Mr. Herculano C. Co. Jr.

August 20, 1993 Mr. Herculano C. Co. Jr. President Confederation of Grains Association, Inc. 30 Imperial St.,Cubao, Quezon City S i r : This refers to your letter of July 21, 1993 inquiring whether the Philippine Confederation of Grains Association, Inc. can establish a "Grains Exchange Center" which will serve as a meeting place where the members can transact their grains business on the basis of the following purpose clause: "13. To pursue such other goals and objectives analogous, allied to or incidental to the above-enumerated purposes which are calculated to contribute to the attainment of the same well-being and economic security of Filipino rice and corn planters, millers and traders." "14. To work for and do any and all such other things or functions as may be conducive to and promote the interest and welfare of the members in particular and the country in general." It is well-settled that a corporation has only powers as are expressly granted in its charter or in the statutes under which it is created or such powers as are necessary for the purpose of carrying out its express powers. (13 Am. Jur. Sec. 739) Only such powers as are reasonably necessary to enable corporations to carry out the express powers granted and the purposes of the creation are to be implied as are to be deemed incidental. (Am. Jur. Sec. 740) Powers merely convenient or useful are not implied if they are not essential having in view the nature and object of incorporation. (Ibid. citing Planters Bank v. Sharp, 6 How (vs) 301, 12L. ed. 447) Thus, in the determination of what businesses may be carried on by a corporation, reference must be made to its articles of incorporation, and unless the power to carry a particular business is either expressly or impliedly conferred thereby it does not exist. ( Chivacla Line v. Disnukes, 8 Ala 344, 650. 122, 5 LRA 100. Cited in Am. Jur. Supra. sec. 743) A perusal of the articles of incorporation of subject Association disclosed that the establishment of a "Grains Exchange Center" is not among the Association's authorized purpose or activities. Neither is the said activity necessary or incidental in the furtherance of the corporation's objectives. Accordingly, should the corporation intend to push thru with the plan, it should amend its articles of incorporation in accordance with Section 16 of the Corporation Code to include the same among its purposes, provided that any income or profit which may be derived in its operation, if there is any, shall be purely used for the furtherance of the purpose(s) for which the Association was organized and in no case shall the same be distributed to the corporate members, officers or directors. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman