Simplified Query: What happens to corporate properties when all directors die? Can heirs automatically sell these properties?
In the Philippines, the sudden demise of all directors of a corporation does not directly lead to the dissolution of the corporation itself, nor does it grant the heirs of these directors the automatic right to sell the corporate properties. This scenario touches upon the aspects of corporate governance and succession, specifically under the Corporation Code of the Philippines.
Corporations are legal entities distinct from their directors and shareholders. Therefore, the rights and obligations of the corporation do not automatically transfer to the heirs of deceased directors. Instead, the corporation continues to exist and operate according to its articles of incorporation and bylaws until it is legally dissolved.
When all directors of a corporation pass away, the immediate step is for the shareholders to appoint new directors. This ensures the continuity of the corporation and the management of its affairs, including the handling of corporate properties. The board of directors, acting collectively, holds the authority to make decisions regarding the sale or management of corporate assets, not individual heirs of the directors.
Heirs of deceased directors may inherit shares if the directors were also shareholders, and these shares were bequeathed to them. However, inheriting shares does not equate to inheriting direct control over the corporate assets. Shareholders influence corporate decisions through their voting rights in electing the board and making decisions that require shareholder approval.
The law requires a proper succession plan and adherence to corporate governance principles to manage transitions smoothly without disrupting the corporation’s operations. It's crucial for corporations to have mechanisms in place for unexpected situations, including the untimely death of directors, to ensure stability and continuity.
In conclusion, heirs cannot automatically sell corporate properties merely because they inherit the positions or shares of deceased directors. They must work within the legal framework governing corporate operations in the Philippines, ensuring all actions are duly authorized by the appropriate corporate bodies.