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REPUBLIC ACT NO. 11232
AN ACT PROVIDING FOR THE REVISED CORPORATION CODE OF THE PHILIPPINES
SEC. 173. Outstanding Capital Stock Defined. – The term “outstanding capital stock”, as used in this Code, shall mean the total shares of stock issued under binding subscription contracts to subscribers or stockholders, whether fully or partially paid, except treasury shares.
SEC. 174. Designation of Governing Boards. – The provisions of specific provisions of this Code to the contrary notwithstanding, nonstock or special corporations may, through their articles of incorporation or their bylaws, designate their governing boards by any name other than as board of trustees.
SEC. 175. Collection and Use of Registration, Incorporation and Other Fees. – For a more effective implementation of this Code, the Commission is hereby authorized to collect, retain, and use fees, fines, and other charges pursuant to this Code and its rules and regulations. The amount collected shall be deposited and maintained in a separate account which shall form a fund for its modernization and to augment its operational expenses such as, but not limited to, capital outlay, increase in compensation and benefits comparable with prevailing rates in the private sector, reasonable employee allowance, employee health care services, and other insurance, employee career advancement and professionalization, legal assistance, seminars, and other professional fees.
SEC. 176. Stock Ownership in Corporations. – Pursuant to the duties specified by Article XIV of the Constitution, the National Economic and Development Authority (NEDA) shall, from time to time, determine if the corporate vehicle has been used by any corporation, business, or industry to frustrate the provisions of this Code or applicable laws, and shall submit to Congress, whenever deemed necessary, a report of its findings, including recommendations for their prevention or correction.
The Congress of the Philippines may set maximum limits for stock ownership of individuals or groups of individuals related to each other by consanguinity, affinity, or by close business interests, in corporations declared to be vested with public interest pursuant to the provisions of this section, or whenever necessary to prevent anti-competitive practices as provided in Republic
Act No. 10667, otherwise known as the “Philippine Competition Act”, or to implement national economic policies designed to promote general welfare and economic development, as declared in laws, rules, and regulations.
In recommending to the Congress which corporations, businesses and industries will be declared as vested with public interest, and in formulating proposals for limitations on stock ownership, the NEDA shall consider the type and nature of the industry, size of the enterprise, economies of scale, geographic location, extent of Filipino ownership, labor intensity of the activity, export potential, as well as other factors which are germane to the realization and promotion of business and industry.
SEC. 177. Reportorial Requirements of Corporations. – Except as otherwise provided in this Code or in the rules issued by the Commission, every corporation, domestic or foreign, doing business in the Philippines shall submit to the Commission:
(a) Annual financial statements audited by an independent certified public accountant: Provided, That if the total assets or total liabilities of the corporation are less than Six hundred thousand pesos (P600,000.00), the financial statements shall be certified under oath by the corporation’s treasurer or chief financial officer; and
(b) A general information sheet.
Corporations vested with public interest must also submit the following:
(1) A director or trustee compensation report; and
(2) A director or trustee appraisal or performance report and the standards or criteria used to assess each director or trustee.
The reportorial requirements shall be submitted annually and within such period as may be prescribed by the Commission.
The Commission may place the corporation under delinquent status in case of failure to submit the reportorial requirements three (3) times, consecutively or intermittently, within a period of five (5) years. The Commission shall give reasonable notice to and coordinate with the appropriate regulatory agency prior to placing under delinquent status companies under their special regulatory jurisdiction.
Any person required to file a report with the Commission may redact confidential information from such required report: Provided, That such confidential information shall be filed in a supplemental report prominently labelled “confidential”, together with a request for confidential treatment of the report and the specific grounds for the grant thereof.
SEC. 178. Visitorial Power and Confidential Nature of Examination Results. – The Commission shall exercise visitorial powers over all corporations, which powers shall include the examination and inspection of records, regulation and supervision of activities, enforcement of compliance, and imposition of sanctions in accordance with this Code.
Should the corporation, without justifiable cause, refuse or obstruct the Commission’s exercise of its visitorial powers, the Commission may revoke its certificate of incorporation, without prejudice to the imposition of other penalties and sanctions under this Code.
All interrogatories propounded by the Commission and the answers thereto, as well as the results of any examination made by the Commission or by any other official authorized by law to make an examination of the operations, books, and records of any corporation, shall be kept strictly confidential, except when the law requires the same to be made public, when necessary for the Commission to take action to protect the public or to issue orders in the exercise of its powers under this Code, or where such interrogatories, answers or results are necessary to be presented as evidence before any court.
SEC. 179. Powers, Functions, and Jurisdiction of the Commission. – The Commission shall have the power and authority to:
(a) Exercise supervision and jurisdiction over all corporations and persons acting on their behalf, except as otherwise provided under this Code;
(b) Pursuant to Presidential Decree No. 902-A, retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution. The Commission shall retain jurisdiction over pending suspension of payment/rehabilitation cases filed as of 30 June 2000 until finally disposed;
(c) Impose sanctions for the violation of this Code, its implementing rules and orders of the Commission;
(d) Promote corporate governance and the protection of minority investors, through, among others, the issuance of rules and regulations consistent with international best practices;
(e) Issue opinions to clarify the application of laws, rules, and regulations;
(f) Issue cease and desist orders ex parte to prevent imminent fraud or injury to the public;
(g) Hold corporations in direct and indirect contempt;
(h) Issue subpoena duces tecum and summon witnesses to appear in proceedings before the Commission;
(i) In appropriate cases, order the examination, search and seizure of documents, papers, files and records, and books of accounts of any entity or person under investigation as may be necessary for the proper disposition of the cases, subject to the provisions of existing laws;
(j) Suspend or revoke the certificate of incorporation after proper notice and hearing;
(k) Dissolve or impose sanctions on corporations, upon final court order, for committing, aiding in the commission of, or in any manner furthering securities violations, smuggling, tax evasion, money laundering, graft and corrupt practices, or other fraudulent or illegal acts;
(l) Issue writs of execution and attachment to enforce payment of fees, administrative fines, and other dues collectible under this Code;
(m) Prescribe the number of independent directors and the minimum criteria in determining the independence of a director;
(n) Impose or recommend new modes by which a stockholder, member, director, or trustee may attend meetings or cast their votes, as technology may allow, taking into account the company’s scale, number of shareholders or members, structure, and other factors consistent with the basic right of corporate suffrage;
(o) Formulate and enforce standards, guidelines, policies, rules and regulations to carry out the provisions of this Code; and
(p) Exercise such other powers provided by law or those which may be necessary or incidental to carrying out the powers expressly granted to the Commission.
In imposing penalties and additional monitoring and supervision requirements, the Commission shall take into consideration the size, nature of the business, and capacity of the corporation.
No court below the Court of Appeals shall have jurisdiction to issue a restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy that directly or indirectly interferes with the exercise of the powers, duties and responsibilities of the Commission that falls exclusively within its jurisdiction.
SEC. 180. Development and Implementation of Electronic Filing and Monitoring System. – The Commission shall develop and implement an electronic filing and monitoring system. The Commission shall promulgate rules to facilitate and expedite, among others, corporate name reservation and registration, incorporation, submission of reports, notices, and documents required under this Code, and sharing of pertinent information with other government agencies.
SEC. 181. Arbitration for Corporations. – An arbitration agreement may be provided in the articles of incorporation or bylaws of an unlisted corporation. When such an agreement is in place, disputes between the corporation, its stockholders or members, which arise from the implementation of the articles of incorporation or bylaws, or from intra-corporate relations, shall be referred to arbitration. A dispute shall be nonarbitrable when it involves criminal offenses and interests of third parties.
The arbitration agreement shall be binding on the corporation, its directors, trustees, officers, and executives or managers.
To be enforceable, the arbitration agreement should indicate the number of arbitrators and the procedure for their appointment. The power to appoint the arbitrators forming the arbitral tribunal shall be granted to a designated independent third party. Should the third party fail to appoint the arbitrators in the manner and within the period specified in the arbitration agreement, the parties may request the Commission to appoint the arbitrators. In any case, arbitrators must be accredited or must belong to organizations accredited for the purpose of arbitration.
The arbitral tribunal shall have the power to rule on its own jurisdiction and on questions relating to the validity of the arbitration agreement. When an intra-corporate dispute is filed with a Regional Trial Court, the court shall dismiss the case before the termination of the pretrial conference, if it determines that an arbitration agreement is written in the corporation’s articles of incorporation, bylaws, or in a separate agreement.
The arbitral tribunal shall have the power to grant interim measures necessary to ensure enforcement of the award, prevent a miscarriage of justice, or otherwise protect the rights of the parties.
A final arbitral award under this section shall be executory after the lapse of fifteen (15) days from receipt thereof by the parties and shall be stayed only by the filing of a bond or the issuance by the appellate court of an injunctive writ.
The Commission shall formulate the rules and regulations, which shall govern arbitration under this section, subject to existing laws on arbitration.
SEC. 182. Jurisdiction Over Party-List Organizations. – The powers, authorities, and responsibilities of the Commission involving party-list organizations are transferred to the Commission on Elections (COMELEC).
Within six (6) months after the effectivity of this Act, the monitoring, supervision, and regulation of such corporations shall be deemed automatically transferred to the COMELEC.
For this purpose, the COMELEC, in coordination with the Commission, shall promulgate the corresponding implementing rules for the transfer of jurisdiction over the abovementioned corporations.
SEC. 183. Applicability of the Code. – Nothing in this law shall be construed as amending existing provisions of special laws governing the registration, regulation, monitoring and supervision of special corporations such as banks, nonbank financial institutions and insurance companies.
Notwithstanding any provision to the contrary, regulators such as the Bangko Sentral ng Pilipinas and the Insurance Commission shall exercise primary authority over special corporations such as banks, nonbank financial institutions, and insurance companies under their supervision and regulation.
SEC. 184. Effect of Amendment or Repeal of This Code, or the Dissolution of a Corporation. – No right or remedy in favor of or against any corporation, its stockholders, members, directors, trustees, or officers, nor any liability incurred by any such corporation, stockholders, members, directors, trustees, or officers, shall be removed or impaired either by the subsequent dissolution of said corporation or by any subsequent amendment or repeal of this Code or of any part thereof.
SEC. 185. Applicability to Existing Corporation. – A corporation lawfully existing and doing business in the Philippines affected by the new requirements of this Code shall be given a period of not more than two (2) years from the effectivity of this Act within which to comply.
SEC. 186. Separability Clause. – If any provision of this Act is declared invalid or unconstitutional, other provisions hereof which are not affected thereby shall continue to be in full force and effect.
SEC. 187. Repealing clause. – Batas Pambansa Blg. 68, otherwise known as “The Corporation Code of the Philippines”, is hereby repealed. Any law, presidential decree or issuance, executive order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent with any provision of this Act is hereby repealed or modified accordingly.
SEC. 188. Effectivity. – This Act shall take effect upon completion of its publication in the Official Gazette or in at least two (2) newspapers of general circulation.
Approved: 20 February 2019.