Apparel Technology & Management Services, Inc.

January 25, 1988 Apparel Technology & Management Services, Inc. Unit H, 11th Floor, Strata 100 Bldg. Emerald Avenue, Pasig Metro Manila Gentlemen : This refers to your letter, dated December 11, 1987, requesting information on the matter of "APPAREL INFO", a monthly publication which Apparel Technology & Management Services, Inc. proposes to issue to 750 companies of the apparel industry for free. In the course thereof, you propose to take in advertisements to augment your printing expenses, and likewise plan to offer subscription rates for the publication. As to whether you may engage in publication and advertising activities, reference should be made on the purposes as enumerated in Article II of your articles of incorporation. 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). The court ruled thus: "In the determination of what business 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) The corporate business is limited by the corporation's charter, and it is illegal for a corporation to apply either its capital or its profit to objects not contemplated by its charter. "(Am. Jur, Supra, sec. 739, citing Dodge v. Voolsey, 18 How. (US) 331, 15L. ed., 401). Likewise, 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). A reading of your articles of incorporation shows that publication and advertising activities are not among your authorized purposes under Article II thereof. Neither are said activities necessary or incidental in the furtherance of your particular business. Accordingly, you are not legally authorized to undertake the publication of "Apparel Info", and soliciting advertisements and subscriptions in the course thereof. However, you may amend your articles of incorporation under Section 16 of the Corporation Code to include said activities among your secondary purposes, and venture thereon pursuant to Section 42 of said Code. cdlex Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman