Determining quorum in corporations
By: Atty. Euney Marie J. Mata-Perez on June 11, 2026
THE quorum issue is very much in discussion today because of the controversy in our Senate. In this article, we revisit the concept from a corporation law perspective.
The term “quorum” has been defined as “that number of members of the body which, when legally assembled in their proper places, will enable the body to transact its proper business, or, in other words, that number that makes a lawful body and gives it power to pass a law or ordinance or do any other valid corporate act.
Under the Revised Corporation Code (RCC), or Republic Act 11232, a quorum is the minimum number of stockholders, members, or directors required to be present to legally transact business at a corporate meeting.
In relation to quorum in meetings of the stockholders of a corporation, Section 51 of the law provides: “Unless otherwise provided in this Code or in the bylaws, a quorum shall consist of the stockholders representing a majority of the outstanding capital stock or a majority of the members in the case of nonstock corporations.”
For stock corporations, the quorum is based on outstanding capital stock. For nonstock corporations, only those who are actual, living members with voting rights will be counted in determining the existence of a quorum during meetings.
It should be noted that capital stock refers to total shares subscribed and issued, whether it be founders’ shares or common shares. It excludes treasury shares. A Supreme Court decision clarified that, for purposes of determining quorum, the intention of the lawmakers was to base the quorum mentioned in Section 51 on the number of outstanding voting stocks.
With respect to stockholders, the right to vote is inherent in and incidental to the ownership of corporate stocks. Under Section 6 of the RCC, each share of stock is entitled to vote unless otherwise provided in the articles of incorporation or declared delinquent under the RCC. In this regard, it is settled that unissued stocks may not be voted or considered in determining whether a quorum is present in a stockholders’ meeting, or whether a requisite proportion of the stock is voted to adopt a certain measure or act. Only stock actually issued and outstanding may be voted.
For board of directors’ or trustees’ meetings, unless the articles of incorporation or bylaws require a greater majority, a quorum consists of a majority of the directors or trustees as fixed or stated in the articles of incorporation. In this regard, Section 52 of the RCC provides: “Unless the articles of incorporation or the bylaws provide for a greater majority, a majority of the directors or trustees as stated in the articles of incorporation shall constitute a quorum to transact corporate business, and every decision reached by at least a majority of the directors or trustees constituting a quorum, except for the election of officers which shall require the vote of a majority of all the members of the board, shall be valid as a corporate act.”
Since the quorum is based on the number of directors as “stated” or “fixed” in the articles of incorporation, any vacancy is irrelevant. In an opinion, the Securities and Exchange Commission (SEC) confirmed that the formula in determining what constitutes “majority of the directors or trustees” as quorum would be one-half plus one of the number of directors/trustees as fixed in the articles of incorporation, notwithstanding the existence of vacancies at the time. If, for instance, the articles of incorporation provide for nine directors, the quorum is five. If only seven were elected, leaving two seats vacant, the quorum remains five.
The RCC provision authorizes corporations to define what constitutes a quorum. In fact, the SEC had the occasion to opine that any corporation is authorized to provide in its by-laws a specific number of stockholders or members necessary to constitute a quorum for the transaction of a corporate business. Thus, a corporation can state in its by-laws that a quorum shall be less than majority or greater than what was provided for in the Corporation Code unless the law specifically provides otherwise.
Determination of quorum is important. The exercise of corporate power is vested upon the board of directors as a collective body, and not upon the individual directors thereof. Every decision of at least a majority of the directors or trustees present at a meeting at which there is a quorum is valid as a corporate act. Any act or transaction made without a quorum is rendered of no force and effect, and thus, not binding on the corporation or parties concerned.
Euney Marie J. Mata-Perez is a CPA-Lawyer and the Managing Partner of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a corporate, M&A and tax lawyer and has been ranked as one of the top 100 lawyers of the Philippines by Asia Business Law Journal and is the Vice Chair of the Tax Committee of the Management Association of the Philippines. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com.
The article was published at the More to Follow Column at The Manila Times on June 11, 2026. Please see this link.