1) What a “Non-Stock Corporation” Is (and Why It Matters)

A non-stock corporation is a corporation without capital stock and organized not for profit, where any income is used to further its corporate purposes and cannot be distributed as dividends to members, trustees, or officers (except as reasonable compensation for services, and as otherwise allowed by law). In Philippine law, non-stock corporations are primarily governed by the Revised Corporation Code of the Philippines (RCC, Republic Act No. 11232) and regulated through SEC registration and compliance rules.

Non-stock corporations are the standard vehicle for many Philippine organizations, including (depending on purpose and governing special laws) charitable institutions, professional and trade associations, clubs, NGOs, religious entities, and various community organizations. Some industries and entity-types may be subject to additional special laws (e.g., educational institutions, condominium corporations, homeowners’ associations), but the RCC provides the baseline corporate framework.

2) Minimum Number of Incorporators (and Who May Be an Incorporator)

A. Minimum and Maximum

Under the RCC, a corporation is formed by not less than two (2) incorporators and not more than fifteen (15).

This is a major shift from the older rule that effectively required five incorporators; under the RCC, two incorporators are sufficient.

B. Who Can Be an Incorporator

Incorporators are the persons who sign the Articles of Incorporation (AOI) and cause the corporation’s creation. Key points:

Natural persons can be incorporators.
Juridical persons (e.g., another corporation) may also be incorporators, subject to SEC rules on authorization and representation.
Incorporators must have legal capacity to enter into contracts.
Incorporators are not merely “founders” in the informal sense—they are statutory participants in incorporation and are identified in the AOI.

C. Relationship Between Incorporators and Trustees/Members

A non-stock corporation is typically built around members and governed by a board of trustees. Incorporators often become initial members and trustees, but incorporators and trustees are conceptually distinct:

Incorporators: sign and file the AOI.
Trustees: comprise the governing board.
Members: comprise the corporate constituency with voting rights (unless the corporation is structured as a non-stock corporation without members, as discussed below).

3) Minimum Governance Body: Board of Trustees (Not Directors)

A. Trustees vs. Directors

Non-stock corporations are governed by a Board of Trustees (as opposed to a Board of Directors for stock corporations). The trustees are the corporation’s principal policy-making body and exercise corporate powers, conduct business, and control property—subject to the RCC, the AOI, and the by-laws.

B. Minimum and Maximum Number of Trustees

The RCC contemplates a board of not less than five (5) and not more than fifteen (15) trustees (as a general framework).

Practical consequence: Even though only two incorporators are required, a standard non-stock corporation generally still needs at least five individuals to serve as the initial trustees, because the AOI must name the initial trustees who will govern upon incorporation.

C. Trustee Term

As a baseline rule, trustees in non-stock corporations typically serve one (1) year and until their successors are elected and qualified, unless the RCC or applicable special rules provide otherwise.

D. Trustee Qualifications and Disqualifications (Baseline)

Common governance rules under the RCC include:

Trustees must comply with statutory disqualification rules (e.g., certain criminal convictions, findings of administrative liability involving fraud or breach of trust, or other grounds recognized by the Code and SEC rules).
Trustees are subject to fiduciary duties (duty of care, duty of loyalty, duty of obedience to corporate purpose and law).
Trustees may incur personal liability in exceptional cases (e.g., bad faith, gross negligence, unlawful acts, conflict-of-interest violations, or consenting to patently unlawful corporate acts).

4) Members: Required in Most Cases, But “Non-Stock Without Members” Is Possible

A. Member-Based Non-Stock Corporations (Typical Model)

Most non-stock corporations have members who elect trustees and exercise voting rights on fundamental corporate matters (e.g., amendments to AOI/by-laws, mergers, dissolution, disposition of substantially all assets, etc., as applicable under the RCC).

Key member concepts:

Membership classes may be created in the by-laws (e.g., regular, associate, honorary), with clear definitions of voting rights and qualifications.
Membership admission, suspension, expulsion, and dues/assessments must be governed by by-laws and due process standards consistent with law and jurisprudential fairness principles.

B. Non-Stock Corporations Without Members (Less Common, But Recognized)

A non-stock corporation may be structured without members, in which case governance is trustee-centered. In that structure:

The AOI/by-laws must clearly provide the manner of election/appointment of trustees, their terms, and how vacancies are filled.
Voting rights that would ordinarily belong to members are either not applicable or are allocated as permitted by the RCC and the entity’s constitutional documents.

This model is often associated (in practice) with some institutional or grant-making setups, but it must be implemented carefully to remain compliant with the RCC and SEC requirements.

5) Officers: Minimum Set and Key Qualifications

Non-stock corporations must appoint the officers required by the RCC and the by-laws. The typical minimum statutory officers include:

President
Treasurer
Secretary
(Plus other officers as may be provided in the by-laws, such as a vice-president, auditor, compliance officer, etc., depending on regulatory expectations and organizational needs.)

A. Secretary

Common statutory baseline: the corporate secretary must be a Filipino citizen and resident of the Philippines.

B. Treasurer

The treasurer is typically required to be a resident of the Philippines. (Some organizations and SEC processes also emphasize capacity to handle funds and bonding/internal controls depending on the entity’s nature.)

C. President

In many non-stock setups, the president is commonly elected from among the trustees, consistent with the by-laws and standard governance practice.

6) Incorporation Documents: What Must Be Filed and What They Must Contain

A. Articles of Incorporation (AOI) — Core Charter

The AOI is the corporation’s primary “constitution.” For a non-stock corporation, it typically includes:

Corporate name (subject to SEC naming rules; must be distinguishable and not misleading).
Specific purpose(s) (non-stock purposes must reflect not-for-profit character; the corporation is bound by its stated purposes).
Principal office address in the Philippines.
Corporate term (under the RCC, corporations generally have perpetual existence unless a limited term is specified).
Names, nationalities, and residences of incorporators.
Number and names of trustees who will act as the initial governing body.
Statement of capital structure (if any), contributions, or other relevant provisions appropriate for a non-stock entity (non-stock corporations do not issue capital stock, but may receive capital contributions, donations, endowments, or membership fees, subject to governance controls).
Other provisions consistent with law that the incorporators choose to include.

B. By-Laws — Internal Governance Rules

The by-laws operationalize governance. Typical by-law content includes:

Qualifications, rights, and obligations of members
Procedures for admission, discipline, and termination of membership
Notice and meeting rules (members’ meetings and trustees’ meetings)
Election rules for trustees and officers; quorum and voting rules
Creation and functions of committees
Rules on conflicts of interest, financial controls, and signatories
Custody of records and internal dispute processes

Under the RCC framework, by-laws must be adopted and filed within the statutory period required by law and SEC rules (commonly a fixed period from incorporation), and must not conflict with the RCC or the AOI.

7) Governance Mechanics: Meetings, Quorum, Voting, and Corporate Acts

A. Trustees’ Meetings

The board acts as a collegial body; individual trustees generally do not have authority to bind the corporation unless authorized.
Quorum for board meetings is generally a majority of the number of trustees fixed in the AOI/by-laws, unless the RCC or the by-laws require a higher threshold.
Board action generally requires a majority of those present at a meeting with quorum, unless otherwise required by the RCC/AOI/by-laws.

B. Members’ Meetings (If There Are Members)

Regular and special meetings must follow by-law notice rules.
Member quorum is commonly based on a majority of members (or as defined by the RCC and by-laws, depending on the voting structure and membership classes).
Major corporate actions often require member approval at statutory thresholds under the RCC (and sometimes higher thresholds in the AOI/by-laws).

C. Voting and Proxies

Non-stock corporations may allow proxy voting if permitted by the RCC and by-laws, subject to form and validity requirements. Voting rules must be carefully drafted for:

multiple membership classes
members in good standing vs. delinquent members
record dates and membership rosters

D. Fundamental Corporate Changes

Actions such as amendments to the AOI/by-laws, mergers/consolidations, dissolution, and sale/disposition of substantially all assets are governed by RCC procedures and approval thresholds (often requiring both board and member participation in member-based corporations).

8) Fiduciary Duties, Conflicts of Interest, and Accountability

Trustees and officers of a non-stock corporation are subject to fiduciary standards under the RCC:

A. Duty of Loyalty / Conflict Rules

Trustees and officers must avoid self-dealing and disclose conflicts.
Interested-director/trustee transactions are not automatically void but are subject to strict validity conditions under corporate law principles (fairness, disclosure, approval, and compliance with the RCC’s conflict standards).

B. Duty of Care

Trustees must act with the diligence of prudent persons in comparable positions.
Gross negligence, bad faith, or willful misconduct can create personal liability.

C. Duty of Obedience (Purpose-Driven Compliance)

Non-stock entities are especially constrained by their stated purposes. Acting outside stated purposes (ultra vires acts) can create governance and legal risk.

9) Nationality and Regulatory Considerations (Philippine Context)

A. Nationality Restrictions

Certain activities in the Philippines are subject to constitutional/statutory foreign ownership restrictions (e.g., mass media, certain utilities, exploitation of natural resources, etc.). Even though a non-stock corporation is not organized for profit, if it engages in regulated activities or holds interests where nationality matters, compliance may still be required.

B. Sector-Specific or Special-Law Entities

Some organizations that are commonly non-stock are governed by special laws and/or additional regulators, such as:

Educational institutions (subject to education-specific regulations)
Condominium corporations (special rules under condominium law)
Homeowners’ associations (special rules under HOA law and regulators)
Certain NGOs receiving public funds or engaged in regulated charitable solicitation may face additional compliance expectations

The RCC remains foundational, but special law prevails where applicable.

10) Practical Reality Check: “Minimum Incorporators” vs. “Minimum People to Operate”

A frequent misconception is that “two incorporators” means only two people are needed overall. In practice:

Minimum incorporators: 2 (RCC baseline)
Typical minimum trustees: 5 (board requirement baseline)
Required key officers: president, treasurer, secretary (plus any required by by-laws)

Because trustees and officers must be real persons with statutory qualifications (e.g., secretary citizenship/residency), forming a compliant non-stock corporation generally requires a small governance roster, even if incorporation signatures come from only two incorporators.

11) Common Drafting and Compliance Pitfalls

Mismatch between AOI and by-laws (e.g., trustee count, election rules, membership classes).
Vague or overly broad purposes that invite SEC objections or operational uncertainty.
Improper membership discipline (expulsions without due process safeguards in by-laws).
Trustee/officer conflicts without disclosure and approval mechanisms.
Dormant governance (no meetings, no elections, no minutes) which can create regulatory exposure.
Using “non-stock” as a label while operating for private benefit, risking findings inconsistent with not-for-profit character.

12) Core Takeaways

Two (2) incorporators are sufficient under the RCC for forming a non-stock corporation.
Governance is trustee-led: a non-stock corporation generally needs a Board of Trustees (commonly 5–15) and must follow statutory meeting, quorum, and fiduciary duty rules.
Many non-stock corporations are member-based, but a non-stock without members structure can be designed if the AOI/by-laws clearly provide for trustee selection and governance.
Mandatory officers and key qualifications—especially the corporate secretary’s Filipino citizenship and Philippine residency—are central compliance points.
SEC registration and ongoing corporate housekeeping (meetings, minutes, elections, proper filings) are not optional; they are part of maintaining corporate existence and good standing.