Mr. Philipps C. Comandante

June 20, 1989 Mr. Philipps C. Comandante Newfoundwealth Corporation 16-42 BL Pag-asa Condominium Bagong Pagasa, Quezon City Sir : This refers to your letter, dated May 15, 1989, requesting for information on the SEC requirements for corporations intending to engage in export and import of chromite ore and other mineral resources, more particularly on the following: 1. Is it necessary to state the said proposed business in the primary purpose or secondary purposes of the articles of incorporation. 2. What is the paid-up capital requirement. Relative to your first query, 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 power. (13 Am. Jur. Sec. 739).In the determination of what businesses 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. (Chiwakla Line v. Disnukes, 87 Ala. 344, 650, 122, 5LRA 100, cited in Am. Jur. Supra.,sec. 743). Thus, there should be a specification of the corporation's purposes in the articles of incorporation with sufficient clarity and elucidation to define with more certainty the scope of the business. However, where a corporation has more than one stated purpose, the articles of incorporation shall state which is the primary purpose and which are the secondary purpose or purposes. (Sec. 14, par. 2, Corporation Code of the Philippines). Relative to your query, the relevant provisions of the Corporation Code of the Philippines are quoted hereunder: SECTION 12. Minimum Capital Stock required of stock Corporation . Stock Corporation incorporated under this Code shall not be required to have any minimum authorized capital stock except as otherwise specifically provided for by special law, and subject to the provisions of the following section. SECTION 13. Amount of capital stock to be subscribed and paid for purposes of incorporation . At least twenty-five (25) percent of the authorized capital stock as stated in the articles of incorporation, must be subscribed at the time of incorporation, and at least twenty-five (25) percent of the total subscription must be paid upon subscription ,the balance to be payable in a date or dates fixed in the contract of subscription, without need of call, or in the absence of a fixed date or dates, upon call for payment by the board of directors: Provided, however, That in no case shall the paid up capital be less than five thousand (P5,000.00) Pesos .(Emphasis supplied). For export-import business, the Commission does not impose any regulation fixing the amount of paid-up capital. Suffice it, therefore, to state that the paid up capital is of such rational amount as may enable the corporation to carry out its purposes, provided, however, that the requirements under the aforecited provisions of the Corporation Code shall be complied with. Should the corporation intend to engage in mining business aside from its export-import business of ore and other mineral resources, the required minimum paid-up capital is P100,000.00. Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman