Officers in a Philippine Corporation
For a corporation to function effectively, it requires competent individuals to make decisions for its growth and improvement. These individuals are known as corporate officers. They are responsible for managing the company in accordance with the decisions made by the Board of Directors, while adhering to the bounds stipulated in the Articles of Incorporation and provided in the by-laws.
According to Section 10 of the Corporation Code of the Philippines, a private corporation may be formed by no fewer than five and no more than fifteen individuals who are of legal age and residents of the Philippines. Each incorporator of a stock corporation must own or subscribe to at least one share of the company’s capital stock.
Additionally, Republic Act No. 11232, also known as the Revised Corporation Code of the Philippines, serves as the foundation for all matters related to corporations. This includes how corporations are formed, their structure, and the obligations and liabilities of the directors, trustees, and officers.
How are Corporate Officers Elected?
In stock corporations, the Board of Directors is responsible to elect the corporate officials; this authority cannot be delegated. In contrast, the corporate officers are elected by their fellow members in the non-stock corporations, unless the corporation’s bylaws or articles of incorporation provide otherwise.
Additionally, as stated in Section 25 of the Revised Corporation Code, the Commission must be notified of any non-holding of elections within thirty (30) days of the scheduled election date. A new election date will be included in the report; this date cannot be set more than sixty (60) days after the original one. In this regard, the Commission may order that an election will be held if no new date has been scheduled or if the rescheduled election is also not held.
The Revised Corporation Code’s Section 24 addresses the election of corporate officers, specifically:
“SECTION 24. Corporate Officers. – Immediately after their election, the directors of a corporation must formally organize and elect:
- A president, who must be a director;
- A treasurer, who must be a resident;
- A secretary, who must be a citizen and resident of the Philippines; and
- Such other officers as may be provided in the bylaws. If the corporation is vested with public interest, the board shall also elect a compliance officer.
The same person may hold two (2) or more positions concurrently, except that no one shall act as president and secretary or as president and treasurer at the same time, unless otherwise allowed in this Code. The officers shall manage the corporation and perform such duties as may be provided in the bylaws and/or as resolved by the board of directors.”
How Can a Corporate Officer be Disqualified?
According to Section 26 of the Revised Corporation Code, an individual will be disqualified from being elected as a corporation officer if he/she:
- Has been convicted by final judgment
- Imprisonment for a period exceeding six (6) years
- Violating the Revised Corporation Code
- Violating Republic Act No. 8799, otherwise known as “The Securities Regulation Code”
- Found administratively liable for any offense involving fraudulent acts
- By a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct
Moreover, the elected trustees, directors and officers are appointed to submit their names, nationalities, shareholdings, and residence addresses to the Commission within thirty (30) days after the election, in accordance with the Revised Corporation Code’s Section 25.
Who are the Corporate Officers and What are their Roles?
President
The President is responsible to lead an executive board, division, or corporation in order to set the strategic direction and supervise its execution.
The president’s duties and responsibilities include:
- Establish and implement departmental or organizational goals, regulations, and procedures;
- Manage the financial and budgetary operations of an organization;
- Monitor daily operations related to providing services and manufacturing products;
- Discuss general operations with staff, executives, and other board members;
- Sign and approve contracts and agreements;
- Appoint department heads and managers;
- Examine financial reports, sales records, and performance metrics; and
- Develop ways to reduce expenses while enhancing policies, programs, and performance.
Treasurer
The Treasurer is in charge of evaluating the company’s financial operations. They could also collaborate with a professional accountant to file taxes and ensure financial accuracy.
The treasurer should be able to do the following duties and responsibilities:
- Manage incoming payments;
- Deposit received funds;
- Prepare outgoing cheques;
- Maintain records of every company’s financial transaction;
- Manage official documents and company bank statements;
- Monitor and approve any financial plans and updates;
- Establish and track the year’s predetermined financial budget; and
- Ensure that the funds are protected from any possible misuse by other committee members.
Secretary
The Secretary maintains the documents of the corporation in accordance with the corporation’s bylaws, articles of organization, and federal and state laws. This position could become an executive role, such as chief governance officer, or it could be incorporated with another role.
The secretary’s duties and responsibilities consist of the following:
- Inform directors and shareholders of upcoming meetings;
- Make plans and scheduled date of meetings;
- Document minutes of director and shareholder meetings;
- Archive director and shareholder lists; and
- Ensure that corporate records are kept by the corporation and that documents are filed with the state.
Compliance Officer
The Compliance Officer is responsible for identifying and eliminating the risk of noncompliance issues, both external and internal. This role must constantly monitor the rules and regulations of the corporation.
The compliance officer’s duties and responsibilities are the following:
- Establish internal corporate policies and ensure adherence to them at all times;
- Verify if the organization has a well-defined legal compliance program;
- Provide management with regular updates on the organization’s adherence to legal and regulatory requirements;
- Deal with noncompliance problems directly by providing practical solutions;
- Conduct regular audits to identify any weaknesses and instances of noncompliance; and
- Keep employees informed to comply with both internal and external laws and regulation.
Need further information and assistance regarding Corporation Matters? Talk to our team at Duran & Duran-Schulze Law to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
