CPA REVIEW SCHOOL OF THE Pt ‘HILIPPIMES: ‘ REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS | COVERAGE: Comparison of Corporation Code of the Philippines (BP 68) and Revised Corporation Code of the Philippines (RA 11232) Direction: Read and study the following concepts. "Tile othe Code ti Code oF th Phil ‘orporation Code of the Philippines Revised Corporation Code ofthe Philippines [ Number oftie Code | Baas Pambansa Bilang 68 (BP 68) Republic At No. 1232 (RA 11532) (BLTBPH Buildings aod Loan Associaton, Tast Company, Banks, tasurance Company, Public BLTBMPO) Bulags ad Laan ARO, Trust Company, Banks, pany, Pak rporations Resrigion as w ecusive right 0. be ‘Common Stocks Urey Uti, Preneed Company, Other turhorized to obain or aciess ftom the public - | (whether publily sted orn) Founders Shares | No irl provision Exclusive right of founder's share To be eet ie the BoD shall not be allowed if ks exercise will ole At-Durimy Lavy, Foreign nvestnents Act flected inte BoD. td ober pertinent ave, Region No nar provi “The ten aa condons Wale We Aol aad Redeemable Shares Shock ceria roping redeenble shares shall ‘besubjdt to rules and regulations issued by SEC. Tearparaton of Private Corporation ‘Daly wataralparvone ot Tse dan five 3) Bit wot ‘more than fifteen (15) may Become insorporator. ‘Any person, partes, association or corporation, Sngly or jottly bat ack more than fifteen (15) in ‘unter my become ineorporatr. Corpora Tem oF Miami tar OF 50 yous aU wale simes of renewal Ferpenial existence oness ov ales of incorporation provides for specif term. Renewal of Corporaie Tem This mandatory becase furs fo veorw wid the deadline for renewal fs an extomave ground for ‘corporate dissolution, This ot mandsory er corporation ih perpeal texitnoe because there is no tm to reeew. AS feqade to cororson wit specie term. 2 ‘corporation whoze fr bas expted may apply with ‘SEC forthe revival of is cet of incorporation fd subject to all of des, deb, and iatliies xing prio tot revival. Upon approval by SEC, ‘Ge corporation shall be deed revived and @ cotifite of reves! of corporate existence shall be Issued, ving it perpetual existence, unless it ppicaron fr revival provides oterwise. ‘Efectof failure reaew Eitan automate paved fo earporie Gsolnion ‘The corporation not sutomaialy dissed by term within he |The coporcn it ip 29 facio solved by | operation of law because itis now allowed t0 fle deadline forresewal | operation ofa. forthe evival of corporate existence wi SEC. Period. of renewal of Within fiveS)sear period @ Ge orginal or| Wibin veuS}year period to the crigiel or comport tera sbsegue expiry ate) ofthe corprse term | subsequent expiry dat) ofthe corporate te “Applicaton fr evival 6 | No sma provision ‘No epplicstion for revival of cerbete of comets of ‘scorpration of banks, baking and quasi-baaking ‘corporation inettatons,preneed, aurance and tust companies, ‘onstock savings and Joan estoetaons, pawashops, | ‘orporstons engaged fm money service business, ‘and oer Hina ntrmeciries call be approved by SEC unless accompanied. by a fiverble reommendaion of the appropite govemunent suchas BSP of Insurance Commission. ‘ina —sbaibed | 25% of ie watoried capa or ‘No similar provision capital stock ‘Minimum paid up capil [25% of wctally subsea dares OF socks oF | No similar provision 5,000, whichever higher Daly signed and acknowledged by al Oe incorporatrs ‘No ina provision Required ‘No Tongerrequred 1Filing of aicies of ‘ncomorwion and spplcaens ‘er ‘mendes thereto with SEC inthe form of electronic documeat (Gleerone Fg) Watallowed Underaking, 10 ciange ‘the name of carpornon imumedinety upon recein (of aticeffom SEC tt ‘mother corporation, artersip or person as Acquired # prior right 10 ‘he we of ach name No sina previin ‘New underiakng nthe nae of asorporion Power of SEC sumimaly onder be | poration ‘mmedinicly cease and oii fom using same tat) ot isingisnble, 2) is No sina proviion The SEC has the power to summary eajolm te corporation ftom” using mane tat is. ot istngustable, already reserved or rgitrd for ‘he use of ancther cororton; ori rch name it alrmady pro‘eced by la, or when ts ue Is coeary to existing laws, rules and regulations If the corporation fils to comply wth the onder of SEC, already prowctad by aw, ‘Be SEC may old the ‘corporation and ts or (@) conrary 9 law, responsible directors or offer in cozeapt anlar res and regulations. or bold them adminisravely, civily andor Crimizally able oder RCC and otber spliable Jaws andor revoke the registration of the sompratin Provan ‘on | No stair provision ’A ome is ot dliagulabable even IF eos oe fetemization of name ‘ormor of te folowing ‘tat ot dsnguishable er tue word company”, icorjertes”, “lined, or" a abbreviation of one of suk words; and b, Puscuatons, ances, conjunctions, cnrsctons,”prepesidons, abbreviations ‘diferent teoeh spacing, or aun of the ume werd or pre, Veriiion of ended campers by SEC name Prior to submission of Actes of Incorporation tad Bylaws aad No ani pov “pen or group or group of parons deag ‘ecorporte sll subm the Baended. corporate ume io the SEC for verifiation. Ifthe SEC Rds ‘het the mane i Siningusbable fom @ name alweey served ct epered for he use of anober ‘erp, nat protected by law ad isnot comaary {aw ses av regulations, the oame shall be acved it vor of the” incorporation. The ineorsoracs sha dea stim thew ances of ‘Bier (i) a ie tae af sabiion of wean of Incorporation or (2) with 20 diye iiom the isouaoe by SEC of Ceifcue of Regisean or Incorporation Wits two) veais fom a aslo) Incorporation (Lsunce by SEC of cerifeae of registration or fvorpration) ‘Witte five) yeas Rom tbe Geof corporation Assuane by SEC of ceteate of epsvation or Incorperaton) ‘Te coon indperaion of + eixpnaion or » period of atleast five (5) years shal bea ground {or te suspension or evocstion of Hs corporate ‘fanchis or certicte of incorporation. L “The SEC way. alr due uoiee wd hearing, pacoa compotion wbich subsequently becomes { aoperacive for a period of at fas ive (5) years under dilinquect fans. A delinquent corporation Shall ave a period of fo (2) years to resume (operons and comply with all requirements that SEC shall presribe. Upon compliance by the covporation, the SEC shall sue an order ling the asinguen ‘stwux, Fallue to. comply withthe requirements and resure operations within the pted given ty the SEC shall emee the revocation OF the eeveraio’s cerifeation of incorporation. The SEC shall give reesonble notice to, and coordinate witb te appropite regulatory agency ror othe suspension revocation ofthe cetfiate Sf lbeorpotnion of companies under their special regulstey sition, (CRAR Regulatory Framework for Business Tansacrons (RFOT 86411) Page 2 of 20Period ie resare operton of delinguest peration (lnoperative fcporstion for # petiod of at least five (5) consecutive year) No sila provision, 7 delngueat corporation tal Rave & period of wo (2) yeas resume ‘nd comply wi all, ‘equremeats hal SEC shall reverb. Waméer of member of Board of Dirctrs ot Board of Trusts provided in onal tiles of incorporation “The manor of Giecars or bases, which da rot be less than ive (5) nor mere thn fiesn (13) "The wane of detion, which Sail not be more han fen (15) or te number of ruses which may be more tha fie (15) ‘Tem of Trustees of Nonstock Corporation “Te egal warm Hagaered er of ne, bo oF sie yu “Tenn not encoding tree G) years Mandatory Prseace of independent directors in ‘he BoD. a east 20% of such BoD ‘No Similar Provion “Tis board af he flowing corporations vesed with ‘ible intrest shall have tdepeadet directors oo a least weary percent (20%) of such ou: ‘© Corporations covered by Section 17.2 of "Securities Regulation Code" namely thove ‘whose secures are epitered with SEC, ‘Sorporston listed with an exchange (PSE) tr wth ast ofa Test PS0,00,000 and Taving 200 or more shareholders, each holding at east 100 shares of class of culty bares. ‘Banks and quasitenks, osock savings and Ioan" ssocitons, pavashops, exporations engaged. in money service bases, prened, ust and. Insurance ompanies, and ober intial nies; and Otter comportions engaged in business vested with pablle imerestsimflar tothe ove, as may be determined by the SEC, ‘fer taking ito account relevant factors Which are germane 1 the objective and ‘purpose of requiring the election of an ladepeodent director, soc asthe extent of minority ownership, ype of oancial products, or secures issbed or offered to Investors, public Interest Involved in the rate of business operations, and other alogous factors ‘Aa independent eector i peion who, spat om Sharatelingr and. fees veceed. fom te corporates, depedert of managment and Soe {for ey basins ooo relaonsip which oa, could resonably be perceived to materially inet wih te exci Of indepondet adgment in coring out te responsi aa drei. Independent ductors must be elected bythe Sarkis pent ea i ea uring. the section of diector. ndependect sector shall be subject rules und regulon oversing their quilifcatons, lsqualifieaion, as panes, don of tem ad ee ‘maximum numberof board memberships and ‘ter requemens thatthe SEC will pesribe 10 Smengihen els independence end ‘align with Intrational bsinss pris, Tieton of icant of ‘Not expres plated ‘Except when the exclusive right Te raewed for holders f founders shares under Section 7 of RCC, ach stockholder or member shall have right 19 nominate any director or tstee who possares all of the qualifewions and none of the Alsqualifcations st forth in RCC. (CRAG Regalatry Framework for Bases: Tanactins (RFBT 6614) Page 3 of 20‘Voi tough remot | No sina proven ‘When 6 athoraed i he by-laws oF By majory ‘communication or ia vote of the board of dzevioratntees, the absentia by steckolders sloekbolders or members may also vote through or menben in the emote communication or in eeria. Provided, hat flection of desert ot the right to vote tough such moder may be tewstees Caer of cxecised in omportons vested sith publi ‘otng by tckolders or Interest, notwithstanding the absence of provision members in thle inthe Bylaws of such corporations. A snckholder oF ‘ecting) rember who paricpates trough remote ‘omiminicaton or in absentia shall be deemed ven for purposes of qooram rovson on dues of | Nosinilr povion, The decir or wastes eld all pooner recom or races dates es presrbed by lnm, mes of good goversace, and by-laws of he coronation. | ‘Ruined — vote on | Uales te ais af acoporton ore laws | No sill provision femnsction of componte | provide fer a geter majors, a majority of the Yusiness or act of | number of director of trustee ae fixed in the rmanagemest' "and | articles of incorporation sal consti quorim Fegued vot for election | for the ransaction of corporate business, and every ‘ofcorporateocers | decison of a leat a maori of the crectore ot trstes present at meeting st which there Is quorum Shall be vabdas to corporate ac, except forthe election of officer whieh shal require vote of majority ofall the members ofthe Board Wesidency Requirement | Not required “Tis easier ie required wo ea resident of Teaser Election of Conpianse | Novroqared Wie corporation is vased wih pable iorest the Oficer boar sal elet a compliance offer ‘Matter 16 Be repaid to | Net required Shareholdings of elected decors, Wwasees aad ‘SEC ater the elacion f| ofits must be reported to SEC. dewcters, ste: and oftcers "Nonholding of Hlesion | No anlar provion ‘Tie cowoling” of aleslons end the reasons fof Director, Trutees therefor shall be reported to SEC within 30 days nd Officers fom the dae ofthe scheduled election. The report all specify anew defor the lection, wich shal ‘ot Be later than sty (60) days from the scheduled te. I 0 nen dae as been designated, oi the rescheduled election is likewise not bold she SEC, ‘may upon the aplication ofa stockholder, member Aigector or euste, and afer verfeation of the Unjsiied nor-holing of the election, summarily onder tha an election beheld. The SEC shall have the power to issue such orders a may be appropriate, inhoing orders directing the ietance ‘ofa mice satin the time and pce ofthe eecion, esignated presiding officer, andthe reoed date or ites for the deteamioation of stockholders of ‘members ead to vote CRON al | a in a Tropa dagen Bra RE TA GY imo mca ea oon al juga pie a peed eng Se RY | CT oan CRORES CO WTS | — Cana yal ae OY OF apelin | Pts fies pate ty ition fr Setieae eet Pere cst a (ea) For peor te yore Sings Coss GS Po eng "The Secures Reguston Code" o b. Found adninsvatvely lable for any ese involving frauen acts cr & By-a foreign cour or equlalece foreign rgulntry "forty, violaons or ‘miscondit similar to those enumerate 2 leer () and) above. CRAR Regulatory Framework for Busnass Tansactins (REBT OGII) Page norPons o SECT remove 1 disualiid decir or ‘No lr proviion Tie SEC shal, moto propio or upon verted compe tod af oc ede oe ie removal ofa director or iste elected dept Supartn, of whose dgulicaten ee ot [i dscovered subsequent 10 an eleion The removal of a disqualified dctr shall be without prejudice w oer sanction that the SEC ray Inpote onthe Board of directors or ruses who, ‘with knowledge of the disqualification, filed to femove such director or tutes Paved Sg wp of vacancy inthe Board of Directors or Trastees ‘No slr provision ‘When the vacancy i due to te expiation, the election sb be eld no later than the dy of suck fxpiration at a meeting called for dat purpose. ‘When the vacancy arses a a ret of removal by the sokholders or members, he election may be ‘eld onthe same day ofthe meting aurzing the reqoval and this fact mus be 30 stated in the ‘Spends and notice of sald meting, In all other ‘es, the election ru beheld no later than forty five (45) days om the time the vacancy arose. A Geto or tse elected fla vacancy shall Be refered to a8 replacement director or Wusee and {hall terve only for the unexpired tm. of the relecesorin office, Enigeany Bowl oF Directors or Tastes Rosia provi ‘When tie vacancy prevets te Fetaang arecion ftom consinting a quorum and emergency action fs required to preve grave, sobsuatal, and ireparabe less or damage tothe corporation, the ‘vacancy may be tenporafily filed fom among the ‘ofies ofthe corperstion by unanimous vote af the renaiing ductors or wstes. The action by the Assigned director or uses shal be fied othe ‘emergency action necessary, and the ter shal ‘ease within ¢rwwonable me from the termination fof the emergency or open. electon of the replacement director or tustes, whichever comes ater. The corporation must notify tbe SEC within ttre (3) days om the cretion ofthe emergency bowed, stating tee the reason for is creation. Prokiben saat recor or waste” Paricpaion in Setenization of theit ows per diem ot compensation ‘No sini provon Diretors of tustes sll not puricipae io the determination of thelr own pot” dems or compensation. Submision of aan report of compecsiion of BODBOT Stockholders and SEC ‘No ini OVC Corporations vesed_—Wi_pubNe terest aball ‘stim to their sazeholdes end SEC, tn anmoal repr of the fetal companion of etch of ther ‘Scope restriction on so eating director, ruses orofices TW eovers selkalng Givcion, wines oroffoe aly. Te covers not enly self-Zaling iets, sles or ‘offices bat also thei spouses and reaves within ‘own (4) eli ot “Addiional raquo for validity of contact wih seledelig Greco, sees of ‘fiers Ror Teas of corporations vesiod with publi eres, raza conacts are approved by’ a least two" thirds (25) of te exci membership of the boxe, ‘witha east a majority of he independent ecters ‘oting to approve he materia conta ‘Allowing te reat of a leat 23. of Hocktolder/members i Tbe requemsent or condiion ata comet fhir od rewcuable is aot complied with the contrat is voldable at the opin of eoportion nd tis defect my nt be claased by ralication fat least 28 of colar of member IF the requirement or condition al th ooabaet B fair and rewonable Is not complied ‘with te ‘coma is veldabe at he opton of eorperation bt this defect_may be tatiiod by at leat 2 of stockholers of members ‘maton i not complied it, ‘Appolaiment of Tobeappokntedty he Bowd of Disc ‘No ina provision | Members of Executive Commits of he BoD ‘reaton of ~ Spedal | No wnt provion The boarda? Giecons maya spear commitees of tempcary or permaent nate snd Commitee by BoD ‘Etemine te menos" tomy competion, ‘onpesation, powers and responabiipe "Cea Rrgliary Framework for Business Tansacions (REBT 6617) Page 5 of 20‘ae povt io Poni af me ys pe a | Te pa ATS we TNE Peretalacine | ped of tne aed “are ace of|beuarin pve aerne ha sac sont aren crim | ‘oa Tar | Nesta pon Tear RST RS TR RO pemahp “o jeat fexclaston of aye come sree rene Shen ena ps Ficbibe oF pO | Ns copealon Gaels w Fag vg Ro fie cosa pe avon aT coe Stn talons peau eens | tp poten e's cabo ar pepo a roses fui i rng | pun gee Si Giese — ake wo Roe pet iter owed oie baer waa ws souset ofthe stockholdermembers, writen nti to stockholderdmembers on proposed corporate ‘ction may be sent elecroniealy in accordance with, ‘the rules and regulations ofthe SEC on the use of, tlectronie din esas, oath pan Subject to the provisions OF RA. No 10867 ake *Phitppine Competition Act” and other related Jas, © corpraion may, by « majority vos of is board of aiectos or wastes, el, ease, exchange, rmortange, pledge ot otberwise dispose of iS ‘Property and asses, upon such terms and conditions ‘nd for such considerations, which may be money, ‘Soaks, bonds, or eke ieument forte payment fof anny or other every or consideration, 25 tt | for ofatecar orevacn may om eget export aes Critter ae of sbsatilly’ all the corporate property Ale oF other Tipastion aa Fe deemed to | cover substantially all be compere property end sso ifthereby the comoratio woalt he rendered incapaile of continuing she vines ot sccomplishing the purpose for which E wat ‘corpora. The delemnation of whether of tot the Sime {nvoles al or subsuaialy all of he corporation's ropeties and assets oust be computed based omits fet eset ase, at shown ta i latest nancial Suirmers. A tale of ler clposiion stall be Geored to cover subsantally all the corporate property and assets thereby ths eorpention would betendered incapebe of entimaing the business or ‘scomplshing the pupese for which it was Income. ‘Date of Regular TRewilr wecings of scRbeMien & Raber | Reguar meetage sf aociboten or weber shall beheld annually on 3 dts xed inthe bylaws, o if Metin: (of | shll beheld caurily cs & cae fed i the by. ‘Stockbolders ‘| laws, or if not so fined, on any dre of April as | noi so fina, ox any date after April 15 as Members setermined by BoD oF BOT. | getrined ty BaD or or. ‘Minimum digs f giving | Writen noice of eguiarecige Wall be we to | Writen noice of rgslr meetings stall Ue seat to Botice to Stocboldes or | all skacknolders or meron at east Meo (2) wees | all stockoles or moles at east twenty-one (21) ‘Members in Regular| prior to the mesg, was © diferet periods | dys prio to tke moving. unless diferent period Meeting Fequired by the blo ‘Becrooic mall oF ole | Nosinilar revision manner of sending notice Presetton ot | No iniarpowion ‘Natce of cay weaing nay be waved, capeaiy or imply, by any stocoléar or arenes. | isaliediy, by any stoethokier or member. Provided, thot general waivers of notice in the articles of| lacerporaton er th by-laws shall not be allowed. Provided, fhe, at aneatence a » meting sall comtinie a waiver of nee of sich meeting, fetcepe wher: the person cons meeting fore fexpess purpose of objecting to the eanection of fbr tess the meng tlw ald or canened, asia vee ‘Unies the >ylns provide fe a Toagey paride | sock and wansie book ot erembership stall be clove tat van (20) ay repr ets {nd oven () daa for spell esting before te ‘Shel ae oft etog R= Rygulatory Framework for Busnes: Tancactions (RFET 6611) Page 6 of 20Tinian dips of ping nodca to Stockholders of ‘Ro sala provision Th ease_of postponement” of foeKiolden or ‘members’ regular meetings, writen notice thereof and the reason therefor shall be sent to all stockholders er members af reord atleast nwo (2) weeks peor 19 the dae of the meting, unlss a cdi ue iy sped ke ai ve | mn ape ‘a | steced” “Cision | te soctcizn ning at ue 23 oe | te sostolas owning eas aly of Se does not prejudice rights | oustanding capital stock or of at east 2/3 of the | outstanding capital stock of of at least majority of | soy cle | rae —— claim against it 2 Minimum sumer of days of giving notice 10 tocbolers o members pret yoe for ‘olen isslution Ae ty GO) a pre ewig Ge voting 8f vray disc whe 53 cesta eaneces Area wey) aps pir toe meg Br a ung ef Sotatay“ditolsion where no Frequency of publication of notice of ecting for ‘elusary disoiion Publication of Ge note of ine, pace a OUST ‘ofthe meeting for ree (3) conseciive week io event f general eeulon pra 10 he dt of meting. Publication of te asics of tne lace nd objet of the meeting shall be made once Ia a newspaper af ‘gencralcirultion prior tothe date of meeting, Traine fr ahora istolution where 20 ‘cediorsaeafeed Wo salar proviion ‘Tveried request for dissolution sal be Wed wit {he Commision stating: (@) the reason for the lsscution; (the form, manner, and time when the notices wore gives; (6) ‘ames of the ‘Soctholders and directors or members an trates ‘who approved the dissolution, () te date, place, sand time of the mestng in which tbe vote was ‘made; and () dots of publication. The Corporation shall submit the following. to the Commission. (1) a copy of the resolution suihorig tbe diols ead by « majriy ch tn tard of Geet or tee at Soumasignd by the socety of te soporte: @) poof of pubeaion, and). avorbe ‘eeonmeeaton Yom tht appOprat rezulsoy gency. mien recenay. Wikinews (3) nt for cnt ofthe vied regent for aio fd in the absence of ery vibra wii Sid Pero, he Comminins sal approved he est {din the certire of dasohnca The slain shal ae ete ony pen he nee ty the Commision of coat of Susi No Stpltion fr dln of enka, ting so {posh asiog ttn, pce, nsrans end thot company, NSSUAG pawships and cer ‘emo temedares tal be mponed bye Comision tle ssconpaned Uy Tvoabe ‘reomeasion of the sporopi.govrnet ‘ey. ‘Witcraval_ of Request snd Paton for Dissolution ‘No ena provoa RTE So a mae ‘eke in mia, cay vee yay acer Seer, mane, arin a ete ed Speed tye ame nimbet Gf enjoy, Secor, taste, shri, cube eal Spe bye toe sant of acoper, Slecao,” ane stchilies oreber Seco) to ean for tlio pts Se"focpie stn Te wits hl Suited no ler tin Hen (13) dye bors tect by te Commision of eerste Sie, be Conmivien sal wished cs, ete equa! fr Sobon ead sale itrenipton (0 se 1 pronouncement that be fequst fr Alan Seetad weve: () Stet ot etn ofthe Bod of dress Sots andthe soskolc or estes fer be sary of wcraiiog Wits 10 piel is GEAR,— Rigor Fromewor or Basins Wancacions (RFBT 6611) Page 11 of 20“Tsschaton; oF (sae suek oar orders os may dem appropriate ‘A wihdrawal ofthe petition for dissolution shall be inthe form ofa motion and similar in substance 1 8 ‘withdrawal of request fr dissolution bat shall be verified and fled prior to publication of the order eting the deadline for fing objections 12 the petisoa. Enumeratoa of Grounds Involuntary cmoration by SEC ‘ carporaton may be dssve” ty the Serves fend: Exchange Commission =m tiny of verifed complaint and after yroper note and bearing onthe grounds povided by exiting me, ‘les an rogulains, ‘A corporaion ay be disalve By he Commission motu propio or upon Gig of a verified complaint by any interested pany. The following may be sounds fr dissolution ofthe corporate: (@) None-se of corporate charter as provided under Section 21 of his Code (©) Continuous inoperton of » corporation es ‘provided under Section 21 of this Code, (6) Upon receipt of a lawful court onder dissolving ‘he corpraion: (@) Upon finding by the inal judgment that the | sopraton prosued fs feorpruion trough (©) Upon finding by nal judgment that the ‘corporation: (1) Was crested for the purpose of commiting, concerng OF tiding che comission of securities ichuion, smuggling, tx evasion, money or graft and corp proces, (@) Commined or aided ib the commission of| secures violations, smugeling, tx evasion, money lnurdering or graft and cori practices, and ts stockholder knew ofthe ame; and G). Repeatedly and knowingly tolerated the Comission of pratt and comp practices or other ‘andolent or eg acts by is dirctors, trustees, offices, or employees, If the comporatien is ordered solved by Saal Judgment pursuae to the grounds set fork in subparagraph c) hereof its assets, fier payment of its [abittes, shall ypu petition of tae Commision ‘with the appropiate cour, be forfeited in fvor of | the nevoral goverament. Sieh forfeitre shall be witoat prgudice to the nights of innocent ‘Moclilder and employees for services rendered, 100 ths epolleston for othr penaly or sneton | nader tis Code o ether las. The Commission shad give ressonable noice to, and soordinn® wits, the appropiate repulatory aeexy pier 10 the invclunay dissolution of | rernies under their special regulatory Jurstcibo. Benetcly of compare propery excested pos the winding wp oF te corporat lla, aay fase! dsribuable 9 any ereder 3 woekbolée oF ‘member who is wakuown or canot be func thll be extheated tothe cy or municipality where suc setae locate, “Bicep oerwise provided Tria Seaton 95 34 of tis Code, ypon the winding up of corporsie ahs, any ast aitibuable to sty credior or Stocktolder ce member who fe unknown or cannot be fourd shall be eacheste fa fvor of the national ‘Bond equivalent To Test eae Tanda Uwasand (100,00, pesos. Provided, however, That within | ‘x (6) months afer each Bacal year of the lente, the SEC shall rogue sho Hcenser epost addtional secures equivalent in retal ‘mars valu to two (2) perceot oe amocat by hich the licensee's gross income for that Fiscal year ex:eed five millon (P,009,000.9 pesos gover an [Bosc equivalent ve Tea Five banded ousand pss (F509.000.00) or sich ther amovnt hat my | Fe set by sie SEC: Provided. however, That within sx (6 son afer coch Beal yon of he lcensee, tho Coramision shal rqute the Leensee to deposit Aldi suites or inaocia instruments ‘gaivalent in act ae! value to owo peoent (Qs) ofthe amour Vy which the Heensse rose inenme fo that tcl year exceeds Ten milion pesos "19.00.0060. ‘Aadioal qualicaian ofa domestic coporation cing as resident agent of foreign corporation Warroad case of e domestic comporeiion who wT wet a8 fesidea ayent it must be likewise be of round financal starding snd aus show proof that te ia 00d sanding as eetifed by SEC, CAR. Regulatory Pramework for Bushs Tarsartion, (REBT 8641) Page 12 of 20Violation tbe Code ‘Violations of any ofthe provisions oF Bie Cage oF ‘ts amendments not otherwise specifialy Penalized therein sal be punished bye ie of ot Jess than one thousand (1,000.0) peso but not ‘more than ten thousand (0,000.00) pesos or by Imprisonment for nt las tan ty (30) day bu rot more than five (5) year, or both, i the Gicreion of the cout. If he voltion is ‘commined by a corporation, the same may, eer otce and bearing. be disolved in appropite proceedings befor the Secures and Commission: Provided, That such diseoltion shal fot prechde the institution of appropriate scion against the dlrecior, trustee of officer of the orprstion responsible for” sald violation Provided, fer, That nothing in is seton shall be construed 10 repost the other causes, for Asschition ofa corporation provided inthis Code. TRfer to Gacuston below for We now pels for lotion of Revised Corporation Code Tavesttion Prosecution of Offenses vad | No sar provision Tie Commission may investigate a aleged volition ofthis Code, or of a rile, regulator, oF rer ofthe Commision, ‘The Commission may publish ks Gadings, orders, provisions of Republic Ace No. 10173, oherwise Knowa asthe "Duta Privacy Act of 2012, and other erent aw. ‘The Commision shall give reaonsbe notice to and oordinete wit the appropriate regulatory agency ‘roe to any such publication involving companies ‘under their regulatory jurisdiction. “Raeaaine f Oats, | No ilar provision “The Commission, trough is deiigaated ofc, ‘Sabpomaa of Winesses my administer oaths and. affimion, seus sand Documents ‘subpoena and. subpoena’ duces ica, take testimony ia any inquiry o investigation, and may perform other acts necessury the proceedings {othe investigation. ‘Cass and Desi Oras] No ill prov ‘Whenever the Coninisson bas revoaable Gaal © believe that a person has vila, or i about to late this Code, ral, regulation. of order of he Commision, it may dirct such person fo dee ‘fom commining the act cousttuing the voltion ‘The Commission may insu x cease and desist order fx parte to enjoin wn act or practice which fuudalent or can be reasonably expected fo use significant, imminent, and itpareble: danger injury to pli safety orwell, The ex parte order shal be valid fora maximum period of twenty (20) ‘ys, without prejudice to te order Beng. made ermianea afer due nice and ering. ‘Thereafer the Commission aay proceed sminiseatvely agent such person in acceance ‘with Section 158 of tis Code andlor wana ‘evidence to the “Deparment of Jurlce for ‘rlicinary investigation or criminal prosecution {cornet eximal prosecatce for any wltion ofthis Code, rule regulon. 1 CAR. Rygulatory Framework for Business Transactions (RFBT 8611) Page 13 of 20,Coaieage ‘No sir provision “hay pean who, witout jusifable cae, Bs or refses to comply with any lawl order, decision, of srpera sued by te Comision hl aes ‘de novice and hearing, be eld in contempt fined in an amount not exceeding Thirty thousand pesos (P50,0000). When the refusal amounts to ‘oar and open defance of the Commissin' order decision, o subpoena, the Commision may impose ‘daly fine of One thousand pesos F1,000.00) et {he order, decision, or subpoena is complied with To sei povaon Tf, ale due notice and beuig, te Commission finds that any provision of this Code, res or regultions, o any of the Coramison's orders bas been violated, the Commission may impose any or all of the following. sanvoes, taking nto ‘onsieration the extent of parteipaton, naire, fffers equency and seriousness of the lation: (@) Import ofa fine aging from Five ‘ousnd pesos (5,000.0) 0 Two milion esos (F,000,000.0), and not more that ne thousand pests (P1,000.00) foreach ay of continuing violation but in no case to exceed Two alin pesos (2000;000.00, ) Issuance of the permanent cease and desist oder, (©) Supersion or revocation of the centiate of corporation; and (® Disohuion of the corperton and lorie ofits acts under he ooadions in Tie XIV ofthis Code Usnutoraed Te ot Vian ca Disgualieaton Provision; Penis ‘ofa provision To sina provision “Tie water’ am of corps tame all be prised wth «fe raging fom Ten sand Fer 81000000) to Two hdred ound pon freon oo ves desis he TWIGS ofa nance ote jou for digelitetion ss proved ln Seton 26 of this ‘Cade, 2 dco imate. er ot wily olds efi, or willy coment sch | dagelfeaun, ‘eh ce, thse or eet ‘hal be pacihed with «ine engin fom Ten ‘eraser pens (61000.00) Two, banded oan pose 20000.) atte Seton of je cou, tod Sal be permanently Ggualiod ftom being a decor mee or ofr of ay corporation. Wen velon of i peovsoa i lure or decent tote pub he pen shal be ans aging fom Twenty thuzand pass ‘reed wo Fou boned thousand poses oon) Vistas of Day Maintain Records, 10 ‘Allow tsi Inspection ot Reproduction; Penalties ‘Novinii rowan | The unjustifieg feilure or refusal by the corporation, 1 ety tone pele pw sos ser eat ech va een 18, Th sr Ti at aoe Pena Proven fs Sele open Sa Modi of wens tat we pelac at {crag om Testu’ ps 00a) {wo hres” pn LEE) Soret fe sy Sg eter te feroter ft idton tates ‘hash sain Ss pen en tevin te pale ey se ak sg owen) sed Js 25 605) i>ft maid and pos td Sas The palin epee ar a be te ree oe Connie cree of iSonic nee nda ene ot hans Page 14 0f 20 RAR Regulatory Fromewor for Dusines Tesectons (RFBY 8611) 20.‘Wilk Cait of Inconplay, hacer, Fairer) Ming Saements or Report Penalties ca No winilar proviion “ay person who willy cae a repo reqaed ‘wader tis Code, knowing tat te seme coat incomplete, inccur, false, of misleading information or sltement, sal be punished wit « fine ranging from Twenty thousand pesos (200000) to. Two hundred towand pesos (200,000.00), "When the wronefl cerieston Is {njurous or cewimental oth pli th adoro the responsible pene may aso be punished with « fine rarging "fom Forty thousand pesos (0000.00) to Four hundred. thousand pesos ‘rs0b,000.00). ‘dependant Ander Coltsio; Penalties To slay provision “An independent audior Who, colsion Wik Be ‘corporation's directors or representatives, cries {he corporations nancial saements despite Is completeness or inaccuracy, is faire fo give a fir and accorte posenasion of the eomperion’s ‘indie, or despite contning fle or misleading ffserment, shall be pushed with « Gae ranging fom Eighty thousand pesos (P80,000.00) to Five hhndved thousand pesos (F300,000.00). When the flalement or report creed i rule, or ba the fet of causing injury to the general public, the dor or tesponsible officer may be panthed with {fine ranging fiom One hundred Gousand pesos (F100,00000) to Six hundred. thousnd pesos (600,000.00), No similar provision “Those responsible Tere foation ofa corporation trough fa, or who aesied dirty cr indiecty therein, shall be punihed with » fine ranging fox ‘Two hundred thousand pesos (F300 00000) Two nillion poses (P2,000,00.00). When the violation ofthis provision is ijrions or deviental to the pubic, the penalty is a fine ranging fom Four Frndred thousand. pesos 400,000.00) 10 Five sullion pos, P5000, 000.0) Fraatilear Conduct of ‘sine; Penaties To stair provion ‘A comortica that conduct i business Gough {and shall be punished with a fine ringing fom ‘Two hundred thousand pesos (F200,00.00) Two sill pesos (P2,000,00.00). When te violation ofthis provision is injurious or devimentl to the public, the penalty is a fine raging from Four hnondred thousand) pasos (00,000.00) 10 Five milion pesos (5, 000,000.00). No sia poviion ‘ corporation used for feud or for Comaiing oF conceding grat and corupt practices as defined vader pertinent sane, shall be lable for 8 fine Tanging from One hundred houtand’ pesot (£100,000) “to Five” millon esor (5,000,000.0) When there is a fading that any of fs directors, ofa, employees, agents, or representatives 26 (© safepards tr the cmsparat and Int Eevery of saree aad.) betes, code of ei an rode ‘his section, “Eagaging_Intemediaries | No similar proviion 1X compton tat appoie an Taemediny Wao for Graft_and Compt fngnges in graft apd comupt pracoas for the Praca; Penalties corporations benef of tnerest shall wih a fine moging fom One hundred ouand Pesos (P100,00000) to One milion pesos (1,000,000.00). (RAR Rept Fromewer or tas Trematons (FBT BBT1) "Page 15 of 20Novia provon “Edisto, nator, or ocr who Rnowngy lt ‘tion, report, ole te appropriate scion with Proper agencies allows or tolerates the grat end ‘orm practices or fraudulent sts commited by & comporations dicts, guste, officers, employer shall be punished wits a ne ranging ‘fom Five hundred thousand pesos (P500,00.00) 0 One milin pses(P1,000,000.00, Wo ilar provision ‘A whistleblower refers wo aay person who provides {Cull nformation relating to te commission or Postible commission of any offense or violation Inder tie Cede. Any peron wh, knowingly and with into to relia, commis cts deimectl to {a whisleloner sucha icterfering with the lawful cxmployment or livelbood of the wbisteblome, shall, at the isrecon ofthe cout, be punished with 4 fine moging fom One. hondrod. thousnd {100,000.60 0 One milion (000,000.90). No win provision ‘Violation of any af be other provisions ofthis Code cr its amendeats not otherwise specially Denalizad heen shal be punished by a foe of mot ‘ess than Ten thousand pesos (P10,000.00) but not ‘ote than One rll pesos (P,000,0000) Ifthe ‘iolitoa is commited by a corpoation the same may, afer note and hearing, be dixoved. in approrinte proceedings before the Commission; Provided. Tost suc dissolution stall not precinge ‘te ieaiuon of appropriate action agaist the sérector,trsiee, of offer of the corporation responsible for sald violation: Provided rhe, ‘Tha nothing im this section shall be consued t9 repeal the other” causes for dissolution of ‘corporation provided in his Code. Liability for any ‘ofthe foregoing ofensos sal be separate fom any ‘ter adnunistaive, civ, of ermiaal Uabity snder this Code and che as Tabi af Diecors, Trustees, “Otte, oF ‘Ro similar provision The offender ia corporation, th peualy may, aT ‘be discretion of the cout, be imposed tpn ch ‘corporation andlor upon is dion users woolder. members, ofiers, or employees ‘esponsble forth violton or indspense tos ‘Labi of Aides and Aberors © and Other Secondary Liability Ro sine provion ‘Anpone who Shall 0d, abe couniel commaand, Inde, or cause any valaton ofthis Code, or any rule regulon or order ofthe Commision shall be unithed wih «fine not exceeding tat imposed on tbe principal offenders, othe deen of te cout, ‘fer taking into account thelr paricipation in the offese TBeorpanion wad oer fee “The Sesares end Exchange Commision Ieby autboried to collect and recive fees as authorized by law or by rules and regulations ‘Promgated by the Commission For a mare taplemenniios Of Tis Code he (Commission is hereby auboriaed to collet, ean nd we Tes, fies, and ther charges put 10 this Code and its rules and regulations. The amount collected shall be deposted and muistaiped io. feperte secoun whish shall form a fund for is ‘modemizaton and. to migment is operational ‘expenses sich a, Du tle, capita oy, ‘See in coupenin and beets Fonpane swith prevalig rates inthe Taseail employer alowene,caplye ta ‘ee services, and ater inserncs, employee career fdvancement ad profesionalization legal ‘ssusance, seminars, and ore professional fees. CENA Rega Franco for Busnes: Tenartons (REBT 8611) 16 0f20Reporoa Requremens of a ‘corporation boing business inthe Philippines shall submit the ‘Secures and Exchange Commission. #8 ‘anual reper of ft operations, togeher wh 8 financial Statement of te asies and labile, extiied by any independent ered. public ‘ccounant” in spproprte cases, covering the ‘receding fiscal year and such ober requrements ‘8 the Securities and Exchange Commision may require Such report shal be sobxted within sie ‘period as may be preseribed byte Securities snd Exchange Commission Every corporation, domente of foreign, Taw flly | Except as Sheri provided in is Code qr the rules issued bythe Commission, every corporation, domestic or” foreign, doing business "in the Philippines shal submit 1 the Comission: (3) ‘Annual financial statements andied by an Independeat certified pblis account: Provided ‘Tht if the tia ase or total lables of the corporation are loss fun. Six hundred thousind pesos (7600.00.00), he financial satements shall be ered under out ‘by. the corporation's ease chief Sail ofa) A ne {aformation set. Corporations vested with pli interest mst also sei own) dcr of ae ‘Soompenstion repr: and (2) A eter or rastee ‘pps oc performance report nd he sandards or Ctra used oases each, dizer or use, ‘The reporrial requberents shall be sobmited annually and. with such period as my be prescribed by the Commis ‘Te Commision may plaoe the corporation under eloquent sats in cave of failure to sobmit the opororal requirements thee (3) ties, onceutvely of izemitenty, within a peiod of five (3) yews. The Commission shall give sonable “notice 10. and coved with the ‘Sppropie regulatory agency prior to placing on einen! satus compass under tbe special repultry jrieiton ‘Commision may radnet coafdeatal Information fom such requred report: Provided, ‘That soch confidential ies ‘shal be fled ina pple rominerty abled ‘Gaede, peter. roquust fr ceoidetalieamert of the report and the Specie rounds for regan there. Visor Power and Conese! Nene of | Enamiaain Reels “A ergs by te Sear and Exchimge Commission and the easwers thet, as wel asthe resus of xy examination made by tbe Commission or by any ocber fil ‘utborzed by lw to make an exciton of the operations, books and records of any corporation, shal be kp strictly confident excep insofar as {he Ln may require the same to be made ble ot where such iterrogatres, answers or rors are ‘ecetary tbe preset as evidence before any ‘The Commission stall exercise vistoral powens ‘egulton and supervision of acvies, enfrcemeat of compliance, and impositon of sanctions ia ‘secoedance with this Code ‘Should the cororton, without jusiBable eau, tefie or obstruct te Commission's exarcie of fs isorial powers, te Commision may revoke is ‘erieateof incorporation, wioutprejuiceto te Impostion of other penulies and Sanctions under ‘his Code ‘Al interrogutorias propounded by the Comission ‘nd he anowers there, oa wollte reuls of any ‘tramiation made by the Commision or by an) ‘ther official authorized by iw to make an ‘uanaton ofthe operations, books, end records of ‘toy corporation, call be kept evi confident, ‘encept when th law requires the same o be made ‘public, when necessary for the Comission te ke Eon Yo protect the public ort sue orders in he fxercise of is powers under this Code, oF where ich terogatres, answer of Fess ae ecesay fo be present as evidence before axy cout, (C8AR Raglan Fomeawrk for Barna Tansacions (RFBT SST) Poee Totz0Rowen of SEC ander Conpration Code “The Scares and Exchange Common tall have the power and autborty to implement the ‘provisions ofthis Code, and to promulgte rues {ind repulsion reasonably neoesary to eaable it to perform is dates header, parcculaly inte ‘prevention of fraud and abases onthe part of the Coouolling stockholders, member, deters, | tastes or officer, L “The Cacision sal ave the power and atop (@) Exercise supervision and jurisdiction ‘overall corporations and persons acting 02 {het bel, except as obbervite provided under this Codes ) Pursuant to Presidential Deeee No. SOA, a atten oe peng ‘cases involving inra-cnporate disputes Submived for” final reschtion The Commision sal ean Jatin oer eading suspension Fyne cr Ada of 33 Sie 2000 unt fialy disposes (© Impose snetions forthe violation of this Code, is implementing rules and fonders ofthe Commission; (@) Promote corporate governance and he Droection of minenty investors, Sough, ‘mong otber, the issuance of rules and fegulations consistent wid Intemational est practices; (@) sue opinions to clarify the application (of a, rales and regulation (1 Ise couse end desist order ex parte 0 ‘prevent immioea: uid oF ijury 10 the public: (@) Hold corporations in vet and inst ‘temp, 0) swe cutpoona ducer ttcim and ‘summon witesses 0 appear in ‘roveodizgs Ufone te Commision; (Ja appropiate cases, order the examination, Search ond” seize of doeuents, papers les and revords, end book of accounts of ty ely of peson ‘oder vestigation as may be necessary for te ploper diposioon of the cases, subject che provisos of existing laws, () Susjend or revoke the coriiate of| Ireorporon aller proper notice and bering, @ Dissolve or impose sanctions on orperstions, upon fal court ores, for ‘conmlting aiding inthe commission of, or in say” tsamer futheriag securities ‘lations, smuggling, x evasion, money Tnundering, gra and corupe paces, ot ober fapdlen regal ae (0) Sssue wits of exeetion and attachment to enforce payment of fees, adminisraive fines, another dues collectible under this cae (tn) Prssbe the numberof independent recs: and the minimum criteria io deeming be depen of 8 (CRAR.— Regulatory Framework for Business Tarsactons (RFST 6611) Page 18 of 20() tapove or recommend uo L. y sheba teckel, women i {rie my stn neg oF cat totes as ecology may elow, ng count the company’ sae roar of Sartor or meats scat od ‘er sort coment wiht bese itt Stecrperae ape (©) Fors sad enforce sandants, Suet pose, a tal equa: SD cary oat te prone of tis Cae, he () Exercise such ator pomers provided by law or those which way be oecessery oF ‘neidemal to carying oot the powers expresty granted tthe Commission. Jn inposing penaies a mitooal monoring ant supervision requremems the Commission al) {aie into considerston tbe sag, ature of the ‘buss, and capi ef te eorperstion ‘No cout below che Cour of Arpeals sal ave jadicion to ie #resaining over, proiary ‘mjweticn, of poliminary meadtiery spunea in ny case, dspue, or contoversy tht dey or ‘ndetly nerteres with the exereie ofthe powers, dies and responses of the Cousmisson that falls xchsively within jurist, To lair provision "Tie Conunision a velop aid maple aa stecronls fling ard moniexing system, ‘The ‘Comission stall promulgate ruler wo fale and expedite, uneng abes, core tame reson ‘ad sepitesion, ncurperaton, bison of ‘eport oo es, and dovamnest required ner ths (Code, aed sharing of pertinent Iifonaaion wi ole: goverment apences, ‘Develops "an Ampleweoration “or Bleewonie Fling and Moniring Sytem “Aion 7 Conporasions Wain provi reolnn wich ae on he ingen of the ancy of cpt or sunt bee “vcore. ribs tad be eked i> tblrmtn. A opte sll be eos an voles ei afore ad of Srey earn gee ten {ice cop, Sencar, wena ‘Sdezeutverocanmges ‘Tobe enforceable, the wtivstion apeement should ‘pial th mer of ubiuses adhe procedure Sepeivetnt. The power 10 appa the sien feraing Ue sb thal al be ‘aoted to 9 designated dependent ‘hid party. ‘Shoe the third party fl to appoint te rbiraors Inthe maser ent wha the pono speed me sabitation agreemen, the pares may sequen che Commission to appoint the arian In tny case, umbitdiors rat be acereted or rit belong 10 stynizains woeredied for the parpoen of i CEAR— Regulatory Framework for Business Transactions (RFBT BOT) a' ‘The aire wibuoal stall hve the power rule oo ‘owe fraction end or guenions relcting f te ‘aidy of te ariaton agresment. Wher an ince= espore dspte i filed wit « Regional Teitl Cour, ho court shall ismice sh care Before Oe teminuion of the previal conference, if it deteccaes that an acbiation agreement i write in ‘the comoraion's ariclee of neorporation, bytes oF uta separate agrerent ‘The sia vihucal shall hie the power fo at interim menses cecesary to exsure exforceest Of the ahard, provent a miscartage of fst, of oars rust he igh te partes. ‘A fost erioal award under this scion shall be executor ae the [epee of fiiesn (15) dns om teseip thertof by the parts and shall be syed ‘only by te fing of «fond or the fsuace by the ‘sppefte court of an junc wrk. ‘The Commission shall forlee the rules and ‘eset’, tick stall govern eblvaton under 18s secon, subjecttoexisng laws en arbirasion, Tatadiaion over Pay | Roni inc ist Organs "Fie fowems onharic td reponse of Be Coomission volving parts! organizabons te tensors! i the “Commision on Elecoas {COMELEC) Wits ex (@) moths air the effecvey of this Ax he awoaievg. supervision, and eegulabon of | tach eorporacons sell be deemed sutomaialy ‘aasered tthe COMELEC. or wis papas, he COMELEC, in codimtion with “the Cone:sion, shail promulgnte the sorespandigg implementing mes Fr the anaes oF Jrsdexon over ts eboverentoned comporeens, Tpplesiing —of te | No ams peso — Comporte Coe TWoitae a tis Actin be Conse ws amending sisting provisions of special lows governing the egirratcn, egalaion,“ao0itving a8 supervision ‘of special serpin: such as bank, nonbank ‘Enancalituc.ons and insurance companies Nowidetadiog say provbioa to Ue cantrey, Temlatrs such asthe Bango Seotral ng Pilipinas ted the tasustre Commissen all exec pezary authori ove seca corporins such as ‘nis, coshank famel!insrions, and tsuraaee ‘copes under lr seperison and eguation, CAR, - Regulatory Framewor for Bins Transactions (REBT Page 20 of 20