Mayor Vicente B. Bermejo

September 2, 1997 Mayor Vicente B. Bermejo Municipality of Panay Province of Capiz S i r : This refers to your letter dated August 11, 1997 requesting opinion on whether or not a juridical entity or a corporation is qualified to occupy the position of a director in a private stock corporation. A corporation cannot act by itself being a mere juridical person, but it can be represented by its officers or authorized agents who can be elected as members of the Board of Directors if they are qualified . For purposes of compliance with the basic qualification required under Section 23 of the Corporation Code re: stock ownership of at least one (1) share ,the Commission, on several occasions, has opined that " beneficial ownership " is not necessary and that a person who holds the " legal title " to the stock, on the books of the Corporation is qualified, although the beneficial ownership may be in another. In other words, it is sufficient that the title to the stock, as it appears on the books of the corporation, is in the director, since the legal title is what counts and it is the person whose name appears as owner in the books of the company who is the stockholder and eligible as director. For instance, a director may hold his stock as "trustee" and yet be legally qualified. So a person to whom one share of stock has been transferred for the express purpose of qualifying him as director is eligible . (SEC Opinion addressed Rilloraza, Africa, De Ocampo & Africa dtd. 3-4-88 citing previous SEC Opinion and 2 Fletcher Cyc. Corp. Sec. 300 pp. 91-92) The transfer, however, should contain a description that the trustee holds the stock merely as a "nominee" for purposes of qualifying him as member of the Board. This situation normally occurs in a parent-subsidiary relationship. Accordingly, while a corporation cannot be "directly" elected as member of the Board of Directors, its duly authorized officer, agent or trustee who has been designated as " nominee " in accordance with the above procedure, may be eligible to be elected as director to represent a corporation. Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Chairman