DISSOLUTION (b) the form, manner, and time when the
notices were given;
 The extinguishment of the franchise to
be a corporation and the termination
of the corporate existence.
Sec. 133. Methods of Dissolution – A
corporation formed or organized under the
provisions of this Code may be dissolved
voluntarily or involuntarily.
Corporate Dissolution may be:
1. Voluntary - by the will of the
1.
stockholders/members of the corporation.
(Sec. 134-137)
2. Involuntary - (Sec. 138)
2.
Modes of Dissolution (Nasa Book)
1. Voluntary Dissolution
2. Involuntary Dissolution
SEC. 134. Voluntary Dissolution Where
No Creditors are Affected.
Procedures: (Nasa Book)
1. A meeting must be held upon the call
of the directors or trustees.
2. At least twenty (20) days prior to the
meeting, notice shall be given to each
shareholder or member. Notice of the time,
place, and object of the meeting shall be
published once prior to the date of the
meeting in a newspaper published in the
place where the principal office of said
corporation is located, or if no newspaper
is published in such place, in a newspaper
of general circulation in the Philippines.
3. A resolution to dissolve must be
approved 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 majority of
the outstanding capital stock or majority of
the members.
4. A verified request for dissolution shall
be filed with the Commission stating:
(a) the reason for the dissolution;
(c) 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 publication.
5. Submission to the SEC of the following;
(1) 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;
(2) proof of publication; and
(3) favorable recommendation from the
appropriate regulatory agency, when
necessary.
6. Within fifteen (15) days from receipt of
the verified request for dissolution, and in
the absence of any withdrawal within said
period, the Commission shall approve the
request and issue the certificate of
dissolution. The dissolution shall take
effect only upon the issuance by the
Commission of a certificate of dissolution.
SEC. 135. Voluntary Dissolution Where
Creditors are Affected; Procedure and
Contents of Petition.
When do we say that creditors are
affected?
For Example: Let say a corporation
entered into a contract of loan with person
X. And this contract of loan is for a long
term of 10 years and an interest-bearing.
Assuming that the contract period is not
yet matured, the corporation would like to
file for its dissolution.
Would creditor X be affected?
Yes, because he will be deprived of
his supposed profit that he will earned in
that contract of loan.
Procedures: (Nasa Book)
1. The petition shall be signed by a
majority of the corporation’s board of
directors or trustees, verified by its
president or secretary or one of its
directors or trustees, and shall set forth all
claims and demands against it, and that
its dissolution was resolved upon by the
affirmative vote of the stockholders
representing at least two-thirds (2/3) of the
outstanding capital stock or at least two-
thirds (2/3) of the members at a meeting
of its stockholders or members called for
that purpose.
2. The petition for dissolution shall be
filed with the Commission and shall
contain the following:
(a) the reason for the 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.
3. Submission of 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 its creditors.
4. The SEC 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 than thirty (30) days nor
more than sixty (60) days after the entry of
the order.
5. Publication of the order at least once a
week for three (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. Posting of a similar
copy shall be posted for three (3)
consecutive weeks in three (3) public
places in such municipality or city.
6. The SEC shall proceed to hear the
petition and try any issue raised in the
objections filed.
7. If no such objection is sufficient, and
the material allegations of the petition are
true, it shall render judgment dissolving
the corporation and directing such
disposition of its assets as justice requires,
and may appoint a receiver to collect such
assets and pay the debts of the
corporation.
8. The dissolution shall take effect only
upon the issuance by the Commission of
a certificate of dissolution.
SEC. 136. Dissolution by Shortening
Corporate Term.
Procedures:
1. A voluntary dissolution may be effected
by amending the articles of incorporation.
2. A copy of the amended articles of
incorporation shall be submitted to the
SEC.
3. Approval of the SEC of the amended
articles of incorporation.
SEC. 137. Withdrawal of Request and
Petition for Dissolution.
Time for filing of withdrawal: within 15
days from receipt by the SEC of the
request for dissolution.
SEC. 138. Involuntary Dissolution.
Grounds for Involuntary Dissolution
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 judgment that the
corporation procured its incorporation
through fraud;
5. Upon finding by final judgment 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) Committed 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.
If the corporation is ordered
dissolved by final judgment pursuant to
the grounds set forth in subparagraph (e)
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.
The Commission shall give
reasonable notice to, and coordinate with,
the appropriate regulatory agency prior to
the involuntary dissolution of companies
under their special regulatory
jurisdiction.
SEC. 139. Corporate Liquidation.
General Rule: 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 three (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.
Exception: Except for banks, which shall
be covered by the applicable provisions of
Republic Act No. 7653, otherwise known
as the “New Central Bank Act”,as
amended, and Republic Act No. 3591,
otherwise known as the Philippine Deposit
Insurance Corporation Charter, as
amended.
General Rule: At any time during said
three (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.
Exception:
Except as otherwise provided for in
Sections 93 and 94 (Distribution of
Corporate Asset to Nonstock Corporation)
of this Code, upon the winding up of
corporate affairs, any asset distributable
to any creditor or stockholder or member
who is unknown 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.