Mr. Salvador J. Bagamasbad

June 9, 1988 Mr. Salvador J. Bagamasbad 8th Flr.,Cibeles Bldg. 6780 Ayala Ave.,Makati, Metro Manila Sir : This refers to your letter dated May 30, 1988, requesting clarification on how "Quintet Services Assistance, Inc." can legally engage in the secondary purposes of its articles of incorporation. It appears therein that "Quintet Services Assistance, Inc." was registered primarily for the purpose of engaging in recruitment business. The Company, however, failed to obtain the required recruitment license from the POEA, and allegedly, due to stringent requirement, the company will not be able to secure one in the immediate future. In view thereof, the company is thinking of engaging in Nos. 2 and 3 of its secondary purposes. Thus, your request for clarification/advice thereon. Relative thereto, please be informed that "Quintet Services Assistance, Inc." is given two (2) options on how it may legally engage in its secondary purpose, to wit: (1) Should it be the desire of the corporation to shift its main line of business to that of the secondary purpose, the corporation may amend article II of its articles of incorporation by transposing said secondary purpose to the primary purpose. In this connection, Section 16 of the Corporation Code must be complied with, which states as follows: SECTION 16. Amendment of Articles of Incorporation . Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code, or the vote or written assent of two-thirds (2/3) of the members if it be a non-stock corporation. The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation. Such articles, as amended, shall be indicated by underscoring the change or changes made, and a copy thereof duly certified under oath by the corporate secretary and a majority of the directors or trustees stating the fact that said amendment or amendments have been duly approved by the required vote of the stockholders or members, shall be submitted to the Securities and Exchange Commission. The amendments shall take effect upon its approval by the Securities and Exchange Commission or from the date of filing with the said Commission if not acted upon within six (6) months from the date of filing for a cause not attributable to the corporation." LexLib (2) The corporation may opt to retain its primary purpose, and nevertheless invests its funds for any purpose other than the primary purpose for which it was organized by complying with the provision of Section 42 of the Corporation Code set forthwith: "SECTION 42. Power to Invest corporate funds in another corporation or business or for any purpose . Subject to the provisions of this Code, a private corporation may invest its funds in any other corporation or business or for any purpose other than the primary purpose for which it was organized when approved by a majority of the board of directors or trustees and ratified by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, or by at least two-thirds (2/3) of the members in case of non-stock corporations, at a stockholders' or members' meeting duly called for the purpose. Written notice of the proposed investment and the time and place of the meeting shall be addressed to each stockholder or member at his place of residence as shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid, or served personally: Provided, that any dissenting stockholder shall have appraisal right as provided in this Code: Provided, however, that where the investment by the corporation is reasonably necessary to accomplish its primary purpose as stated in the articles of incorporation, the approval of the stockholders or members shall not be necessary." Please be guided accordingly. prcd Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner