Dr. Claro M. Cinco

May 2, 1984 Dr. Claro M. Cinco Cebu Doctors Hospital Cebu City Sir : This refers to your letter dated April 17, 1984 inquiring as to whether Section 6 of the Corporation Code, particularly paragraph 6 and 7 thereof applies to non-stock corporations organized before the effectivity of the Corporation Code, the by-laws of which classify the members into voting proprietary members and non-voting proprietary members. The Commission as a matter of policy has refrained from rendering opinions on questions where the facts are not fully disclosed and made known to the Commission. However, for purposes of information only, the following may be imparted. Section 6 of the Corporation Code provides in part, to wit: "SECTION 6. Classification of shares . ... Where the articles of incorporation provide for non-voting shares in cases allowed by this Code, the holders of such shares shall nevertheless be entitled to vote on the following matters: 1. Amendment of the articles of incorporation; 2. Adoption and amendment of by-laws; 3. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of the corporate property; 4. Incurring, creating or increasing bonded indebtedness; 5. Increase or decrease of capital stock; 6. Merger or consolidation of the corporation with another corporation or other corporations; 7. Investment of corporate funds in another corporation or business in accordance with this Code; and 8. Dissolution of the corporation. Except as provided in the immediately preceding paragraph, the vote necessary to approve a particular corporate act as provided in this Code shall be deemed to refer only to stocks with voting rights." (emphasis supplied) From the underlined words/phrases in the aforecited provisions, it can be implied that said provision applies only to corporations which issue shares of stocks (stock corporations). For non-stock corporations, the Corporation Code has a separate provision relative to the right of the members to vote on corporate matters. The law provides, thus: "SECTION 89. Right to Vote . The right of the members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the by-laws .Unless so limited, broadened or denied, each member, regardless of class, shall be entitled to one vote." (emphasis supplied) xxx xxx xxx As to the applicability of the provisions of the Corporation Code to corporations existing prior to its effectivity, Section 148 thereof provides, to wit: "SECTION 148. Applicability to existing corporations . All corporations lawfully existing and doing business in the Philippines on the date of the effectivity of this Code and heretofore authorized, licensed or registered by the Securities and Exchange Commission, shall be deemed to have been authorized, licensed or registered under the provisions of this Code, subject to the terms and conditions of its license and shall be governed by the provisions hereof : Provided, That where any such corporation is affected by the new requirements of this Code, said corporation shall, unless otherwise herein provided, be given a period of not more than two (2) years from the effectivity of this Code within which to comply with the same." (emphasis supplied) Please be advised accordingly. LexLib Very truly yours, (SGD.) MANUEL G. ABELLO Chairman