Archt. Jaime C. Marquez, FUAP

November 18, 1998 Archt. Jaime C. Marquez, FUAP Philippine Technological Council PSME Bldg., Bayoran St. South Triangle, Quezon City S i r : This refers to your letter dated October 15, 1998 requesting clarification on the implications with regard to the alleged withdrawal of the " Philippine Technological Council " (PTC) from the " Philippine Federation of Professional Associations " (PFPA) as one of the Councils composing the same, and as a result of said withdrawal, the effect of an incomplete membership in the board of directors of PFPA, and the status of the current PFPA president who is by way, also from PTC. llcd It is well settled that a corporation registered under the Corporation Code is considered a juridical person with a personality separate and distinct from that of each shareholder/members. This attribute gives rise to a fundamental principle in corporation law that under normal conditions, the stockholders/members of a corporation are not the same as the corporation itself. Another attribute of a corporation is that it has the right of succession which means that a corporation has a continuity of existence during its term of existence stated in the articles of incorporation, independent from that of its shareholders/members. Its continued existence cannot be affected by any change in the stockholder/members, whether the change be the consequence of death of a stockholder/member or transfer of shares of a stockholder or withdrawal of a member. Accordingly, the change or reduction in the composition/membership in a corporation neither dissolve a corporation nor render the same inoperative. Regarding the reduction of the members of the Board of Directors as a result of the withdrawal, the Commission, on several occasions, had previously opined that a disqualification or resignation of a director would not render the Board incapable of transacting business, for as long as the remaining directors still constitute a quorum. Such a situation would merely give rise to vacancy in the Board which may be filled up in accordance with the provisions of the Corporation Code and By-laws of the corporation. It is well-settled that the power of the Board of Directors is not suspended by vacancies, unless the number be reduced below a quorum. Regarding the status of the president under the above situation, Section 23 and 25 of the Corporation Code expressly prescribe the basic qualifications of a president of a corporation, i.e. he must be a member and duly elected director of the corporation. (SEC Opinion dtd. February 11, 1993, addressed to Dr. Gloria D. Lacson). Accordingly, in the absence of said qualifications, one cannot act as president of a corporation. Very truly yours, (SGD.) SONIA M. BALLO Director Corporate and Legal Department