Ms. Felicitas C. Rabonza

April 30, 1991 Ms. Felicitas C. Rabonza Directress/Administrator Saint Bernadette School of Alabang Rm. 23, 6 East Service Road Uding's Compound, Alabang Metro Manila M a d a m : This refers to your letter of March 21, 1991 requesting clarification/certification that Saint Bernadette School of Alabang, Inc.,a non-stock educational institution, is considered a non-profit Corporation. cdlex Non-stock corporations are those corporations which are not stock corporations. (Section 3, Corporation Code of the Philippines). As aptly defined in Section 87 of the Corporation Code, "a non-stock corporation is one where no part of its income is distributed as dividends to its members, trustees, or officers, . . . ." Said law amplifies "that any profit which a non-stock corporation may obtain as an incident to its operation shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized, . . . ." In other words, it does not necessarily follow that a non-stock corporation can make no profits. Many such corporations obtain profits as an incident to its operations, but unlike stock corporations, such profits are not distributed among its members but are used for the furtherance of its purposes. (Campos, Campos, The Corporation C od e, "Comments, Notes and Selected Cases", 1981 ed., p. 19) Thus, while Saint Bernadette School of Alabang, Inc. is organized as a non-stock corporation, in the pursuit of its purposes, it may obtain profits in the course thereof. However, having been organized as a "non-stock" corporation, our law does not empower it to distribute its profits as dividends to its members. As to whether such type of organization is a "profit or non-profit corporation," the Commission in a letter dated April 20, 1988 addressed to San Beda College ,opined that while a non-stock corporation may obtain profit as an incident to its operation, it is considered a "non-profit corporation" in the sense that its income is not distributed to its members. Accordingly, Saint Bernadette School of Alabang, Inc. which is a non-stock corporation, is considered a non-profit corporation. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner