Mr. Augusto M. Macam

August 21, 1997 Mr. Augusto M. Macam Medel Macam Del Rosario Collado & Polines 6th Flr.,Bay Side Royal Match Building 6780 Ayala Avenue, Makati Metro Manila S i r : This refers to your letter dated July 30, 1997 requesting guidance/ruling on the allowable number of the Board of Directors/Trustees in "non-stock, non-profit corporations. The pertinent provision of the Corporation Code provides: "SECTION 92. Election and term of trustees . Unless otherwise provided in the articles of incorporation or the by-laws, the board of trustees of non-stock corporations ,which may be more than fifteen (15) in number as may be fixed in their articles of incorporation or by-laws, shall, as soon as organized so classify themselves that the term of office of one-third (1/3) of the number shall expire every year, and subsequent elections of trustees comprising one-third (1/3) of the board of trustees shall be held annually and trustees so elected shall have a term of three (3) years. Trustees thereafter elected to fill vacancies occurring before the expiration of a particular term shall hold office only for the unexpired period. No Person shall be elected as trustee unless he is a member of the corporation . Unless otherwise provided for in the articles of incorporation or the by-laws, officers of a non-stock corporation may be directly elected by the members." (Emphasis provided) A non-stock corporation may thus have more than fifteen (15) trustees/directors. This is to give more representation to the Board of Trustees of nationwide membership associations. However, while there appears to have no maximum limit, the number should not exceed the number of the members of the corporation as can be implied from the second paragraph of the above cited provision requiring that "trustees" must be members thereof. Further, the Commission, in its meeting of August 14, 1997 ( SEC Res. No. 6111 s. 1997 ), has adopted a policy to require registrant corporation to submit an explanation/justification if its Articles of Incorporation provide for more than fifteen (15) membership in the Board of Directors. Thus, while the incorporation Code expressly allows more than fifteen members in the Board of non-stock non-profit corporations, the Commission may question the propriety of a large number, especially if it feels that the number is unreasonable under the surrounding circumstances . LibLex Please be advised accordingly. Very truly yours, (SGD.) SONIA M. BALLO Director Corporate and Legal Department