Consolidated Financing Corporation

June 26, 1986 Consolidated Financing Corporation c/o Mr. Radel M. Fucio Rm. 505 State Center Bldg. Ortigas cor. EDSA, Mandaluyong Metro Manila Sir : This refers to your letter dated May 20, 1986, requesting for the opinion of this Commission on the following query: "We are a member of a non-stock, non-profit condominium corporation. As a member, are we entitled to receive a stock certificate from the corporation? Expressed otherwise, is a non-stock corporation obliged to issue stock certificate? Anent thereto, Section 63 of the Corporation Code provides, thus: "SECTION 63. Certificate of stock and transfer of shares . The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant secretary and sealed with the seal of the corporation shall be issued in accordance with the by-laws .Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner or his attorney in fact or other person legally authorized to make the transfer. No transfer however shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation showing the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number of shares transferred. xxx xxx xxx (emphasis supplied) "Of course the corporation would have no right to issue certificate if it has no right the issue stock".(Reno Oil Co. v. Calver, 60 App. Div. 129, 69 N.Y. Supp. 969, revlg. 33 Misc. 717, 68 N.Y. Supp. 303 cited in Fletcher Vol. 11, p. 414) From the foregoing provision and ruling, it is clear, therefore, that only stock corporations can issue stock certificates. Insofar as membership in a non-stock, non-profit corporation is concerned, the following rulings are appropriate: , "Membership in non-profit or non-stock corporations is usually evidenced by a certificate or policy of some kind issued by the corporation, and showing that the person named therein, or the holder, is entitled to the rights of membership." (Vol. 12A, Fletcher's p. 550) "Charitable and religious corporations and the various kinds of so-called membership corporations are further examples of corporations which ordinarily are not authorized to have capital stock and shares, in the strict sense of those terms." (Vol. 11, Fletcher's, p. 380) "Florida Condominium A c t permitted an association that operated such a project to function as a corporation not for profit." (Vol. 12A, Fletcher's, p. 553) Under Republic Act No. 4726 otherwise known as "The Condominium Act", membership in a condominium corporation is not transferable separately from the condominium unit. The pertinent provision, Section 10 provides thus: "SECTION 10. xxx xxx xxx Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation shall not be transferable separately from the condominium unit of which it is an appurtenance. When a member or stockholder ceases to own a unit in the project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or stockholder of the condominium." Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman