SEC OGC Opinion No. 23-12: Nationality of the President of a Non-Stock Non-Profit Corporation

On 19 June 2023, the Securities and Exchange Commission (“SEC“) – Office of the General Counsel (“OGC“) issued an opinion regarding the eligibility of a non-Filipino citizen to serve as the President of Union Church of Manila, Inc. (the “Church“), a non-stock, non-profit religious corporation.

Following Section 24 of the Revised Corporation Code, the position of President was introduced in 2020, and a Filipino citizen was elected by the Church Council, the official body that exercises the corporate powers of the Church, to fulfill this role. The opinion of SEC was sought on whether a non-Filipino citizen can be a President of the Church. 

The SEC-OGC, citing Section 2-A of the Anti-Dummy Law, opined that if the Church owns land, it is prohibited from appointing a foreigner as its President or officer. 

The SEC-OGC explained that on several occasions, the SEC has opined that in firms engaged in wholly or partially nationalized activities, aliens are banned from being appointed to management positions, such as president, vice-president, treasurer, auditor, etc., of such companies. However, aliens can be elected as directors in proportion to their allowable participation or share in the capital of such activities, under Section 2-A of the Anti-Dummy Law. 

It is also important to note that a corporation’s legal capacity to acquire land in the Philippines is regulated by the 1987 Constitution and the Public Land Act. The SEC has previously opined that if a corporation owns the land, it shall already be considered engaged in a partly nationalized activity. Consequently, foreigners cannot constitute more than 40% of its membership and are ineligible to be elected as President/Chairman of the Board of Trustees.

Therefore, based on Section 2-A of the Anti-Dummy Law, the Church is prohibited to appoint a foreigner as its President or officer if the Church owns land.