Professional Documents
Culture Documents
of the Philippines
Corporation Corporation
A B
Submission to
SEC
Approval of 2/3
OCS/members
Hearing Proper
Judgment
Section 119…
Objections must be filed no less than
30 days nor more than 60 days after
the entry of the order;
After the expiration of such period,
hearing should be conducted within
five days;
Judgment may include procedure of
disposing the assets and the
assignment of receivers.
Involuntary Dissolution
(Section 121)
Filing of verified complaint based on the
following grounds:
Failure to organize within 2 years from
incorporation;
Continuously inoperative for five years;
Failure to file by-laws;
Continuance is not feasible;
Fraud in procuring Certificate of Registration;
Serious misrepresentation;
Failure to submit required reports
Effects of dissolution
Transfer of legal title to corporate property
to the stockholders;
Cessation of the existence of the corporate
body;
Possible creation of a new corporation;
Possible reincorporation of the dissolved
corporation;
Continuation of the body corporate for
liquidation purposes.
Modes of Liquidation
By the BOD as trustees of the
corporate assets;
Through a trustee to whom the
properties are conveyed;
By a management committee or
rehabilitation receiver
Foreign corporation…
Corporation formed, organized or
existing under any law other than
those of the Philippines and whose
laws allow Filipino citizens and
corporations to do business in its
own country or state;
Foreign…
Engaging in business implies a
community of commercial dealings
and arrangements and contemplates
to some extent the performance of
acts or works or the existence of
some functions normally incident to
and in progressive prosecution of the
purpose and object of its
organization.
Suability of foreign corporations
• Foreign corporations doing business
in the Philippines:
• With license, may sue and be sued;
• Without license, cannot sue but may be
sued in the Philippines
• Foreign corporations not doing business
in the Philippines on isolated transaction
may sue and be sued.
Doing business…
Soliciting orders;
Service contracts;
Opening offices, whether called liaison
offices or branches;
Appointing representative or distributors
domiciled in the Philippines and who stay
for periods totaling to 180 days in a year;
Participating in the management and
supervision of domestic firms;
Other analogous circumstances.
Issuance of license
The SEC will issue a license to the
foreign corporation to do business in
the Philippines, provided the following
are met:
Appointment of a resident agent
Either a Filipino or a domestic corporation;
Power of attorney to SEC to receive
processes
Requisites…
Must prove that the foreign corporation’s
country grants reciprocal rights to Filipinos
and Philippine corporations;
Establish office in the Philippines;
Bring in assets;
In the event of insolvency, undertaking that
the Filipino creditors will be preferred;
Franchise and patents must remain in the
Philippines if possible;
Requisites….
Must file a bond of P100,000.00
Within six months of each fiscal year,
the SEC shall require the deposit of
additional securities equivalent to
25% of the amount in excess of
P5,000,000.00 of the gross income
Grounds for revocation
of license
Failure to file annual report or pay
fees as required;
Failure to appoint or maintain
resident agent;
Failure to inform SEC about change of
resident agent;
Failure to file with SEC authenticated
articles of incorporation;
Grounds….
Misrepresentation in its reports;
Failure to pay taxes;
Doing business outside the line of
business;
Other analogous circumstances.
Close Corporations
The Articles of Incorporation must
state that the number of stockholders
will not exceed 20;
The Articles of Incorporation must
contain a restriction on the transfer of
stocks;
The stocks cannot be listed in the
stock exchange nor should it be
publicly offered.
The following cannot be
close corporations
Mining companies;
Oil companies;
Stock exchanges;
Banks;
Insurance corporations;
Public utilities;
Educational institutions;
Other corporations declared to be vested
with public interest
Deadlocks in close corporations
SEC may intervene to perform such
functions as are necessary;
The stockholders are themselves the
members of the BOD without need of
election;
When they manage, they are liable as
directors;
The stockholders are liable for tort;
Questions for discussion…
What are the ways through which the
business organization is regulated based on
the Corporation Code of the Philippines?