Ano yung persons acting on their behalf?

Example. Resident Agent when we talk about foreign corporation. Retain certain jurisdiction we will
discuss inter-corporate dispute the PD 902-A because meron na tayong corporate courts so you have
to distinguish the jurisdiction of SEC and the jurisdiction of the RTC operating as a commercial court.
Kasi before it would only be the SEC but there was PD 902-A which actually transfer the jurisdiction
to the RTC acting as a corporate court. Impose actions for the regulation of this code, promote
corporate governance, issue opinion, issue cease and desist orders ex parte etc.

Arbitration for corporation. Now this is also a revision of the Old Corporation Code.

SEC. 181. Arbitration for Corporations. – An arbitration agreement may be provided in the articles
of incorporation or bylaws of an unlisted corporation. When such an agreement is in place, disputes
between the corporation, its stockholders or members, which arise from the implementation of the
articles of incorporation or bylaws, or from intra-corporate relations, shall be referred to arbitration.
A dispute shall be nonarbitrable when it involves criminal offenses and interests of third parties.

The arbitration agreement shall be binding on the corporation, its directors, trustees, officers, and
executives or managers.

Now for Party-list organization by express provision, – The powers, authorities, and responsibilities
of the Commission involving party-list organizations are transferred to the Commission on Elections .
(Section 182)

Because before sobrang weird kasi pag party-list ka ang SEC may jurisdiction pa but now it is
transferred by express provision with the COMELEC.

Now everything that has to begin has an end. Let’s talk about corporate debt for dissolution and also
the integration of FRIA.

DISSOLUTION

You have:

[1] Voluntary

Creditors are affected

Creditors are not affected

[2] Involuntary.

Sec. 134. Voluntary dissolution where no creditors are affected – If dissolution of a corporation does
not prejudice the rights of any creditor having a claim against it, the dissolution may be effected by
majority vote of the board of directors or trustees, and by a resolution adopted by the affirmative
vote of the stockholders owning at least a majority of the outstanding capital stock or majority of the
members of a meeting to be held upon the call of the directors or trustees.
For voluntary dissolution where no creditors are affected ang kailangan mo lang is a request. Please
be particular with the remedy, kailangan mo lang is a verified request for dissolution so it’s not a
petition it’s just a request and it must be verified.

A verified petition for dissolution shall be filed with the Commission stating:

[a] the reason for dissolution;

[b] the form, manner, and time when the notices were given;

[c] the names of the stockholders and directors or members and trustees who approved the
dissolution;

[d] the date, place and time of the meeting in which the vote was made; and [e] details of the
publication.

Because remember pag nag vovoluntary dissolve ka ikaw lang yung nagsasabe na wala kang utang so
kailangan siya e publish to give opportunity to you creditors.

The corporation shall submit to the Commission the following:

[a] a copy of the resolution authorizing the dissolution, certified by a majority of the board of
directors or trustees and countersigned by the secretary of the corporation; and

[b] proof of publication and

[c] favorable recommendation from the appropriate regulatory agency, when necessary.

Within 15 days from receipt of the verified request for dissolution, and in the absence of any
withdrawal within the said period, the commission shall approve the request and issue of the
certificate of dissolution. The dissolution shall take effect only upon the issuance by the commission
of a certificate of dissolution.

No application for dissolution of banks, banking and quasi banking institutions, pre-need insurance
and trust companies, non stock savings and loan associations, pawnshops, and other financial
intermediaries shall be approved by the commission unless accompanied by a favorable
recommendation of the appropriate government agency.

Again if there are creditors and they want to dissolve voluntarily what you will file is not a verified
request but a petition for dissolution. Again, magkaiba sila and please don’t get the wrong remedy.
Now you file this also with the SEC or the commission and it must be signed by the majority of the
BOD verified by it president or secretary or one of its directors or trustees.

Please take note it must be resolve by an affirmative vote of the stockholders representing 2/3 so it’s
not majority kasi in majority kailangan mo ng 2/3 in the semi-capital stock
The petition shall likewise state:

[a] the reason for dissolution;

[b] the form, manner, and time when the notices were given; and

[c] the date, place and time of the meeting in which the vote was made.

The corporation shall submit to the Commission the following:

[a] a copy of the resolution authorizing the dissolution, certified by a majority of the board of
directors or trustees and countersigned by the secretary of the corporation; and

[b] a list of all of its creditors.

If the petition is sufficient in form and substance, the commission shall, by an order reciting the
purpose of the petition, fix a deadline for filing objections to the petition which date shall not be less
that 30 days nor more than 60 days after the entry 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 the municipality or city where the principal office of the corporation is
situated, or if there be no such newspaper, then in a newspaper of general circulation in the
Philippines, and a similar copy shall be posted for 3 consecutive weeks in 3 public places in such
municipality or city.

Actually mag submit ka ng list of creditors and bibigyan ng copy yung creditors mo for them to file an
objection.

Upon 5 days notice, given after the date on which the right to file objections as fixed in the order has
expired, the Commission shall proceed to hear the petition and try any issue raised in the objections
filed; and if no such objection is sufficient and the material allegations of the petition are true, it shall
render judgement dissolving the corporation and directing such disposition of its assets as justice
requires, and may appoint a receiver to collect such assets and pay the debts of the corporation.

So given that this a petition there has to be an hearing because there is an objection, unlike in a
request for dissolution na no need for a hearing.

This is a common problem that I face as a practioner. So ganito gumawa ng corporation kasi nga
they were advice to make a corporation tapos nandoon naka pangalan ang property, tapos non-
operating na kasi wala ng business permit, ngayon the title of the property is still under the name of
the corporation but dissolve , paano nila ngayon ma benta kasi may gusting bumili.

Ano ang kanilang gagawin? Paano nila mabebenta? What instrument will you prepare? What is your
remedy? Ok. Kayo na bahalang sumagot.

Sec 137. Withdrawal of request and petition for dissolution. A withdrawal of the request for
dissolution shall be made in writing, duly verified by any incorporator, director, trustee, shareholder,
or member and signed by the same number of incorporators, directors, trustees, shareholders, or
members necessary to request for dissolution as set forth in the coregoing sections. The withdrawal
shall be submitted no later than 15 days from receipt by the commission of the request for
dissolution. Upon receipt of a withdrawal of request for dissolution, the commission shall withhold
action on the request for dissolution and shall after investigation:

[a] make a pronouncement that the request for dissolution is deemed withdrawn;

[b] direct a joint meeting of the board of directors or trustees and the stockholders or members for
the purpose of ascertaining whether to proceed with dissolution; or

[c] issue such other orders as it may deem appropriate.

A withdrawal of the petition for dissolution shall be in the form of a motion and similar in substance
to a withdrawal of request for dissolution but shall be verified and filed prior to a publication of the
order setting of the deadline for filing objections to the petitions.

Now, withdrawal of request for dissolution, ito yung procedure. But if it is a petition for dissolution
tapos you withdraw it should be in a form of a motion to withdraw the petition for dissolution,
hindi lang siya request or letter in writing but it must be in a form of motion.

Kasi pag meron ng publication you can no longer withdraw.

Sec 136. Dissolution by shortening the corporate term. – A voluntary dissolution may be effected by
amending the articles of incorporation to shorten the corporate term pursuant to the provisions of
this Code. A copy of the amended articles of incorporation shall be submitted to the Commission in
accordance with this Code. Upon the expiration of the shortened term, as stated in the approved
amended articles of incorporation, the corporation shall be deemed dissolved without any further
proceedings, subject to the provisions of the Code on liquidation. In the case of expiration of
corporate term, dissolution shall automatically take effect on the day following the last day of the
corporate term stated in the articles of incorporation without the need for the issuance by the
Commission of a certificate of dissolution.

Now, this is still under voluntary dissolution but this is a special mode of dissolution and mind you
this has been the easiest way to dissolve a coporation. Let the life pass. The problem of a petition for
dissolution is meron pa mga objections, you have to publish, etc... So you want to dissolve
corporation tapos ayaw mo dumaan sa mga petition for dissolution, now what you will do is to
amend the term and shorten it, so kung gusto mo ma dissolve siya next year “amend natin lagay
natin April 2020. Once ma approve yan hintayin mo lang mag lapse siya and it will automatically be
dissolve. This is what you call Dissolution by shortening the corporate term.

But because this has been abused by people gumawa ng internal rule ang SEC na they would not
receive an amendment of corporate term if it for shortening within less than one year from the
intended shortened date. So kung three (3) years pa you have top plan it properly kasi if one (1)
nalang yung gusto mong e shorten, hindi nila tanggapin yan at sasabihin na nila na you file a petition
for dissolution.
Let us go to Involuntary dissolution. How do you make an involuntary dissolution.

Sec 138. Involuntary dissolution – A corporation may be dissolved by the Commission motu proprio
or upon filing of a verified complaint by any interested party. The following may be grounds for
dissolution of the corporation:

[1] Non use of corporate charter as provided under section 21 of this Code;

[2] Continuous inoperation of a corporation as provided under Section 21 of this Code;

[3] Upon receipt of a lawful court order dissolving the corporation;

[4] Upon finding by final judgement that the corporation procured its incorporation through fraud;

[5] Upon finding by final judgement that the corporation

[a] Was created for the purpose of committing, concealing or aiding the commission of
securities violations, smuggling, tax evasion, money laundering or graft and corrupt practices

[b] Committee or aided in the commission of securities violations, smuggling, tax evasion,
money laundering or graft and corrupt practices and its stockholders knew; and

[c] Repeatedly and knowingly tolerated the commission of graft and corrupt practices or
other fraudulent or illegal acts by its directors, trustees, officers or employees.

So you can consolidate now what you have learned so far. So kung money laundering you can
actually file a verified petition for dissolution as use as the medium for money laundering. [a]

If the corporation is ordered dissolved by final judgement pursuant to the ground un subparagraph 5
hereof, its assets, after payment of its liabilities shall, upon petition of the Commission with the
appropriate court, be forfeited in favor of the national government. Such forfeiture shall be without
prejudice to the rights of innocent stockholders and employees for services rendered, and to the
application of other penalty or sanction under this Code or other laws.

So ito lang yung difference because here mapupunta siya sa government and hindi sa stockholders
but of course babayaran muna yung creditors.

Now let us go to corporate liquidation, so after the dissolution what’s next? Sasauli na yung dapat
ibalik. Except for banks which should be covered by the “New Central Bank Act”.

Sec. 139. Corporate liquidation. – Except for banks, which shall be covered by the applicable
provisions of RA 7653, otherwise known as the New Central Bank Act as amended, and RA 3591,
otherwise known as the Phlippine Deposit Insurance Corporation Charter, as amended, every
corporation whose charter expires pursuant to its articles of incorporation, is annulled by forfeiture,
or whose corporate existence is terminated in any other manner, shall nevertheless remain as a
body corporate for 3 years after the effective 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 the business for which it
was established.

So meron din tinatawag na winding up period which is 3 years and similar to your law on partnership
merong period to liquidate.

At any time during said 3 years, the corporation is authorized and empowered to convey all of its
property to trustees for the benefit of stockholders, members, creditors and other persons in
interest. After any such conveyance by the corporation of its property in trust for the benefit of its
stockholders, members, creditors and others in interest, all interest which the corporation had in the
property terminates, the legal interest vests in the trustees, and the beneficial interest in the
stockholders, members, creditors or other persons in interest.

Except as otherwise provided for in Sections 94 and 95 of this Code, upon the winding up of its
corporate affairs, any asset distributable to any creditor or stockholder or member who is known or
cannot be found shall be escheated in favor of the national government.

Except by decrease of capital stock and as otherwise allowed by this Code, no corporation shall
distribute any of its assets or property except upon lawful dissolution and after payment of all its
debts and liabilities.

This is the express provision which recognizes the TRUST FUND DOCTRINE. That you cannot
distribute the capital unless and until you are lawfully dissolved and you‘ve paid the debts and
liabilitie

Ok let us go to FRIA