Mr. Estero L. Balsamin

September 1, 1987 Mr. Estero L. Balsamin Multi-Ventures Insurance Services Corporation 12th Flr.,Manilabank Bldg. Ayala Ave.,Makati, MM Sir : This refers to your letter dated August 18, 1987, requesting opinion on the query posed therein. prcd It appears therein that sometime in August 1986, Multi-Ventures Direct Response, Inc. (Formerly: Multi-Ventures Insurance Services Corporation) filed with the Commission an amended articles of incorporation to include under its primary purpose, the business of "advertising agency".However, instead of including it under the primary purpose clause, the applicant was advised to transfer it among the secondary purposes. Thus, as approved by the Commission on August 28, 1986, the business of advertising agency was included as one of its secondary purposes. However, when the amended articles of incorporation was presented to the Print Media Organization for its consideration of your application for accreditation, it insisted that the purpose of advertising agency be included in the primary purpose clause. You would like, therefore, to seek opinion on whether it is necessary for you to apply for further amendment of your amended articles of incorporation in order to legally discharge the function of an advertising agency or simply legitimize the exercise of that authority via stockholders confirmation as required by law. In connection therewith, Section 14, par. 2 of the Corporation Code provides: "2. ....Where a corporation has more than one stated purpose, the articles of incorporation shall state which is the primary purpose and which is/are the secondary purpose or purposes:" To effect a change in the primary purpose of the corporation, compliance with Section 16 of the Corporation Code is necessary. The law provides: "SECTION 16. Amendment of Articles of Incorporation . Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code, or the vote or written assent of two-thirds (2/3) of the members if it be a non-stock corporation. The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation. Such articles, as amended, shall be indicated by underscoring the change or changes made, and a copy thereof duly certified under oath by the corporate secretary and a majority of the directors or trustees stating the fact that said amendment or amendments have been duly approved by the required vote of the stockholders or members, shall be submitted to the Securities and Exchange Commission. The amendments shall take effect upon its approval by the Securities and Exchange Commission or from the date of filing with the said Commission if not acted upon within six (6) months from the date of filing for a cause not attributable to the corporation." Thus, if you want to change your primary purpose to advertising agency, the aforecited provision of law should be complied with. However, the corporation may opt to retain its primary purpose and still engage in any of its secondary purposes which include among others the business of "advertising agency by complying with Section 42 of the Corporation Code which provides: "SECTION 42. Power to invest corporate funds in another corporation or business or for any purpose . Subject to the provisions of this Code, a private corporation may invest its funds in any other corporation or business or for any purpose other than the primary purpose for which it was organized when approved by a majority of the board of directors or trustees and ratified by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, or by at least two-thirds (2/3) of the members in case of non-stock corporations, at a stockholders' or members' meeting duly called for the purpose. Written notice of the proposed investment and the time and place of the meeting shall be addressed to each stockholder or member at his place of residence as shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid, or served personally: Provided, That any dissenting stockholder shall have appraisal right as provided in this Code: Provided, however, That where the investment by the corporation is reasonably necessary to accomplish its primary purpose as stated in the articles of incorporation, the approval of the stockholders or members shall not be necessary." Thus, in answer to your query, you may either comply with Section 16 or 42 of the Corporation Code. Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Commissioner