Association of Private Schools, Colleges

April 10, 1985 Association of Private Schools, Colleges and Universities Region 1 (APSCU) c/o Mr. Luis F. Samson Luzon Colleges Dagupan City Gentlemen: This refers to your letter dated March 12, 1985, requesting the advice of this Commission on the queries posed therein. cdlex It appears that the members of your association are contemplating to organize a foundation for the primary purpose of promoting the advancement of private education in the region by contributing to or fostering projects or activities of an educational, cultural, scientific, charitable or other eleemosynary nature, especially those under the auspices of the APSCU. Like other ordinary foundations, the APSCU Region 1, Philippines, Foundation (its proposed name) shall solicit and receive donations, endowments and aids from all persons here and abroad, the same to be expended or invested for the furtherance of the purpose of the foundation. The membership and trustees of the foundation will generally come from the APSCU member-schools, and the principal beneficiaries of the foundation's grants or assistance are the same member-schools. Your queries are: a) Would the set-up be a violation of the rule against distribution of property and income of a non-stock, non-profit corporation to its members, trustees and officers? b) Would the set-up be a violation of the trust or trusteeship doctrine, notwithstanding that the grants or assistance of the foundation are for the furtherance of its stated purpose? The Corporation Code defines a non-stock corporation as follows: "SECTION 87. Definition . For the purposes of this Code, a non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees or officers , subject to the provisions of this Code on dissolution: Provided, That any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized, subject to the provisions of this Title." (Emphasis supplied) As to purposes of non-stock corporations, the law further provides: "SECTION 88. Purposes . Non-stock corporations may be formed or organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes ,like trade, industry, agricultural and like chambers, or any combination thereof, subject to the special provisions of this Title governing particular classes of non-stock corporations." (Emphasis supplied) Considering therefore that the contemplated objectives of your proposed foundation are among those enumerated purposes for which a non-stock corporation may be formed, the APSCU Region I, Philippines, Foundation may be legally organized as such. However ,no income arising from the operation of the proposed foundation shall be distributed among its members or Board of Trustees, meaning, that no pecuniary benefits shall inure in favor of the members or Board of Trustees, although they may avail of or derive other forms of assistance from the Foundation. Please be advised accordingly. cdlex Very truly yours, (SGD.) MANUEL G. ABELLO Chairman