PUBLIC INTERNATIONAL LAW

PUBLIC INTERNATIONAL LAW

• Branch of public law which regulates the relations of stats and of other entities which have been granted an international law.
  Rules based on the natural moral law and on common consent, which govern the relations of sovereign states and other international persons.
  

INTERNATIONAL LEGAL SYSTEMS CONSIST OF:

• Natural moral law principles
  Set of generally agreed-upon norms of conduct
  and certain authoritative processes for enacting and changing these aforementioned norms.

BASIS OF INTERNATIONAL LAW

1. NATURAL LAW SCHOOL- This theory postulates the natural moral law as the basis of PILA. The natural moral law may be said to b the voice of conscience, a rule of human conduct implanted by God in the very nature of man. Thru this law, a man is supposed to do whatever is right and to avoid whatever is evil. Thus, laws not in conformity with the moral nature cannot b binding on sovereign states.
2. POSITIVIST SCHOOL- Insists that the only basis of PILA is the common consent of states. This common consent, can be found in acquiescence to customs.
3. ECLECTIC SCHOOL- Maintains that PILA is premised both on natural moral law and on common consent.

PAQUETE HABANA

• In this case, Two fishing vessels, which during the Spanish and American war, while regularly engaged in fishing in Cuban coast, were seized by U.S. Navy. In Florida, to which they have been brought, they were considered by a U.S. district as prize of war. They appealed to the Supreme Court of US. They were exempted from such capture because of an international custom.
• International law is part of our law, and must be ascertained and administered by courts of justice of appropriate jurisdiction. For this purpose, where there is no treaty and no controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized nations; and as evidence of these, to the works of jurists and commentators who by years of labor, research, and experience have made themselves peculiarly well acquainted with the subjects of which thy treat.
  

WEST RAND CENTRAL GOLD MINING CO. LTD VS. THE KING

• Government officials of Republic of South Africa allegedly seized two parcels of gold owned by West Rand. Subsequently, the Republic was conquered by Great Britain. The company filed a suit against Great Britain to recover said parcels, on th ground that as conqueror it had the duty to assume obligations of the conquered South African Republic.
  
• In this case, particular doctrine alleged had not been adequately proved. Thus, it was held that Great Britain is not bound by the obligations of the Republic of South Africa. Although it is true that whatever has received the common consent of civilized nations must have received assent of Great Britain. But any doctrine so invoked must be one really accepted as binding among nations.
  
• The mere opinions of jurists, however eminent or learned, that it ought to be so recognized are not in themselves sufficient. They must have received the express sanction of international agreement or gradually have grown to be part of international law by their frequent practical recognition in dealing between various nations.

Q: Is International Comity a source of international law?

A: NO. It is distinctly the contrast to the law of nations. But there can be no doubt that many a rule which formerly was a rule of international comity only is nowadays a rule of international law.

Q: What is the difference between SUBJECT and OBJECT of International Law?

A: SUBJECT is an entity directly possessed of rights and obligations in the international legal order. While as an OBJECT is merely indirectly vested with rights and obligations in the international sphere.
Q: Are Private Individuals regarded as OBJECT of International law?

A: No. They are SUBJECT. But while an individual is a subject of international law, his capacity as such is different from that of his state. Thus, he cannot make treaties and cannot possess belligerent rights. But it is clear that he can commit war crimes and piracy, and crimes against humanity and foreign sovereigns; he can own property which international law protects for acts arising ex contractu or ex delicto. He may not be able to pursue his claims and take action to protect his property without intervention of his own State, but it is still his claim and still his interest which the machinery of enforcement is designed to facilitate.

THE NUREMBERG JUDGMENT

• One of the defenses raised by the war criminals in Germany was that they themselves are mere individuals were not directly liable for their acts; that they were merely carrying out the orders of Hitler and that individuals have no international duties.
• International law punishes not only states but also individuals. This rule has long been recognized. Crimes against international law are committed by MEN, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced.

COUNT BERNADOTTE CASE

• Count Bernadotte was assassinated, while working as part of a United Nations Commission in Israel. The General Assembly requested the International Court of Justice to render an advisory opinion as to whether or not the UN can bring an international claim against the government responsible for the killing.
  It was held that the UN can bring such a claim. Competence to bring an international claim is the capacity to resort to the customary methods recognized by international law for the establishment, the presentation, and the settlement of claims. Among these methods may be mentioned:
  1. protest
  2. request for an inquiry
  3. negotiation
  4. and request for submission to an arbitral tribunal or to the World Court insofar as this may be authorized by its Statute.
• The UN was clearly intended by the Charter to exercise and enjoy functions, and rights which can only be explained on the basis of the possession of a large measure of international personality and the capacity to operate upon an international plane. It must be acknowledged that its members, by entrusting certain functions to it, with the attendant duties and responsibilities, have clothed it with the necessary competence. According, the court has come to the conclusion that the UN is an international person and may bring an international claim even against a non-member, considering that the UN represents the vast majority of the members of the international community.

DEPENDENT STATES

They are subject to the control and sovereignty of some other “superior” states in the conduct of their external and foreign relations. They may be allowed some control in foreign matters they are considered as international persons; if they have no authority whatsoever on this point, their personality is restricted. They may not even be accorded any status as international entities.

TWO KINDS OF DEPENDENT STATES:

PROTECTORATE
SUZERAINTY


PROTECTORATE STATE

Possesses all competence in international affairs which it has not expressly and specifically waived or renounced. The protectorate, to a certain degree may be said to be possessed of an international personality.

SUZERAINTY STATE

Has only such competence as has been specifically conferred upon it by the suzerain. In other words, suzerainty is MORE DEPENDENT than a protectorate, and for exactly this reason, the relationship between the suzerainty and the suzerain is much closer than that existing between the protectorate and its protector.
Only suzerain has been accorded international status. The suzerainty is generally only vassal or tributary in character.


BELLIGERENT COMMUNITIES

When insurgency reaches serious proportions, the rebels, instead of being merely insurgents, may properly be called “belligerents” and their community a “belligerent community” provided the following conditions all concur:

The end must be POLITICAL in character;
The hostilities must be of the CHARACTER OF WAR, and must be carried on in accordance with the laws of war;
The proportions of the revolt must be such as to render the issue uncertain and to make its continuance for a considerable time possible;
The conduct of the hostilities and general government of the revolting community must be in the hands of a responsible organization.

Has been recognized and accorded a certain status in the international order, insofar does it possess an international personality – but only for a limited period.


INSURGENTS COMMUNITIES

Insurgents or rebels may be said to be organized groups who for PUBLIC POLITICAL purposes are in a STATE OF ARMED HOSTILITY towards an established government. As such, they have no rights under international law, but if the civil strife threatens to interfere with the autonomy of foreign intercourse, and has assumed such proportions as to jeopardize the sovereignty of the state over the insurgent community, certain insurgent rights may be tacitly admitted.
No insurgent rights arise, if the ends are not political and are obviously private in character.
Even if a foreign state admits the existence of insurgent rights, the parent state would still be liable for acts committed by the insurgent community within the jurisdiction of said parent state.
In case of hostile acts committed by the insurgents against foreign state, the latter may choose to punish them, or turn them over to the parent state.
A foreign state ought in general to refrain from interfering in the hostilities between the parent state and the insurgent community. Interning of the insurgents may however be allowed. At the discretion of the foreign state, it may of course grant temporary entry or asylum.
Just because an insurgent community has been given certain insurgent rights, it does not necessarily follow that the community has acquired the status of a belligerent. Neither is there an official recognition of the insurgents as a belligerent community as contra-distinguished from a mere insurgent community.


Q: Are Colonies, dependencies, and possessions considered as states?

A: No. They are part and parcel of the territory to which they may belong, and cannot therefore be a state. However, international legal orders grants them in a very restricted degree some international personality.


COLONY

Is a dependent political community, consisting of a number of citizens of the same country who have migrated therefrom to people of another country, but remain subject to the mother state.

DEPENDENCIES

Is a territory distinct from the country in which the supreme sovereign power resides, but belonging rightfully to it, and subject to the laws and regulations which the sovereign may think proper to prescribe.


Q: How does a dependency distinguish from a colony and possession?

A: Dependency is said to be distinguished from a colony in that the former is not necessarily settled by the citizens of the sovereign or mother state, and from a possession in that it is held by a title other than of mere physical conquest.


MANDATES


Were former territorial possessions of the states defeated in the First World War; they were placed under the control of the League of Nations and the so-called Mandatories. After the Second World War, many of these mandates became trust territories under the supervision of the UN, the Trusteeship Council, and the so-called Administering Authorities.
They were created to afford a chance for them to be developed economically and socially by more advanced nations.


TRUST TERRITORY


Is a qualified or quasi-international personality in the sense that it has some rights and obligations in the international order;
However, he Administering Authority exercises the power of sovereignty over them, although of course they cannot be ceded to others without the approval of the UN inasmuch as they do not form part of the territory of the Administering Authority.
The inhabitants of the trust territory do not become nationals or citizens of the Administering Authorities;
They are not generally affected by treaties concluded by the Administering Authorities. It shall be the duty of the Administering Authority to ensure that the trust territory shall play its part in the maintenance of international peace and security.
The Administering Authority may make use of volunteer forces, facilities, and assistance from the trust territory in carrying out the obligations towards the Security Council undertaken in this regard by the Administering Authority, as well as for local defense, and the maintenance of law and order within the trust territory.


PRIVATE CORPORATION

Usually fall under the domain of private international law, particularly where their rights are involved;
However, they are discussed also in public international law when in time of war, their property and other rights are impaired, or when, whether in time of peace or of war, maritime law has been infringed.


PUBLIC CORPORATION

Have delegated political powers and assume quasi-international status.
While usually restricted by the functions enumerated in their respective charters, these companies often performed acts not warranted by said charter. Their home government sanctioned their actuations, and so in time, they more or less were invested with certain powers of sovereignty; like the power to govern, and the power to enter into and conclude wars.

SCHROEDER VS. BISSEL COLLECTOR

• Under Sec. 447 of the American Tariff Act of 1922, it is unlawful for any ship to upload any part of its cargo of goods at a place other than a port of entry. An English vessel unloaded part of its cargo at a place 19 miles away from the coast of the US, whereupon it was seized by the American coast guard. It was alleged that the seizure violated the tenets of international law because it had been made beyond the territorial or maritime zone of the US.
• It was held that the seizure us valid despite the alleged violation. What is important is that a statute of the US has been violated.
• International law is law in so far as we adopt it, and like all common or statute law, it bends to the will of Congress, even if the act may contravene recognized principles of international comity.
  
  

ACT OF STATE DOCTRINE

• Is the doctrine that a state should not inquire into the legal validity of the public acts of another state done within the territory of the latter.
• “Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.

Q: Is the “Act of State Doctrine” a principle of International Law?

A: No. Failure to apply the doctrine does not constitute a breach of international obligation, but neither does international law forbid the application of the rule.


Q: What is the usual remedy of the citizen aggrieved by an act of state of a foreign country?

A: It is not for the citizen to go to the courts of his own country, but for him to exhaust the local remedies in the foreign country and failing in this, to repair to the executive authorities of his own state to persuade them to champion his claim in diplomacy on or before an international tribunal.


THE SABBATINO CASE

BANCO NACIONAL DE CUBA VS. SABBATINO

• An American broker entered into a contract with a Cuban Corporation for the sale of Cuban Sugar.
  Because of antagonism between US Government and Cuban Government, The latter “expropriated” the properties and rights of the corporation.
• To make sure that the sugar would be shipped to the US, the broker entered into a contract with Cuban Government instrumentality, promising to make payment to the latter.
• The governmental instrumentality then assigned its rights to another Cuban governmental entity, Banco Nacional de Cuba.
• The bank subsequently instructed its New York agent to deliver the necessary documents to the broker, who in turn was supposed to turn over the payment to the New York agent.
• The agent turned over the documents to the broker, but the broker refused to give the money.
• The Bank then brought this action to recover the payment for the broker, as well as to prevent Sabbatino from making use of said purchase price.
• The first court ruled against the Cuban bank, stating that inasmuch as there was a violation of international law, the act of state doctrine could not be applied.
• CA affirmed the decision.
• On appeal to the US SC, the court held that the “act of state” doctrine can be applied for while this is not a recognized principle of international law, neither dos international law prohibits its application.

SABBATINO AMENDMENT

• Requires American Courts to decide a case on the merits if there is an alleged violation of the principles of international law in connection with expropriation or confiscation by a foreign state of private properties.
• An important exception is made in any case with the President determines that application of the act of state doctrine is required in that particular case by the foreign policy interests of the US , and a suggestion to this effect is filed on his behalf in that case with the court.
• Constitutional and can be given retroactive effect.
  

CORPORATION LAW part II

CORPORATION BY ESTOPPEL

• The doctrine of corporation by estoppel is based on equitable consideration and resorted to in fairness to all concerned. It applies against a third party dealing with the ostensible corporation "only when tries to escape liability on a contract from which he has benefited on the irrelevant ground of defective incorporation.
• The rule that a third party cannot deny the corporate existence of the association because it had contracted and dealt with it in such a manner as to recognize and in effect admit its existence does not apply if the third party "is not trying to escape liability from the contract but rather is the one claiming from the contract" ( INTERNATIONAL EXPRESS TRAVEL AND TOURS VS. CA)

SEC. 21

Corporation by estoppel - All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof; Provided, however, that when any such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such it shall not be allowed to use as a defense its lack of corporate personality.

QUALIFICATION OF DIRECTORS

1. Must own at least 1 shares of capital stocks of the corporation of which he is a director
2. Standing in his name in the books of corporation

Sec. 25

Every director must own at least 1 share of the capital stock of the corporation of which he is a director, which share shall stand in his name in the books of the corporation. Any director who ceases to be the owner of at least 1 share of the capital stock of the corporation of which he is a director xxx

• Apparent from the provision is that a director who ceases to be an owner of a share of stock becomes automatically disqualified to be and act as a director. Thus, if he assigns his shares and the same is recorded in the books of the corporation, he can not act for and in behalf of the corporation despite the fact that he may remain the beneficial owner of the shares assigned or transferred. Whoever is the registered owner as "appearing in the books" of the corporation has the right to vote or be voted for.

Q: Can a transferor in the VTA still be qualified to be a director?

A: No. The immediate effect of VTA is that the transferor becomes a beneficial owner, thus, he becomes disqualified or ineligible to be a director. Under the NCC, which ommitted the phrase "in his own right", what is material is the legal title to, not the beneficial ownership of the stocks as appearing in the books of the corporation. That is whoever owns the shares as appearing in the books of corporation, becomes eligible to be elected and act as a director. (LEE VS. CA)

Q: What is the purpose of VTA?

A: The purpose of VTA is to confer upon the trustee the right to vote and other rights pertaining to shares, for a period not exceeding 5 years.

Q: What is the effect of VTA?

A: The certificate of stock is cancelled and a new one will be issued to the transferee. Thereafter, it shall be noted in the books of corporation. Once entered into VTA, the transferor ceases to be owner of at least 1 share of stocks standing in his name in the books of corporation. He becomes a mere beneficial owner. He ceases to have anything to do with the management of the enterprise. He ceases to become a director or becomes ineligible to as such.

Q: When does VTA expires?

A: Upon full payment of the loan.

Q: What are the conditions or requirements of VTA?

A: It must be in writting and notarized, specifying theterms and conditions. The certificate of agreement must be filed with the corporation and the SEC.

Q: What is the effect if the certificate is not filed?

A: It becomes ineffective and unenforceable.

SERVICE OF SUMMONS

Q: To whom summons may be served if the defendant is a corporation, partnership or association, organized under the laws of the Philippines with a juridical personality?

A: Service of summons may be made upon;

1. President
2. Managing Partner
3. General Manager
4. Corporate Secretary
5. Treasurer
6. In-house Counsel

Q: Can liberal construction be invoked or utilized as to the service of summons?

A: No. Strict compliance is necessary to confer jurisdiction. Service must be made to the one who is named in the statute. (E.B VILLAROSA & PARTNERS CO.LTD VS. BENITO)

COMPENSATION OF DIRECTORS

• In the absence of any provision in the by-laws fixing their compensation, the directors shall not receive any compensation, as such director, except for reasonable per diems xxx

" AS SUCH DIRECTORS"

• Western Institute of Technology vs. Salas, explains the phrase "as such director" when SC held valid the questioned resolution, which was passed by the Board of directors, who are themselves the Chairman, Vice Chairman, Secretary and Treasurer, granting compensation for their services. The compensation was for the services rendered by them as officers of the corporation and not as such directors.

LIABILITY OF DIRECTORS/ TRUSTEES AND OFFICERS

• As a General Rule, Corporate Directors, Officers and Agents are not liable for obligations incurred by corporation through their acts if they did so within the scope of their authority in good faith.

Q: When can they be held liable?

A: Personal liability of corporate directors, trustees or officers with the corporation may validly attach, as a rule only when;

1. He ASSENTS to a patently unlawful act of the corporation; for bad faith or gross negligence in directing its affairs; or for conflict of interest resulting in damages to the corporation, its stockholders or other persons.
2. He CONSENTS to the issuance of watered stocks, or who having knowledge, thereof, does not file his written objection thereto.
3. He AGREES to hold himself personally and secondarily liable to the corporation.
4. He IS MADE BY SPECIFIC PROVISION OF LAW to personally answer for the corporate action.

Llamado vs. Ca

• In this case, the Corporate Secretary and the Treasurer issued and signed checks with ISF. The court held them personally liable. This is because corporate officers are made so liable as such under Sec. 1 of BP. 22, which provides that;
• " Where a check is drawn by a corporation, company or entity, the person or persons who actually signed the checks in behalf of such drawer shall be liable under this act."

Uichico vs. CA

• In this case, the court held corporate directors and officers liable for the termination of its employees for the feigned ground of serious business losses.
• In Labor cases, corporate directors and officers are solidarily liable with the corporation for termination of employees done with malice or bad faith.

DOCTRINE OF SECONDARY MEANING

• A word or phrase originally incapable of exclusive appropriation with reference to an article in the market, because of geographically or otherwise descriptive might nevertheless have been used so long and so exclusively by one producer with reference to his acrticle that, in that trade and to that branch of purchasing public, the word or phrase has become to mean that the article was his product.

DOCTRINE OF CORPORATE OPPORTUNITY

• Rest fundamentally on unfairness, in particular circumstances of an officer/director taking advantage of an opportunity for his own personal profit when the interest of the corporation justly calls for protection.

CORPORATE ENTITY THEORY

• As a legal entity, the corporation is possessed with a personality seperate and distinct from the individual stockholders/members and is not affected by the personal rights obligations or transactions of the latter.

PIERCING THE VEIL OF CORPORATE FICTION

• Notion of corporate legal entity is not at all times respected. Corporate entity theory is confined to legitimate transactions and is subject to equitable limitations to prevent its being used as a cloak or cover for fraud or illegality, or to work an injustice.
• It is a fundamental principle in corporation law that a corporation is an entity seperate and distinct from its stockholders or members and from other corporation to which it may be connected. But when the notion of legal entity is being used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as a mere association of persons, or in the case of two corporations, merge them into one, the one being merely regarded as part or instrumentality of the other. Same is true when a corporation is a mere dummy and serves no business purpose and is intended only as a blind, or an alter-ego or business conduit for the sole benefit of the stockholders.

INSTRUMENTALITY RULE

• States that when one corporation is so organized and controlled and its affairs are conducted so that in fact a mere instrumentality or adjunct of the other, the fiction of corporate entity of the instrumentality may be disregarded. The control necessary is to invoked the rule is not majority or complete stock control but such domination of finances, policies and practices that the controlled corporation has, so to speak, no seperate mind, will or existence of its own and is but a conduit for its principal. The control and the breach of duty must proximate cause the the injury or loss for which the complaint is made.

TEST IN DETERMINING THE APPLICABILITY OF THE RULE:

1. Control, not merely majority but complete control and domination not only of finances but of policies and practices so that the corporate entity so controlled has no seperate mind, will or existence of its own.
2. Such control was used to commit fraud or wrong to perpetuate the violation of a statutory or positive duty, or dishonest or unjust act in contravention to plaintiff's legal rights; and
3. Said control and breach of duty must proximately cause the injury or loss complained of.

***Absent any one, piercing the veil of corporate fiction will not be justified.

"IN HIS OWN RIGHT" vs. "STAND IN HIS NAME ON THE BOOKS OF CORP"- with regard to qualification of director/trustee

• The phrase "in his own right" was already deleted under Sec. 23 with regard to the qualification of a director or trustee. Hence, there is a clear indication that in order to be eligible as director, what is material is the LEGAL TITLE, not the BENEFICIAL OWNERSHIP, of stock as appearing on the books.

ULTRA-VIRES ACTS- Doctrine of Limited Capacity

• Those that can not be executed or performed by a corporation because they are not within its express, inherent or implied powers as defined by its charter or articles of incorporation. It allows collateral attack upon the authority of corporation to engage in such particular endeavor. May not be necessarily illegal but merely beyond the power of the corporation to perform.

Q: May ultra-vires acts which are not illegal per se become binding and enforceable?

A: Yes. Mere ultra-vires acts or those which are not illegal per se and void ab initio, but are not merely within the scope of AOI are voidable and may become binding and enforceable when ratified by the stockholders. Unless, thepublic or third parties are therby prejudiced. ( PRIVANO, ET AL VS. DE LA RAMA STEAMSHIP CO.)

Q: May ultra-vires acts which are illegal be subject to ratification?

A: No.

Q: Does the liability of an accomodation party apply in a corporation?

A: No. An accomodation party liable on the instrument to a holder for value although such holder at the time of taking the instrument knew him to be only an a accomodation party, does not include nor apply to corporation which is an accomdation party. This is because the issue or indorsement of negotiable paper by a corporation without consideration and for the accomodation of another is ultra-vires. Hence, one who has taken the instrument with knowledge of the accomodation nature thereof can not recover against a corporation. Except, when an officer or agent of a corporation execute or indorse it with authority.

Q: Do President and Vice President have the power to execute for mere accomodation a negotiable instrument of corporation for ther individual debts or transactions arising from or in relation to matters in which the corporation has no legitimate concern?

A: None. In fact, it can not be enforced against corporation, escpecially since it is not involved in any aspect of the corporate business or operations. Signatories thereof shall be primarily liable therefor, as well as the consequences arising from their acts in connection therewith. (CRISOLOGO-JOSE VS. CA)

CONSEQUENCES OF ULTRA VIRES ACT:

1. ON CORPORATION ITSELF

• May suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporation for serious misrepresentation as to what the corporation can do or is doing to the great damage or prejudice of general public.

2. ON THE RIGHTS OF STOCKHOLDERS

• Stockholder may bring either an individual or derivative suit to enjoin a threatened ultra-vires act or contract.
• If act or contract has already been performed, a derivative suit for damages against the directors may be filed, but their liability will depend on whether they acted in good faith and with reasonable diligence in entering into the contract.

3. ON THE IMMEDIATE PARTIES

• If the contract is fully executed on both sides, the contract is effective and the courts will not interfere to deprive either party of what has been under it;
• If the contract is executory on both sides, as a rule, neither party can maintain an action for its non-performance; and,
• Where the contract is executory on one side only and has been fully performed on the other, the courts differ as to whether an action will lie on the contract against the party who has received benefits of performance under it. Majority of the courts, however, hold that the party who has received benefits from the performance is "estopped" to set up that the contract is ultra vires to defeat an action on the contract. This is more in conformity with the doctrine that no person shall be allowed to enrich himself at the expense of the other.

BY-LAWS

• Rules and ordinance made by a corporation for its own government to regulate the conduct and define the duties of the stockholders or members towards the corporations and among themselves.
• Express power granted to all corporations registered under the corporation code.

Q: Is the adoption of By-Laws mandatory?

A: Yes.

Q: When should the by-laws be adopted?

A:

1. PRIOR TO THE INCORPORATION - The same must be signed by all incorporators without the need of affirmative vote of the majority of the outstanding capital stock or the majority of the members in case of a non-stock corporation
2. AFTER INCORPORATION - Stockholder's or member's consent or approval would be required. In such case, it must be signed by the stockholders or members voting for them. The corporation must adopt with in a period of one month after receipt of notice of its due incorporation.

Q: What will happen if adopted/filed not in accordance with the provisions of Sec. 14?

A: Failure to comply may result to suspension or revocation of its corporate franchise after proper notice and hearing.

Q: Will it result to automatic dissolution?

A: No outright demise of corporate existence. The incorporators must be given a chance to explain their neglect or omission. (LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOC., INC. VS. CA)

Q: When do by-laws become effective?

A: Upon approval of the SEC.

Q: What if the SEC failed to act within the period of 6 months, does its inaction result to effectivity?

A: No. Last paragraph of Sec. 16 with regard to the inaction of SEC within 6 months applies only to Articles of Incorporation. Still, approval of SEC is necessary for the effectivity of by-laws.

TWO MODES OF AMENDING OR REPEALING BY-LAWS/ADOPTING A NEW ONE:

1. MAJORITY VOTE of the directors or trustees and majority vote of outstanding capital stock or members in a non-stock corporation at a regular or special meeting duly called for the purpose.
2. DELEGATION to the board of directors or trustees the power to amend or repeal any by-laws or adopt a new one.

Q: Who may delegate to the board of directors or trustees such powers?

A: The owners of 2/3 of outstanding capital stock or 2/3 of members in a non-stock corporation.

Q: Can the BOD/BOT by itself amend the by-laws?

A: Yes.

Q: Are stockholders presumed to know the provisions of by-laws?

A: Yes. Conclusively presumed. ( FLEISCHER VS. BOTICA NOLASCO, INC.)

Q: What about third parties?

A: They are not presumed to know the by-laws.

ELEMENTS OF A VALID BY-LAWS - CIGIR

1. Must not contrary to lae, public policy or morals.
2. Must not be inconsistent with the Articles of Incorporation.
3. Must be general and uniform in its effect or applicable to all alike or those similarly situated.
4. Must not impair obligations and contracts or vested rights.
5. Must be reasonable.

Q: May the provision of by-laws provides meeting be held anywhere in the Philippines?

A: No. Contrary to the Law (Sec. 51). Meeting which may be held anywhere in the Philippines applies only to a non-stock corporation.

Q: May by-laws provide non-member be a President?

A: No. Contrary to law. ( GOKONGWEI VS. SEC )

Q: May the provision of by-laws provide for continuing compensation even after their service?

A: No. Contrary to law. ( BARETTO VS. LA PREVISORA FILIPINO )

Q: In case of discrepancy between AOI and by-laws, what should govern?

A: Articles of Incorporation.

MEETINGS

• Applies to every duly convened assembly either of stockholders, members, directors or trustees, managers, etc. for any legal purposes, or the transaction of business of common interest.

STOCKHOLDER'S REGULAR MEETING

• Those held ANNUALLY on a date fixed in by laws, or if not so fixed, on any date of April of every year as the BOD/BOT may determine.

STOCKHOLDER'S SPECIAL MEETING

• Shall be held any time deemed necessary or as provided in the by-laws.

Q: May the notice of any meeting be waived?

A: Yes. It may be waived expressly or impliedly by the stockholder or member.

Q: What is the notice requirement in meeting?

A: 2 weeks prior if Regular Meeting/ 1 week prior if Special Meeting.

Q: May sending of notices be shortened or extended?

A: Yes. By-laws may extend or shorten notice whether for Regular or Special Meetings.

REQUIREMENTS FOR VALID STOCKHOLDER'S MEETING:

1. Held on the date fixed in the by-laws or in accordance with law.
2. Prior notice must be given
3. Must be held at the proper place
4. Must be called by proper party
5. Quorom and voting requirements must be met.

Q: Where should stockholder's meetings shall be held?

A: Must at all times, be held in the city or municpality where the principal office of the corporation is located. However, Non-stock members are given privelege to hold their meetings anywhere in the Philippines, provided proper notice is sent to all membersindicating the date, time and place of meeting which shall be within the Philippines.

Q: Who presides at the meeting of directors?

A: President

PERSON OR PERSONS WHO MAY CALL THE MEETING:

1. Person or persons authorized under a by-law provision;
2. Absent of any provision in the by-laws, it may be called by the president;
3. By the secretary on order of the President or on written demand of the stockholders representing or holding at least a majority of the outstanding capital stock or majority of the members entitled to vote in a non-stock corporation, or the stockholder or member making the demand if there is or secretary if he refuses to do so, under Sec.28; and
4. On order of the SEC pursuant to Sec. 50 of the code.

Q: Who may call a meeting if there is no person authorized to do so?

A: For any cause, the SEC, upon petition of a stockholder or member, and on showing of "good cause" therefor, may issue an order to the petitioning stockholder or member directing him to call a meeting of the corporation by giving proper notice required by this code or by the by-laws.

Q: In such case, who shall preside?

A: The petitioning stockholder or member shall preside thereat until at least a majority of the stockholders or members present have chosen one of their number as presiding officer.

CORPORATION LAW part I

CORPORATION

• An artificial being created by operation of the law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

ATTRIBUTES:

1. Artificial being
2. Created by operation of the law
3. Rights of succession
4. Powers, attributes and properties expressly authorized by law or incident to its existence

ADVANTAGES OF CORPORATE FORM OF BUSINESS:

1. Capacity to act as a single unit
2. Limited stockholder's liability
3. Continuity of existence
4. Feasibility of greater undertaking
5. Transferability of Shares
6. Centralized Management
7. Standardized method of organization, management and finance

DISADVANTAGES OF THE CORPORATE FORM OF BUSINESS:

1. Formal proceedings sush as Board meetings are required (to have a valid & binding corporate act).
2. Business transaction is limited to the State of its incorporation and may not act as such corporation in other jurisdiction, unless it has obtained license or authority from foreign state.
3. Shareholder's limited liability tends to limit the credit.
4. Transfer of Share may result to uniting incompatible and conflicting interests.
5. Minority shareholders have practically no say in the conduct of corporate affairs
6. In large scale enterprises, stockholder's voting rights may become merly fictitious and theoretical because of disinterest in management,wide scale ownership and inaccessible place of meeting.
7. Double taxation may be imposed on corporate income.
8. Corporation are subject to governmental regulations supervision and control including submission of reportorial requirements and otherwise imposed in other business form.

Q: What are the two requisites for a stockholder to exists?

A:

1. Capital Stock divided into shares
2. Authority to distribute to the holders of such shares dividends or allotments of surplus profits. (CIR VS. CLUB FILIPINO, INC. OF CEBU)

Q: What law should govern those corporations created by special law or charter?

A: They shall be governed primarily by the provisions of the special law or charter creating them, supplemented by the provisions of Corporation Code, in so far as they are applicable.

Q: Is registration with SEC required for them to acquirea legal and juridical personality?

A: No. They are their existence as such not by virtue of their compliance with the requirements of registration under the corporation code but by virtue of the law specially creating them.

Q: What is the test in determining whether they are governed by the Civil Service Law?

A: The manner of their creation.

Q: If they are incorporated under General Corporation Law?

A: Employee and Employer relationship shall be governed by the Labor Code. (PNOC-ENERGY DEV'T CORP VS. NLRC)

INVESTMENT LAW (provisions of Phil.Consti)

ARTICLE 2

Section 18.

The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

Section 19.

The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.

Section 20.

The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

ARTICLE 12

Section 1.

The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the under-privileged.
The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.

Section 2.

All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish- workers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.

Section 3.

Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.

Section 4.

The Congress shall, as soon as possible, determine, by law, the specific limits of forest lands and national parks, marking clearly their boundaries on the ground. Thereafter, such forest lands and national parks shall be conserved and may not be increased nor diminished, except by law. The Congress shall provide for such period as it may determine, measures to prohibit logging in endangered forests and watershed areas.

Section 5.

The State, subject to the provisions of this Constitution and national development policies and programs, shall protect the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social, and cultural well-being.
The Congress may provide for the applicability of customary laws governing property rights or relations in determining the ownership and extent of ancestral domain.

Section 6.

The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands.

Section 7.

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

Section 8.

Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.

Section 9.

The Congress may establish an independent economic and planning agency headed by the President, which shall, after consultations with the appropriate public agencies, various private sectors, and local government units, recommend to Congress, and implement continuing integrated and coordinated programs and policies for national development.
Until the Congress provides otherwise, the National Economic and Development Authority shall function as the independent planning agency of the government.

Section 10.

The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.

Section 11.

No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.

Section 12.

The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.

Section 13.

The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.

Section 14.

The sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers, high-level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the State. The State shall encourage appropriate technology and regulate its transfer for the national benefit.
The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law.

Section 15.

The Congress shall create an agency to promote the viability and growth of cooperatives as instruments for social justice and economic development.

Section 16.

The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.

Section 17.

In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest.

Section 18.

The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government.

Section 19.

The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.

Section 20.

The Congress shall establish an independent central monetary authority, the members of whose governing board must be natural-born Filipino citizens, of known probity, integrity, and patriotism, the majority of whom shall come from the private sector. They shall also be subject to such other qualifications and disabilities as may be prescribed by law. The authority shall provide policy direction in the areas of money, banking, and credit. It shall have supervision over the operations of banks and exercise such regulatory powers as may be provided by law over the operations of finance companies and other institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the Philippines operating under existing laws, shall function as the central monetary authority.

Section 21.

Foreign loans may only be incurred in accordance with law and the regulation of the monetary authority. Information on foreign loans obtained or guaranteed by the Government shall be made available to the public.

ARTICLE 13

Section 1.

The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

Section 2.

The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

ARTICLE 14

Section 4.

(1) The State recognizes the complementary roles of public and private institutions in the educational system and shall exercise reasonable supervision and regulation of all educational institutions.

(2) Educational institutions, other than those established by religious groups and mission boards, shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the capital of which is owned by such citizens. The Congress may, however, require increased Filipino equity participation in all educational institutions.
The control and administration of educational institutions shall be vested in citizens of the Philippines.
No educational institution shall be established exclusively for aliens and no group of aliens shall comprise more than one-third of the enrollment in any school. The provisions of this subsection shall not apply to schools established for foreign diplomatic personnel and their dependents and, unless otherwise provided by law, for other foreign temporary residents.

(3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties. Upon the dissolution or cessation of the corporate existence of such institutions, their assets shall be disposed of in the manner provided by law.
Proprietary educational institutions, including those cooperatively owned, may likewise be entitled to such exemptions, subject to the limitations provided by law, including restrictions on dividends and provisions for reinvestment.

(4) Subject to conditions prescribed by law, all grants, endowments, donations, or contributions used actually, directly, and exclusively for educational purposes shall be exempt from tax.

ARTICLE 16

Section 10.

The State shall provide the policy environment for the full development of Filipino capability and the emergence of communication structures suitable to the needs and aspirations of the nation and the balanced flow of information into, out of, and across the country, in accordance with a policy that respects the freedom of speech and of the press.

Section 11.

(1) The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.
The Congress shall regulate or prohibit monopolies in commercial mass media when the public interest so requires. No combinations in restraint of trade or unfair competition therein shall be allowed.

(2) The advertising industry is impressed with public interest, and shall be regulated by law for the protection of consumers and the promotion of the general welfare.
Only Filipino citizens or corporations or associations at least seventy per centum of the capital of which is owned by such citizens shall be allowed to engage in the advertising industry.
The participation of foreign investors in the governing body of entities in such industry shall be limited to their proportionate share in the capital thereof, and all the executive and managing officers of such entities must be citizens of the Philippines.

INVESTMENT LAW

(Syllabus by: Atty. Minda C. Gapuz)

INVESTMENT

• Equity participation in any enterprise formed, organized or existing under the laws of the Philippines.

FOREIGN INVESTMENT

• Equity investments owned by a non-Philippine national made in the form of FOREIGN EXCHANGE or OTHER ASSETS actually transferred to the Philippines and registered with the Central Bank and the Board, which shall assess and appraise the value of such assets other than foreign exchange.

PHILIPPINE NATIONALS

• A CITIZEN of the Philippines; or
• A DOMESTIC PARTNERSHIP or ASSOCIATION wholly-owned by citizens of the Philippines; or
• A CORPORATION organized under the laws of the Philippines of which at least 60% of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines; or
• A TRUSTEE for pension or other employee retirement or seperation benefits, where the trustee is a Philippine national and at least 60% of the fund will accrue to the benefit of the Philippine Nationals.

*** Provided, that where a corporation and its non-Filipino stockholders own stock in a registered enterprise, at least 60% of the capital stock outstanding and entitled to vote of both corporations must be owned and held by the citizens of the Philippines and at least outstanding 60% of the members of the Board of Directors of both corporations must be citizens of the Philippines in order that the corporation shall be considered a Philippine National.

INVESTING

• Covers making an equity investment in the Philippines through ACTUAL REMITTANCE of foreign exchange, TRANSFER of assets, whether capital goods, patents formulae or OTHER TECHNOLOGICAL PROCESSES etc., which requires registration with the Bangko Sentral, SEC and other concerned entity.

CLASSIFICATION OF INVESTMENTS:

1. Foreign
2. Local

FORM OF INVESTMENT:

1. Foreign Exchange
2. Technical Services
3. Assets (Machineries, Equiptment etc.)
4. Intangible Assets ( Patents, Franchise, Inventions etc.)

WHAT CONSTITUTES "DOING BUSINESS" IN THE PHILIPPINES?

It includes: SAPA

1. Soliciting orders, service contracts, opening of office/liason/branch
2. Appointing representatives or distributors operating under the full control of foreign corporation domiciled in the Philippines
3. Participating in management, supervision control of any domestic corporation
4. Any other acts which imply a CONTINUITY OF COMMERCIAL DEALINGS/ARRANGEMENTS in a progressive prosecution of commercial gain/purpose/object of the organization.

OBJECTIVE OF GOVERNMENT

• To Accelerate sound development of national economy which are enshrined in the 1987 Philippine Constitution.

WHAT ARE THE POLICIES OF THE GOVERNMENT IN RELATION TO INVESTMENT?

1. To encourage investment in agriculture industry, mining, tourism, etc.
2. To extend fiscal incentives to compensate for market imperfections and as a reward for economic development
3. To provide a climate for growth and attain industrial peace
4. To encourage private initiative

ROLE OF INVESTMENT:

1. Instrument for peace and order/employment
2. Engine of growth - balanced economy
3. Come-on to tourism

WHO MAY INVEST?

• Anyone regardless of nationality up to 100% ownership.
• Except to some areas of economic activities reserved to Philippine Nationals or to those areas which are reserved/ limited by the Philippine Constitution to Philippine Nationals; or
• Except those areas listed in the Foreign Investment Negative List (FINL).

FINL LIST:

1. List A shall enumerate the areas of activities reserved to Philippine Nationals by mandate of the Constitution and Specific Laws.
2. List B shall contain the areas of activities and enterprises regulated pursuant to law;

• which are defense-related activities
• which have implications on public health and morals

AREAS WHERE NO FOREIGN EQUITY/OWNERSHIP IS ALLOWED

This list of activities must be owned by 100% filipino citizens such as the following:

1. Mass Media - except recording business (Art 6 sec. 11 Phil. Consti)
2. Services involving the practice of a licensed Profession such as: Lawyers, CPAs, Engineers, Nurses, Doctors, etc.
3. Cooperatives
4. Private Security Agencies (RA 5487)
5. Small-scale Mining (RA 7076)
6. Utilization of Marine Resources (Art. 12 sec. 2 Phil. Consti)
7. Operation, Ownership and Management of Cockpits (PD 449)
8. Manufacture, repair, distribution of Nuclear Weapons (Art 2 sec 8 Phil. Consti)
9. Manufacture, repair, distribution of biological chemical radiological weapons (Treaties)
10. Retail Trade (RA 1180, as amended) However, Foreign Equity is now allowed. Provided a minimum foreign equity of more than USD 2.5 Million is invested. Otherwise it should be 100% filipino-owned.

SMALL AND MEDIUM-SIZED DOMESTIC MARKET ENTERPRISES

• Small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of USD200,000.00 are reserved to the Philippine Nationals; Provided, that if:

1. they involve advanced technology as determined by the DOST, or
2. they employ at least 50 direct employees, then a minimum paid-in capital of USD100,000.00 shall be allowed to non-Philippine Nationals.

INCENTIVES TO REGISTERED ENTERPRISES:

1. Income Tax Holiday
2. Additional deduction for Labor Expense
3. Tax and duty exemption on imported capital equipment and its accompanying spare parts
4. Tax credit on Domestic capital equipment
5. Simplification of customs procedures
6. Unrestricted use of consigned equipment
7. Employment of Foreign Nationals
8. Exemptions on breeding stocks and genetic materials
9. Tax credit on duty portion of domestic breeding stocks and genetic materials
10. Tax credit for taxes and duties on raw materials
11. Access to bonded manufacturing/trading system
12. Exemption from taxes and duties on imported spare parts.
13. Exemption from wharfage dues and Export tax, duty impost and fee.

INCENTIVES TO EXPATRIATES

1. Multiple Entry Visa
2. Withholding Tax of 15%
3. Tax and duty free importation
4. Travel Tax Exemption

INCENTIVES TO THE REGIONAL HEADQUARTERS

1. Exemption from Income tax
2. Exemption from contractor's tax
3. Exemption from all kinds of local licenses, fees, dues
4. Tax and duty free importation of training materials; importation of motor vehicles
5. Exemption from registration requirements

SPECIAL INVESTORS RESIDENT VISA

• An alien shall be entitled to reside in the Philippines while investment subsists. For this purpose he shall submit an annual report, in the form duly prescribed for the purpose, to prove that he has maintained his investment in the country.
• Should the alien withdraw his said investment from the Philippines, then the VISA issued to him will automatically expire.

MULTIPLE ENTRY SPECIAL VISA

• Foreign nationals employed, their spouses, and unmarried children under 21 years of age who are not excluded by Sec. 29 of C.A. No. 613, as amended, shall be permitted to enter and reside in the Philippines during the period of employment of such foreign nationals.
• Validity of this, is up to the period of 3 years and extendible yearly.
• Once issued, they will be exempted from obtaining alien certificate of registration and emigration clearances certificates and all types of clearances required by any government department or agency.