Stockholders’ Meeting Cannot be Conducted Via Teleconference

The SEC, in its Opinion No. 16-01, stated that under the present Corporation Code, a stockholder’s voting and appearance cannot be conducted via teleconferencing or videoconferencing. 
 
Section 51 of the Corporation Code provides that “stockholder’s or member’s meetings, whether regular or special, shall be held in the city or municipality where the principal office of the corporation is located, and if practicable in the principal office of the corporation.” Since this provision presupposes that the attendees to a stockholders’ or members’ meeting are in the same place during the meeting, it is in contrast to teleconferencing, where the participants are in different places although their communication with each other is facilitated through an electronic medium, making their presence in the meeting merely “virtual” or electronic.
 
On the other hand, the conduct of a meeting of the board or directors may be held anywhere in or outside the Philippines, unless the by-laws provide otherwise, per Section 53 of the Corporation Code. In this regard, SEC Memorandum Circular No. 15 Series of 2001 provides the guidelines for the conduct of board meetings through teleconferencing.  In addition, Section 47 of the Corporation Code permits the place of the directors’ meeting to be stipulated in the corporations’ by laws, but not in the case of stockholders’ meetings.
 
Clearly, the aforementioned provisions of law disallows stockholder’s voting and appearance conducted via teleconferencing. However, there are pending bills in Congress that proposed amendments to the Corporation code. This includes permitting the conduct of stockholders meetings through electronic means.

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