Opinion No. 23-12Re: Nationality of the President of a Non-Stock Non-Profit Corporation

Securities and Exchange Commission PINE

OFFICE OF THE GENERAL COUNSEL

SEC OGC Opinion No. 23 -12 Re: Nationality of the President of a Non-Stock Non-Profit Corporation 19 June 2023

UNION CHURCH OF MANILA, INC. Rada St. cor. Legazpi Village Makati, Philippines 1229 ucmadmin@unionchurch.ph

Attn: Alberto P. Roa Church Administrator

Senior Pastor and Chairman of the Council Chad Williams

Dear Sirs:

or not a non-Filipino citizen can be the President of Union Church of Manila, Inc. (the "Church"), a non- stock, non-profit religious corporation. This refers to your letter dated 27 March 2023 requesting the Commission's opinion on whether

As stated in your letter, the relevant facts are as follows:

1. The Church, a non-stock, non-profit religious corporation, was originally organized in 1915 under the provisions of Act No. 271 of the former Philippine Commission. It was further incorporated in 1954 as Union Church of Manila, Inc., with office address at the corner of Legazpi and Rada Streets, Legazpi Village, Makati City.

2. As provided in its By-laws, as amended on 17 February 2013 and approved by the Commission on 29 January 2014, the corporate officers are the following:

(a) ) (b (c (e Corporate Secretary: Treasurer; Chairperson; Vice Chairperson; Finance Secretary; and Assistant Finance Secretary. Assistant Treasurer;

3 In compliance with Section 24 of the Revised Corporation Code, the position of President was

created in 2020 and a President, a Filipino citizen, was elected by the Chairperson is usually the Senior Pastor, an American citizen, and a resident of the Philippines. The Senior Pastor/Chairperson, with the help of the Church Administrator, who is a regular management of the affairs of the Church. employee of the Church and is not a member of the Council, takes care of the overall Council.1 The

of the Church, directs strategic priorities, delegates management authority and responsibility of the Pastoral Team or other appropriate Committees of the Church and monitors and reviews Church operations. (Article III, Section 3.1 of the Church's By-laws). 1 The official body of the Church which receives authority form the members of the Church and which exercises the corporate powers

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Hence, this query.

known as the Anti-Dummy Law, provides: Section 2-A of Commonwealth Act No. 108, as amended by Presidential Decree No. 715, otherwise

which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or other specific country, or to corporations or associations at least sixty per centum of the capital of which is existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of the board of directors or governing body of corporations or associations engaging in partially nationalized enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or in any manner permits or allows any person, not possessing the qualifications required by the Constitution, or whether as an officer, employee or laborer therein .. . And provided, finally, That the election of aliens as members activities shall be allowed in proportion to their allowable participation or share in the capital of such entities.2 of any other specific country, to intervene in the management, operation, administration or control thereof, or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; . . . Section 2-A. Unlawful use, Exploitation or enjoyment. -- Any person, corporation, or association

nationalized activities, aliens are banned from being appointed to management positions such as president, although they can be elected directors in proportion to their allowable participation or share in the capital vice-president,treasurer,auditor,etc.of said companies pursuant to the ruling of the Department of Justice of such activities in accordance with Section 2-A of the Anti-Dummy Law.3 The Commission, on several occasions, has opined that in firms engaged in wholly or partially

1987 Constitution and the Public Land Act. Section 7, Article XII of the 1987 Constitution provides: Meanwhile, the legal capacity of a corporation to acquire land in the Philippines is regulated by the

individuals, corporations or associations qualified to acquire or hold lands in public domain. Section 7. Save in cases of hereditary succession, no private lands shall be transferred except to

acquire land in the Philippines, viz: Corollary thereto, Sections 22 and 23 of the Public Land Act expressly provide who are qualified to

a head of a family, and any corporation or association of which at least sixty percentum of the capital stock belongs wholly to citizens of the Philippines, and which is organized and constituted under the laws of the Philippines, authorized under their charter, to do so, may purchase any tract of public agricultural land disposable under this Act... "Section 22. Any citizen of lawful age of the Philippines and any such citizen not of lawful age who is

preceding section, may acquire or own agricultural public land or land of any other denomination or classification, which is at the time or was originally really or presumptively of the public domain, or any permanent improvement thereon, or any real right on such land and improvement, . . . . "Section 23. No person, corporation, association, or partnership other than those mentioned in the last

be considered to have engaged in a partly nationalized activity. As such, foreigners should not comprise more than 40% of its membership and cannot be elected as President/Chairman of the Board of Trustees.5 Thus: The Commission previously opined that in the event that a corporation owns land, it shall already

or partly nationalized business or industry, it may have an alien trustee in its board, and a foreigner as its President/Chairman. Thus, considering that PFI, based on its Articles of Incorporation, is not engaged in any nationalized

membership. 1 Consequently, PFI can elect foreign trustees in proportion to their allowable participation foreigners. However, it cannot have a foreigner as President/Chairman of the board. in the membership of the corporation. Otherwise stated, not more than 40% of the trustees should be of land by the corporation. Hence, in the event that PFI owns land, it shall already be considered to have engaged in a partly nationalized activity. As such, foreigners should not comprise more than 40% of its However, the purpose clause PFI's Articles of Incorporation allows, or does not exclude, ownership

SEC Opinion dated 27 July 1990, addressed to Philippine Association of Service Exporters. Inc., citing SEC Opinions dated 14 June 1982, 01 July 1983, 15 May 1985, 28 May 1985, and 26 April 1989. 4 The Public Land Act, Commonwealth Act No. 141, 07 November 1936, as quoted in SEC-0GC Opinion No. 14-05 dated 25 April 2014, 2 Emphasis supplied. 6 Emphasis and italics supplied. addressed to Atty. Rester John L. Nonato. Italics supplied. 5 SEC-OGC Opinion No. 16-12 dated 24 May 2016, addressed to Atty. Rester John L. Nonato. Citations omitted

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a foreigner as its President or officer. Accordingly, based on Section 2-A of the Anti-Dummy Law, if the Church owns land, it cannot have

therein. It shall not be used in the nature of a standing rule binding upon the Commission in other cases or upon the courts whether of similar or dissimilar circumstances.7 If, upon further inquiry or investigation, it will be disclosed that the facts relied upon are different, this opinion shall be rendered void. circumstances and documents disclosed/submitted and relevant solely to the particular issue raised It shall be understood that the foregoing opinion is rendered solely on the basis of the facts,

Please be guided accordingly.

Very truly yours,

Uofmmarsm! Romuald C Padilla $eneral Couhsel

7 Paragraph 7, SEC Memorandum Circular No. 15, Series of 2003.

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