Friday, November 07, 2008 Apo Golf: How many members should constitute a quorum? By Imee Garcia
MY FATHER Tony Garcia and I had a conversation recently about corporations, more specifically on how a group of people can easily take control of a particular corporation.
Obviously, the more shares you have, the stronger you are. And when you are able to get a majority (50 percent plus 1), you can dictate to the rest what you want done, change rules to your advantage, in other words, you 'own' the corporation. Such power and so much control one can have...scary isn't it?
What all the other shareholders can do is to pray that this particular person's decision-making will be for the good of the corporation and not for his own personal gain.
If the majority of the shares is difficult to obtain, one way of getting more is to propose the addition of more shares. Davao Doctor's Hospital, for example, may decide to expand and build more structures. And instead of seeking funds from its shareholders, like for example--charge special assessments, they may decide to increase the number of shares, then sell, and then use the money to fund those structures. The ones who have the money can buy those shares thus getting more control in the corporation. And when a group of people gets the majority, to my understanding, they will have complete control over the corporation.
At present, with Apo Golf & Country Club, a person can only have one share. This was done so that no "one person" can have control over the club.
Sometime in March 1997, when I was part of the executive board of the Board of Directors of Apo Golf Club, during the term of Mr. Lads Aviola as president, the corporation amended its by-laws. One of the amendments was "for the purpose of amending this Amended By Laws, at least Two Thirds (2/3) of the members in good standing shall constitute a quorum at which meetings proxies shall be admitted in determining a quorum but shall not be allowed to vote."
This move was made to protect the bylaws from getting amended easily. And if it is an absolute necessity to amend it, it would require not just 50 percent plus one, but two thirds of the members in good standing to constitute a quorum.
I don't know about the other shareholders, but, I am at peace with the thought that the by-laws cannot be amended that easily. It gives me comfort to know that when major decisions have to be made, my vote will count because to gather 2/3 of the members in good standing to produce a quorum is difficult to attain.
In the coming Special General Membership Meeting (SGMM) scheduled on November 30, there is a move again to amend the bylaws. One of the proposed amendments is "for the purpose of amending this Amended By-Laws, at least majority of the members in good standing shall constitute a quorum at which meetings proxies shall be admitted in determining a quorum and shall be allowed to vote."
Where is the "at least two thirds of the members in good standing"? Gone? Are we going back to just getting 50 percent plus 1 to constitute a quorum? How easily the by-laws may be changed in the future.
Going back to what my dad and I talked about earlier about how corporations can be controlled by a few, I am worried once again. Will that happen to Apo Golf someday?
Many of us are aware about one of the topics to be discussed in the SGMM, and that is--the proposal to increase the number of shares from 500 to 1,000.
Who knows what will be amended in the future--a member can have two shares of more? With just getting 50 percent plus one for quorum, that can be accomplished easily.
Apo Golf Special General Membership Meeting will be on November 30 at the Apo Golf & Country Club.
