Who can become directors/trustees in a corporation? How long can they sit as director/trustee?

Summary

Attorney Chris Batan Lasko's YouTube channel simplifies legal concepts, focusing on the role and composition of boards in corporations. He explains the term limits for directors and trustees, with directors serving one year and trustees up to three in non-stock corporations. Becoming a director requires stock ownership, registration, and maintaining shares throughout the term. The channel also covers additional qualifications set by bylaws and the importance of independent directors in corporations vested with public interest, who must constitute at least 20% of the board.

Takeaways

• 📚 The speaker, Attorney Chris Batan Lasko, aims to simplify the law in under 10 minutes on his YouTube channel.
• 👔 The role of the board of directors in a stock corporation and the board of trustees in a non-stock corporation are discussed, with the former being the governing body of the corporation.
• 🔑 Directors must be holders of at least one share of stock and must be the registered owner of such shares to qualify for the position.
• 🔄 Directors are elected for a term of one year, while trustees in a non-stock corporation can hold a term not exceeding three years, according to the Revised Corporation Code.
• 🏢 Juridical persons, such as corporations or partnerships, cannot serve as directors, but they can appoint someone to represent them on the board by providing that person with a qualifying share.
• 🌐 There is no citizenship or residence requirement for becoming a director in a corporation under the Revised Corporation Code.
• 👮‍♂️ Independent directors are required in corporations vested with public interest to act as watchdogs and protect the interests of the corporation and its stakeholders.
• 🔢 At least 20% of the board in such corporations must be composed of independent directors, who are shareholders with no other connection to the corporation except their stock ownership.
• 🏦 Corporations covered by specific regulations, such as those listed on an exchange or with assets over 50 million pesos, are required to have independent directors.
• 📝 The qualifications to become a trustee in a non-stock corporation are simpler, requiring only that the individual is a member in good standing of the corporation.
• 👋 The video concludes with an invitation for viewers to like, subscribe, and turn on notifications for new uploads, emphasizing the educational value of the content.

Q & A

What is the purpose of Attorney Chris Batan Lasko's YouTube channel?

The purpose of Attorney Chris Batan Lasko's YouTube channel is to simplify the law by discussing concepts and principles of law in under 10 minutes.

What is the role of the board of trustees in a non-stock corporation?

The role of the board of trustees in a non-stock corporation is to act as the governing body of the corporation, overseeing its management and ensuring the interests of the corporation are protected.

According to the revised corporation code, what is the standard term for a director in a stock corporation?

The standard term for a director in a stock corporation, as per the revised corporation code, is one year.

What is the maximum term for a trustee in a non-stock corporation as stated in the revised corporation code?

The maximum term for a trustee in a non-stock corporation is not more than three years, according to section 22 of the revised corporation code.

What are the basic qualifications required to become a director in a stock corporation?

To become a director in a stock corporation, one must be a holder of at least one share of stock, be the registered owner of such share(s), and continue to hold those shares for the entire period of their term as a director.

Why is there a stock ownership requirement for directors?

The stock ownership requirement ensures that directors, as shareholders, have a vested interest in the corporation and will act in the best interest of the corporation.

Can a juridical person become a director in a corporation?

No, only natural persons can be directors. Juridical persons, such as corporations or partnerships, cannot serve as directors, although they can be incorporators.

What is the purpose of having independent directors in corporations vested with public interest?

The purpose of having independent directors is to act as a watchdog, ensuring that the corporation operates in the best interest of its stakeholders and adheres to regulations, especially since it is vested with public interest.

What corporations are required to have independent directors constituting at least 20 percent of their board?

Corporations required to have independent directors include those covered by the Securities Regulation Code, banks, quasi-banks, non-bank financial institutions, pre-need companies, insurance companies, and other corporations engaged in businesses with public interest.

What is the qualification needed to become a trustee in a non-stock corporation?

The only qualification needed to become a trustee in a non-stock corporation is to be a member in good standing of the corporation.

Can the corporation add more qualifications for becoming a director beyond what is provided in the revised corporation code?

Yes, the corporation can add more qualifications for becoming a director, provided that these additional qualifications are included in the corporation's bylaws.