Atty. Manuel C. Moyco

November 25, 1992 Atty. Manuel C. Moyco Encanto, Mabugat and Associates 9th Floor, UCPB Building, Makati Avenue, Makati Metro Manila S i r : This refers to your letter of November 23, 1992 requesting opinion whether United Coconut Planters Bank can accept donations in order to enhance the Bank's community development projects, without necessarily amending its Articles of Incorporation to include therein the power to accept donations. prLL Section 36 of the Corporation Code expressly enumerates the powers conferred on corporations. Said powers include, among others, the power to donate. The Law provides, thus: "SECTION 36. Corporate powers and capacity . Every corporation incorporated under this Code has the power and capacity: xxx xxx xxx (9) To make reasonable donations ,including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity; ...." (Emphasis supplied) The fact that the power of a corporation to donate is expressly recognized by law, such power need not be stated in the Articles of Incorporation and said power includes the authority to undertake community development projects. However, it has to be emphasized that although stock corporations have the power to make donations, the board of directors should use good judgment in the exercise of such power. Donations should be reasonable in amount in the light of the corporation's financial condition, bear some reasonable relation to the corporation's interest, and not to be so "remote and fanciful" as to excite the opposition of shareholders whose property is being used. (6-A Fletcher Sec. 2939) Thus, when doubtful as to the amount involved, the stockholders may review the exercise of such corporate power and may inquire into its reasonableness, and if found excessive to afford adequate relief therefrom. As to the power of a corporation to accept donations to enhance its community development projects, it is well-settled that in addition to its express powers conferred by law, it has also such powers as are necessary in carrying out such express powers. Any activity which is reasonably necessary to enable a corporation to carry out its express powers granted by law or under its Articles of Incorporation are to be deemed implied or incidental powers. Accordingly, since the acceptance of the donation by the Corporation will serve the ends of its community development projects or is reasonably tributary to the promotion of those ends, it may be fairly considered as within the incidental or implied powers of the corporation. Therefore, there is no need to amend its Articles of Incorporation to reflect therein such incidental power. However, the same is subject to the provisions of Act No. 4075, otherwise known as the Solicitation Permit Law , as amended by P.D. 1564, and Rules and Regulations of the Department of Social Welfare and Development . LibLex Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman