Reza Pacific International, Inc.

August 13, 1987 Reza Pacific International, Inc. c/o Ms. Teresita S. Manalo Topside Level T4-A Milelong Specialty Center Amorsolo St., Legaspi Vill. Makati, Metro Manila Gentlemen : This refers to your letter dated July 29, 1987, inquiring on whether the above-named corporation can manage a farm, particularly Kristina Farms, Inc., pursuant to the provisions of its articles of incorporation. It is well settled that a corporation has only such powers as are expressly granted in its charter or in the statutes under which it is created or such powers as are necessary for the purpose of carrying out its express powers (13 Am. Jur., sec. 739). Thus, the court ruled: "In the determination of what business may be carried on by a corporation, reference must be had to its charter, and unless the power to carry on a particular business is either expressly or impliedly conferred thereby, it does not exist." (Chewacla Lime v. Disnukes, 87 Ala 344, 6So. 122, 5 LRA. 100, cited in Am. Jur., sec. 743) The corporate business is limited by the corporation's charter, and "it is illegal for a corporation to apply either its capital or its profit to objects not contemplated by its charter". (Am. Jur., Supra., sec. 739, citing Dodge v. Voolsey, 18 How. (US) 331, 15L. ed. 401). Likewise, only such powers as are reasonably necessary to enable corporations to carry out the express powers granted and the purposes of their creation are to be implied or are to be deemed incidental. (Am. Jur. sec. 740). Powers merely convenient or useful are not implied if they are not essential, having in view the nature and object of incorporation. (Ibid., citing Planters Bank v. Sharp. 6 How., (U.S.) 301, 12 L. ed., 447). A perusal of the articles of incorporation of Reza Pacific International, Inc. disclosed that "management activity" is not among the specific purposes which subject corporation has the power to do and perform. Neither is the same necessary to carry out its express powers/purposes. In view thereof, the corporation cannot undertake such business activity. Please be advised accordingly Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner