In general, all corporate powers are exercised by the board of directors; stockholders’ approval for corporate acts is usually not required. However, the Corporation Code requires (and the by-laws of the corporation may require) stockholders’ approval for certain corporate acts. Stockholders’ approval is usually given during a stockholders’ meeting where the matter is submitted to the stockholders for approval.
Let’s run through a typical agenda for a stockholders’ meeting:
1. Call to Order
During this part of the meeting, the person authorized to call the meeting states that he is calling the meeting to order. Unless otherwise provided in the by-laws, the President of the corporation has authority to preside at all meetings of stockholders (Corporation Code, sec. 54). Hence, the President would normally call the meeting to order.
If the person entitled to preside is not present at the time the meeting is convened, the stockholders present may request a stockholder to temporarily preside at the meeting (Corporation Code of the Philippines Annotated, p. 480).
After the presiding officer calls the meeting to order, the presiding officer will usually note that the Corporate Secretary will record the proceedings. The Corporate Secretary prepares the minutes of meeting, which he will co-sign with the presiding officer of the meeting.
2. Certification of Quorum
A quorum is necessary in order that business can be transacted during the stockholders’ meeting. During this part of the meeting, Corporate Secretary certifies that a quorum exists for the transaction of business by the stockholders. Unless otherwise provided in the Corporation Code or in the by-laws, a quorum consists of stockholders representing a majority of the outstanding capital stock.
If notice of the meeting was not given within the period provided in the by-laws, the Corporate Secretary will also certify whether the stockholders have waived the notice requirement.