Atty. Manuel C. Moyco

June 11, 1987 Atty. Manuel C. Moyco Encanto, Mabugat and Associates 7th Floor, UCPB Building Makati, Metro Manila Sir : This refers to your letter dated June 9, 1987 which was filed with this Commission requesting for opinion on the manner of sending notices of annual stockholders' meeting of San Pablo Manufacturing Corporation. You likewise request our legal view on the matter of postponement of annual stockholders' meeting. Anent thereto, the Corporation Code provides: "SECTION 47. Contents of by-laws . Subject to the provisions of the Constitution, this Code, other special laws, and the articles of incorporation, a private corporation may provide in its by-laws for: xxx xxx xxx 6. The time for holding the annual election of directors or trustees and the mode or manner of giving notice thereof ;(emphasis supplied) From the above quoted provision, it is clear that the manner of sending notices of annual stockholders' meeting lies within the sphere of regulation of the corporation's by-laws. Corollary thereto, the by-laws of San Pablo Manufacturing Corporation provides, thus. Article II "SECTION 2. Annual Meeting and Order of Business .... ...Notice of the annual meeting of the stockholders shall be given at least two (2) weeks prior to the meeting by publication in the newspaper of general circulation or in such other manner as may be required by law. "(emphasis supplied). Considering the foregoing, it is advised that the corporation should adopt the above-cited manner of sending notices of annual stockholders' meeting of San Pablo Manufacturing Corporation. As regards postponement of annual meeting, the general rule is, when the by-laws provide for the time of holding an annual meeting for the election of directors, the same should be held at the regular appointed time. The rule, however, admits of certain exceptions as where the annual meeting cannot be held on the appointed time for some valid reasons .( SEC letter dated March 5, 1987 addressed to Quasha, Asperilla Ancheta ).It is, however, necessary that the postponement of the annual meeting be for a reasonable time ( SEC Opinion dated June 13, 1967 citing 5 Fletcher Cyc. Corp. p. 2001).Likewise, proper notice on the postponement following the manner of giving notice of annual meeting as prescribed in the aforecited by-laws provisions, must be given to the stockholders. In the case of subject corporation, however, it was observed that the scheduled annual meeting of the corporation as provided for in the by-laws which was the last Thursday of May, had already lapsed. It is therefore advised that the annual meeting of the corporation for the year 1987 be called at the soonest possible time with proper notice as prescribed above. Regarding the possible violation incurred by the corporation for non-holding of annual meeting on the date fixed in the by-laws, your attention is invited to the provision of our "Rules Governing the Filing of Information Sheet by Domestic Corporations" which prescribes, under paragraph 2 thereof, that no extension of period for postponement of annual stockholders' meeting shall be allowed except for very justifiable reasons so stated in writing by the President, Secretary, Treasurer or other officers, upon which the Commission may grant an extension for not more than ten (10) days. It has to be emphasized that violation of said rules carries the corresponding penalty prescribed therein. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman