MEETINGS

PURPOSE
• For electing directors or trustees and transacting some other
business calling for or requiring the action or consent of the
shareholders or members such as amendment of articles of
incorporation, sale of corporate assets, consolidation and
merger, or any other business that may properly come before
the meeting

• In the absence of an express charter or statutory provision,

the general rule is that every member of a non-stock
corporation, and every legal owner of shares in a stock
corporation has a right to be present and to vote in all
corporate meetings. Voting may be expressed personally or
through proxies who vote in their representative capacities.
REQUIREMENTS FOR STOCKHOLDERS’/
MEMBERS’ MEETINGS
• 1. It must be held at the proper place
• 2. It must be held at the stated date and appointed time
• 3. It must be called by the proper reason
• 4. The person/s designated in the by-laws have authority to call
the meeting
• 5. In the absence of such provision in the by-laws, it may be
called by a director/trustee or by an officer entrusted with the
management of the corporation
• 6. A petitioning stockholder or member may make the call on
order of the SEC whenever for any cause, there is no person
authorized to call a meeting or the person authorized unjustly
refuses to call a meeting
• 7. There must be previous notice
• 8. There must be a quorum
KINDS OF MEETINGS OF
STOCKHOLDERS/MEMBERS
• REGULAR MEETING
• When: Annually on a date fixed in the by-laws, or if not fixed, on any date
after April 15 of every year as determined by the board of directors/trustees
• Where: In the principal officer of the corporation set forth in the articles of
incorporation, or if not practicable, in the city/ municipality where the
principal office is located
• Notice: Written notice of regular meetings must be given to
stockholders/members of record at least (21) days prior to the meeting,
unless otherwise provided in the by-laws, law, or regulation

• SPECIAL MEETING
• When: At any time deemed necessary or as provided in the bylaws
• Where: In the principal officer of the corporation set forth in the articles of
incorporation, or if not practicable, in the city/ municipality where the
principal office is located
• Notice: At least (1) week written notice, unless otherwise provided
QUORUM IN MEETINGS OF
STOCKHOLDERS OR MEMBERS
• In stock corporations, the presence of a quorum is ascertained
and counted on the basis of the outstanding capital stock
• “Outstanding Capital Stock defined – as used in the Code, means
the total shares of stocks issued under binding subscription
contracts to subscribers or stockholders, whether fully or partially
paid, except treasury shares”

• For stock corporations, quorum is based on the number of

outstanding voting stocks. For non-stock corporations, only
those who are actual, living members with voting rights shall
be counted in determining existence of a quorum during a
meeting.
QUORUM AT A REGULAR OR SPECIAL
MEETING OF DIRECTORS/TRUSTEES
• GENERAL RULE:
• Majority of the number of directors/trustees as stated in the
articles of incorporation

• Majority means fifty percent plus one (50% + 1)

• EXCEPTION:
• If the articles of incorporation or by-laws provide for a greater
majority
VALID CORPORATE ACT
• GENERAL RULE:
• Every decision reached by at least a majority of the
directors/trustees constituting a quorum shall be a valid
corporate act

• EXCEPTION:
• The election of offices shall require the vote of a majority of all
the members of the board
MEETINGS OF DIRECTORS/TRUSTEES
• REGULAR MEETING
• When: monthly, unless otherwise provided in the by-laws
• Where: Anywhere in or outside the Philippines, unless otherwise provided in the by-
laws
• Notice: Written notice of regular meetings must be given to director/trustee at least
(2) days prior to the scheduled meeting, unless otherwise provided in the by-laws

• SPECIAL MEETING
• When: At any time upon the call of the president, unless otherwise provided in the by-
laws
• Where: Anywhere in or outside the Philippines, unless otherwise provided in the by-
laws
• Notice: Written notice of regular meetings must be given to director/trustee at least
(2) days prior to the scheduled meeting, unless otherwise provided in the by-laws

• WHO PRESIDES AT MEETINGS: The chairman or in his absence the president shall
preside at all meetings of directors/trustees as well as of stockholders/ members,
unless the by-laws provide otherwise
VOTING IN CASE OF JOINT OWNERSHIP
OF STOCK
• GENERAL RULE:
• In case of shares of stock owned jointly by two or more persons,
in order to vote the same, the consent of all shall be necessary

• EXCEPTIONS:
• 1. There is a written proxy signed by all co-owners authorizing
one or some or any other person to vote such share/s; and
• 2. The shares are owned in an “and/or” capacity by the holders
thereof, any one of the joint owners can vote said shares or
appoint a proxy therefor.
VOTING TRUST AGREEMENT vs. PROXY
Voting Trust Agreement Proxy

Governed by the law on trust Governed by the law on agency

Trustee acquires legal title to the shares of the Proxy has no legal title
transferring stockholder
The trustee votes as owner The proxy votes as agent

Agreement must be notarized Proxy need not be notarized

Trustee may vote in person/proxy Proxy must vote in person

Trustee is not limited to act at any particular meeting Proxy can only act at a specified meeting

Trustee can vote even when the stockholder is present Proxy can only vote in the absence of the owners of the
stock
An agreement must not exceed (5) years at any one time A proxy is usually of shorter duration, but still must not
exceed (5) years at any one time
As a rule, a voting trust agreement is intended to be As a rule, a proxy is revocable
irrevocable for a definite period
Trustee has the right to inspect corporate books Proxy does not have the right to inspect corporate books

The stock certificate shall be cancelled and a new one in No cancellation of stock certificate
the name of trustee shall be issued stating that they are
issued pursuant to a voting trust agreement
PROXY
• REQUIREMENT FOR VALIDITY OF PROXY
• 1. It shall be in writing in any form authorized in the by-laws;
• 2. It shall be signed by the stockholder/member;
• 3. It shall be filed before the scheduled meeting with the corporate
secretary;
• 4. Unless otherwise provided, it shall be valid only for the meeting which
it is intended; and
• 5. No proxy shall be valid and effective for a period longer than (5) years
at any one time

• PURPOSES OF PROXY
• 1. for convenience
• 2. it assures the presence of a quorum
• 3. it enables those who do not wish to attend the meeting to protect
their interest
• 4. It secures voting control
PROXY
• RIGHT TO VOTE BY PROXY MAY BE EXERCISED IN ANY OF THE FOLLOWING
INSTANCES:
• 1. Election of Board of Directors/Trustees
• 2. Voting in case of joint ownership of stock
• 3. Voting by trustee under voting trust agreement
• 4. Voting by members in non-stock corporations
• 5. in case of pledge or mortgage of shares;
• 6. In all meetings of stockholders/members; and
• 7. In all other matters as may be provided in the by-laws

• REVOCATION OF PROXY
• 1. Formal Notice;
• 2. Verbal Communication; or
• Conduct
VOTING TRUST
• A voting trust is defined as: trust created by an agreement
between a group of stockholders of a corporation and the
trustee or by a group of identical agreements between
individual stockholders and a common trustee, whereby it is
provided that for a term of years, or for a period contingent
upon a certain event, or until the agreement is terminated,
control over the stock owned by such stockholders, either for
certain purposes or for all purposes, is to be lodged in the
trustee, either with or without reservation to the owners, or
persons designated by them of the power to direct how such
control shall be sued
VOTING TRUST
• NATURE OF VOTING TRUST AGREEMENT
• A voting trust agreement results in the separation of the voting rights
of a stockholder from his other rights such as the right to receive
dividends, the right to inspect the books of corporation, the right to
sell certain interest in the assets of the corporation and other rights to
which a stockholder may be entitled until liquidation of the corporation

• THREE TEST OF VOTING TRUST AGREEMENT

• In order to distinguish a voting trust agreement from proxies, it must
pass these tests:
• 1. that the voting rights of the stock are separated from the other
attributes of ownership;
• 2. that the voting rights granted are intended to be irrevocable for a
definite period of time; and
• 3. that the principal purpose of the grant of voting rights is to acquire
voting control of the corporation.