Minister Jaime C. Laya

January 22, 1986 Minister Jaime C. Laya Ministry of Education, Culture and Sports Palacio del Governador Intramuros, Manila Dear Minister Laya: This refers to your letter, dated November 5, 1985, requesting that the following statements be stamped on the face of the certificate of registration of corporations, the principal purpose of which is the operation, establishment of a school/institution of learning: "The registration of Articles of Incorporation of the corporation shall not be construed as a grant or permit to operate the school institution of learning. The establishment, operation, administration and management of said school/institution of learning shall be subject to the existing laws, rules and regulations, policies and standards of the Ministry of Education, Culture and Sports which shall be complied with before said school/institution of learning may be allowed to operate. Said compliance shall be evidenced by a certificate to be issued by MECS." Pursuant to the Constitution, "All educational institutions shall be under the supervision of, and subject to regulations by the State." Consequently, no school or educational institution shall be established nor operate any educational program, whether formal or non-formal, except by law or pursuant to law and in accordance with the Rules and Regulations In the Implementation of Batas Pam ban sa 232 .(Sec. 1, Rule III). It appears that your request is geared toward the effective implementation of the provisions of B.P. 232, its rules and regulations, specifically on the matter of recognition." However, instead of stamping the statement on the face of the Certificate of Incorporation, it is suggested that the same be recited as a separate article in the charter or articles of incorporation of educational institutions. In this regard, it is worth mentioning that "the charter of a corporation, whether it is created by special act or formed under a general corporation law, is a contract (1) between the state and the corporation, (2) between the corporation and the stockholders, and (3) between the stockholders and the state. (Martin T.C. Commentaries on Jurisprudence on the Philippine Commercial Laws, 1981 Rev. Ed., p. 78, citing Government v. Manila Railroad Co., G.R. No. 30646, January 30, 1929, 52 Phil. 699). The articles of incorporation or charter of a corporation being considered as a contract, the corporation is bound to observe all the provisions thereof. I hope that the foregoing merit your consideration. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman