MEMORANDUM

FOR: SAAD

FROM: EJEH

RE: Purchase Property of a Dissolved

Corporation (File: 1-C)

DATE: 27 April 2019

STATEMENT OF FACTS
TechSolutions is expanding and planning to purchase parcels of land from
Ascent Corporation, a dissolved corporation. Ascent was dissolved in 2010 and
the SEC approved it in 2011. Majority of its Board of Directors and stockholders
are still alive. The TCT is registered in the name of Ascent and it has not yet
been obtained, but it was found that there are no liens or encumbrances on the
title. Ascent has no creditors left, neither does it have trustees.

QUESTIONS PRESENTED
PRINCIPAL ISSUE: Whether or not TechSolutions can purchase the property
from Ascent, a dissolved corporation

SUBSIDIARY ISSUES:
• Whether or not a dissolved corporation may still convey its property despite being
past its period of liquidation
• Whether or not the former board of directors have the capacity to dispose of a
dissolved corporation’s assets

BRIEF ANSWERS

I. TechSolutions can purchase the property from Ascent.

• The Corporation Code of the Philippines gives a corporation 3 years to
remain as a corporation after it has been dissolved to settle matters
concerning the corporation itself such as liquidation.1
• The Securities and Exchange Commission of the Philippines (SEC) has
stated that liquidation may still continue after this 3 year period.2
II. The former board of directors may dispose of the corporation’s
assets.
• The Supreme Court has ruled in Clemente v. CA that after the 3 year
period given by the Corporation Code, the board of directors may be

1 The Corporation Code of the Philippines [Tʜᴇ Cᴏʀᴘᴏʀᴀᴛɪᴏɴ Cᴏᴅᴇ ᴏғ ᴛʜᴇ

Pʜɪʟɪᴘᴘɪɴᴇs], Batas Pambansa Blg. 68, § 122 (1980)

2 Securities and Exchange Comission, SEC-OGC Opinion No. 15-07 (July 21, 2015)
 permitted to act as trustees by legal implication to complete the corporate
liquidation if no trustee or receiver has been designated.3

DISCUSSION

I. Ascent’s property may be purchased by TechSolutions even after the

3 year period given by the Corporation Code.
• TechSolutions aims to purchase the property of Ascent after it has been
dissolved. A substantial amount of time has passed beyond the 3 year
period given by the Corporation Code for a dissolved corporation to
remain as a corporation to settle different matters concerning the
corporation itself. TechSolutions now comes to our firm asking if Ascent’s
properties may still be purchased even after this 3 year period given by
the Corporation Code.
• Section 122 of the Corporation Code Specifically states that a corporation
is given a period of 3 years after it has been dissolved to remain as a
corporation to complete tasks such as
o prosecuting and defending suits by or against it and enabling it to
settle and close its affairs, to dispose of and convey its property
and to distribute its assets, but not for the purpose of continuing
the business for which it was established (emphasis supplied). 4
• Yet the SEC has stated that even after the 3 year period given by the
Corporation Code to remain as a corporation, the disposition of the
remaining undistributed assets must necessarily continue even after such
period.5
• Jurisprudence also shows that acts of liquidation may go beyond the 3
year period. As can be seen from Supreme Court cases such as Clemente
v. CA 6 and Alabang Development Corporation v. Alabang Village Hills
Association.7
• Applying these to the present case, Ascent may still liquidate its assets.
As can be seen from the facts, the only action that is being done with
relation to Ascent is the purchase of its properties. There is no other action
related to the dissolved corporation such as prosecuting or defending
cases.

3 Luis C. Clemente et al. v. Court of Appeals, G.R. No. 82407, March 27, 1995.
4 Tʜᴇ Cᴏʀᴘᴏʀᴀᴛɪᴏɴ Cᴏᴅᴇ ᴏғ ᴛʜᴇ Pʜɪʟɪᴘᴘɪɴᴇs, §122
5 Securities and Exchange Comission, SEC-OGC Opinion No. 15-07 (July 21, 2015)
6 Luis C. Clemente et al. v. Court of Appeals, G. R. No. 82407, March 27, 1995.
7 Alabang Development Corporation v. Alabang Village Hills Association and Rafael

Tinio, G.R. No.187456, June 2, 2014.

 • Ascent is only barred from continuing its business because of the 3 year
period but it may still liquidate whatever assets it may still have.

II. The former board of directors may dispose of the properties since
there are no creditors or trustees still alive.
• Since the time of its dissolution, all of the creditors and trustees of Ascent
have passed away and only the Board of Directors and former
stockholders remain. As such, another issue being raised is if these
remaining directors can liquidate the properties that TechSolution aims to
purchase.
• In the case of Clemente v. CA, the Supreme Court ruled that if the 3-year
extended life has expired without a trustee or receiver having been
designated for, the board of directors may be permitted to act as trustees
by legal implication to complete the corporate liquidation
• Applying this ruling to the present case where no trustees remain alive,
the Board of Directors can in fact liquidate the remaining properties of the
company.

CONCLUSION AND RECOMMENDATIONS

To sum up, TechSolutions may purchase the properties of Ascent even
after the 3 year period given by the Corporation Code. It is recommended though
that this case be limited only to liquidation of the Ascent’s properties. This is such
since Ascent is barred from other acts of business as a corporation after the 3
year period.
The remaining Board of Directors may also liquidate these properties
pursuant to the Supreme Court’s ruling in Clement v. CA.8

8 Luis C. Clemente et al. v. Court of Appeals, G. R. No. 82407, March 27, 1995.