Published — June 1, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: WHEN DOES STOCK CORPORATION BECOME NON-STOCK?
Nonstock Corporation is defined by the Revised Corporation Code as one where no part of its income is distributable as dividends to its members, trustees, or officers. Its capital is in the form of contributions or donations. It is not organized for profit and any profit earned by the non-stock corporation shall be used for the furtherance of the purpose or purposes for which it is organized.
Nonstock Corporation may be formed or organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, like trade, industry, agricultural and like chambers, or any combination thereof.
In nonstock corporations, the right of the members of any class or classes to vote may be limited, broadened, or denied to the extent specified in the articles of incorporation or the bylaws. Unless so limited, broadened, or denied, each member, regardless of class, shall be entitled to one (1) vote.
As compared to Stock Corporation, where shares may be transferred by the stockholder with or without the consent of the corporation, in a Nonstock Corporation, membership is personal in character and is not transferable unless allowed by the Articles of Incorporation (AOI) or By-laws. The termination of membership shall extinguish all rights of a member in the corporation or in its property, unless otherwise provided in the articles of incorporation or the bylaws.
To Register a Nonstock Corporation to the Securities and Exchange Commission, the following documents must be submitted:
- Basic Requirements
- Name Verification Slip
- Articles of Incorporation (AI) and By-laws (BL)
- Joint affidavit of two incorporators to change corporate name (not required if already stated in AI)
- List of members certified by the corporate secretary, unless already stated in the Articles of Incorporation; and
- List of the names of contributors or donors and the amounts contributed or donated certified by the treasurer. There is no fixed amount of contribution required but only such reasonable amount as the incorporators and trustees may deem sufficient to enable the corporation to start operation, except in the case of foundations which must have a minimum contribution of at least One Million Pesos (P1,000,000.00).
- Additional Requirements:
- Endorsement/clearance from other government agencies, if applicable
- For Foundations: Notarized certificate of bank deposit of the contribution which shall not be less than P1,000,000.00 and statement of willingness to allow the Commission to conduct an audit
- For Religious corporations: Refer to Sections 109-116 of the Code, and an affidavit of affirmation or verification by the chief priest, rabbi, minister or presiding elder
- For Federations: Certified list of member-associations by corporate secretary or president
- For Condominium corporations/associations: Master Deed with primary entry of the Register of Deeds and Certification that there is no other existing similar condominium association within the condominium project.
Procedure:
- Verify or reserve proposed name;
- Present Articles of Incorporation and By-Laws;
- Pay filing fee at the Cashier
- Present Official Receipt to Releasing Unit.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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