Sample by-Laws
BY-LAWS
OF
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ARTICLE I
SUBSCRIPTION, ISSUANCE AND TRANSFER OF SHARES
Section 1. Subscriptions – Subscribers to the capital stock of
the corporation shall pay the value of the stock in accordance with the terms
and conditions prescribed by the Board of Directors. Unpaid subscriptions
shall not earn interest unless determined by the Board of Directors.
Section 2. Certificate – The shareholder shall be entitled to one
or more certificates for fully paid stock subscription in his name in the books
of the corporation. The certificates shall contain the matters required
by law and the Articles of Incorporation. They shall be in such form and
design as may be determined by the Board of Directors and numbered
consecutively. The certificate shall be signed by the President,
countersigned by the Secretary or Assistant Secretary, and sealed with the
corporate seal.
Section 3. Transfer of Shares – Subject to the restrictions,
terms and conditions contained in the Article of Incorporation, shares may be
transferred, sold, assigned or pledged by delivery of the certificates duly
indorsed by the shareholder, his attorney-in-fact, or other legally authorized
person. The transfer shall be valid and binding on the corporation only
upon record thereof in the books of the corporation. The secretary shall
cancel the stock certificates and issue new certificates to the transferee.
No share of stock against which the corporation holds an unpaid claim shall be
transferable in the books of the corporation.
All certificates surrendered for transfer shall be stamped “Cancelled” on the
face thereof, together with the date of cancellation, and attached to the
corresponding stub with the certificate book.
Section 4. Lost Certificates – In case any stock
certificate is lost, stolen, or destroyed, a new certificate may be issued in
lieu thereof in accordance with the procedure prescribed under Section 73 of
the Corporation Code.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Annual/Regular Meetings – The annual/regular meetings
of shareholders shall be held at the principal office on the 30th of June of
each year, if a legal holiday, then on the day following.
Section 2. Special Meeting – The special meetings of
shareholders, for any purpose or purposes, may at any time be called by any of
the following: (a) Board of Directors, at its own instance, or at the
written request of shareholders representing a majority of the outstanding
capital stock, (b) President.
Section 3. Place of Meeting – Shareholders meetings, whether
regular or special, shall be held in the principal office of the corporation or
at any place designated by the Board of Directors in the city or municipality
where the principal office of the corporation is located.
Section 4. Notice of Meeting – Notices for regular or special
meetings of shareholders may be sent by the Secretary by personal delivery or
by mail at least two (2) weeks prior to the date of the meeting to each
shareholder of record at his last known address. The notice shall state
the place, date and hour of the meeting, and the purpose or purposes for which
the meeting is called.
When the meeting of shareholders is adjourned to another time or place, it
shall not be necessary to give any notice of the adjourned meeting if the time
and place to which the meeting is adjourned are announced at the meeting at
which the adjournment is taken. At the reconvened meeting, any business
may be transacted that might have been transacted on the original date of the
meeting.
Section 5. Quorum - Unless otherwise provided by law, in all
regular or special meeting of shareholders, a majority of the outstanding
capital stock must be present or represented in order to constitute a
quorum. If no quorum is constituted, the meeting shall be adjourned until
the requisite amount of stock shall be present.
Section 6. Conduct of Meeting – A meeting of the shareholders
shall be presided over by the President, or in his absence, by a chairman to be
chosen by the shareholders. The Secretary shall act as Secretary of every
meeting, but if not present, the chairman of the meeting shall appoint a
secretary of the meeting.
Section 7. Manner of Voting – At all meetings of shareholders, a
shareholder may vote in person or by proxy. Unless otherwise provided in
the proxy, it shall be valid only for the meeting at which it has been
presented to the Secretary. All proxies must be in the hands of the
Secretary before the time set for the meeting. Proxies filed with the
Secretary may be revoked by the shareholders either in an instrument in writing
duly presented and recorded with the Secretary, prior to a scheduled meeting or
by their personal presence at the meeting.
Section 8. Closing of Transfer Books or Fixing of Record Date –
For the purpose of determining the shareholders entitled to notice of, or to
vote at, any meeting of shareholders or any adjournment thereof or to receive
payment of any dividend, the Board of Directors may provide that the stock and
transfer books be closed for ten (10) working days immediately preceding such
meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers of the Board – Unless otherwise provided by
law, the corporate powers of the corporation shall be exercised, all business
conducted and all property of the corporation controlled and held by the Board
of Directors to be elected by and from among the shareholders. Without
prejudice to such powers as may be granted by law, the Board of Directors shall
also have the following powers:
a)
From time to time, to make and change rules and regulations not inconsistent
with these by-laws for the management of the corporation’s business and
affairs;
b) To
purchase, receive, take or otherwise acquire for and in the name of the
corporation, any and all properties, rights, or privileges, including
securities and bonds of other corporations, for such consideration and upon
such terms and conditions as the Board may deem proper or convenient;
c) To
invest the funds of the corporation in other corporations or for purposes other
than those for which the corporation was organized, subject to such
shareholders’ approval as may be required by law;
d) To
incur such indebtedness as the Board may deem necessary, to issue evidence of
indebtedness including without limitation, notes, deeds of trust, bonds,
debentures, or securities, subject to such shareholders approval as may be
required by law, and/or pledge, mortgage, or otherwise encumber all or part of
the properties of the corporation;
e) To
establish pension, retirement, bonus, or other types of incentives or
compensation plans for the employees, including officers and directors of the
corporation;
f)
To prosecute, maintain, defend, compromise or abandon any lawsuit in which the
corporation or its officers are either plaintiffs or defendants in connection
with the business of the corporation;
g) To
delegate, from time to time, any of the powers of the Board which may lawfully
be delegated in the course of the current business of the corporation to any
standing or special committee or to any officer or agent and to appoint any
person to be agent of the corporation with such powers and upon such terms as
may be deemed fit;
h) To
implement these by-laws and to act on any matter not covered by these by-laws,
provided such matter does not require the approval or consent of the
shareholders under the Corporation Code.
Section 2. Election and Term – The Board of Directors shall be
elected during each regular meeting of shareholders and shall hold office for
one (1) year and until their successors are elected and qualified.
Section 3. Vacancies – Any vacancy occurring in the Board of
Directors other than by removal by the shareholders or by expiration of term,
may be filled by the vote of at least a majority of the remaining directors, if
still constituting a quorum; otherwise, the vacancy must be filled by the
shareholders at a regular or at any special meeting of shareholders called for
the purpose. A director so elected to fill a vacancy shall be elected
only for the unexpired term of his predecessor in office.
The vacancy resulting from the removal of a director by the shareholders in the
manner provided by law may be filled by election at the same meeting of
shareholders without further notice, or at any regular or at any special
meeting of shareholders called for that purpose, after giving notice as
prescribed in these by-laws.
Section 4. Meetings – Regular meetings of the Board of Directors
shall be held once a month on such dates and at places as may be called by the
Chairman of the Board, or upon the request of a majority of the Directors.
Section 5. Notice – Notice of the regular or special meeting of
the Board, specifying the date, time and place of the meeting, shall be
communicated by the Secretary to each director personally, or by telephone,
telegram, or by written message. A director may waive this requirement,
either expressly or impliedly.
Section 6. Quorum – A majority of the number of directors as
fixed in the Articles of Incorporation shall constitute a quorum for the
transaction of corporate business and every decision of at least a majority of
the directors present at a meeting at which there is a quorum shall be valid as
a corporate act, except for the election of officers which shall require the
vote of a majority of all the members of the Board.
Section 7. Conduct of the Meetings – Meetings of the Board of
Directors shall be presided over by the Chairman of the Board, or in his
absence, by any other director chosen by the Board. The Secretary, shall
act as secretary of every meeting, if not present, the Chairman of the meeting,
shall appoint a secretary of the meeting.
Section 8. Compensation – By-resolution of the Board, each
director shall receive a reasonable per diem allowance for his attendance at
each meeting of the Board. As compensation, the Board shall receive and
allocate an amount of not more than ten percent (10%) of the net income before
income tax of the corporation during the preceding year. Such
compensation shall be determined and apportioned among the directors in such
manner as the Board may deem proper, subject to the approval of shareholders
representing at least a majority of the outstanding capital stock at a regular
or special meeting of the shareholders.
ARTICLE IV
OFFICER
Section 1. Election/Appointment – Immediately after their
election, the Board of Directors shall formally organize by electing the
President, the Vice-President, the Treasurer, and the Secretary at said
meeting.
The Board may, from time to time, appoint such other officers as it may
determine to be necessary or proper. Any two (2) or more positions may be
held concurrently by the same person, except that no one shall act as President
and Treasurer or Secretary at the same time.
Section 2. President – The President shall be the Chief Executive
Officer of the corporation and shall exercise the following functions:
a) To
preside at the meeting of the shareholders;
b) To
initiate and develop corporate objectives and policies and formulate long range
projects, plans and programs for the approval of the Board of Directors,
including those for executive training, development and compensation;
c) To
supervise and manage the business affairs of the corporation upon the direction
of the Board of Directors;
d) To
implement the administrative and operational policies of the corporation under
his supervision and control;
e) To
appoint, remove, suspend or discipline employees of the corporation, prescribe
their duties, and determine their salaries;
f)
To oversee the preparation of the budgets and the statements of accounts of the
corporation;
g) To
represent the corporation at all functions and proceedings;
h) To
execute on behalf of the corporation all contracts, agreements and other
instruments affecting the interests of the corporation which require the
approval of the Board of Directors;
i)
To make reports to the Board of Directors and shareholders;
j)
To sign certificates of stock;
k) To
perform such other duties as are incident to his office or are entrusted to him
by the Board of Directors.
Section 4. The Vice-President – He shall, if qualified, act as
President in the absence of the latter. He shall have such other powers
and duties as may from time to time be assigned to him by the Board of
Directors or by the President.
Section 5. The Secretary – The Secretary must be a resident and a
citizen of the Philippines. He shall have the following specific powers
and duties:
a) To
record the minutes and transactions of all meetings of the directors and the
shareholders and to maintain minute books of such meetings in the form and
manner required by law;
b) To
keep record books showing the details required by law with respect to the stock
certificates of the corporation, including ledgers and transfer books showing
all shares of the corporation subscribed, issued and transferred;
c) To
keep the corporate seal and affix it to all papers and documents requiring a
seal, and to attest by his signature all corporate documents requiring the
same;
d) To
attend to the giving and serving of all notices of the corporation required by
law or these by-laws to be given;
e) To
certify to such corporate acts, countersign corporate documents or
certificates, and make reports or statements as may be required of him by law
or by government rules and regulations.
f)
To act as inspector at the election of directors and, as such, to determine the
number of shares of stock outstanding and entitled to vote, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and to receive votes, ballots or consents, hear and determine
questions in connection with the right to vote, count and tabulate all votes,
determine the result, and do such acts as are proper to conduct the election.
g) To
perform such other duties as are incident to his office or as may be assigned
to him by the Board of Directors or the President.
Section 6. The Treasurer – The Treasurer of the corporation shall
have the following duties:
a) To
keep full and accurate accounts of receipts and disbursements in the books of
the corporation;
b) To
have custody of, and be responsible for, all the funds, securities and bonds of
the corporation;
c) To
deposit in the name and to the credit of the corporation, in such bank as may
be designated from time to time by the Board of Directors, all the moneys,
funds, securities, bonds, and similar valuable effects belonging to the
corporation which may come under his control;
d) To
render annual statements showing the financial condition of the corporation and
such other financial reports as the Board of Directors, or the President may,
from time to time, require;
e) To
prepare such financial reports, statements, certifications and other documents
which may, from time to time, be required by government rules and regulations
and to submit the same to proper government agencies;
f)
To exercise such powers and perform such duties and functions as may be
assigned to him by the President.
Section 7. Term of Office – The term of office of all officers
shall be one (1) year and until their successors are duly elected and
qualified.
Section 8. Vacancies – If any position of the officers becomes
vacant by reason of death, resignation, disqualification, or for any other
cause, the Board of Directors, by majority vote may elect a successor who shall
hold office for the unexpired term.
Section 9. Compensation – The officers shall receive such
remuneration as the Board of Directors may determine. A director shall
not be precluded from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
ARTICLE V
OFFICES
Section 1. The principal office of the corporation shall be
located at the place stated in Article III of the Articles of
Incorporation. The corporation may have such other branch offices, either
within or outside the Philippines as the Board of Directors may designate.
ARTICLE VI
AUDIT OF BOOKS, FISCAL YEAR AND DIVIDENDS
Section 1. External Auditor – At the regular shareholders’
meeting, the external auditor of the corporation for the ensuing year shall be
appointed. The external auditor shall examine, verify and report on the
earnings and expenses of the corporation.
Section 2. Fiscal Year - The fiscal year of the corporation
shall begin on the first day of January and end on the last day of December of
each year.
Section 3. Dividends – Dividends shall be declared and paid out
of the unrestricted retained earnings which shall be payable in cash, property,
or stock to all shareholders on the basis of outstanding stock held by them, as
often and at such times as the Board of Directors may determine and in
accordance with law.
ARTICLE VII
AMENDMENTS
Section 1. These by-laws
may be amended or repealed or new by-laws adopted by the by the affirmative
vote of at least a majority of the Board of Directors and the shareholders
representing a majority of the outstanding capital stock at any shareholders’
meeting called for that purpose. However, the power to amend, modify,
repeal or adopt new by-laws may be delegated to the Board of Directors by the
affirmative vote of shareholders representing not less than two-thirds of the
outstanding capital stock; provided, however, that any such delegation of
powers to the Board of Directors to amend, repeal or adopt new by-laws may be
revoked only by the vote of shareholders representing a majority of the
outstanding capital stock at a regular or special meeting.
ARTICLE VIII
SEAL
Section 1. Form and
Inscriptions – The corporate seal shall be determined by the Board of
Directors.
ARTICLE VIII
ADOPTION CLAUSE
The foregoing by-laws were adopted by all the
shareholders of the corporation on _______________ at the principal office of
the corporation.
IN WITNESS WHEREOF, we the undersigned
shareholders present at said meeting and voting thereat in favor of the
adoption of said by-laws, have hereunto subscribed our names this _______ day
of ________ 20__ at ____________________.
