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Stock  Non-Stock 

Definition 

Corporations which have capitalstock divided into shares and 

are authorized to distribute to theholders of shares dividends orallotments of the surplus profits onthe basis of the shares (§3) 

 All other private corporations (§3) 

One where no part of its income isdistributable as dividends to itsmembers, trustees or officers. (§87) 

Purpose  Primarily to make profits for itsshareholders 

May be formed or organized forcharitable, religious, educational,professional, cultural, fraternal,literary, scientific, social, civicservice, or similar purposes like

trade, industry, agricultural and likechambers, or any combinationthereof. (§88) 

Distribution of Profits  Profit is distributed to shareholders  Whatever incidental profit made isnot distributed among its membersbut is used for furtherance of itspurpose. AOI or by-laws mayprovide for the distribution of itsassets among its members upon itsdissolution. Before then, no profitmay be made by members. 

Composition  Stockholders  Members 

Scope of right to vote  Each stockholder votes according tothe proportion of his shares in thecorporation. No shares may bedeprived of voting rights exceptthose classified and issued as"preferred" or "redeemable" shares,and as otherwise provided by theCode. (Sec. 6) 

Each member, regardless of class,is entitled to one (1) vote UNLESSsuch right to vote has been limited,broadened, or denied in the AOI orby-laws. (Sec. 89) 

Voting by proxy  May be denied by the AOI or the by-

laws. (Sec. 89) 

Cannot be denied. (Sec. 58) 

Voting by mail  May be authorized by the by-laws,with the approval of and under theconditions prescribed by the SEC.(Sec. 89) 

Not possible.

Who exercises CorporatePowers §23 

Board of Directors or Trustees  Members of the corporation

Stock v. Non-Stock Corporations

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Governing Board  Board of Directors or Trustees,consisting of 5-15 directors /trustees. 

Board of Trustees, which mayconsist of more than 15 trusteesunless otherwise provided by the AOI or by-laws. (Sec, 92) 

Term of directors ortrustees 

Directors / trustees shall hold officefor 1 year and until their successorsare elected and qualified (Sec. 23). 

Board classified in such a way thatthe term of office of 1/3 of theirnumber shall expire every year.Subsequent elections of trusteescomprising 1/3 of the board shall beheld annually, and trustees soelected shall have a term of 3 years.(Sec. 92) 

Election of officers  Officers are elected by the Board ofDirectors (Sec. 25), except in closecorporations where the stockholdersthemselves may elect the officers.(Sec. 97)

 

Officers may be elected directly bythe members UNLESS the AOI orby-laws provide otherwise. (Sec.92) 

Place of meetings  Generally, the meetings must beheld at the principal office of thecorporation, if practicable. If not,then anyplace in the city ormunicipality where the principaloffice of the corporation is located.(Sec. 51) 

 Any place within the Philippines, ifprovided for by the by-laws (Sec.93)

Transferability of interestor membership 

Transferable.  Generally non-transferable sincemembership and all rights arisingthere from are personal. However,the AOI or by-laws can provideotherwise. (Sec. 90)

 

Distribution of assets incase of dissolution 

See Sec. 94.