Atty. Jose P. Llopis

October 29, 1990 Atty. Jose P. Llopis J.P. Llopis & Co. 164 P. Domingo St. B. F. Resort Village Las Pias, Metro Manila S i r : This refers to your letter dated October 8, 1990 requesting confirmation of your view relative to the effects of a by-law provision which is in conflict with the Corporation Code. As stated, your client corporation was registered before the effectivity of the Corporation Code. The by-laws of said corporation provide that the same "may be amended or repealed by the affirmative vote of the holders of a majority of the entire subscribed capital stock of the corporation" without any reference to Board participation or approval. It is your contention that said provision is contrary to Section 48 of the Corporation Code which provides that the by-laws shall likewise be approved by the Board of Directors; that the provisions of the Code shall, prevail over the by-laws; and that said by-law provision should have been amended pursuant to Section 148 of the same Code to conform with the provisions of the Code. The pertinent provision of the Corporation Code provides: "SECTION 148. Applicability to existing corporations . All corporations lawfully existing and doing business in the Philippines on the date of the effectivity of this Code and heretofore authorized, licensed or registered by the Securities and Exchange Commission, shall be deemed to have been authorized, licensed or registered under the terms and conditions of its license, and shall be governed by the provisions hereof : Provided, That where any of such corporation is affected by the new requirements of this Code, said corporation shall unless otherwise herein provided, be given a period of not more than two (2) years from the effectivity of this Code within which to comply with the same ." (Emphasis supplied) It is clear from the above that all existing corporations are subject to the provisions of the Corporation Code and affected corporations were given two years from the effectivity of the Code within which to comply with the provisions thereof. The Commission, in several occasions, has ruled that failure on their part to amend their articles of incorporation to comply with the applicable provisions of the Code on or before May 1, 1982, the expiry date of the two (2)-year period, the Commission will consider the provisions therein as written into the articles of incorporation as of May 1, 1980, the date of effectivity of the Corporation Code. (SEC opinions dated April 26 and June 29, 1982) Thus, applying the above ruling in the instant case, the provision of the Corporation Code on the matter shall prevail over the provisions of the by-laws. Regarding your other queries relative to inward remittances of foreign subscribers, please be advised that under existing policy of the Commission, proof of foreign currency inward remittance is required only for "non-resident" aliens. The requirement applies to initial paid-up capital of new corporations and payment on subscriptions to capital stock increases. A foreigner may be considered a "resident" alien for purposes of investment in Philippines if he/she is a holder of an Immigration Certificate of Registration, Special Investors Visa, Retirement Visa or Student Visa. LibLex Please be advised accordingly. (SGD.) RODOLFO L. SAMARISTA Associate Commissioner