INTRODUCTION

TITLE I GENERAL PROVISIONS DEFINITIONS AND CLASSIFICATIONS SECTION.
1. Title of the Code. – This Code shall be known as the “Revised

Corporation Code of the Philippines”. SEC. 2. Corporation Defined.
– A corporation is an artificial being created by operation of law,
having the right of succession and the powers, attributes, and
properties expressly authorized by law or incidental to its
existence. SEC. 3. Classes of Corporations. – Corporations formed or
organized under this Code may be stock or nonstock corporations.
Stock corporations are those which have capital stock divided into
shares and are authorized to distribute to the holders of such
shares, dividends, or allotments of the surplus profits on the basis
of the shares held. All other corporations are nonstock corporations.
Page 2 of 73 SEC. 4. Corporations Created by Special Laws or
Charters. – Corporations created by special laws or charters shall
be governed primarily by the provisions of the special law or charter
creating them or applicable to them, supplemented by the provisions
of this Code, insofar as they are applicable. SEC. 5. Corporators and
Incorporators, Stockholders and Members. – Corporators are those who
compose a corporation, whether as stockholders or shareholders in a
stock corporation or as members in a nonstock corporation.
Incorporators are those stockholders or members mentioned in the
articles of incorporation as originally forming and composing the
corporation and who are signatories thereof. SEC. 6. Classification
of Shares. – The classification of shares, their corresponding
rights, privileges, or restrictions, and their stated par value, if
any, must be indicated in the articles of incorporation. Each share
shall be equal in all respects to every other share, except as
otherwise provided in the articles of incorporation and in the
certificate of stock. The shares in stock corporations may be divided
into classes or series of shares, or both. No share may be deprived
of voting rights except those classified and issued as “preferred”
or “redeemable” shares, unless otherwise provided in this Code:
Provided, That there shall always be a class or series of shares with
complete voting rights. Holders of nonvoting shares shall
nevertheless be entitled to vote on the following matters: (a)
Amendment of the articles of incorporation; (b) Adoption and
amendment of bylaws; (c) Sale, lease, exchange, mortgage, pledge, or
other disposition of all or substantially all of the corporate
property; (d) Incurring, creating, or increasing bonded indebtedness;
(e) Increase or decrease of authorized capital stock; (f) Merger or
consolidation of the corporation with another corporation or other
corporations; (g) Investment of corporate funds in another
corporation or business in accordance with this Code; and (h)
Dissolution of the corporation. Except as provided in the immediately
preceding paragraph, the vote required under this Code to approve a
particular corporate act shall be deemed to refer only to stocks with
voting rights. Page 3 of 73 The shares or series of shares may or may
not have a par value: Provided, That banks, trust, insurance, and
preneed companies, public utilities, building and loan associations,
and other corporations authorized to obtain or access funds from the
public, whether publicly listed or not, shall not be permitted to
issue no-par value shares of stock. Preferred shares of stock issued
by a corporation may be given preference in the distribution of
dividends and in the distribution of corporate assets in case of
liquidation, or such other preferences: Provided, That preferred
shares of stock may be issued only with a stated par value. The board
of directors, where authorized in the articles of incorporation, may
fix the terms and conditions of preferred shares of stock or any
series thereof: Provided, further, That such terms and conditions
shall be effective upon filing of a certificate thereof with the
Securities and Exchange Commission, hereinafter referred to as the
“Commission”. Shares of capital stock issued without par value
shall be deemed fully paid and nonassessable and the holder of such
shares shall not be liable to the corporation or to its creditors in
respect thereto: Provided, That no-par value shares must be issued
for a consideration of at least Five pesos (P5.00) per share:
Provided, further, That the entire consideration received by the
corporation for its no-par value shares shall be treated as capital
and shall not be available for distribution as dividends. A
corporation may further classify its shares for the purpose of
ensuring compliance with constitutional or legal requirements. SEC.
7. Founders’ Shares. – Founders’ shares may be given certain
rights and privileges not enjoyed by the owners of other stocks.
Where the exclusive right to vote and be voted for in the election of
directors is granted, it must be for a limited period not to exceed
five (5) years from the date of incorporation: Provided, That such
exclusive right shall not be allowed if its exercise will violate
Commonwealth Act No. 108, otherwise known as the “Anti-Dummy Law”;
Republic Act No. 7042, otherwise known as the “Foreign Investments
Act of 1991”; and other pertinent laws. SEC. 8. Redeemable Shares.
– Redeemable shares may be issued by the corporation when expressly
provided in the articles of incorporation. They are shares which may
be purchased by the corporation from the holders of such shares upon
the expiration of a fixed period, regardless of the existence of
unrestricted retained earnings in the books of the corporation, and
upon such other terms and conditions stated in the articles of
incorporation and the certificate of stock representing the shares,
subject to rules and regulations issued by the Commission. SEC. 9.
Treasury shares. – Treasury shares are shares of stock which have
been issued and fully paid for, but subsequently reacquired by the
issuing corporation through purchase, redemption, donation, or some
other lawful means. Such shares may again be disposed of for a
reasonable price fixed by the board of directors.

INTRODUCTION

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TITLE I GENERAL PROVISIONS DEFINITIONS AND CLASSIFICATIONS SECTION.

1. Title of the Code. – This Code shall be known as the “Revised

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