MORE than a year after sharing my inspirational message to my fourth-year law class at Rizal Memorial College-School of Law (RMC-SOL) in Davao City, the same students are now yearning to embark on the historic 2020/ 2021 Bar Examinations – the first digital and localized test in the Philippines. It will be held on February 4 and 6, unlike the traditional exams which took place on the four Sundays of November.
Last January 28, I conducted a pre-week exam for my RMC-SOL students and discussed a few points on the main provisions of the RCC (Revised Corporation Code of the Philippines) as well as additional doctrines and jurisprudence in matters of company law which could be useful. to them, pursuant to Supreme Court Bar Bulletin 31, art. of 2022 (reduction of bar coverage and shortening of bar exams 2020/21).
I thought I’d share a few questions about the CCR and its suggested answers here for the indulgence of all bar exam candidates:
1. Who can set up companies?
Section 10 of the RCC provides that founders can now be any combination of individuals, SEC-registered partnerships, SEC-registered domestic corporations or associations, and foreign corporations.
2. How long can a company exist?
A company will exist in perpetuity and is now permitted to exist beyond the 50 year term permitted in the old Code, in accordance with Article 11 of the RCC, unless its articles of association provide otherwise.
3. What capital is required to form a company?
Pursuant to Article 12 of the RCC, joint-stock companies are not required to have a minimum share capital, except for specific provisions of a specific law. This reduces barriers to opening a company and doing business.
4. Has the corporate name threshold for what is permitted under the CCR changed?
Yes. Article 17 of the RCC provides that no company name will be accepted by the Commission if it is not different from that already reserved or registered for the use of another legal person. The old Code uses the “confusingly similar” threshold.
5. What is the notice period required to notify shareholders before an ordinary or extraordinary meeting?
Article 49 of the RCC provides that for ordinary meetings, the company must notify the shareholders at least 21 days before the meeting. For special meetings, notification is at least one week before the meeting.
6. Distinguish how directors and shareholders can participate in board and shareholder meetings.
Article 49 of the RCC authorizes the use of remote communications, such as videoconferencing and teleconferencing, at meetings of shareholders and directors. Shareholders can also attend and vote in absentia. The right to vote may be exercised in person, through a proxy or when the articles of association authorize it.
Section 52 of the RCC states that for directors or trustees who cannot physically attend or vote at board meetings, they may participate and vote by remote communication, such as videoconference, teleconference or other means of communication alternatives, which offer them reasonable opportunities to participate. . However, directors or trustees may not attend or vote by proxy at board meetings.
I hope you learned something from this column. I know it has been a very difficult time for you with the pandemic and the many postponements, but know that my prayers are with you and I wish you the best in your exams.
Kelvin Lester K. Lee is Commissioner of the Securities and Exchange Commission. The views and opinions expressed herein are his own. You can send your comments and questions to [email protected]
