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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Corporate powers are vested in the Board of Directors. The officers carry out management functions on a day-to-day basis. Some corporate acts require the majority vote of the board while other corporate acts require also the acquiescence of the stockholders.
Sec. 22 of the Revised Corporation Code provides that the Board of Directors/Trustees shall exercise the corporate powers, conduct all business and control all properties of the corporation.
Corporate powers may be directly conferred upon corporate officers or agents by statute, the articles of incorporation, the by-laws or by resolution or other act of the board of directors. Such are referred to as express powers. The board may exercise their granted corporate powers subject to the limitations imposed by the Constitution, statutes, articles of incorporation or by-laws.
Under the Revised Corporation Code, among those powers are amendment of articles of incorporation, removal of directors or trustees, filling up vacancy, creation of special committees, sale or disposition of assets and declaration of dividends.
Jurisprudence says:
Just as a natural person may authorize another to do certain acts for and on his behalf, the board of directors may validly delegate some of its functions and powers to officers, committees or agents. The authority of such individuals to bind the corporation is generally derived from law, corporate bylaws or authorization from the board, either expressly or impliedly by habit, custom or acquiescence in the general course of business. (People’s Aircargo And Warehousing Co. Inc., Vs. Court Of Appeals And Stefani Saño, G.R. No. 117847 October 7, 1998)
There are also powers incidental to express powers conferred. It is a fundamental principle in the law of agency that every delegation of authority, whether general or special, carries with it, unless the contrary be expressed, implied authority to do all of those acts, naturally and ordinarily done in such cases, which are reasonably necessary and proper to be done in order to carry into effect the main authority conferred. (Citibank, N.A., Petitioner, Vs. Hon. Segundino G. Chua, G.R. No. 102300. March 17, 1993.)
Under the Corporation Code, stockholders or members periodically elect the board of directors or trustees, who are charged with the management of the corporation. The board, in turn, periodically elects officers to carry out management functions on a day-to-day basis.
While stockholders are entitled to receive profits, the management and direction of the corporation are lodged with their representatives and agents — the board of directors or trustees. In other words, acts of management pertain to the board; and those of ownership, to the stockholders or members. In the latter case, the board cannot act alone, but must seek approval of the stockholders or members. (Tan, vs. Sycip, G.R. No. 153468, August 17, 2006)
Related article: WHO ARE CORPORATE OFFICERS OF A CORPORATION?
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