Post from the past: Management contracts

Soho Central Condominium Corporation Management contract dated August 24, 2009

The management contract had expired since the Philippine Corporate Code Title IV Section 44 states five (5) years as a maximum.  We were finally able to see a copy and it was dated August 24, 2009.  So there has been no contract with Century Properties Management Inc. (CPMI) since that August 24, 2014.  Also stated in Section 44 you may read below from a previous post is the clause requiring "at least a majority of the members in the case of a non-stock corporation" must approve a new management contract.  It is important to note that while Annual and Special Meetings of the Soho Central Condominium Corporation only allow those members (Unit Owners) to vote who are not delinquent in their dues and assessments, the Philippine Corporate Code makes no such restriction.  So all members (Unit Owners) delinquent or not are allowed the vote.  Additionally, the meeting must be "duly called for the purpose."  So does this mean an Annual Meeting may vote on the contract so long as it is stated or must there must be a separate meeting?  Of course the meeting may take place on the same day with all members, delinquent or not, allowed to vote.  Does anyone read this section differently?

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A vote for a management contract and period of management contracts up to five years

Was there a vote I am unaware of?  How is it that a contract is longer than five years given the Philippine Corporate Code Title IV Section 44?

...No corporation shall conclude a management contract with another corporation unless such contract shall have been approved by the board of directors and by stockholders owning at least the majority of the outstanding capital stock, or by at least a majority of the members in the case of a non-stock corporation, of both the managing and the managed corporation, at a meeting duly called for the purpose ... No management contract shall be entered into for a period longer than five years for any one term. ...


http://www.chanrobles.com/legal5title4.htm#.VCyxso0cTmI


BATAS PAMBANSA BLG. 68
THE CORPORATION CODE OF THE PHILIPPINES

TITLE IV — POWERS OF CORPORATIONSSECTION 44. Power to enter into management contract. — No corporation shall conclude a management contract with another corporation unless such contract shall have been approved by the board of directors and by stockholders owning at least the majority of the outstanding capital stock, or by at least a majority of the members in the case of a non-stock corporation, of both the managing and the managed corporation, at a meeting duly called for the purpose: Provided, That (1) where a stockholder or stockholders representing the same interest of both the managing and the managed corporations own or control more than one-third (1/3) of the total outstanding capital stock entitled to vote of the managing corporation; or (2) where a majority of the members of the board of directors of the managing corporation also constitute a majority of the members of the board of directors of the managed corporation, then the management contract must be approved by the stockholders of the managed corporation owning at least two-thirds (2/3) of the total outstanding capital stock entitled to vote, or by at least two-thirds (2/3) of the members in the case of a non-stock corporation. No management contract shall be entered into for a period longer than five years for any one term.

The provisions of the next preceding paragraph shall apply to any contract whereby a corporation undertakes to manage or operate all or substantially all of the business of another corporation, whether such contracts are called service contracts, operating agreements or otherwise: Provided, however, That such service contracts or operating agreements which relate to the exploration, development, exploitation or utilization of natural resources may be entered into for such periods as may be provided by the pertinent laws or regulations. (n)

SECTION 45. Ultra vires acts of corporations. — No corporation under this Code shall possess or exercise any corporate powers except those conferred by this Code or by its articles of incorporation and except such as are necessary or incidental to the exercise of the powers so conferred. (n)