Merdex International Corporation

July 26, 1983 Merdex International Corporation Pamilihang Bayan Bldg. Former Pre-Departure Area MIA Road, Pasay City Attention : Mr . Bienvenido R . Mercado Sir : This has reference to your letter dated June 28, 1983, requesting for a favorable opinion from this Commission that under your charter, you are allowed to engage in the business of air freight forwarding as defined in the CAB Economic Regulation No. 4 and Presidential Decree No. 1462. LibLex Section 1, subsection (ll) of Presidential Decree No. 1462 and Section 2 (a) of CAB Economic Regulation No. 4 define "air freight forwarder" as follows: "Air Freight Forwarder means any indirect air carrier which, in the ordinary and usual course of its undertaking, assembles and consolidates or provides for assembling and consolidating such property or performs or provides for the performance of break-bulk and distributing operations with respect to consolidated shipments, and is responsible for the transportation of property from the point of receipt to point of destination and utilizes for the whole or any part of such transportation the services of a direct air carrier." A close examination of the primary and secondary purposes of your Articles of Incorporation reveals that the same do not authorize the corporation to engage in the business of air freight forwarding as defined in the aforementioned provision. It is a fundamental precept that a corporation cannot engage in a business if it is not expressly authorized in its Articles of Incorporation. Said business cannot be implied from the words "forwarding agent" in your Articles of Incorporation considering that the business of air freight forwarding is a peculiar and distinct line of corporate enterprise for which special provisions are made and prescribed in Presidential Decree No. 1462 and CAB Economic Regulation No. 4 . In view of the foregoing reasons, you are hereby advised to amend your Articles of Incorporation in accordance with Section 16 of the Corporation Code to include said business. The law provides, thus: "SECTION 16. Amendment of Articles of Incorporation . Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code, or the vote or written assent of two-thirds (2/3) of the members if it be a non-stock corporation. The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation. Such articles, as amended, shall be indicated by underscoring the change or changes made, and a copy thereof duly certified under oath by the corporate secretary and a majority of the directors or trustees stating the fact that said amendment or amendments have been duly approved by the required vote of the stockholders or members, shall be submitted to the Securities and Exchange Commission The amendments shall take effect upon its approval by the Securities and Exchange Commission or from the date of filing with the said Commission if not acted upon within six (6) months from the date of filing for a cause not attributable to the corporation." Please be guided accordingly. llcd Very truly yours, (SGD.) JESUS J. VALDES Associate Commissioner