law on corporations15

8/11/2019 Law on Corporations15

1/13

Law on Corporations

Foreign Corporations


2/13

Definition

A corporation that derives its existencesolely from the law of another state,government, or country.

In the Philippines, only foreigncorporations organized in countries whose

laws allow Filipinos to do business thereinmay given a license to transact businessin the Philippines (Sec. 123)


3/13

Requirements for Doing Business

in the Philippines

License from the SEC.

Can be used by the foreign corporation aslong as it retains its authority to act as a

corporation under its own laws Until such license is sooner surrendered,

revoked, suspended, or annulled.

Certificate of authority from theappropriate government authority/agency.


4/13

License

If there is no license A foreign corporation doing business in the

Philippines cannot sue, but can be sued in Philippinecourts or administrative tribunals.

A foreign corporation not doing business can sueprovided the object or subject matter of the suit iswithin the jurisdiction of the courts.

Effects of lack of license

Cannot transact business in the Philippines Cannot enforce any suit for the recovery of a debt,

claim or demand

Contracts entered into are void


5/13

Revocation of License

The SEC may revoke the license under the

grounds enumerated in Section 134.

Effect of revocation

The foreign corporation cannot legally transact

business in the Philippines

But the revocation does not affect the validity of the

contracts entered into by the corporation prior to the

revocation, and may therefore maintain an action to

enforce such contracts.


6/13

Deposit of Securities

Within 60 days from the issuance of the

license, the foreign corporation shall

deposit with the SEC securities in the

aggregate value of 100,000 (which may be

increased or decreased in accordance with Sec.

126).

For the benefit of present and future creditors of thecorporation in the Philippines.


7/13


8/13

Service of Summons and Other

Legal Processes

Service of summons and legal processes

on foreign corporations:

To its resident agent;

Or to the SEC if the corporation ceases to

transact business in the Philippines.


9/13

Applicable Laws

All laws applicable to domesticcorporations shall apply to foreign

corporations except:

Laws regarding the creation, formation,organization and dissolution of corporations;

Laws fixing the relations, liabilities, or duties

of stockholders, directors, or officers to each

other or to the corporation.


10/13

Amendment to Articles or By-laws

Must be filed with the SEC and with the

appropriate government authority/agency

within 60 days of amendment (Sec. 130).


11/13

Amended License

License of a foreign corporation can be

amended:

Upon a change of the corporations name; or

When the foreign corporation wants to pursue

other or additional purposes.


12/13

Merger/Consolidation

If with a domestic corporation, themerger/consolidation is legal if the same isallowed under the Corporation Code and underthe laws of the foreign corporation.

If with another foreign corporation, the articles ofmerger/consolidation must be filed with the SECwithin 60 days after the effectivity of the same.

If the foreign corporation doing business in thePhilippines is the absorbed corporation in the merger,a petition for withdrawal of its licence must be filedwith the SEC.


13/13

Withdrawal

Requirements for withdrawal

Petition to be filed with the SEC.

All claims against the foreign corporation must

be paid or settled

All taxes or charges due the government must

be paid or settled

Petition must be published once a week for 3consecutive weeks in a newspaper of general

circulation.

law on corporations15

Documents