Category Archives: Corporate Law

Corporate Dissolution and Liquidation in the Philippines: Revised Corporation Code

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A corporation formed or organized under the provisions of the Revised Corporation Code may be dissolved voluntarily or involuntarily. Corporate dissolution and liquidation, however, are proceedings under different bodies. The Securities and Exchange (SEC) has jurisdiction over corporate dissolution, but not corporate liquidation. The procedure, requirements and jurisdiction of corporate dissolution and liquidation are discussed below.

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Beneficial Ownership: Layers in Corporations must be Disclosed in the General Information Sheet (GIS)

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The Securities and Exchange Commission (SEC) has issued a directive, covering both stock and non-stock DOMESTIC corporations, that the beneficial ownership of corporations must be reflected in the General Information Sheet (GIS), which is one of the reportorial requirements that must be submitted every year. This requirement is contained SEC Memorandum Circular No. 17, series of 2018 (dated 27 November 2018), on the “Revision of the General Information Sheet (GIS) to Include Beneficial Ownership Information“. 

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Unpaid Subscription, Delinquent Stocks and Delinquency Sale: Revised Corporation Code

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No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation (RCC, S62). Still, holders of subscribed shares not fully paid which are not delinquent shall have all the rights of a stockholder (RCC, S71). The stockholder loses the rights as a stockholder, except the right to receive dividends, only when the stock becomes delinquent. 

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Foreign Company Registration in the Philippines

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Foreign investors who wish to do business in the Philippines has two options in terms of registration. Non-Filipinos can either: (a) secure a license to do business as a foreign corporation in the Philippines; OR (b) register a foreign-owned corporation in the Philippines. A variant of option (b) is to invest in an existing Philippine company. 

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One Person Corporations in the Philippines

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A One Person Corporation is a corporation with a single stockholder, who must be a natural person, trust, or an estate. It must not be confused with a corporation sole. The creation of a One Person Corporation or OPC is provided in Title XIII (Special Corporations) of Republic Act No. 11232, also known as the “Revised Corporation Code”. The guidelines, as provided in SEC Memorandum Circular No. 7, series of 2019, are discussed below. 

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Mergers and Acquisitions under the Philippine Competition Act and its Implementing Rules and Regulations (IRR)

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Part of the regulatory framework governing mergers and acquisitions in the Philippines is the review, when specific thresholds are met, by the Philippine Competition Commission (“Commission”), pursuant to Republic Act No. 10667, also known as the “Philippine Competition Act“. The details are provided in the Implementing Rules and Regulations (IRR).

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