Corporation Law: The Revised Corporation Code of the Philippines - Sec 25



THE REVISED CORPORATION CODE  OF THE PHILIPPINES

Republic Act No. 11232 

TITLE III -  BOARD OF DIRECTORS/TRUSTEES AND OFFICERS

Section 25. Report of Election of Directors, Trustees and Officers, Non-holding of Election and Cessation from Office.

Within thirty (30) days after the election of the directors, trustees and officers of the corporation, the secretary, or any other officer of the corporation, the secretary, or any other officer of the corporation, shall submit to the Commission, the names, nationalities, shareholdings, and residence addresses of the directors, trustees and officers elected.

The non-holding of elections and the reasons therefor shall be reported to the Commission within thirty (30) days from the date of the scheduled election. The report shall specify a new date for the election, which shall not be later than sixty (60) days from the scheduled date.

If no new date has been designated, or if the rescheduled election is likewise not held, the Commission may, upon the application of a stockholder, member, director or trustee, and after verification of the unjustifiable non-holding of the election, summarily order that an election be held. The Commission shall have the power to issue such orders as may be appropriate, including other directing the issuance of a notice stating the time and place of the election, designated presiding officer, and the record date or dates for the determination of stockholders or members entitled to vote.

Notwithstanding any provision of the articles of incorporation or by laws to the contrary, the shares of stock or membership represented at such meeting and entitled to vote shall constitute a quorum for purposes of conducting an election under this section.

Should a director, trustee or officer die, resign or in any manner case to hold office, the secretary or the director, trustee or officer of the corporation, shall, within seven (7) days from knowledge thereof, report in writing such fact to the Commission.

Notes:
  • Report of Election of Directors, Trustees and Officers
    • Timeframe:
      • within thirty (30) days after the election 
    • Responsible person:
      • secretary,
      • any other officer of the corporation
    • Contents of the GIS:
      • names
      • nationalities
      • shareholdings
      • residence addresses
  • Report on Non-holding of Election 
    • to the Commission within thirty (30) days from the date of the scheduled election
    • shall specify a new date for the election
      • not be later than sixty (60) days from the scheduled date
  • Order of Summary Election
    • Conditions:
      • no new date has been designated
      • rescheduled election is not held
    • Remedy:
      • Commission may summarily order that an election be held
      •  after verification of the unjustifiable non-holding of the election
    • Applicants:
      • stockholder
      • member
      • director
      • trustee
  • Order of the Commission
    • direct the issuance of a notice stating the time and place of the election
    • designate presiding officer
    • record date or dates for the determination of stockholders or members entitled to vote
  • Quorum
    • the shares of stock or membership represented at such meeting and entitled to vote
  • Report on Cessation from Office
    • Instances:
      • director, trustee or officer:
        • die
        • resign 
        • in any manner case to hold office
    • Action:
      • Responsible Persons:
        • secretary
        • director
        • trustee 
        • officer
    • within seven (7) days from knowledge 
    • report in writing such fact to the Commission
1. Rationale.
  • The objective sought to be achieved by Section 25 of the RCCP is to give the public information, under sanction of oath of responsible officers, of the:
    • nature of business
    • financial condition
    • operational status of the company 
    • information on its key officers or managers
  • so that those dealing with it and those who intend to do business with it may know or have the means of knowing facts concerning the corporation's financial resources and business responsibility. 

2. Report after Annual Election. 
  • Corporations are required under Section 25 of the Corporation Code to submit to the SEC within 30 days after the election the names, nationalities and residence addresses of the elected directors, trustees, and officers of the Corporation. 
    • Information:
      • names
      • nationalities
      • shareholdings
      • residence addresses
  • This is in order to keep stockholders and the public transacting business with domestic corporations properly informed of their organizational operational status. 
  • The SEC rules provide that a "General Information Sheet" (GIS) shall be filed with the Commission within 30 days following the date of the annual stockholders' (or members') meeting.
    • The GIS contains the names of the stockholders, directors and corporate officers. 
    • The recent enhancement of the GIS includes a portion that is designed for compliance with the Anti-Money Laundering Law as well as entries that are designed to comply with the provisions of the Data Privacy Act. 
    • Any change in the information in the GIS between annual meetings must be reflected in an Amended GIS that must be filed within 30 days from the effectivity or occurrence of the change. 
    • The Amended GIS should be labeled as such and the changes should be underscored. 
3. GIS as Evidence. 
  • The GIS indicates who and who is not a corporate officer or director or stockholder.
  • However, the GIS is only a piece of evidence and is subject to stronger proof if entries therein are in question.
  • Premium Marble Resources, Inc. v. Court of Appeals
    • The Court was confronted with the issue of capacity of officers of the corporation to file a complaint for damages in behalf of the corporation. 
    • The Supreme Court sustained the dismissal of the complaint because it was not established that the Members of the Board who authorized the filing of the complaint were the lawfully elected directors of the corporation. 
    • The General Information Sheet filed pursuant to Section 26 of the Corporation Code (now Section 25 of the RCCP) does not show the names of the persons who authorized the filing of the case. 
  • Monfort Hermanos Agricultural Development Corporation v. Antonio B. Monfort III
    • The Supreme Court did not give credence to the allegation that the alleged members of the Board whose names do not appear in the General Information Sheet were duly elected. 
    • It was noted that these alleged members were reported to the SEC only more than two years later. 
4. Report in Case of Vacancy. 
  • Section 25 of the RCCP provides that should a director, trustee or officer die, resign or in any manner cease to hold office, the secretary, or the director, trustee or officer of the corporation, shall, within seven (7) days from knowledge thereof, report in writing such fact to the SEC.
  • Instances:
    • director, trustee or officer:
      • die
      • resign 
      • in any manner case to hold office
  • Action:
    • Responsible Persons:
      • secretary
      • director
      • trustee 
      • officer
  • If a new director is elected because of a vacancy in the Board, the Corporate Secretary must submit an Amended General Information Sheet indicating the change of director within 30-calendar days from the occurrence of such change. 
5. Report on Non-Holding of Election. 
  • Section 25 of the RCCP provides that the non-holding of election shall be reported to the SEC within 30 day from the date of the scheduled election. 
  • The report shall include the following: 
    1. the fact of non-holding of election on the scheduled date; 
    2. the reason for the non-holding of the election; and
    3. the new date for the election, which shall not be later than 60 days from the scheduled date.
6. Remedy if No Election is Set.
  • If no new date has been designated, or if the rescheduled election is likewise not held, the remedy of a stockholder, member, director or trustee is to file an application with the SEC for the latter to order that the election be held. 
  • The SEC, upon the filing of such application, shall:
    1. conduct a verification of the unjustified non-holding of the election; 
    2. summarily order that an election be held.
  • SEC Orders. 
    • The SEC shall have the power to issue such orders as may be appropriate, including orders directing the issuance of a notice stating:
      • the time and place of the election; 
      • the designated presiding officer; and
      • the record date or dates for the determination of stockholders or members entitled to vote. 
  • Emergency Quorum. 
    • Section 25 of the RCCP expressly provides that "notwithstanding any provision of the articles of incorporation or bylaws to the contrary, the shares of stock or membership represented at such meeting and entitled to vote shall constitute a quorum for purposes of conducting an election." 
    • In other words stockholders representing a majority of the outstanding shares, or a majority of the members is no longer necessary for the existence of the quorum. 
    • This will ensure that there is no prolonged tenure of hold-over directors and officers.

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