Re : Per Diem of Directors forNon-Stock Corporations

February 4, 2004 SEC OPINION NO. 07-04 Re : Per Diem of Directors for Non-Stock Corporations Atty. Jose Oscar M. Salazar Bormaheco Condominium, Metropolitan Ave., 1205 Makati City S i r : This refers to your letter requesting opinion on the grant of per diems in favor of the directors of a non-stock, non-profit corporation organized primarily to manage the affairs of the condominium corporation. Please be informed that under SEC Memorandum Circular No. 15 Series of 2003, " requests for legal opinion must present the complete factual circumstances from which the Commission may draw premises and conclusions, and the resolution of the legal issues presented hinges on factual matters which are readily discernible from the query ." In addition, it was also stated therein that " Requesting parties must submit all the pertinent papers and documents necessary to the resolution of the query, such as but not limited to the Articles of Incorporation, By-laws, General Information Sheets, copies of applicable laws and administrative rules ." However, for purposes of information, incorporators or members of a non-stock, non-profit corporation are not entitled to receive any amount from the income of the corporation, unless they actually render services to the corporation as directors, officers or employees of the corporation. However, any grant of compensation must be provided for in the by-laws, otherwise, they are not entitled to any compensation, except those allowed under Section 30 of the Corporation Code, quoted hereunder: "SECTION 30. Compensation of directors . In the absence of any provision in the by-laws fixing their compensation, the directors shall not receive any compensation, as such directors except for reasonable per diems :Provided, however, That any such compensation (other than per diems ) may be granted to directors by the vote of the stockholders representing at a least majority of the outstanding capital stock at a regular or special stockholders' meeting. In no case shall the total yearly compensation of directors, as such directors, exceed ten (10%) per cent of the net income before income tax of the corporation during the preceding year." Be further advised that this opinion does not preclude judicial interpretation and/or application of the law by other government agencies should the issue be raised or litigated in the proper forum. DTcHaA Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel