St. Mary's Academy Development Foundation, Inc.

November 15, 1989 St. Mary's Academy Development Foundation, Inc. C/o Mr. Bienvenido V. Santos P. Burgos Street Pasay City Sir : This refers to your letter dated October 12, 1989, requesting opinion on whether the above-named company can grant the following benefits: cdlex 1. grant of interest-free loans to the St. Mary's Academy Faculty Club; 2. financial support for faculty uniforms; 3. financial support for health care maintenance program; 4. financial support for educational trips and inter-school visitations; and 5. financial support for sports tournaments and fellowship meetings designed to promote faculty morale, teamwork, interpersonal relationships and esprit de corps. It is well-settled that a corporation has only such powers as are expressly granted in its charter or in the statutes under which it is created or such powers as are necessary for the purpose of carrying out its express power .(13 Am. Jur. Sec. 739).In the determination of what businesses may be carried on by a corporation, reference must be had to its charter, and unless the power to carry on a particular business is either expressly or impliedly conferred thereby, it does not exist. (Chiwacla Line v. Disnukes, 87 Ala. 344, 650, 122, 5LRA 100, cited in Am. Jur. sec. 743).Only such powers as are reasonably necessary to enable corporations to carry out the express powers granted and the purposes of the creation are to be implied as are to be deemed incidental. (Am. Jur. sec. 740). Powers merely convenient or useful are not implied if they are not essential, having in view the nature and object of incorporation .(Ibid, citing Planters Bank v. Sharp, 6 How (US) 301, 12L. ed 447). The exercise of implied powers by a corporation is expressly recognized by law, particularly, under Sec. 36 (11) of the Corporation Code quoted hereunder: "SECTION 36. Corporate powers and capacity . Every corporation incorporated under this Code has the power and capacity: xxx xxx xxx 1. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in the articles of incorporation ".(emphasis supplied). A perusal of the articles of incorporation of subject corporation disclosed that proposal No. 1 is not among the corporation's authorized purposes or activities. Neither is said activity necessary or incidental in the furtherance of the corporation's objectives. Accordingly, the corporation cannot grant loans. However, the rest of the proposals may be considered within the implied or incidental powers in the exercise of the objectives for which the corporation was organized. Please be advised accordingly. cdlex Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner