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    SEC Opinion 4-28-1997

    Uploaded by

    Nash Ortiz Luis
    The document discusses two queries regarding amendments to the articles of incorporation of a non-profit golf club. For the first query, the document states that members' silence or failure to object cannot be considered approval of amendments under the law, which requires written assent. For the second query, the document confirms that appraisal rights are available to stockholders of the non-profit organization.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    SEC Opinion 4-28-1997

    Uploaded by

    Nash Ortiz Luis
    138 views2 pages
    The document discusses two queries regarding amendments to the articles of incorporation of a non-profit golf club. For the first query, the document states that members' silence or failure to object cannot be considered approval of amendments under the law, which requires written assent. For the second query, the document confirms that appraisal rights are available to stockholders of the non-profit organization.

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    SEC Opinion 4-28-1997

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    The document discusses two queries regarding amendments to the articles of incorporation of a non-profit golf club. For the first query, the document states that members' silence or failure to object cannot be considered approval of amendments under the law, which requires written assent. For the second query, the document confirms that appraisal rights are available to stockholders of the non-profit organization.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    138 views2 pages

    SEC Opinion 4-28-1997

    Uploaded by

    Nash Ortiz Luis
    The document discusses two queries regarding amendments to the articles of incorporation of a non-profit golf club. For the first query, the document states that members' silence or failure to object cannot be considered approval of amendments under the law, which requires written assent. For the second query, the document confirms that appraisal rights are available to stockholders of the non-profit organization.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    April 28, 1997

    Mr. Patrick T. Lugue


    Calatagan Golf Club, Inc.
    5/F Enzo Building, 399 Sen. Gil Puyat Ave.,
    1200 Makati, Metro Manila

    Sir:

    This refers to your letter dated March 13, 1997 requesting opinion on the
    following queries: Cdpr

    1. Can the Calatagan Golf Club, Inc., a non-profit stock corporation,


    within the context of Article 16 of the Corporation Code, obtain approval of
    amendment to articles of incorporation on the qualification of ownership of
    shares by sending all of its members through registered mail a notice of the
    proposed amendment together with a form which should be sent back by those
    who object to the proposed amendment, with the statement that unless the Club
    receives within a specified period the requisite number of the written objection
    form, the proposed amendment shall be considered approved by the members?
    In effect, the proposal will be considered carried unless a sufficient number of
    members manifest their objection.

    2. Is the appraisal right available to the stockholders of this non-profit


    organization?

    Relative to query no. 1 the Corporation Code provides:

    "SECTION 16. Amendment of articles of incorporation. — Unless


    otherwise prescribed by this Code or by special law, and for legitimate
    purposes, any provision or matter stated in the articles of incorporation may be
    amended by a majority vote of the board of directors or trustees and the vote or
    written assent of the stockholders representing at least two-thirds (2/3) of the
    outstanding capital stock, without prejudice to the appraisal right or dissenting
    stockholders in accordance with the provisions of this Code, or the vote written
    assent of two-thirds (2/3) of the members if it be a non-stock corporation.

    xxx xxx xxx."

    While the above provision allows voting by "written assent", silence or failure
    to object on the proposal should not be treated as approval thereof, as the law
    explicitly requires the stockholder's "assent" to be in writing.
    Copyright 1994-2018 CD Technologies Asia, Inc. Securities and Exchange Commission 2019 First Release 1
    Anent the second query, the above cited provision expressly authorizes the
    exercise of appraisal right in accordance with Section 81 of the same Code, quoted in
    part hereunder:

    "SECTION 81. Instances of appraisal right. — Any stockholder of


    a corporation shall have the right to dissent and demand payment of the fair
    value of his shares in the following instances:

    1. In case, any amendment to the articles of incorporation has the


    effect of changing or restricting the rights of any stockholders or class of
    shares, or of authorizing preferences in any respect superior to those of
    outstanding shares of any class, or of extending or shortening the term of
    corporate existence;

    . . . ." (Emphasis supplied)

    While the Club is a "non-profit" corporation, it has the character of a "stock


    corporation". Unlike an ordinary non-profit, non-stock corporation, the member
    stockholders thereof have individual pecuniary interest in the Club represented in
    terms of " proprietary shares", ownership of which is EVIDENCED BY certificates
    of proprietary share or membership, and the corresponding market value of which
    can easily be determined or fixed. This kind of corporation is called "proprietary
    membership corporation". While it has the color of a "non-stock corporation" being
    non-profit, it has the character more of a "stock corporation". In the light of the
    foregoing, your second query may be answered in the affirmative.

    Very truly yours,

    (SGD.) FE ELOISA C. GLORIA


    Associate Commissioner

    Copyright 1994-2018 CD Technologies Asia, Inc. Securities and Exchange Commission 2019 First Release 2

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