demand payment of the fair value of his shares in with.
the following instances:
2. The amount of the increase or diminution of the capital
1. In case any amendment to the articles of incorporation has stock.
the effect of changing or restricting the rights of any
3. If an increase of the capital stock, the amount of capital
stockholder or class of shares, or of authorizing preferences in
stock or number of shares of no-par stock thereof actually
any respect superior to those of outstanding shares of any
subscribed, the names, nationalities and residences of the
class, or of extending or shortening the term of corporate
persons subscribing, the amount of capital stock or number of
existence;
shares of no-par stock subscribed by each, and the amount
2. In case of sale, lease, exchange, transfer, mortgage, pledge paid by each on his subscription in cash or property, or the
or other disposition of all or substantially all of the corporate amount of capital stock or number of shares of no-par stock
property and assets as provided in the Code; and allotted to each stockholder if such increase is for the
purpose of making effective stock dividend therefor
3. In case of merger or consolidation. (n) authorized.
Extension of corporate term limited to 50 years 4. Any bonded indebtedness to be incurred, created, or
The corporate term may be extended for periods not increased.
exceeding 50 years in any single instance as provided by 5. The actual indebtedness of the corporation on the day of
section 11 of the Corporation Code. No extension can be the meeting.
made earlier than 5 years prior to the original or subsequent
expiry date(s) unless there are justifiable reasons for an 6. The amount of the stock represented at the meeting.
earlier extension as determined by the SEC.

Corporation cannot extend expired term.

 7. The vote authorizing the increase or diminution of the
capital stock, or the incurring, creating or increasing of any
bonded indebtedness.