Corporate Bylaws in the Philippines: What They Are and When You Must Adopt Them

Corporate bylaws are the internal rules that govern how a Philippine corporation is run, covering everything from how directors are elected to how meetings are held. Under the Revised Corporation Code of the Philippines (Republic Act No. 11232), the adoption of bylaws is not optional—it is a mandatory requirement for incorporation. The bylaws must be submitted to the Securities and Exchange Commission (SEC) together with the articles of incorporation before the certificate of incorporation is issued.

What Are Corporate Bylaws?

Corporate bylaws are the internal rules and regulations that govern the day-to-day operations and management structure of a corporation. While the articles of incorporation establish the corporation's existence and basic structure—such as its name, purpose, and capital stock—the bylaws provide the detailed framework for how the corporation will actually function.

The Revised Corporation Code requires all corporations to have bylaws, and they must be filed with the SEC as part of the incorporation process. Under Section 18 of the Code, the incorporators shall submit their articles of incorporation and bylaws to the Commission, and the certificate of incorporation is issued only if the Commission finds the submitted documents fully compliant with the requirements of the law.

When Must Bylaws Be Adopted?

Bylaws must be adopted and filed before or at the same time as the articles of incorporation are submitted to the SEC. There is no option to incorporate first and adopt bylaws later—both documents are required for the SEC to issue the certificate of incorporation.

The key timing rule is simple: bylaws are a prerequisite to incorporation. A private corporation organized under the Revised Corporation Code commences its corporate existence and juridical personality only from the date the SEC issues the certificate of incorporation. Without the bylaws, the SEC will not issue that certificate.

Who Adopts the Bylaws?

The bylaws are adopted by the incorporators—the stockholders or members who sign the articles of incorporation. Under Section 5 of the Code, incorporators are those stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and who are signatories thereof.

For a stock corporation, each incorporator must own or be a subscriber to at least one share of the capital stock. The incorporators, acting collectively, approve the bylaws as part of the incorporation process.

What Must the Bylaws Cover?

While the Revised Corporation Code does not prescribe a single mandatory form for bylaws, the bylaws must address the internal governance matters necessary for the corporation to operate. Standard provisions typically cover:

• The time, place, and manner of calling and conducting regular and special meetings of directors and stockholders
• The number of directors or trustees and their qualifications, terms of office, and manner of election
• The powers and duties of officers
• The manner of filling vacancies in the board
• The issuance and transfer of stock certificates
• The declaration of dividends
• The amendment of the bylaws itself

The bylaws must be consistent with the articles of incorporation and with the Revised Corporation Code. Any conflict between the two documents will generally be resolved in favor of the articles of incorporation and the law.

Can Bylaws Be Amended?

Yes. The stockholders or members may amend the bylaws, but the amendment must follow the voting requirements set by law. The Revised Corporation Code requires that amendments to the bylaws be approved by the vote or written assent of stockholders representing at least a majority of the outstanding capital stock, or by a majority of the members in the case of a nonstock corporation.

It is important to note that even holders of nonvoting shares are entitled to vote on the adoption and amendment of bylaws. Under Section 6 of the Code, holders of nonvoting shares shall nevertheless be entitled to vote on the adoption and amendment of bylaws, among other specified matters.

What Happens If a Corporation Operates Without Bylaws?

Operating without bylaws is not merely a technical oversight—it is a violation of the Revised Corporation Code. Since the SEC will not issue a certificate of incorporation without the bylaws, a corporation that has not filed bylaws does not legally exist as a corporation.

If a corporation's bylaws are defective, incomplete, or inconsistent with the law, the SEC may disapprove the articles of incorporation or any amendment thereto under Section 16. The Commission shall give the incorporators a reasonable time to modify the objectionable portions.

Frequently Asked Questions

Can a One Person Corporation (OPC) have bylaws? Yes. A One Person Corporation, which is a corporation with a single stockholder under Section 10 of the Code, is still required to adopt and file bylaws as part of its incorporation requirements.

Are bylaws the same as the articles of incorporation? No. The articles of incorporation establish the corporation's existence, name, purpose, and capital structure. The bylaws set out the internal rules for how the corporation is governed and operated.

Who can amend the bylaws? The stockholders or members can amend the bylaws, and the amendment must be approved by the required vote—a majority of the outstanding capital stock for stock corporations or a majority of members for nonstock corporations.

Practical Takeaways

• File bylaws with the articles of incorporation. The SEC requires both documents before it will issue a certificate of incorporation.
• Draft bylaws that match the articles. The two documents must be consistent, and the bylaws cannot contradict the articles of incorporation or the Revised Corporation Code.
• Remember the voting rules. Even nonvoting shareholders have the right to vote on the adoption and amendment of bylaws.
• Keep bylaws current. As the corporation grows or changes, review and amend the bylaws to reflect new governance needs.
• Seek professional help. Corporate formation involves precise legal requirements, and a lawyer can help ensure the bylaws are compliant and workable.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.