Are you preparing to incorporate your business? Turning a business into a corporation can be very beneficial for it in the long run. You can protect yourself from personal liability, enjoy tax benefits, and ensure the longevity of your business. But before you start the process, it’s important to fully understand the roles that make up the corporate officers of a corporation.
The Board of Directors in a corporation must elect a team of corporate officers. This is according to Section 24 of the Revised Corporation Code of the Philippines. The roles to be filled up include the president, the treasurer, and the secretary. The Board may also elect other roles as it deems necessary.
These corporate officers are entrusted with the business’s day-to-day operations and execute any plans or decisions created by the corporation’s Board of Directors. If someone wants to be a corporate officer, there are certain qualifications and requirements he or she will need to meet, depending on the position he or she is aiming for. Here’s what you need to know about each role in a team of corporate officers.
President
The president must be a member of the Board of Directors. He or she must also own at least one share of the corporation, or at least have his or her name on the share as its owner. If it is a non-stock corporation, he or she must be a member thereof. He or she must also be a Filipino citizen.
A president of a corporation must not have been convicted by final judgment of a felony punishable by more than six years in prison. He or she must also not have violated the Revised Corporation Code within five years before the election.
Treasurer
In contrast to the president, the treasurer does not have to be a member of the Board of Directors. However, he or she must be a resident of the Philippines. The role of president and treasurer cannot be held by the same person, unless otherwise stated in the Revised Corporation Code.
Secretary
Similarly to the treasurer, the secretary does not have to be a director. He or she must also be a resident of the Philippines. Again, the role of secretary cannot be claimed by the president unless circumstances say otherwise.
Compliance Officer
Not all corporations are in need of a compliance officer. However, the Board of Directors must nominate a compliance officer if the corporation is vested with the public interest. The compliance officer is in charge of watching over the corporation’s operations and business transactions. This is to ensure that the corporation is following all of the necessary legal and internal rules.
Other Corporate Officers
While the president, secretary, and treasurer are required roles in a team of corporate officers, the Board of Directors may choose to fill other roles as they deem necessary for the corporation. For example, the Board of Directors may also elect a vice-president, a cashier, an auditor, and/or a general manager.
Any two or more of these positions can be held by the same person at the same time. The only exception to this is that no one can hold the roles of President and Treasurer or Secretary concurrently.
Qualifications and Rights of Corporate Officers
While the base qualities of each corporate officer were listed above, the other qualifications are to be decided by the corporation’s by-laws. By-laws refer to the set of rules created by a company, listing the rights and duties of the officers, the Board, and/or the stakeholders. These by-laws may elaborate on the other requirements a potential officer must meet, as well as how an officer is elected or appointed.
