SEC Opinion dated 24 February2003The SEC Opinion pertains to the reply given by Director Benito Cataran, in behalf ofthe Commission, with regard to the following issues forwarded by one Benedicta Bello (President, Regis Benedictine Academy, Inc.):1.WON itislegallyfeasibleto convertanon-stock educationalinstitutionintoa stock corporation NOAnon-stockcorporationisonewherenopartofitsincomeisdistributableas dividends to its members, trustees, or officers, subject to the provisions of this Code ondissolution(Sec.87,CorporationCode.)In linewiththis,theCommissionhas previouslyruledthatanon-stockcorporationcannotbeconvertedintoastock corporation bymere amendment ofthe articles ofincorporation. Forpurposes oftransformation, it is fundamental that the non-stock corporation be dissolved first under the methods specified in Title XIV of the Corporation Code. Thereafter, the members may organize a stock corporation directed to bring profits or pecuniary gains to themselves (SEC Opinion datedDec. 10, 1992.)2. WON members of a non-stock corporation (NSC) are entitled to any beneficial or vested interest over the assets of the NSC NO (general rule)Non-stock, non-profit corporations hold their funds in trust for the carrying out of the objectives and purposes expressed in its charter and unless it is so provided in the AOI or by-laws, the members are not entitled to any beneficial or vested interest over the assets of the NSC.3.WON membership ina NSCis transferable NOSection 90 of the Corporation Code provides that membership in a NSC and all rights arising therefrom are personal and non-transferable, unless the articles ofincorporation or the by-laws otherwise provide. Unlike shares of stock in a stock corporation, which are bought at a fixed value, there is no such valuation in the case of membership in ordinary NSC. In the case of the latter, the money put in the corporation are merely contributions or donations, notinvestmentswhichwouldentitlethememberstodividends.Suchfundsareheldmainly to carry out the purposes for which it is organized.