Mr. Alfredo R. Rodriguez

February 15, 1991 Mr. Alfredo R. Rodriguez Securities and Exchange Commission Cebu Extension Office 4th Floor, Danaque Bldg. Osmea Blvd. Cebu City S i r : This refers to your letter of February 1, 1991 inquiring whether members of non-stock corporations have vested or beneficial interest over the assets and other properties of the corporation. As aptly defined in Section 87 of the Corporation Code, "a non-stock corporation is one where no part of its income is distributable as dividends to its members, trustees or officers ,...." Said law amplifies that "any profit which a non-stock corporation may obtain as an incident to its operation shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized ,...." Accordingly, the members of a non-stock corporation are not entitled to any profit that may be obtained out of the income from operations or activities or from other assets of the corporation. However, the articles of incorporation or by-laws of a non-stock corporation, subject to Sections 94 and 95 of the Corporation Code ,may provide for the distribution of its assets among its members upon its dissolution ,except as to those assets which have been received by it subject to restrictions as to their use or return, or assets which it holds upon some trust, public or private, in which case the claims of the beneficiaries or of the founder and his successors must have to be considered. Thus, until the corporation is dissolved and unless it is so provided in the articles of incorporation or by-laws, the members are not entitled to any beneficial or vested interest over the assets of a non-stock corporation. Please be advised accordingly. Very truly yours, (SGD.) ARMANDO Z. GONZALES Associate Commissioner