Ms. Zenaida Cuison Maglaya

January 20, 1999 Ms. Zenaida Cuison Maglaya Bureau of Trade Regulation & Consumer Protection 2nd Floor, Trade and Industry Building 361 Sen. Gil J. Puyat Avenue, Makati city M a d a m : This refers to your 1st Indorsement Letter dated January 13, 1999 referring to this Commission the issue on the legality of the allege selling of raffle tickets by Relief Aid for Lahar Victims in Pampanga, Inc. (RAFLAVIPI). 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 powers. (13 Am. Jur. Sec. 739). 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 (vs) 301 12L, ed 447) The principle that only such necessary powers are to be deemed implied or incidental is emphasized under Section 36 (11) of the Corporation Code which provides: cdlex "SECTION 36. Corporate powers and capacity . Every corporation incorporated under this Code has the power and capacity: xxx xxx xxx (11) 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) Thus, in determining what business/activity may be carried on by a corporation, reference must be made to its articles of incorporation, and unless the power to carry a particular business/activity is either expressly or impliedly conferred thereby, it cannot be undertaken by a corporation. Hereunder is the purpose clause of subject corporation under its articles of incorporation on file with the Commission: "By giving them relief goods such as rice, sugar, canned goods, clothes, milk and other items they win need in time of leaving their homes and stay in the evacuation centers. We can also teach them on how to generate income like handicrafts making and bread making." To carry out the above corporate purpose, we believe that RAFLAVIPI may engage in fund solicitation activity. However, while the corporation may be authorized to undertake fund solicitation, such activity, which may include selling of raffle tickets, is subject to the provisions of Act No. 4075 , otherwise known as the Solicitation Permit Law, as amended by PD 1564, and the Rules and Regulations of the Department of Social Welfare and Development and Internal Revenue .The SEC power to regulate corporations does not preclude other government agencies from enforcing other existing laws, rules and regulations applicable to corporations whose operations are also under their jurisdiction. Very truly yours, (SGD.) PERFECTO R. YASAY Chairman