SEC En Banc Case No. 06-14-334 FOREST HILLS GOLF AND COUNTRY CLUB, INC., Appellant, -versus- COMPANY REGISTRATION AND MONITORING DEPARTMENT Appellee.

Republic of the Philippines

PICC Secretariat Building, PICC Complex, Pasay City Securities and Exchange Commission COMMISSION EN BANC Department of Finance

COUNTRY CLUB, INC., FOREST HILLS GOLF Appellant, AND

- versus - SEC En Banc Case No.06-14-334

MONITORING DEPARTMENT, COMPANY REGISTRATION AND Appellee. Y

DECISION

for being contrary to the Corporation Code, specifically as to voting rights in a stock corporation. DEPARTMENT (CRMD) dated 2 May 2014,where the CRMD denied FOREST HILLS's proposed amendments to its articles of incorporation Appellant FOREST HILLS GOLF AND COUNTRY CLUB,INC. (FOREST HILLS), praying that the En Banc reverse the Letter-Order of the Commission's COMPANY REGISTRATION AND MONITORING This resolves the Memorandum on Appeal filed on 3 June 2014 by

should be regulated as a stock corporation or as a non-stock corporation. At the heart of the controversy is whether a golf/country club

RELEVANT FACTS

Commissiont as a "non-profit stock corporation," viz. On 29 June 1995, FOREST HILLS was registered with the

FOREST HILLS GOLF AND COUNTRY CLUB, INC. ARTICLES OF INCORPORATION OF

KNOW ALL MEN BY THESE PRESENTS:

1 SEC Reg. No. AS095-006190.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 2 of 14

(Emphasis supplied) whom are residents of the Philippines, have this day voluntarily associated ourselves together for the purpose of forming a non-profit stock corporation under the laws of the Republic of the Philippines. THAT WE, who are of legal age, and a majority of

The primary purpose of FOREST HILLS is:

pools, and other indoor and outdoor related sports and recreational facilities. main objective of which will be the construction and maintenance of a golf course, tennis courts, swimming To promote the social, recreational and athletic activities on a non-profit basis among its members, the

provide for capital stock divided into shares, viz. The Articles of Incorporation of FOREST HILLS specifically

899 Class "C" Common shares, and 449 Class "D' Common shares. (Emphasis supplied) SEVENTH -- That the total authorized capital stock of into 1,652 Class "A" Common Shares, 600 Class "B' Common Shares, inclusive of eight (8) Founders' Shares, the Corporation shall consist of Three Thousand Six Hundred (3,600) no par value common shares, divided

specifically provide that no dividends shall be distributed to its members, viz. However, the Articles of Incorporation of FOREST HILLS also

That the ownership of all shares of stock of this Club is subject to the following restrictive conditions:

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the time of its dissolution or liquidation. (Emphasis member. Hence, no dividend shall at any time be declared and/or paid. Members shall be entitled only to a pro-rata share of the assets of the Corporation at supplied). 4. No profit shall inure to the benefit of any

amendments to its By-Laws, which would restrict the voting rights only to (A) "individual regular members," and (B) "nominees of juridical entities as defined under Article II2 hereof," during the first five (5) On 6 August 2013,FOREST HILLS filed with the CRMD proposed

MEMBERSHIP, xxx A. REGULAR MEMBERS, 2.3.1. Regular membership is open to a natural person who is a registered owner of a share of stock, and the duly designated nominee(s) of a juridical entity in whose name a stock certificate has been issued. (Emphasis supplied) 2 By-Laws of FOREST HILLS, Article II. CLUB MEMBERSHIP,Section 2.3. CLASSIFICATION OF

FOREST HILLS GOLF v.CRMD SEC EB Case No. 06-14-334 Page 3 of 14

years from the formal turnover of the project from the developer to FOREST HILLS.

be deprived of voting rights except those classified and issued as the Corporation Code, which pertinently provides that: "no share may 'preferred' or 'redeemable' shares, unless otherwise provided in this regarding the latter's proposed amendments to its By-Laws. The CRMD denied the proposed amendments, as these run contrary to Section 6 of Code xxx" On 22 October 2013, the CRMD met with FOREST HILLS

xxx it is actually a non-stock corporation based on law and because "although [FOREST HILLS] has capital stock divided into shares reconsideration, arguing that it may validly include the amendments jurisprudence." On 5 November 2013, FOREST HILLS wrote to CRMD for

non-stock corporation, Section 89,3 viz. corporation. The distinction is relevant because the Corporation Code has a separate, more liberal provision for restriction of voting rights in a distribute dividends. thus it should be treated as a non-stock FOREST HILLS maintained that it has capital stock but does not

of any class or classes to vote may be limited, limited, broadened or defined, each member, regardless broadened or denied to the extent specified in the of class, shall be entitled to one (1) vote. Section 89. Right to Vote. -- The right of the members articles of incorporation or the by-laws. Unless so

that: On 2 May 2014, the CRMD issued the assailed Letter-Order, stating

limits the voting rights of the stockholders of subject Essentially, said, said proposed amendments

corporation, that is-only regular members (registered owner of a share of stock) in good standing shall be entitled to vote.

than those classified and issued as "preferred" or "redeemable" shares, may be deprived of voting rights. corporation as a stock, non-profit corporation, is Philippines which provides that no shareholder, other governed by Section 6 of the Corporation Code of the The Department, however, notes that subject

SEC. 88. Right to Vote. -- The right of the members of any class or classes to vote may be limited, limited, broadened, or denied, each member, regardless of class, shall be entitled to one vote. 3 Reenacted as Paragraph 1 of Section 88 of the Revised Corporation Code, viz. broadened, or denied to the extent specified in the articles of incorporation or the bylaws.Unless so

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 4 of 14

and, thus, cannot be given due course. denial of voting rights of the stockholders is in clear violation of the aforementioned Section 6 of the Code corporation's proposed amendments which include In view of this, the Department ruled that subject

reconsideration of the Department's position and maintains validity of its proposed amendments. It anchors its claim on the position that while subject corporation has capital stock divided into shares under its articles or incorporation or by-laws, it is actually a non-stock corporation. considering it is not authorized to distribute dividends Subject corporation, however, seeks

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allows denial of the voting rights or certain classes of its shares or members. subject corporation claims that it is not governed by Section 6 of the Code but by Section 89 thereof which Consequently, as a non-stock corporation,

Department reaffirms its findings that subject corporation is a stock corporation. Taking all this into consideration, however, the

corporation cannot be clearer than what is provided following are controlling: under it Articles of Incorporation. Specifically, the Its intention to be registered as a stock

KNOW ALL MEN BY THESE PRESENTS:

purpose of forming a non-profit stock and a majority of whom are residents of the Philippines, have this day voluntarily associated ourselves together for the corporation under the laws of the Republic of the Philippines. THAT WE, who are of legal age,

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capital stock of the Corporation shall SEVENTH - That the total authorized consist ofThree Thousand Six

shres, divided into 1,652 Class "A" Hundred (3,600) no par value common Common Shares, inclusive of eight (8) Founders' Shares, Common Shares, 600 899 Class ClassB C

Common shares. Common shares, and 449 Class "D"

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 5 of 14

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in said Seventh [article] of subject corporation's AOI ownership and transfer of shares are further provided Additional terms and conditions on the

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by the Commission. as stock, non-profit corporations has long been upheld Lastly, the nature of golf clubs being registered

stockholders cannot be given due course. laws constituting denial of voting rights of its subject corporation's applied [for] amendment of by- Thus, in view of the foregoing, we reiterate that

On 3 June 2014, FOREST HILLS filed its Memorandum on Appeal, praying that the En Banc reverse the CRMD and allow the proposed amendments, because: (1) the CRMD committed an error of

the CRMD committed an error of law when it applied Section 6 of the law when it considered FOREST HILLS as a stock corporation; and (2)

Corporation Code to FOREST HILLS, instead of Section 89.

FOREST HILLS cited the Supreme Court cases of Collector of Internal Revenue v. Club Filipino, G.R. No. L-12719, 31 May 1962 (Club Filipino case) and Republic of the Philippines v. Citv of

as legal basis that, in order to be considered a stock corporation, an Paranaque, G.R. No.191109,18 July 2012 (City of Paranaque case)

entity must not just have capital stock, but must also distribute dividends.

DISCUSSION

The only genuine issue here is whether or not FOREST HILLS, which was self-described and incorporated as a "stock non-profit"may

provisions of Section 89 will apply. be considered as a non-stock corporation. If so, the more liberal

either stock or non-stock and non-stock corporations are those excluded from the definition of a stock corporation in Section 3,4 viz. The Corporation Code expressly provides that corporations are

SEC. 3. Classes of Corporations. -- Corporations formed or organized under this Code may be stock or nonstock corporations. Stock corporations are those which have capital stock divided into shares and are authorized to distribute to the holders of such shares, dividends, or allotments of the surplus profits on the basis of the shares held. All other corporations are nonstock corporations. 4 Reenacted as Section 3 of the Revised Corporation Code, viz.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 6 of 14

DEFINITIONS AND CLASSIFICATIONS TITLE I -GENERAL PROVISIONS

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shares held are stock corporations. All other corporations are non-stock corporations. (Emphasis supplied) allotments_of the_surplus profits_on the basis of the formed or organized under this Code may be stock or non-stock corporations. Corporations which have capital stock divided into shares and are authorized to distribute to the _holders of such shares dividends or Section 3. Classes of corporations. - Corporations

Section 875 as one where no income is distributed as dividends to its members, viz. The Corporation Code further defines a non-stock corporation in

TITLE XI - NON-STOCK CORPORATIONS

which the corporation was organized, subject to the used for the furtherance of the purpose or purposes for provisions of this Title. trustees, or officers, subject to the provisions of this Code on dissolution: Provided, That any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper, be Section 87. Definition. - For the purposes of this Code a non-stock corporation is one where no_part of its income is distributable as dividends to its members

pertinent, shall be applicable to non-stock corporations, Title. (Emphasis supplied) The provisions governing stock corporation, when except as may be covered by specific provisions of this

UNLESS A CORPORATION CAN BE CONSIDERED A STOCK,IT IS A NON-STOCK

non-stock corporation is to first eliminate the possibility that it is a stock corporation. Prevailing jurisprudence suggests that the key to identifying a

nonstock corporation is one where no part of its income is distributable as dividends to its members to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or The provisions governing stock corporations, when pertinent, shall be applicable to non-stock corporations, except as may be covered by specific provisions of this Title. 5 Reenacted as Section 86 of the Revised Corporation Code, viz. SEC. 86. Definition. -- For purposes of this Code and subject to its provisions on dissolution, a trustees, or officers: Provided, That any profit which a non-stock corporation may obtain incidental purposes for which the corporation was organized, subject to the provisions of this Title.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 7of 14

In the 1962 Club Filipino case, the Supreme Court held that:

therefore, be considered a stock corporation, within the contemplation of the corporation law. (Emphasis supplied) be found an authority for the distribution of its dividends or surplus profits. Strictly speaking, it cannot, of such shares, dividends or allotments of the surplus profits on the basis of the shares held. In the case at bar, nowhere in its articles of incorporation or by-laws could be complied with, to wit: (1) a capital stock divided into shares and (2) an authority to distribute to the holders [F]or a stock corporation to exist. two requisites must

In the 2012 City of Paranaque case, the Supreme Court held that:

any part of their income to said members (Emphasis requisite is present, it cannot be properly classified as a they must have members and must not distribute supplied) authorized to distribute_dividends and allotments of stock corporation. As for non-stock corporations, Two requisites must concur before one may be classified as a stock corporation, namely: (1) that it has capital stock divided into shares: and (2) that it is surplus and profits to its stockholders. If only one

A NON-STOCK CANNOT HAVE "PROFITABLE BUSINESS" AS ITS PURPOSE

stock corporation must be organized for a specific "eleemosynary purpose,7 viz. The Corporation Code also mandates in Section 886 that a non-

Sec. 88. Purposes. - Non-stock corporations may be formed or organized for charitable, religious, literary, scientific, social, civic service, or similar chambers, or any combination thereof, subject to the educational, purposes, like trade, industry, agricultural and like professional, cultural, fraternal

7 Cesar L. Villanueva and Teresa Villanueva-Tiansay, Philippine Corporate Law (2018) at 760, viz. "By definition, therefore, the essence of a non-stock non-profit corporation is not the non-existence of shares of stock to cover its capital, but that: (a) its primary purpose should be eleemosynary in nature; and (b) there is a prohibition in its articles of incorporation and by-laws that no part of the income or any form of dividend is distributable to the members, trustees and officers of the corporation, even though the corporation may incidentally earn profits from its operations." (Emphasis supplied) SEC. 87. Purposes. -- Nonstock corporations may be formed or organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, like trade, industry, agricultural and like chambers, or any combination thereof, subject to the special provisions of this Title governing particular classes of non-stock corporations. 6 Reenacted as Section 87 of the Revised Corporation Code, viz.

FOREST HILLS GOLF v.CRMD SEC EB Case No. 06-14-334 Page 8 of 14

classes of non-stock corporations. (Emphasis supplied) special provisions of this Title governing particular

inconsistent with the character of a non-stock corporation, viz The articles of incorporation must not include any purpose

incorporation in any of the official languages duly signed and acknowledged by all of the incorporators, Sec. 14. Contents of the articles of incorporation. - All corporations organized under this code shall file with the Securities and Exchange Commission articles of containing substantially the following matters, except as otherwise prescribed by this Code or by special law:

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its nature as such[.] (Emphasis supplied) 2. The specific purpose or purposes for which the incorporation shall state which is the primary purpose corporation is being incorporated. Where a corporation has more than one stated purpose, the articles of and which is/are the secondary purpose or purposes: Provided, That a non-stock corporation may not include a purpose which would change or contradict

nature as such" in Section 14(2)was clarified as "profitable business" in The meaning of "a purpose which would change or contradict its

Feliciano, viz. SEC Opinion dated 11 September 1995 addressed to Lawrence D.

It may be allowed to engage in business activities only if it is necessary to carry out the purpose(s) for which the or members, but are used for the furtherance of corporate purposes. (Emphasis supplied) any_profit that may be derived from such business activities are not distributable to the directors, officers rule, are not empowered to venture on profitable business. A corporation organized as a non-profit concern is not permitted to engage in business with the object of making income or profits directly or indirectly. corporation is organized, but unlike stock corporations [I]t is clear that non-stock corporations, as a general

Further, SEC Opinion dated 18 June 1990 addressed to Coffee Exporters Association of the Philippines, Inc. clarifies that

incorporation that any profit which may be derived to the benefit of any of the members, if the business activity would run counter to its very nature as a non- profit association, such business activity cannot be Even if there is a manifestation in the articles of from the proposed business venture shall not redound

FOREST HILLS GOLF v.CRMD SEC EB Case No. 06-14-334 Page 9 of 14

undertaken by a non-stock corporation. (Emphasis supplied)

Since "profitable business" is contrary to its very character, a non- stock corporation must be not-for-profit. Hence the term, "non-stock non-profit."

SOME GOLF/COUNTRY CLUBS HAVE BEEN REGISTERED AS "STOCK NON-PROFIT"BECAUSE THEY ISSUE PROPRIETARY MEMBERSHIP

CERTIFICATES

must register itself as a stock corporation or a non-stock corporation. The economic reality, however. is that membership in golf/country The Commission does not dictate whether a golf/country club

clubs are often coupled with the issuance of a share of stock representing a proprietary interest in the club facilities.8 The moment that a corporation, even a non-stock non-profit, offers for sale

facilities, it must comply with the registration requirements of the proprietary membership certificates to the public for the use of its Commission.9

The CRMD's argument that "golf clubs being registered as stock

based on SEC Opinion dated 28 April 1997 addressed to Patrick T. non-profit corporations has long been upheld by the Commission" is

Lugue, viz.

terms of proprietary shares, ownership of which is Unlike an ordinary corporation, the members of a individual pecuniary interest in the club represented in evidenced by certificates of proprietary share or membership, and the corresponding market value of "proprietary membership club corporation" have

Code governing stock corporations, when pertinent, corporation, it has the character more of a stock may be applied. (Emphasis supplied) which can be easily determined or fixed. While it has the color of a "non-stock corporation" being a non-profit corporation. Hence the provisions of the Corporation

27 June 1991 addressed to Federacion of Small and Medium Scale Enterprises, Inc. s See Timoteo B. Aquino, Philippine Corporate Law Compendium (2014) at 580, viz. "There are interest in the facilities of the club. In most cases, apart from being able to avail of the facilities of the club, the purchase of the certificate represents a form of investment in anticipation of the value of the purchase of a share is a [condition] sine qua non." See also Villanueva, supra at 763, viz. "Proprietary Membership -- There are many instances, especially in leisure clubs, such as a golf club, that 9 See Lucila M. Decasa, Handbook on Private Corporations (2009) at 565, citing SEC Opinion dated instances when the membership involves property rights (like membership in a club) where the membership is granted coupled with the issuance of a share of stock representing a proprietary share in the future and its disposition at a profit.

FOREST HILLS GOLF v.CRMD SEC EB Case No. 06-14-334 Page 10 of 14

were seen as inconsistent with the "non-profit" purpose of a non-stock corporation. Recall that a non-stock corporation may not have a purpose inconsistent with its character as such. considered an investment which may be bought and sold at a profit, Shares in a proprietary membership club, because they may be

words, "proprietary membership club" should be read as merely incorporated as either stock or non-stock. used in this Opinion, did not create a third class of corporation. In other describing the structure of a corporation which has to necessarily be However,the term "proprietary membership club corporation,"as

offered by a golf/country club to the public, consistent with Section Also, the term "proprietary.membership" describes the securities

necessarily follow that a "non-stock corporation" does not issue stock. Thus, the fact that a non-stock issues proprietary membership corporation." already pointed-out, while a "stock corporation" issues stock, it does not certificates does not turn it into a 3.1(f) of the Securities Regulation Code,10 which expressly includes "proprietary membership certificates in the definition of "securities." As ."proprietarymembership

CONCLUSION:FOREST HILLSIS A STOCK CORPORATION

the incorporation of golf/country clubs as "stock, non-profit" the many years that followed its issuance, the Commission has allowed The unintended consequence of this SEC Opinion is that during

corporations.

However, the perpetuation of such stock, non-profits goes against

non-stock corporation is a non-profit corporation, while a stock corporation is a for-profit corporation."11 legal principle and common sense. As one author succinctly put it:"A

itself and was incorporated as a "stock non-profit" corporation, it should be considered a "non-stock" and thus be entitled to the more liberal In this case,FOREST HILLS argues that,even though it described

provisions of Section 89.

corporation. On the contrary, we rule that FOREST HILLS is a stock

1o Section 3. Definition of Terms. - 3.1. "Securities" are shares, participation or interests in a contract, instruments, whether written or electronic in character. It includes: xxx (f Proprietary or nonproprietary membership certificates in corporations; xxx (Emphasis supplied) corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate 11 De Leon and De Leon, Jr., The Corporation Code of the Philippines Annotated (2013) at 664.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 11 of 14

a non-stock. Here, there is ample support that FOREST HILLS, by its own admission and actuations is a stock corporation. We stated that unless a corporation can be considered a stock, it is

Articles of Incorporation. First, FOREST HILLS identified itself as a stock corporation in its

membership" but plain and simple common shares, defined by the Commission thus: Second, FOREST HILLS issues stock. Not just "proprietary

any preference or advantage whatsoever.12 7.5 Common shares refer to the basic class of stock iquidation, and in the management of its affairs without whose owners are entitled to pro-rata share in the profits of the corporation and its assets upon

be declared and/or paid." incorporation, such as adding a right of first refusal, but the authority to declare dividends is inherent in a common share. Of course, the corporation may choose to stipulate that "no dividends will at any time Features of common shares may be altered in the articles of

by the very existence of common shares, although it has chosen to withhold or waive the declaration of dividends. In other words, FOREST HILLS is authorized to distribute profit

Section 3 of the Corporation Code provides:

shares and are authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held are stock Corporations which have capital stock divided into

corporations.

non-stock. We assert that the determining factor is "non-profit" conclusive factor in determining whether it should be regarded as a purpose. Third, FOREST HILLS' choice not to declare dividends is not a

dividends was not held conclusive as to "non-profit" purpose, viz. The Supreme Court ruled in USEAEA v. USEA,13 the absence of

Specifically, private respondent USEA asserts that its non-profit character is discernible from the fact that

12 Primer on the Corporation Code of the Philippines, published by the Securities and Exchange 13 G.R. No. L-36896, 31 August 1981. Commission (2010) at 5.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 12 of 14

of dividends or otherwise and the members do not from liquidation. there is no distribution of earnings or profits by way receive any interest in the net funds and assets resulting

We find the foregoing contention of private respondent USEA untenable.

A close examination of the contribution of respondent association will show that while it is true that the members of the association do not receive dividends in the form of cash, nevertheless, they do receive benefits in the form of commissary privileges xxx (Emphasis supplied)

access to the club facilities, but also (2) an ownership interest in the club's assets. In this case, the shareholders of FOREST HILLS receive not just (1)

appreciate and depreciate in value. They are an investment. Such a "profitable business" purpose cannot co-exist with non-profit purposes. Fourth, FOREST HILLS' shares are subject to market forces, they

the very means by which membership is acquired. In other words, the monetary value and property rights attached to a golf/country club share are fundamental to the existence of the corporation. investment in golf/country club shares are not incidental because it is While the law does exempt "incidental" business activities, the

golf/country can look forward, in most cases, to a return that far exceeds their initial investment. that have increased in value translates to a claim over such profits via the common shares as discussed above. The shareholders of a Moreover, the accumulated profit from golf/country club shares

assets of the corporation, viz. Fifth, FOREST HILLS' shareholders have an inchoate right to the

That the ownership of all shares of stock of this Club is subject to the following restrictive conditions:

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member. Hence, no dividend shall at any time be the time of its dissolution or liquidation.14 (Emphasis supplied) declared and/or paid. Members shall be entitled only to a pro-rata share of the assets of the Corporation at 4. No profit shall inure to the benefit of any

14 Articles of Incorporation of FOREST HILLS.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 13 of 14

ownership of the club's assets. Thus, FOREST HILLS' members can look forward to acquiring

either by the Articles of Incorporation (Section 94) or a Distribution Plan (Section 95). It should come as no surprise that common stock as evidence of an inchoate right to the assets of the non-stock non-profit is not provided for. "Distribution of Assets in Non-Stock Corporations," provide that the members' share in the assets of a non-stock, non-profit are determined Sections 94 and 95 of the Corporation Code,15 pertaining to the

"stock, non-profit" and is not on all fours with this case. Sixth, the Supreme Court's ruling in Club Filipino does not cover a

voting rights of a non-stock corporation, the best of both worlds. stock corporation with investment value claiming the more flexible FOREST HILLS' very structure is a circumvention of law--it is a

Court ruled that Club Filipino is a non-stock, non-profit, they were Viz. dealing with a corporation that declared itself as non-stock, non-profit compare it with a legitimate non-stock, non-profit. When the Supreme The easiest way to spot a counterfeit non-stock, non-profit is to

ARTICLES OF INCORPORATION OF THE CLUB FILIPINO,INC.DE CEBU

KNOW ALL MEN BY THESE PRESENTS:

That we the majority of whom are residents of the

ourselves together for the purpose of forming a non- Philippines. (Emphasis supplied) Philippines have this day voluntarily associated stock and non-profit corporation under the laws of the

common shares. shares anywhere in its articles of incorporation. It does not issue Moreover, Club Filipino does not have a provision for issuance of

CONCLUSION

FOREST HILLS is a stock corporation. It needs to amend its articles of There is no such thing as a "stock, non-profit" corporation.

15 Reenacted as Sections 93 and 94 of the Revised Corporation Code, respectively.

FOREST HILLS GOLF v.CRMD SEC EB Case No.06-14-334 Page 14 of 14

incorporation to reflect that it is a plain and simple stock corporation to avoid further confusion.

is hereby DENIED.The Letter-Order of the CRMD dated 2 May 2014 is hereby AFFIRMED. WHEREFORE, premises considered, the Memorandum on Appeal

to indicate that it is a stock corporation, within a period not exceeding one (1) year from receipt of this Decision. FOREST HILLS is directed to amend its Articles of Incorporation

and Monitoring Department for information and appropriate action. Let a copy of this Decision be furnished the Company Registration

SO ORDERED

Pasay City, Philippines; 23 July 2019

EMIL Chdirperson B>AQUINO

naneep deranp.h Ce

ANTONIETA F.IBE Commissioner EPHYRO LUIS'B.AMATONG Commissioner

JAVEY PAUL D.FRANCISCO Commissioner KELVIN LESTER K.LEE Commissioner