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RULE 104VOLUNTARY DISSOLUTION OF CORPORATIONS
( The Dissolution of Corporations should now be filed with the SEC, and iscovered by Secs. 117 to 122 of the Corporation Code of the Philippines (BP68) which took effect on May 1, 1980.Dissolution - when the corporation ceases to be a juridical person.
§117. Methods of Dissolution
. A corporation formed or organizedunder the provisions of this Code may be dissolved voluntarily orinvoluntarily.
NOTES:Q
: How many ways are there to dissolve a corporation?
A
: Two ways--voluntary & involuntary.
Q
: How many ways of dissolving voluntarily?
A
: Three:
Voluntary dissolution where no creditors are affected (Sec. 118)
Voluntary dissolution where creditors are affected (Sec. 119)
Dissolution by shortening corporate term(Sec. 120)
§118.
Voluntary dissolution where no creditors are affected
.
In case dissolution of a corporation does NOT prejudice the rights of any creditor having a claim against such corporation, then such dissolutionmay be effected
by majority vote of the BOD or trustees, and
by a resolution duly adopted by the affirmative vote of thestockholders owning at least 2/3 of the outstanding capital stock or of at least 2/3 of the membersat a meeting to be held upon call of the dirs. or trustees
after publication of the notice
of the time, place and object of the meeting
for 3 consecutive weeks
in a newspaper published in the place where the principal officeof said corporation is located; and if no newspaper is published in suchplace, then in a newspaper of General circulation in the Philippines,(after sending such notice to each stockholder or member either byregistered mail or personal delivery at least 30 days prior to saidmeeting.A copy of the resolution authorizing the dissolution shall be
certified by a majority of the BOD or trustees
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and counter-signed by the secretary of the corporation. The SEC shall thereupon issue the certificate of dissolution.
NOTES:Q
: How do directors and stockholders vote?
A
: Both issue their respective resolutions duly adopted by affirmative votesof the required no. (BOD-majority; SH-2/3 OCS)
Q
: Publication for 3 consecutive weeks?
A
: Actually, once a week for three consecutive weeks. This is the commonreq’t in procedure. (Maybe an oversight or already considered understood.)
Q
: What is the President’s role here?
A
: The President signs the Resolution.
§ 119.
Voluntary dissolution where creditors are affected
.
Where the dissolution of a corporation may prejudice the rights of anycreditor, a petition for dissolution shall be filed with the SEC. The petition shall be
signed by a majority of its BOD or trustees or other officers having themanagement of its affairs,
verified by its president or secretary or one of its directors, or trustees,and
shall set forth
all claims and demands against it, and
that its dissolution was resolved upon the affirmative vote of thestockholders representing
at least 2/3 of the outstanding capital stock or by
at least 2/3 of the members, at a meeting of itsstockholders or members called for that purpose.If the petition is sufficient in form and substance, the Commission shall,by an ORDER reciting the purpose of the petition,
fix a date on or before which objections thereto may be filed by anyperson,
which date shall not be less than 30 days nor more than 60 days after theentry of the order.Before such date, a copy of the order shall be published
at least once a week for 3 consecutive weeks
in a newspaper of General circulation ( published in themunicipality or city where the principal office of the corporation issituated, or if there be no such newspaper, then in a newspaper of General circulation in the Phils.,and a similar copy shall be posted
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for 3 consecutive weeks
in 3 public places
in such municipality or city.Upon 5 days notice, Given AFTER the date on which the right to fileobjections as fixed in the order has expired, the Commission shall proceed to
hear the petition and
try any issue made by the objections filed;and IF
no such objection is sufficient, AND
the material allegations of the petition are true,it (Commission) shall
render judgment dissolving the corporation and
directing such disposition of its assets as justice requires,and
may appoint a receiver to collect such assets and pay thedebts of the corporation.
NOTES:
Just note that the date fixed is a deadline, on or before which objections tothe petition may be filed.
§ 120.
Dissolution by shortening of corporate term.
A
voluntarydissolution may be effected by amending the AOI to shorten the corporateterm pursuant to the provisions of this Code.A copy of the amended AOI shall be submitted to the SEC inaccordance with this Code.Upon approval of the amended AOI or
the expiration of the shortened term, as the case may be,
the corporation shall be deemed dissolved without any furtherproceedings, subject to the provisions of this Code on liquidation.
NOTES:Q
: When is the corporation deemed dissolved?
A
: Two instances:1.Upon approval of the Amended AOI, OR2.the expiration of the shortened termActually, the ff. are the rules:
If expiration date is before approval by SEC
corpo dissolves uponapproval
If expiration date is after approval by SEC
corpo dissolves on the dateof expiration of term
If the SEC does not act on petition within 6 mos. from the date of filing(Sec. 16, Corpo Code)
corpo dissolves either
on the day after the 6-mo. pd. (if date of expiration was withinthe 6-mo. pd.)
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