Atty. Jesulito A. Manalo

October 17, 2002 SEC OPINION Atty. Jesulito A. Manalo Manalo Puno Jocson & Placido Law Offices 5th Floor, Valero Tower, 122 Valero Street, Salcedo Village Makati City S i r : This is in reply to your letter dated October 4, 2002 regarding the intended disposition of the real estate property of your client, Philippine Racing Club, Inc. Basic is the rule that a corporation is a creature of law and a creation of the sovereign rule-making power, which is the State. As such, it can only act according to the authority granted or conferred upon it by law. Usually, this authority is delineated in a document known as the "articles of incorporation." Without the express authority in its primary or secondary purposes, a corporation cannot engage in a particular area of business unless the same is germane to the general scope of the objects for which the corporation was created or is necessary or proper to carry into effect the object of its creation. ( SEC Opinion dated October 4, 2001 ) Fletcher has regarded the power to acquire and convey property as an incident to every corporation although such power is expressly conferred to corporations incorporated in accordance with Section 36(7) of the Corporation Code. Therefore, whether or not such power is included in what the corporation could do or perform under its articles of incorporation, it is nevertheless, deemed to be within the scope of its corporate powers by express declaration of Section 36 of the Corporation Code. ( Lopez, Corporation C od e, p. 512 citing SEC Opinions dtd September 6, 1982, Marble Corporation of the Philippines and January 25, 1991, Philippine Library Materials Project Foundation Inc. ) In the case of your client, PRCI, there is no need to amend its articles of incorporation to include the purpose of disposing the property of PRCI in Makati as heretofore explained. Please be guided accordingly. cSDHEC Very truly yours, (SGD.) BENITO A. CATARAN Director Company Registration and Monitoring Department