Alpha International Manpower Services, Inc.

June 27, 1984 Alpha International Manpower Services, Inc. c/o Mr. Alfonso Ma. Z. Corpuz Room 704, 7th Floor, Alexander House Bldg. 132 Amorsolo St.,Legaspi Village Makati, Metro Manila Sir : This has reference to your letter dated June 4, 1984 requesting opinion on whether a corporation which is engaged in manpower export as its primary business may also carry out the other business enumerated in its articles of incorporation, more particularly the export of Philippine agricultural products pursuant to one of its secondary purposes. LexLib A perusal of your amended articles indicates that the primary purpose of that corporation is as follows: "To organize, establish, engage, operate and manage a manpower placement and recruiting office and furnish manpower services which will undertake, manage and conduct the business of providing employment and service assistance, and aid to any local or foreign firm, establishment, corporation, partnership, entity, proprietorship or individuals for the recruitment and placement of professionals, technicians entertainers, artists, office and industrial workers, personnel and officers and crews needed for local and foreign registered vessels and all kinds of skilled and unskilled personnel or workers for determination of their special qualifications and skills in the performance and execution of a desired work, duty or assignment and conduct selecting, screening, testing and arranging travel documents and render employment assistance desired or required and to be hired by any local and/or foreign firm, company, corporation, proprietorship, entity, business establishment, commercial houses, trade centers, industrial enterprises and any other legitimate business undertaking, all to the extent provided by law." and that one of the secondary purposes is: "II. To act as general merchants of Philippine quality export products and, in the furtherance of the same, to engage in and carry on a general mercantile business, and more specifically; to buy, sell, import, export ,barter, exchange and otherwise deal in different agricultural and industrial products and commodities either grown or processed locally, and to this end, to install, operate and maintain mills, machineries, manufacturing plants and factories by utilizing as raw materials all classes and descriptions of local produce, the component materials thereof and the appurtenances thereto, and to manufacture any and all supplies, materials, tools, machines, appliances or apparatus employed in or related to the manufacture of the said wares intended principally for foreign distribution; and to engage in construction of buildings and industrial plants, locally or in any part of the world as may be necessary to carry out the furtherance of the business, and to undertake contract on any construction job, and in general, to engage in such other pursuits; and to this end to acquire by purchase or lease or otherwise, lands or interest in lands, and to hold, improve, develop and manage any real estate so acquired, engage in the business of realty brokerage and/or act as commercial broker or agent of any person, firm, corporation or association, both domestic or foreign, for and in transactions involving or related to the acquisition, sale, lease, mortgage and administration of lands and other realities and the improvements thereon without engaging in the subdivision business." (as amended on October 5, 1983) Where the purpose clause of the articles of incorporation of a company embodies a variety of different and related purposes, the corporation may intend either to carry them out simultaneously or to prosecute first the primary business in which it is most interested and then embark later in anyone of the other objectives, as the need for expansion of the enterprise may warrant or the necessity for a change of business may demand ( SEC letter to Filfactors Financial Corporation dated January 2, 1973 ). cdlex Accordingly, where your corporation has for its primary purpose the operation of a manpower placement and recruiting office and the same wishes to engage in the other purposes enumerated in its articles of incorporation, it may do so, provided that the requirements of Section 42 of the Corporation Code of the Philippines are complied with. Under this Section, a corporation can engage in a business other than the primary purpose, provided that the same be approved by a majority of the board of directors and ratified by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock at a stockholders meeting duly called for the purpose. The Board of Investments (BOI), however, in its letter dated June 6, 1984 advised the Commission that the corporation has 30% foreign shareholdings. In this connection, please be advised that foreign ownership in a manpower and recruitment entity is limited only to 25%. The Labor Code of the Philippines as amended provides, thus: "ARTICLE 27. Citizenship Requirement . Only Filipino citizens or corporation, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers locally or overseas."(emphasis supplied) In view thereof, the corporation is hereby directed to reduce its foreign equity to 25% of its voting stock and furnish this Commission proof of its compliance with the directive. However, should the corporation decide to proceed with its application with the Board of Investments (BOI) to increase its 30% foreign shareholdings to 50%, the corporation should amend its articles of incorporation changing its primary purpose from recruitment to exportation business as well as its corporate name in accordance with Section 16 of the Corporation Code. cdlex Very truly yours, (SGD.) MANUEL G. ABELLO Chairman