By Arra B. Francia
THE CORPORATE REGULATOR will allow companies whose incorporation papers have expired to apply for revival, following approval of a perpetual corporate term under Republic Act No. 11232, or the Revised Corporation Code of the Philippines.
In a notice posted on its Web site on Monday, the Securities and Exchange Commission (SEC) said it is inviting interested parties, market participants and the investing public to submit their comments on its proposed Guidelines on the Revival of Expired Corporations.
This is in line with the grant of a perpetual corporate term for existing and future corporations under RA 11232, which President Rodrigo R. Duterte signed into law on Feb. 20.
“The guidelines will help clarify how they can petition to revive their previously expired certificate of registration,” SEC Chairman Emilio B. Aquino said in a mobile phone message.
“We have to resolve many cases in the past where, by sheer oversight, they failed to extend their companies’ term of existence,” Mr. Aquino explained.
“It caused grave consequences to their firms, like contending with tax clearances and all. Thus, among the amendments legislated is to grant SEC authority to approve revival of their terms, since direction is towards perpetuity of companies.”
The proposed guidelines will allow companies to submit a petition to revive corporate existence, so long as the petition was approved by a vote of at least two-thirds of outstanding capital stock.
The draft rules provide that the petitioner must state changes in the composition of its stockholders, or members for non-stock corporations, since the time its incorporation papers have expired.
The petitioner must also have no intracorporate controversies at the time of the filing of the petition.
Revival of the firm’s corporate term must also not prejudice third persons or any government agency.
The petitioner must submit several documents to the SEC alongside its petition for revival, including its certificate of incorporation and articles of incorporation, a general information sheet as of the date of the expiration of its corporate term, as well as its audited financial statement as of and for the year immediately preceding the expiration of its corporate term, among others.
The draft rules exclude companies whose certificates of incorporation have been revoked, as Section 11 of the revised corporation code provides only for the revival of a “corporation whose term has expired” not terminated.
A company whose certificate of registration has been suspended and has expired may be allowed to revive its corporate existence. Such firm has to file a proper petition to lift its suspension and settle corresponding penalties. The firm may then file for the revival of its corporate existence.
Banks, banking and quasi-banking institutions, pre-need, insurance and trust companies, non-stock savings and loan associations, pawnshops and corporations engaged in money service businesses whose terms have expired may apply for revival, provided that they have secured the favorable recommendation of the government agency governing them.
Once approved by the commission en banc, the firm will be issued a Certificate of Revival, which shall provide for a “perpetual term of existence unless a specific corporate term is stated by the applicant corporation in the verified Petition for Revival.”
The SEC earlier said that a perpetual term of existence will eliminate the possibility of legitimate, productive businesses from prematurely closing down just because they failed to renew their registration.
The commission is accepting comments for the draft guidelines until April 26.