Imperial Commodities, Inc.

October 19, 1988 Imperial Commodities, Inc. 18th Floor, Producers Bank Bldg. Paseo de Roxas, Makati Metro Manila Gentlemen : This refers to the amended articles of incorporation of that corporation which was presented to this Commission for filing on June 22, 1988. Section 17 of the Corporation Code of the Philippines reads in part thus: "The Securities and Exchange Commission may reject the articles of incorporation or disapprove any such amendment thereto if the same is not in compliance with the requirements of the Code: Provided, that the Commission shall give the incorporators a reasonable time within which to correct or modify the objectionable portions of the articles or amendment. The following are grounds for such rejection or disapproval: 1. ... 2. That the purpose or purposes of the corporation are patently unconstitutional, illegal, immoral or contrary to government rules and regulations .(Emphasis supplied). Under the guidelines issued by the Commission relating to stock brokerage business, a stock brokerage corporation which is a member of a stock exchange must engage solely and exclusively in said business and to do acts directly or indirectly connected with or incidental thereto .All the transactions or dealings of such corporation, and that of all stockholders thereof shall be subject to the approval of the Board of Governors of the stock exchange; and that no corporation shall be allowed to operate any seat in the Exchange unless all the stockbrokers thereof which in no case be more than ten (10) are acceptable to the Board of Governors of that Exchange. The purpose of a corporation as stated in the articles of incorporation are not to be restricted by the words of a single clause, but are to be ascertained by the reading of the entire declaration. (1A Fletcher, Cyc. Corp.,sec. 160)."All the clauses are to be considered together and in association with one another in determining what the corporation may do." (Ibid),There should be a specification of the corporate purpose with sufficient clarity and elucidation, to define with more certainty the scope of the business or undertaking prescribed, and to enable the officer granting the charter to see that the purpose specified is one provided for by the statute. (Fletcher, Supra.,sec. 101). llcd Imperial Commodities, Inc. proposes to act both as broker or dealer in equity securities, and at the same time, broker or dealer in commodity futures and in general, all types of securities falling within the broad definition of the term under paragraph (b), Article II of its proposed amended articles of incorporation. Under our rules, a corporation engaged in stock brokerage cannot undertake any other activities not allied to the stock brokerage business. Trading in all types of securities as defined under "The Revised Securities Act" is a very all-encompassing or an all-purpose clause. In this connection, a corporation cannot be organized for two or more incompatible purposes. (1A Fletcher, sec. 99). And where the articles expresses broadly diverse and general large number of incompatible objects, its registration may be denied. In view of the foregoing, the Commission en banc in its meeting of October, 13, 1988 resolved to deny your amended articles of incorporation. Accordingly, said documents are returned to you herewith. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman