Ms. Yolanda G. Escolano

September 25, 2003 SEC OPINION NO. 46-03 Ms. Yolanda G. Escolano Vice Chairperson Patnubay Development, Inc., Brgy. No. 6, Poblacion, Municipality of Quezon Province of Quezon M a d a m : This refers to your letter dated 23 July 2003 inquiring whether it is possible to implement your corporation's new by-laws without the approval of SEC considering that some of the policies in the new by-laws were already implemented upon its approval by the facilitator and the assembly. Relative thereto, the basic rule in this jurisdiction is that "In all cases, by-laws shall become effective only upon the issuance by the Securities and Exchange Commission (SEC) of a certification that they are not inconsistent with this Code." (Sec. 46, par. 3 of the Corporation Code of the Philippines). The certification referred to in the law relates to Certificate of Filing of By-laws issued by the Commission attesting to the fact that the by-laws are consistent with or not violative of the Corporation Code. Parenthetically, it is only from the date of issuance of such certificate by the SEC that the set of rules of action adopted by a corporation for its internal government, as well as those of its stockholders, members, or board or officers in their relation to the corporation and among themselves, that the by-laws become effective, not retroactively but prospectively. Your query is therefore answered in the negative. The issuance of the certificate of filing of By-laws, in essence is an approval by the Commission, which is a mandatory legal requirement, without which the corporate by-laws may not be put into effect. DHacTC Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel