Atty. Rufino R. Tan

September 4, 1981 Atty. Rufino R. Tan R. R. Tan & Associates Rm. 519 Bank of P.I. Bldg. Plaza Cervantes, Manila Sir : It appears in your letter of August 21, 1981, that your articles of incorporation provides for seven directors to be elected every year by the stockholders; that for more than five years now, only five out of the seven seats have been filled up leaving two unfilled for the same length of time; that you wish to elect two directors to fill up said two positions, who will serve up to the next annual stockholders' meeting on April, 1982. Your query is whether a stockholders' meeting or only a directors' meeting specially called for that purpose, would only be needed to elect the two directors to fill up the two unfilled positions in the board. You cited in this connection, Article II, Section 1 of your by-laws providing for the filling of vacancies in the board of directors, and we quote: "SECTION 1. Qualifications and Elections . ... Any vacancy in the Board of Directors shall be filled by a majority vote of the subscribed capital stock entitled to vote at a meeting specially called for the purpose, and the director or directors chosen shall hold office for the unexpired term." It is apparent that your by-laws was approved by this Commission in accordance with the provisions of the Corporation Law (Act 1459). Under said law, a by-laws may provide for the manner by which vacancies in the board may be filled up. Consequently, the provision of your by-laws will apply to the query before us. Seemingly, however, the by-law provision does not conform to the provision of Section 29 of the Corporation Code. Accordingly, the Corporation has two years from May 1, 1981 within which to comply with the same. In the meantime, the corporation should follow its provisions in filling up the two unfilled positions in the board. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner