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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:
When an emergency action is required to prevent grave, substantial, and irreparable loss or damage to the corporation, the vacancy in the board of directors may be temporarily filled from among the officers of the corporation by unanimous vote of the remaining directors or trustees. (Section 28, Republic Act No. 11232 or the Revised Corporation Code of the Philippines)
The law says –
Any vacancy occurring in the board of directors or trustees other that by removal or expiration of term may be filled by the vote of at least a majority of the remaining directors or trustees, if still constituting a quorum; otherwise, said vacancies must be filled by the stockholders or members in a regular or special meeting called for that purpose.
When the vacancy is due to term expiration, the election shall be held no later that the day of such expiration at a meeting called for that purpose. When the vacancy arises as a result of removal by the stockholders or members, the election may be held on the same day of the meeting authorizing the removal and this fact must be so stated in the agenda and notice of said meeting. In all other cases, the election must be held no later than forty-five (45) days from the time the vacancy arose. A director or trustee elected to fill vacancy shall be referred to as replacement director or trustee elected to fill a vacancy shall be referred to as replacement director or trustee and shall serve only for the unexpired term of the predecessor in office.
However, when the vacancy prevents the remaining directors from constituting a quorum and emergency action is required to prevent grave, substantial, and irreparable loss or damage to the corporation, the vacancy may be temporarily filled from among the officers of the corporation by unanimous vote of the remaining directors or trustees. The action by the designated director or trustee shall be limited to the emergency action necessary, and the term shall cease within a reasonable time form the termination of the emergency or upon election of the replacement director or trustee, whichever comes earlier. The corporation must notify the Securities and Exchange Commission (SEC) within three (3) days from the creation of the emergency board, stating therein the reason for its creation.
Any directorship or trusteeship to be filled by a reason of an increase in the number of directors or trustees shall be filled only by an election at a regular or at a special meeting of stockholders or members duly called for the purpose, or in the same meeting authorizing the increase of directors or trustees if so stated in the notice of the meeting.
In all elections to fill vacancies under this section, the procedure set forth in Section 23 and 25 of this Code shall apply. (Section 28, Republic Act No. 11232 or the Revised Corporation Code of the Philippines)
Read also: When may a corporation apply for revival of its corporate existence?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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