Membership Book; Disqualification/termination of Membership and Quorum

December 18, 2003 SEC OPINION NO. 69-03 Mr. Artemio U. Lim 105 San Salvador Greenpark Village Pasig City SUBJECT : Membership Book; Disqualification/termination of Membership and Quorum S i r : This pertains to your letter of 17 December 2003 requesting opinion on the following queries: Can the Chairman of the COMELEC/Corporate Secretary legally determine the presence of a quorum for the election of the Board of Trustees based on a list of voters which is not validated against the Membership Book duly registered with the SEC, not certified/countersigned by the corporate secretary, and still includes deceased members and members who were dishonorably dismissed/discharged from the service/employment? In reply thereto, please be informed that the Commission had occasion to rule that: "To be able to give a definite information as to the present members of the corporation who are entitled to the above-mentioned rights, such would depend on what is recorded in the membership book of the corporation. The membership book is the best evidence to establish Filipino membership in a non-stock corporation . Considering therefore that the corporate secretary has the custody thereof and is vested with the function of registering the members of a corporation, he is in a better position to determine and certify whether the corporation has met the ratio required under the Law." (SEC letter dated November 9, 1995 addressed to Sebastian Ligador & Tierra, [Emphasis ours.]) Applying the aforequoted provision to the case at bar, membership book shall be the basis for the determination of the qualified members entitled to vote as well as the presence of quorum in a meeting for the election of the Board of Trustees in a non-stock corporation. The list of members must be preferably signed by the members and certified or countersigned by the Corporate Secretary. Any list submitted for that purpose must reflect the true and correct number of qualified members duly validated against the membership book registered with the Commission and certified by the Corporate Secretary. Relative to the inclusion of deceased and disqualified members in the list of members, it may be stated that the provision of the association's by-laws shall be controlling on matters pertaining to disqualification or termination of membership. However, the hereunder quoted provision of Code governs the issue at point: IcEaST "Sec. 91. Termination of membership Membership shall be terminated in the manner and for the causes provided in the articles of incorporation or the by-laws. Termination of membership shall have the effect of extinguishing all rights of a member in the corporation or in its properly, unless otherwise provided in the articles of incorporation." (Emphasis supplied) It is clear from the foregoing that termination of membership extinguishes all the rights of a member, including the right to vote. Therefore, members terminated either by death or disqualification of membership in accordance with the corporate by-laws should be delisted from the membership book of the corporation and need not be counted to arrive at a correct number of members constituting a quorum. The Corporate Secretary is legally obliged to update the list of members from time to time especially before the holding of annual meeting or conduct of election of trustees to reflect the accurate number of members of a corporation which is necessary for the proper determination of a quorum. Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel