Mr. Antonio M. Garcia

February 23, 2000 Mr. Antonio M. Garcia Manila Polo Club, Inc. No. 17 McKinley Road, Forbes Park Makati City S i r : This refers to your letter dated February 3, 2000 inquiring as to whether the board of directors of the Manila Polo Club, Inc. has the authority to levy an annual special assessment of P4000 per month for the payment of realty tax to be apportioned among the proprietary members of the Club. ISDHcT Please be advised that we cannot give you a categorical answer to the above query as it might develop into a case which may be brought before the Commission for litigation. However, for purposes of information only, the following is imparted. The manner of imposing membership dues and other forms of assessments should be done in accordance with the provisions of the corporate by-laws, the amount of which should be reasonable. Even in the absence of a provision in the by-laws, a corporation may collect reasonable assessments for the accomplishment of its objectives pursuant to the following provisions of the Corporation Code: "SECTION 36. Corporate powers and capacity . Every corporation incorporated under this code has the power and capacity: xxx xxx xxx 11. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in its articles of incorporation." (Emphasis supplied) It is well-settled that the board of directors is the governing body of the corporation with whom the management of the corporate affairs is vested. (Sec. 23 Corporation Code) Thus, it is for the Board, by virtue of its management power, to determine whether or not the above-mentioned proposal can be properly regarded as an act of management of corporate affairs and whether or not the desired assessment is reasonably necessary under the circumstances to keep and maintain the corporation. In the exercise of such power, the Board should exercise best care and good judgment solely in the interest of the corporation. Acts of the Board done in good faith and in the exercise of an honest judgment are presumed to be regular and valid. It has to be emphasized, however, that any act of the Board is subject to review and scrutiny where the corporation and members' interests are prejudiced, and grievance or complaint of any irregularity committed by the Board in the exercise of its management functions may be filed with the Commission by any member of the corporation. Very truly yours, (SGD.) PERFECTO YASAY Chairman