Mr. Ahmad Elias

July 16, 1990 Mr. Ahmad Elias 180 Carreon Street Castro East, Santiago Isabela S i r : This refers to your letter dated June 16, 1990 requesting opinion on the legality of the provisions of the pending new by-laws of Northeastern College, Inc.,filed with the Commission on February 21, 1990, which provide that the president of the corporation may not be a stockholder of the corporation and shall have a term of office of four (4) years. 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 ,..." (Emphasis supplied) The foregoing provision requires that the president must be a director, and in order to be eligible as director, Section 23 of the Code requires that one must be a stockholder at the time of his election. The law states, thus: "SECTION 23. . . ., the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporation controlled and held by the board of directors or trustees to be elected from among the holders of stock ,or where there is no stock, from among members of the corporation, who shall hold office for one (1) year and until their successors are elected and qualified. ...(Emphasis supplied) It is clear from the aforecited provisions of law that the basic qualifications of a president is that he must be a stockholder and at the same time a director of the corporation. Regarding the term of office of the president, Section 23 of the Corporation Code provides that the directors "...shall hold office for a term of one (1) year and until their successors are elected and qualified." Section 25 of the Code further provides that ". . . immediately after their election, the directors of a corporation must formally organize by the election of a president, ...." It therefore necessarily follows that the term of office of the president is also for one (1) year and cannot go beyond that of the directors. In the light of the foregoing, the above-mentioned provisions of the new by-laws of Northeastern College, Inc., are violative of the Corporation Code. In view thereof, the Commission, on even date, has returned the proposed by-laws of the corporation with the advice that the same be corrected to conform with the provisions of the Corporation Code. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner