Provisions or matters in the Articles of Incorporation may cover pertinent items allowed by law and those that are considered legitimate under prevailing circumstances. We have previously discussed the formal requirements of an amendment of articles and also the grounds for its rejection as found in the Corporation Code. Here, we will tackle the coverage thereof.

Lets consider the primary and secondary purposes of a corporation. These are matters in the articles of incorporation that can be formally amended to reflect the interest of the stakeholders. If a corporation has a specific purpose and its business is in pursuit of the same, it cannot arbitrarily shift to another form or type of business or activity without following the formalities of an amendment filed with the Securities and Exchange Commission (SEC). The powers and functions of the SEC even provide it with authority to order a corporation to amend its articles in order to conform with its activities (Section 5 of Republic Act 8799).

Another item that is capable of amendment is the corporate term or life of a corporate entity. The amendment either extends or shortens the original term of existence of the corporation by complying with the procedural requirements found in Section 37 of the Corporation Code of the Philippines (Power to extend and shorten the corporate term). There is a caveat here, however, that an amendment to extend cannot be done during the three-year period of liquidation of a corporation (Alhambra Cigar vs. SEC, 24 SCRA 269).

Change in the corporate name is also a form of amendment. Generally, the corporate name manifests the line of business of a corporation. The reasons why the stakeholders opt to change or amend the corporate name can range from a business style, to a venture strategy. However, a corporation may be ordered by the SEC to change its name if it is discovered that a complaining corporation has a prior right over the use of a certain corporate name or the name is either identical or deceptively or confusingly similar to other name that is already protected by law. A name found to be patently deceptive, confusing or contrary to existing law may also be ordered changed by the SEC. The Commission also mandates the inclusion of an undertaking to be signed by all who incorporate, signifying their unequivocal intention to change their corporate name if it is proven that another entity has a prior or superior right to its use (Agpalo, Comments on the Corporation Code of the Philippines, page 85, 2001 ed.).

The number of directors or trustees is another matter that can be increased or reduced within specified limits allowed by the Corporation Code.

As a general rule, Section 14 of the said Code provides that the number of directors or trustees shall not be less than five (5) nor more fifteen (15). Additional qualifications of directors may be added as amendment in the articles of incorporation.

Other items, which can be amended such as provisions on cumulative voting, quorum, restriction of rights, will be discussed in the next column.

SOME local investors are concerned that prevailing volatility in the market might impact against the initial share sale of Cebu Air Inc., the country’s second largest flag carrier.

Microsoft to launch SQL Server 2008 this April 

AN executive from software giant Microsoft said that a new version of its SQL Server would be easier to use, scalable and affordable as it focuses on features that would delight customers, particularly business users.

APART from accelerating the payment of some debts, First Gen Corp. is also eyeing to tap the debt market to finance expansion plans for the year, chief operating officer Richard B. Tantoco, said Tuesday.

UNIVERSAL Robina Corp. (URC), the branded food-product arm of the Gokongwei group, reported that net profit rose 84.1 percent to P5.56 billion in fiscal year 2007 ending September, from P3.02 billion a year earlier.

NEW YORK—A US recession poses a bigger threat to the global economy than a slowdown in China, according to Burton Malkiel, the Princeton University economics professor who wrote A Random Walk Down Wall Street.