Status of Fellowship of Christians in Government, Inc.

August 29, 2003 SEC OPINION NO. 43-03 Atty. Aurea Elnora A. Casiano Fellowship of Christians in Government, Inc. Room 304 Don Raul Bldg., #77 Kamuning Road, Quezon City Gentlemen : This has reference to your letter dated July 07, 2003 requesting a written confirmation on the status of FELLOWSHIP OF CHRISTIANS IN GOVERNMENT, INC. as a non-stock, non-profit corporation. Based on records, the SEC Express Lane Form No. 1-NS refers to ordinary non-stock corporations. These corporations are defined under Section 87 of the Corporation Code for purposes stated under Section 88 thereof. By definition, a non-stock corporation does not issue stock and distribute dividends to their members; they are created not for profit but for the public good and welfare. (De Leon, Corporation Code, p. 45) Incidental profits obtained from its operation shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized. It is in this sense that a non-stock corporation is considered a non-profit corporation. ( ibid ., P. 636) However, not all non-stock corporations are classified as non-profit under the BIR. There are instances when non-stock corporations earn profits which inure to the benefit of the corporation. To comply with the requirements of the Bureau of Internal Revenue for you to qualify as an accredited donee institution, please be advised that you have to amend the prefatory clause of your Articles of Incorporation to reflect the phrase ". . . to form a non-stock and non-profit association under the laws of the Republic of the Philippines". The prefatory clause of the SEC Express Lane Form for non-stock corporation (NS-97-01) had been revised to reflect the phrase "non-stock and non-profit association". Further, pursuant to the provisions of Sections 34(H) and 101(A) of the National Internal Revenue Code of 1997, as implemented by Revenue Regulations No. 13-98, please declare in your articles that " No part of our net income inures to the benefit of any private individual, and that the level of administrative expenses of the association does not exceed thirty percent (30%) of total expenses for the total taxable year ". HCaDET Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel