Ms. Ila Virginia Contado, Lisa Masaquel,

September 19, 1988 Ms. Ila Virginia Contado, Lisa Masaquel, Mardonia Ramos and Madeline Suva c/o Institute of Development Communication UP Los Baos, Laguna Madams : This refers to your letter, dated July 5, 1988, requesting information on the queries posed therein. llcd It appears therein that the development journalism faculty of the Institute of Development Communication, UP Los Baos intends to put up a non-stock corporation to engage in print media. The faculty will serve as advisers, editors and/or writers of the community newspaper to be published by the corporation, while students of development journalism will act as reporters/writers thereon. Your queries are: What are the steps involved in setting up a non-stock, non-profit corporation? Can this non-stock corporation be converted into a profit-sharing corporation? Can the faculty members of the Institute of Development Communications, UP may act as staffers/incorporators of the newspaper to be put up by the non-stock corporation? To organize a non-stock corporation under Corporation Code, you may file with the Commission the articles of incorporation of the proposed corporation duly signed and acknowledged by all the incorporators, containing substantially the following matters: 1. The name of the corporation; 2. The purpose or purposes for which the corporation is being incorporated. A non-stock corporation may not include a purpose which would change or contradict its nature as such; 3. The place where principal office of the corporation is to be located which must be within the Philippines; 4. The term for which the corporation is to exist; 5. The names, nationalities and residences of the incorporators; 6. The number of directors or trustees, which shall not be less than five (5) nor more than fifteen (15); 7. The names, nationalities and residences of the persons who shall act as directors or trustees until the first regular directors or trustees are duly elected and qualified in accordance with the Corporation Code; 8. The amount of the capital contribution, the names, nationalities and residences of the contributors and the amount contributed by each; 9. Such other matters as are not inconsistent with law and which the incorporators may deem necessary and convenient. Attached is a list of requirements for non-stock corporation which should be submitted together with the articles of incorporation. In connection with your second query, quoted hereunder is the pertinent section of the Corporation Code: "SECTION 87. Definition . For purposes of this Code, a non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers, subject to the provisions of this Code on dissolution: Provided, That any profit which a non-stock corporation may obtain as an incident to its operation, shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized, subject to the provisions of this Title. xxx xxx xxx." A non-stock corporation cannot be converted into a stock corporation by mere amendment of the articles of incorporation. For purposes of transformation, it is fundamental that the non-stock corporation be dissolved under the methods specified in Title XIV of the Corporation Code. Thereafter, the members may organize a stock corporation directed to bring profits or pecuniary gains to themselves. The answer to your third query would depend much on the relevant provision of the charter of UP Los Baos as well as your contract with U.P. In addition, if the faculty members are covered by the Civil Service Law, while they can be members or incorporators of a non-stock corporation, nevertheless, they cannot participate directly in the management of the business of the corporation. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman