Reublic of the Philppines Batangas State University COLLEGE OF ACCOUNTANCY

Reublic of the philppines batangas state university

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Reublic of the Philppines Batangas State University COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS AND INTERNATIONAL HOSPITALITY MANAGEMENT Batangas City 41 II. Discussions 1. State the qualifications prescribed by the Corporation Code for directors and trustees of stock and non-stock corporation. For stock corporations, the qualifications of directors are as follows: every director must own at least one (1) share of the capital stock; the share of stock held by the director must be registered in his name on the books of corporation; every director must continuously own at least a share of stock during his term, otherwise, he shall automatically cease to be a director; and a majority of the directors must be residents of the Philippines. On the other hand, for non-stock corporations, the trustees must be members in good standing thereof and majority of them must be residents of the Philippines. 2. How shall the directors/trustees exercise their powers in order to bind the corporation? Give the reasons for the rule. Under Section 23, the board of directors or trustees must act together as a body in a lawful meeting, not individually or separately, in order to bind the corporation by their acts. The general rule that the directors or trustees can bind the corporation only by action taken at aboard meeting seems to rest upon two reasons: a meeting is necessary in order that any action may be adopted only after full discussion; and as agents of the corporation managing its affairs, directors or trustees have no power other than as a board. 3. Illustrate straight voting as a method in the election of directors. By straight voting, every stockholder "may vote such number of shares for as many persons as there are directors" to be elected. For example, Jace owns 200 shares of stock in a corporation. If there are three directors to be chosen, Jace is entitled to 600 votes. He may give the three candidates he wants to be elected 200 votes each. Under this method, the votes are distributed equally among the three candidates without preference.
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Reublic of the Philppines Batangas State University COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS AND INTERNATIONAL HOSPITALITY MANAGEMENT Batangas City 42 4. Illustrate voting in a non-stock corporation in the election of trustees. As provided by Section 25, members of non-stock corporations may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate. If Iñigo is a member of a non-stock corporation and there are 5 directors to be elected, he is entitled only to five votes. He may give one vote to each of the five candidates he wants to be elected. If he has only one candidate he can cast only one vote for said candidate unless cumulative voting is authorized in the articles of incorporation or in the by-laws. Thus, where cumulative voting exists, there are nine (9) trustees to be elected, a member is entitled to cast nine (9) votes for one (1) candidate or by distributing the same among as many candidates as he shall fit.
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