Mr. Cesar R. Arances

August 22, 2002 SEC OPINION Mr. Cesar R. Arances Vice President C/o Peter Onyo Jr. Lot 34 Blk. 23 Pointsettia St. Antipolo Hills Subdivision Antipolo City S i r : This has reference to your letter dated 12 August 2002 requesting opinion of the Commission on the queries posed therein. In reply to your first query, the articles of incorporation should be amended by the majority of the board and two third (2/3) of the members to include additional purposes in its desire to expand its objectives. As regards the second query, the number of Trustees should not be less than five (5) but may be more than fifteen (15) in number as may be fixed in the articles of incorporation. Anent your third query, associations are not allowed to distribute dividends to its members. Section 87 of the Corporation Code provides that: "Sec. 87. A non-stock/non-profit corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers subject to the provision of this Code on dissolution: Provided, That any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized, subject to the provision of this Code. EaHDcS Relative to the succeeding queries, the By-laws of the association should be amended to reflect the proposed changes therein. The association may create additional positions of corporate officers and extend the term of trustees and officers for two years. Further, the membership meeting should be held annually in the month specified in the by-laws. Very truly yours, (SGD.) BENITO A. CATARAN Director Company Registration and Monitoring Department