Ms. Louise Y. Gochan

September 20, 1995 Ms. Louise Y. Gochan Gochan, Gochan, & Gochan P.O. Box 556 Gochan Building Cebu City M a d a m : This refers to your letter dated August 3, 1995, addressed to the Cebu Extension Office requesting opinion on the legality of electing only five (5) out of the required seven (7) directors as fixed in the articles of incorporation. Cited hereunder are the pertinent rulings on the matter: llcd "An election of a less number of directors than the number which the meeting was called to elect is valid as to those actually elected." (in re: Excelsior Ins. Co., 38 Barb. 297; In re: Union Insurance Co., 22 Wend. 591, cited in 2 Fletcher, Cyc. Corp. 1969 Rev. Vol. Sec. 291, p. 77). "The general rule is well-settled that the power of the board is not suspended by vacancies in the board, unless the number is reduced below a quorum." (2 Fletcher, Sec. 421, Co., 127 Cal 261, 59 p. 563). "If a certain number of directors is provided for by statute or the articles of incorporation, the failure of the stockholders to fill all the directorship does not invalidate the title of the directors who are elected or prevent them from legally representing the corporation so long as they constitute a quorum." (Great Falls & T.C.R. Co. v. Ganong, 48 Mont, 54, 136 p. 390 cited in Fletcher, Sec. 421, p. 270). Thus, the Commission previously opined that the stockholders or members of a corporation may opt to elect a number of Directors less than the number of directors as fixed in the articles of incorporation, provided that the elected directors constitute a quorum and are qualified to act as such. Such a situation would merely give rise to vacancy in the board which may be filled up in a subsequent special meeting duly called for the purpose. (SEC Opinions dated Feb. 20, 1987 and June 10, 1992 addressed to Asian Brothers Corporation and Mr. Geminiano R. Pineda, respectively). Please be advised accordingly. (SGD.) FE ELOISA C. GLORIA Associate Commissioner