Merger and Consolidation
of each of
● Two or more corporations may
merge into a single corporation or
may consolidate into a new single
corporation
● Merger: 1 company takes over
another, including its previous assets
and liabilities; the one acquired
ceases to exist
● Consolidation: 2 corporations form a
new larger corporation; all of each
company’s assets and liabilities
become the property of the new
corporation
● BOD/T of each corporation shall
approve a plan of M/C setting forth:
○ Names of the corps.
proposing to merge or
consolidate/constituent corps.
○ Terms of the
merger/consolidation and the
mode of carrying into effect
○ Other provisions as necessary
● Upon approval of the majority of the
BOD/T of the plan, the same shall be
submitted for approval by the Sh/M
of each of the corps. at separate
meetings
○ Requires approval of ⅔ of the
OCS/M
■ Any dissenting SH
have the right to
appraisal
■ If the BOD/T
abandons the plan,
appraisal right is
extinguished
● Articles of M/C: signed by the
president/VP and certified by the
Secretary/Assistant Sec.
the corporation:
○ Plan of M/C
○ Stock Corp.: number of
outstanding shares;
Non-stock: number of
members
○ The number of
shares/members voting for or
against the plan (in each
corporation)
○ Carrying amounts and fair
values of A/L of each
corporation as of the agreed
cutoff date
○ Method to be used in the M/C
of accounts of the companies
○ Other information SEC will
require
● Articles of M/C, signed and certified,
will be submitted to the SEC for
approval
○ Banks, educational
institutions, etc. and other
special corporations, will be
required to have favorable
recommendation of the
appropriate gov’t agency.
● If the SEC is satisfied, it shall issue a
certificate of approval, at which time
the M/C shall be effective
● If upon investigation the SEC thinks
the plan of M/C is inconsistent with
the code, it shall set a hearing to give
the constituents the opportunity to be
heard.
○ Notice shall be sent 2 weeks
before said hearing
● M/C shall have the ff. Effects:
○ Constituent corps. shall
become a single corporation
which, in case of M shall be
the surviving corporation;
and in case of C, shall be the
consolidated corporation
○ Separate existence of the
constituent corporations will
cease
○ Surviving/Consolidated
Corporation shall possess all
rights, privileges, immunities,
and powers and shall be
subject to all the duties and
liabilities of a corporation
○ Surviving/consolidated
corporation shall possess all
rights, privileges, immunities,
and franchises of each
constituent corporation; and
all real or personal property,
all receivables due, including
subscriptions to shares and
other choses in action, and
every other interest of,
belonging to, or due to each
constituent, shall be deemed
transferred to and vested in
S/C corporation
○ The s/c corporation is
responsible for all the
liabilities and obligations of
each constituent
■ Any pending claim,
action or proceeding
brought by or against
any constituent may
be prosecuted by or
against the s/c
corporation
■ Rights of creditors
shall not be impaired
Appraisal Right
● Any SH shall have the right to
dissent and demand payment of the
fair value of the shares:
○ In case of an amendment to
the AOI has the
effect/changing/restricting
the rights of any SH or class
of shares, or of authorizing
preferences, or of
extending/shortening the term
of corporate existence
● Dissenting SH makes a written
demand on the corporation for the
payment of the FV of the shares
within 30 days from the date the vote
was taken
○ Failure to make a demand
within said period=waiver of
appraisal right
● If implemented, corporation shall
pay SH, upon surrender of
certificates of Stock, the FV thereof
as of the day before the vote was
taken, excluding appreciation or
depreciation
● If within 60 days from the approval
of the action by the SH, the
withdrawing SH and the corporations
cannot agree on the FV of shares:
○ It shall be determined by 3
persons
■ One chosen by SH
■ One chosen by Corp
 ■ One chosen by SH
and corp
○ Findings of the majority of
the 3 shall be final and they
will be paid by the
corporation within 30 days
■ Payment must be out
of unrestricted
retained earnings
■ Upon payment, shares
is transferred to the
corp
● All rights accruing to shares,
including voting and dividend rights
shall be suspended from the time the
demand for payment until either the
abandonment of corporate action or
the purchase of the shares by the
corporation
○ Except the right to receive
payment for the FV
■ If SH is not paid
within 30 days, all
rights are restored
● No demand for payment may be
withdrawn, unless the corporation
consents thereto
● If payment is withdrawn with
consent or corporate action is
abandoned or rescinded or
disapproved by the SEC or SEC
determines said SH is not entitled to
appraisal, right of payment to SH
ceases, status as SH is restored, and
all accrued dividend distributions
shall be paid to the SH
● Costs and expenses of appraisals is
borne by the corporation
○ Unless the appraiser’s value
is approximately the same as
the corporation’s offer, then
the SH will pay
● Within 10 days after demanding
payment, dissenting SH shall submit
the certificates of stock for notation
that such shares are dissenting shares
○ Failure may result in the
termination of rights, at the
corporation’s option
Nonstock Corporation
● Nonstock: no part of its income is
distributable as dividends to its
M/T/O
○ Any profit is for the
furtherance of the purpose/s
for w/c the corporation was
organized
● Provisions governing SC shall be
applicable to NSC
● NSC may be organized for
charitable, religious, educational,
professional, cultural, fraternal,
literary, scientific, social, civic
service or similar purposes
● Rights of the members of any class
to vote may be
limited/broadened/denied as
specified in the AOI or bylaws
○ Otherwise, each will be
entitled to 1 vote
● A member may vote by
proxy/remote communication/in
absentia
● All rights as a member are personal
and non-transferable
 ● Membership shall be terminated in
accordance to the AOI or the bylaws
○ Termination shall extinguish
all the rights of a member in
a corporation or in its
property, unless otherwise
provided
● Number of trustees shall be fixed in
the AOI or bylaws
○ Can be more than fifteen
○ Can hold office for not more
than 3 years, unless their
successors are elected and
qualified
● Trustees elected to fill vacancies
before expiration of a term shall hold
office only for the unexpired period
● With respect to independent trustees
of NSC vested with public interest,
only a corporate member shall be
elected as trustee
● NSC at all times shall keep a list of
its members and their proxies
● The list shall be updated to reflect
the members and proxies record 20
days prior to election
● They may hold R/S meetings at any
place even outside the principal
office
○ Proper notice is sent to all
members (date, time, place)
○ Place of meeting is within PH
Distribution of Assets in NSC
● The assets of a dissolving NSC shall
be applied and distributed:
○ All liabilities and obligations
of the NSC shall be paid,
satisfied, discharged or
adequately provided
○ Assets held upon a condition
requiring return, transfer or
conveyance and w/c
condition occurs because of
dissolution shall be R/T/C
○ Assets received and held
subject to limitations
permitting their use only for
charitable, religious,
benevolent, educational, or
similar purposes shall be
transferred or conveyed to 1
or more corps., societies or
orgs. engaged in activities in
the PH substantially similar
to that of the dissolving corp.
○ Other assets shall be
distributed in accordance
with the AOI/bylaws
■ AOI/Bylaws may
determine the
distributive rights of
members
○ In any other case, assets may
be distributed to persons,
societies, orgs or corps.,
whether or not organized for
profit, as may be specified
● A plan may be adopted in the ff.
Manner:
○ BOT, by majority vote, may
adopt a resolution
recommending a plan of
distribution and directing the
submission at a R/S meetings
of the members w/ voting
rights
 ○ Plan will be adopted upon
approval of ⅔ of the
members having voting rights
Close Corporations
● CC: one whose AOI provides that:
○ All issued stock of all classes,
sans treasury shares, shall be
held of record by a specified
number of persons, not
exceeding 20
○ All issued stock of all classes
is subject to one or more
specified restrictions on
transfer
○ Company shall not list in any
stock exchange or make any
public offering of its stocks
of any class
■ If ⅔ of CC’s stocks is
owned/controlled by a
non-CC, it is not a CC
● Any corporation may be a CC,
except mining or oil companies, SEs,
banks, insurance companies, public
utilities, educational institutions, and
corporations vested with public
interest
● AOI:
○ Classification of
shares/rights, qualifications
for owning/holding, and
restrictions on transfers
○ Classification of D into 1 or
more classes, each may be
vored for and elected solely
by a particular class of stock
○ Greater quorum/voting reqs
in meetings
● AOI of a CC may provide that it
shall be managed by the SH rather
than the BOD
○ No meeting of SH need to be
called to elect D, unless
required
○ SH shall be subjected to all
liabilities of D
○ O/E shall be
elected/appointed by SH
● Restrictions on the right to transfer
must appear in AOI, bylaws, and
CoS
○ Otherwise, it will not be
binding
● Restrictions must not be more
onerous than granting the existing
SH/Corp to purchase the shares of
the transferring SH
● If upon expiration of said period,
existing SH/Corp fails to purchase,
transferring SH may sell to 3rd
person
● Effects of Issuance/Transfer in
Breach of Qualifying Conditions:
○ If issued to an ineligible
person and certificate shows
the qualifications, such a
person is presumed to have
notice of the fact
○ If AOI states no. of persons
entitled to be SH, and if
certificate reflects the same
number, and the
issuance/transfer causes the
stock held to be more than
such number, person issued
or transferred to is presumed
to have knowledge
 ○ If a stock certificate shows
restriction on transfer and the
transferee acquires it in
violation, transferee is
presumed to have notice of
such face
○ A person to whom a stock
has been
issued/transferred/presumed
to have notice of under the
prev. par:
■ Corp. may refuse to
register the transfer
○ Provision of previous par. is
not applicable if transfer, has
been consented to by all SH
or if the CC amends its AOI
○ Transfer is not limited to
value transfer
○ Any right to w/c transferee
may have to either rescind or
recover under any
express/implied warranty is
not impaired
● Agreements:
○ Agreements dul signed and
executed by and among all
SH before the formation and
organization of CC shall
survive the incorporation and
continue to be valid and
binding between such SH
○ A written agreement signed
by 2 or more SH may provide
that the shares held by them
shall be voted as provided or
as agreed, or in accordance
with a procedure
○ No provision in a written
agreement signed by the SH,
shall be invalidated between
the parties on the ground that
its effect is to make them
partners among themselves
○ A written agreement among
some or all SH is not
invalidated on the ground that
it relates to the business and
affairs of the corporation as
to restrict/interfere with the
discretion or powers of the
BOD
■ Such agreement shall
impose on the SH the
liabilities for
managerial acts
○ SH engaged in the
management/operation of the
business shall be held to strict
fiduciary duties
■ Personally liable for
corporate torts unless
it has obtained
liability insurance
● Any action taken by the D of CC
without a proper meeting is valid if:
○ All SH have actual/implied
knowledge of the action and
make no prompt written
objection
○ Directors are accustomed to
take informal action with
express/implied acquiescence
of all SH
○ All directors have
express/implied knowledge
 and none of them makes
prompt written objection
● Any action is deemed ratified by
absent D, unless promptly files
written objection
● Preemptive right shall extend to all
stock to be issued, including
reissuance of treasury shares
● Any amendment to the AOI w/c
seeks to delete/remove any provision
or reduce quorum/voting req shall
require the vote of ⅔ of OCs, with or
w/o voting rights or greater as
provided in the AOI
● If D/Sh are divided that the business
can no longer be conducted, the
SEC, upon written petition, shall
have the power to arbitrate
● SEC has the authority to:
○ Cancel or alter any provision
○ Cancel, alter, enjoin a
resolution
○ Direct/prohibit any act
○ Require the purchase at the
FV of shares, either by the
corporation (regardless of
URE) or by other SH
○ Appoint a provisional
director
○ Dissolve the corporation
○ Grant such other relief
● Provisional director: impartial person
who is neither a SH or a C of a
corporation whose qualifications
may be determined by the SEC
○ Shall have all the rights and
powers of a director
○ Compensation is determined
by agreement between said
director and the corporation,
subject to the approval of the
SEC, w/c may fix such in the
event of
disagreement/absence of
agreement
● Any CC’s SH may compel the
corporation to purchase shares held
at FV, not less than the par/issued
value, when the corporation has
sufficient assets to cover debts and
liabilities, exclusive of CS
○ Any SH of such corporation,
by written petition to the
SEC, may compel the
dissolution if the acts of those
in control is illegal,
fraudulent, dishonest,
oppressive, or unfair
Special Corporations: Educational
Corporations:
● Governed by special laws and by the
general provisions of the RCC
● Trustees organized as NSC shall not
be less than 5 nor more than 15
○ Should be in multiples of 5
● BOT of inc. schools, colleges, or
other learning institutions shall, as
soon as organized, so classify
themselves that ⅕ of their no. shall
expire every year
● Trustees elected to fill vacancies
before expiration shall hold office
for the unexpired period only
● Trustees elected to fill vacancies
caused by expiration shall hold
office for 5 years
● Majority = quorum
 ● Powers and authority of T is
determined in the bylaws
● Institutions organized as SC, number
and term of D is governed by
provisions on SC
Religious Corporations
● May be incorporated by 1 or more
persons
● May be classified into sole and
religious societies
● Corporation sole: may be formed by
the chief archbishop, bishop, priest,
minister, rabbi, etc. for the purpose
of administering and managing, as a
trustee, the affairs, property,
temporalities of any religious
denomination, sect, or church
● AOI:
○ Applicant chief archbishop,
bishop, priest, minister, rabbi,
etc. represents the religious
org w/c desires to become a
sole
○ Rules, regulations, and
discipline of the religious org
are consistent with becoming
a corporation sole
○ Such chief archbishop,
bishop, priest, minister, rabbi,
etc. is charged with the admin
of the temporalities and
management, estate and
properties of the religious org
within the territorial
jurisdiction, as described in
the AOI
○ Manner by w/c any vacancy
occurring in the office of
chief archbishop, bishop,
priest, minister, rabbi, etc. is
required to be filled
○ Place of the principal office
within the PH
○ May include any other lawful
provision
● AOI must be verified via affidavit
and accompanied by a copy of the
SEC, certificate of election or letter
of appointment of the chief
archbishop, bishop, priest, minister,
rabbi, etc., duly certified
● From and after filing with the SEC,
such chief archbishop, bishop, priest,
minister, rabbi, etc. shall become a
corporation sole
○ Everything will be personally
held in trust for the use,
purpose, exclusive benefit,
and on behalf of the religious
org
● Corporation sole may purchase and
hold real estate and hold personal
property, and may receive bequests
or gifts of such purposes
○ May sell or mortgage real
property by obtaining an
order for that purpose from
the RTC,upon notice of the
app for leave to sell or
mortgage has been made
through publication or as
ordered, and it is in the
interest of the corporation to
proceed.
○ Must be made, duly verified
by the chief archbishop,
bishop, priest, minister, rabbi,
 etc. and may be opposed by
any member
■ Rules and regulations
of religious org shall
govern and court does
not have to interfere
● The successors shall become the
corporation sole on their accession to
office
○ Permitted to transact business
upon filing a copy of their
commission, certificate of
election, or letters of
appointment, duly certified
● During vacancy, authorized person/s
shall exercise all the powers and
authority of the corporation sole
● May be dissolved upon submission
of a verified declaration:
○ Name
○ Reason
○ Authorization for the
dissolution
○ Names and addresses of
supervisors of winding up
● Cease to carry on upon approval,
except for winding up
● Religious societies, unless forbidden
may incorporate upon approval of ⅔
of its membership upon filing to the
SEC, the AOI verified by the
presiding elder of such religious
society, order, diocese, synod, or
district organization, setting forth the
ff:
○ The religious society is a
religious org of a ● Not required to have bylaws
denomination/sect/church
○ ⅔ of its membership has
given written consent to
incorporate
○ Incorporation is not
forbidden
○ Religious society desires to
incorporate for admin of its
affairs, properties, and estate
○ Principal office within the PH
○ Names, nationalities, and
residence addresses of the
trustees, not less than 5 nor
more than 15, elected to serve
for the 1st year or other
prescribed period
One Person Corporations
● OPC: single SH
○ Only a natural person, trust or
estate
○ A natural person who is
licensed to practice a
profession cannot make an
OPC to practice such
profession
● Not required to have a minimum
ACS
● AOI:
○ If trust/estate: name,
nationality, residence of
T/A/E/G/C/CU with proof of
authority
○ Name, nationality, residence
of nominee and alternate
nominee, extent and
limitation of authority
● Shall indicate OPC either below or at
the end
● Single SH is sole director and ○ Single SH shall designate a
president nominee/alternate who shall
● Within 15 days of issuance of COI, manage the corporation in the
OPC shall appoint a treasurer, a event of the SSH’s death or
secretary, and other officers and incapacity
notify the SEC within 5 days from ○ The written consent of the
appointment nominee/alternate, as well as
○ Single SH cannot be the their extent and limitations of
secretary authority
● Single SH appointed as the treasurer ■ Attached to the app
shall give a bond to the SEC in such for inc
a sum as may be required ■ May be withdrawn
○ Said SH shall undertake in anytime before
writing to faithfully death/incapacity of
administer the funds to be SSH
received and to disburse and ● If incapacity is temporary: nominee
invest the same according to is director until SSH regains the
the SOI capacity, by self-determination
○ Bond will be renewed every ● In case of death/permanent
two years or as often a incapacity, nominee is director until
required legal heirs have been lawfully
● Corporate secretary: determined, and heirs have
○ Maintain books/records designated one of them or have
○ Notify the nominee/alternate agreed that the estate shall be the
of the death or incapacity of SSH of the OPC
the single SH, no later than ● Alternate shall sit as director in case
five days from occurrence of nominee’s inability, incapacity, or
○ Notify the SEC of the death refusal to discharge the functions as
of the single SH within five director/manager, and only for the
days and stating the names, same term and under the same
addresses, and contact details conditions
of known legal heirs ● SSH may change its
○ Call the nominee/alternate nominee/alternate anytime by
and the known legal heirs to a submitting the names of the
meeting and advise the KLH nominees and their consent to the
the election of a new director, SEC
amendment of the AOI and ● OPC shall maintain a minutes book:
other matters contains all actions, decisions,
resolutions
● When action is needed, it is
sufficient to prepare a written
resolution, signed and dated by the
SSH, and recorded in the minutes
book
○ Date of recording in the
minutes = date of the meeting
● Reportoria reqs.:
○ Annual FS audited by an
independent CPA
■ Total assets/liabilities
are less than 600K,
FS shall be certified
under oath by the
treasurer and the
president
○ Report with explanations or
comments by the president on
every remark by the auditor
○ Disclosure on all
self-dealings
○ Others
● SEC may place OPC under
delinquent status if OPC fails to
submit reqs. 3 ties, consecutively or
intermittently within five years
● A SSH claiming limited liability has
the burden of proving that the
corporations was adequately
financed
● If unable to do so, SSH shall be
jointly and severally liable for the
debts and liabilities of the OPC
● Piercing the corporate veil applies
● When an SSH acquires all the stocks
of an OSC, latter may apply for
conversion into an OPC
○ If app is approved, SEC shall
issue a certificate of filing of
amended AOI reflecting the
conversion
○ The OPC shall succeed and
be responsible for all the
outstanding liabilities as of
the date of conversion
● An OPC may be converted into an
OSC after due notice to the SEC,
with the circumstances leading to the
conversion and after compliance
with other reqs.
● Such notice shall be filed with the
SEC within 60 days from the
occurrence of the circumstances
● If complied with, SEc shall issue a
certificate of filing of amended AOI
reflecting the conversion
● In case of death of the SSH,
nominee/alternate shall transfer the
shares to the designated legal heir or
estate within seven days from receipt
of affidavit of heirship or
self-adjudication executed by the
sole heir or any other legal
document, and notify the SEC of the
transfer
● Within 60 days, the legal heirs shall
notify the SEC of their decision to
dissolve or convert to an OSC
● The OSC shall succeed and be
legally responsible for all the
outstanding liabilities as of the dte of
conversion
Dissolution
● Voluntarily or involuntarily
● If it does not affect creditors, may be
effected by majority vote of the
 BOD/T, adopted by the affirmative
vote of the majority of the OCS/M
● At least 20 days prior to the meeting,
notice shall be given to every SH/M,
whether or not entitled to vote
○ Such notice shall state that
the purpose is to vote on
dissolution
○ Notice shall be published
once prior to the date in a
newspaper
● A verified dissolution request shall
be filed with the SEC stating:
○ The reason
○ Form, manner, and time
when the notices were given
○ Names of the SH/D/M/T who
approved
○ Date, place, and time of the
meeting in w/c the vote was
made
○ Publication details
● Corporation shall submit:
○ Copy of the resolution
authorizing the dissolution,
certified by a majority of the
BOD/T and countersigned by
the secretary
○ Proof of publication
○ Favorable recommendation
from the appropriate
government agency
● Within 15 days from the receipt of
the verified request and in the
absence of any withdrawal, SEC
shall approve the request and issue a
certificate of dissolution
● No application of dissolution for
banks, etc. will be approved unless
accompanied by favorable
recommendation from appropriate
gov’t agency
● If dissolution may prejudice the right
of any creditor: a verified petition
shall be filed with the SEC
○ Petition shall be signed by a
majority of the BOD/T, and
shall set all the claims and
demands against it and the
dissolution was resolved
upon the vote of SH/M
representing ⅔ of the OCS/M
○ Petition shall state:
■ Reason
■ Form, manner, and
time when notices
were given
■ Date, place, and time
of the meeting in w/c
the vote was made
○ Corporation shall submit to
the SEC the ff:
■ Copy of resolution,
certified by a majority
of the BOD/T, and
countersigned by the
secretary
■ List of all creditors
○ If petition is sufficient, SEC
shall fix a deadline for filing
objections to the petition
which shall not be less than
30 days nor more than 6o
days after entry
○ A copy of the order shall be
published at least once a
week for 3 consecutive weeks
in a newspaper and a similar
 copy shall be posted for 3
consecutive weeks in 3 public
places in such municipality or
city
● Upon 5 days’ notice, after the date
on w/c the right to file objections has
expired, the SEC shall proceed to
hear the petition and try any issue
raised in the objections filed
○ If no objection is sufficient,
and the material allegations
of the petition are true, it
shall render judgment and
directing the disposition of its
assets, and may appoint a
receiver to collect such assets
and pay the debts of the
corporation
○ Dissolution shall take effect
only upon the issuance by the
SEC of a certificate
● A voluntary dissolution is effected
by amending the AOI to shorten the
corporate term
○ A copy of which is submitted
to the SEC
● Upon expiration, the corp. is deemed
dissolved w/o any further
proceedings
● In case of expiration, dissolution
shall automatically take effect on the
day following the expiry, w/o
issuance of a certificate
● A withdrawal of request shall be
made in writing, duly verified by any
I/D/T/SH/M and signed by the same
number of I/D/T/SH/M necessary to
request for a dissolution
● Withdrawal shall be submitted no
later than 15 days from receipt of the
SEC of the request for dissolution
● SEC shall withhold action on request
for diss., upon receipt of withdrawal,
and after investigation:
○ Make a pronouncement that
request is withdrawn
○ Direct a joint meeting of the
BOD/T and the SH/M on
whether to proceed or not
○ Issue other orders
● A withdrawal of petition shall be in
the form of motion but shall be
verified and filed prior to publication
of the order setting the deadline for
objections
● A corp. may be dissolved by the SEC
or upon filing of a verified complaint
by any interested party:
○ Non-use of corporate charter
○ Continuous inoperation
○ Upon receipt of lawful court
order
○ Upon finding by final
judgment that the
incorporation was procured
through fraud
○ Upon finding by final
judgment:
■ Created for the
purpose of
committing,
concealing, or aiding
the commission of
securities violations,
smuggling, tax
evasion, money
 laundering, or graft
and corrupt services
■ Committed the same
and the stockholders
knew
■ Repeatedly and
knowingly tolerated
the graft and corrupt
practices or other
fraudulent and illegal
acts of the D/T/O/E
○ If dissolved through par. E,
its assets, after payment of
liabilities, shall be forfeited
in favor of the national gov’t
● Corporate liquidation: every
corporation whose charter is
annulled by forfeiture or whose
existence is terminated in any other
manner, will remain as a body
corporate for 3 years after the date of
dissolution for the purpose of
prosecuting and defending suits by
or against it and enabling it to settle
and close its affairs, dispose of and
convey its property, and distribute its
assets but not for the purpose of
continuing its business
● Corporation is authorized and
empowered to convey all of its
property to trustees
○ After conveyance, all interest
w/c the corporation had
terminates, the legal interest
in the trustees, and the
beneficial interest in the
SH/M/C/Others
● Any asset distributable to any
creditor or SH or M unknown or
cannot be found shall be escheated in
favor of the nat’l gov’t
● Except by decrease of CS, no
corporation shall distribute any of its
assets or property except upon lawful
dissolution and after payment of all
its debts and liabilities
Foreign Corporations
● FC: one formed, organized, or
existing under laws other than those
of the PH and whose laws allow
Filipinos/PH corps. to do business in
its own country/state. It shall have
the right to transact in the PH after
obtaining such license and a
certificate from the appropriate gov’t
agecy
● FCs applying for a license shall
submit to the SEC:
○ Copy of AOI and bylaws
○ AOI shall set forth:
■ Date and term of inc
■ Address of the
principal office of the
SC
■ Name and address of
is resident agent
authorized to accept
summon, pending the
establishment of a
local office
■ Place in the PH where
it intends to operate
■ Specific purpose/s
(stated in COA)
■ Names and addresses
of present D/O
 ■ Statement of its ACS
and the aggregate
no.of shares it is ● Within 60 days, the licensee shall
authorized to issue,
itemized by class, par
value of shares, shares
w/o par value, and
series
■ Statement of its OCS
and the aggregate
number of shares
issued, itemized by
class, par value of
shares, shares w/o par
value, and series
■ Statement of the
amount actually paid
in
■ Additional info
● Attached is a certificate under oath
attesting to the fact that the laws of
the country or State of the applicant
allow Filipino/PH corporations to do
business therein, and the applicant is
in good standing
● Application is accompanied by a
statement of the president showing
the SEC that the applicant is solvent ● Resident agent: individual/domestic
and in sound financial standing, with
assets and liabilities as of the date
not exceeding 1 year immediately
prior to application
● If SEC is satisfied, it shall issue a
license to transact business in the PH
○ Applicant may commence to ● FC shall file a written PoA
transact business upon
issuance, unless such license
is sooner surrendered,
revoked, suspended, or
annulled
deposit securities consisting of bonds
with a market value of at least 500K
○ Within 6 months after each
fiscal year, the SEC requires
the licensee to deposit
additionals = to 2% of the
amount in excess of the gross
income exceeding 10M. SEC
will also require additional if
the market value of the
deposited securities has
decreased by 10%. It may
release if the gross income of
the FC decreased or deposits
increased in value by 10%.
SEC may allow substitutes as
long as FC is solvent
○ FC is allowed to collect
interest
○ When it ceases to do
business, it gets back its
deposits upon proof that the
licensee as no liability to PH
residents, including the gov’t
corporation
○ Indiv RA must be of good
moral character and of sound
financial standing
○ Domestic corporations must
show proof of good standing
designating a person on whom
summons and other legal processes
may be served and service upon RA
 = as if served upon duly authorized
officers of the FC
● If they cannot locate the RA,
summons are served to the SEC
● SoS is made upon SEC: Within 10
days, transmit a copy of SoS at FC’s
home office
○ Paid in advance by FC
● Duty of RA to notify the SEC any
change in address
● Bound by all laws, rules, regulations
applicable to domestic corporations
● When AOI are amended, file to SEC
within 60 days after taking effect a
copy of the AOI/bylaws with the
changes underscored
○ Such filing shall not alter the
purpose/s of transacting in
the PH
● Obtain an amended license if it
changes its name, or desires to
pursue other purposes
● 1 or more FC authorized may M/C
with any domestic corporation if
permitted under PH laws or law of
inc.
○ Requirements for M/C are
followed
● In its home country/state: shall file in
SEC a copy of articles of M/C within
60 days after the effectivity
○ If FC is absorbed corp., it
shall file a petition for
withdrawal of its license
● FC shall be sued if doing business
without license
● Grounds for revocation:
○ Failure to:
■ File annual report or
pay any fees
■ Appoint and maintain
an RA
■ Submit a statement of
change in case of its
RA changing
addresses
■ Submit to the SEC an
authenticated copy of
any amendment to
AOI/bylaws or any
AM/C
○ Misrepresentation of any
material matter in any app,
report, affidavit or any
document
○ Failure to pay any and all
taxes, imposts, assessments
or penalties
○ Transacting business outside
of the purpose/s
○ Transacting business as an
agent or acting on behalf of
any FC or entity not duly
licensed to do business in the
PH
○ Any other ground as would
render it unfit to transact
business in the PH
● Upon revocation of the license, SEC
shall issue a corresponding
certificate of revocation
○ Mail the notice and copy of
the CoR at its PH office
● FC may withdraw by filing a petition
for withdrawal of license if the ff.
requirements are met:
○ All accrued claims have been
paid, compromised, or settled
○ All taxes, imposts,
assessments, penalties, have
been paid
○ Petition for withdrawal has
been published once a week
for 3 weeks in a newspaper