Mr. Esteban N. Eugenio, Jr.

May 28, 1985 Mr. Esteban N. Eugenio, Jr. Vice-President/Treasurer Usoha Express Phil. Corporation Ground Flr.,Cityland IV Condominium 124 Valero St.,Salcedo Village Makati, Metro Manila Sir : This has reference to your letters both dated May 9, 1985, requesting the opinion of this Commission on the following queries: prcd 1. Can a President of a corporation remove his Vice-President at will? and, 2. Can a non-resident U.S. citizen occupy the position of President of a corporation with an ownership distribution of 70% Filipino and 30% foreigner? The Corporation Code provides: "SECTION 25. Corporate officers, quorum . Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director, a treasurer, who may or may not be a director, a secretary, who shall be a resident and citizen of the Philippines and such other officers as may be provided for in the by-laws ...." (emphasis supplied). Your first query is answered in the negative. Officers of a corporation are elected to their respective offices by a majority vote of all the members of the board of directors. The power to elect being vested with said body, the power of removal must necessarily be exercised by it. Accordingly, where the power to remove an officer is lodged with the directors, action by them is necessary to constitute removal. (2 Fletcher Cyclopedia Corporation 169). In reply to your second query, please be informed that this Commission, in its previous opinions, has ruled that in firms engaged in wholly or partially nationalized activities, aliens are banned from being appointed to management positions as president, vice-president, treasurer, auditor, etc. of the same companies pursuant to a ruling of the Ministry of Justice, although, as earlier stated, they can be elected directors in proportion to their allowable participation or share in the capital of such activities in accordance with the Anti-Dummy Law, as amended by P.D. No. 715. (SEC opinions dated June 14, 1982; July 1, 1983; May 15, 1985). Accordingly, a foreigner, such as a U.S. citizen, cannot be elected as president of a domestic corporation engaged in nationalized or partially nationalized activities. Conversely, where the existing law does not forbid any non-Philippine ownership in the enterprise or does not limit ownership by non-Philippine nationals to a certain proportion, such foreigner may be elected as president thereof, subject to the qualification provided for in Section 25 of the Corporation Code quoted in part as follows: cdll "Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director ,...." Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner