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A nonstock corporation is one where no part of its income is distributable as dividends to its members, trustees, or officers
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Nonstock corporations may be formed for charitable purposes
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The number of trustees may or may not be more than fifteen (15)
A nonstock corporation is one where no part of its income is distributable as evidence as to its members, trustees, or officers. Any profit which a nonstock corporation may obtain incidental to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized.
What are the possible purposes of nonstock corporations?
The law says:
Nonstock corporations may be formed or organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes like trade, industry, agricultural and like chambers or any combination of such purposes.
Do members of nonstock corporations have the right to vote?
The law says:
The right of the members of any class or classes to vote may be limited, broadened, or denied to the extent specified in the articles of incorporation or the bylaws. Unless so limited, broadened, or denied, each member, regardless of class, shall be entitled to one (1) vote.
Also, unless otherwise provided in the articles of incorporation or bylaws, a member may vote by proxy. The bylaws may likewise authorize voting through remote communication and/or in absentia.
Take note that membership in a nonstock corporation and all rights arising from being a member of such are personal and non-transferable, unless the articles of incorporation or the bylaws otherwise provide.
As for the number of trustees, it shall be fixed in the articles of incorporation or bylaws which may or may not be more than fifteen (15). They shall hold office for not more than three (3) years until their successors are elected and qualified. Trustees elected to fill vacancies occurring before the expiration of a particular term shall hold office only for the unexpired period. Unless otherwise provided in the articles of incorporation or the bylaws, the members may directly elect officers of a nonstock corporation.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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